April Fools...
if there is one, it is on us for believing that we have free and open markets.
The famous economist / immigrant from Germany by way of Austria to America, Joseph Schumpeter
stated, "Capitalism will use 'creative destruction' to move its economy forward. His insights were on the money. Governments should not fear a downturn due to this interruption because a new and better way is in the works. This is how a modern economy operates. The problem now government is run by egos who cannot fathom losing their position for any reason, most of all, an economic one. They have turned to socialist ideas as opposed to allowing the national forces of capitalism to function.
What it means...
It means that new technology, new ideas will destroy a segment of the economy as the new replaces the old. One year vinyl records were the thing. The following saw the addition of the 8-track. Then, this was destroyed by the cassette. This is how a free open market operates. It is harsh. No one says life is easy. Weak government leaders facing unemployment choose diversions. LBJ chose Vietnam. Today, government protects big corporations. This is socialism by any other name.
Enter the Socialist
When socialist come to power in different nations, they used their ideology to the economy. If any company is an important producer that offered jobs, it had to be protected. This protection covered any and all aspects from taxes and tariffs to regulations, permitting and subsidies, if necessary. This is how most of the world operates. It is why American corporations are at a disadvantage when it comes to selling, especially exports. State sponsored companies have their nation behind them to back them up. In the US the only segment of our society that could say that is banking. Banking has the Federal Reserve watching its back. This is the first germ of socialism in America. The rest of us are on our own.
Enter lobbyists
They convinced enough heads to protect agriculture. Then, the collapse of the auto industry got enough votes to lend Chrysler money to survive. This saved jobs and fortunately, Lee Iacocca was running that firm. He fathered our greatest auto, the Mustang and he saved the company while he was in control. Our problem is that we don't promote people like him to positions of power. Anyway, the use of socialist ideas are used so many times, our real free, open market is in name only. The losing streak of our capitalist system can be viewed through any segment of our economy.
It is most visible in the slow decay of our manufacturing. This segment is losing is in the competition with state sponsored entities. These are well paying jobs and the loss is reflected in our shrinking middle class. When you add the creative destructiveness of the internet, which is destroying our retail along with the stupidity of our Congress and government, another 15 million jobs are at risk. Things are adding up in the wrong column. Then, the onslaught of immigrants who seek any type of employment(read low-level wages). They are in competition with unemployed US citizens which makes things worse. We can see the effects in the wealth gap, homelessness and poverty. All these negatives are on the rise. Oh yeah, real wages have remained stagnant since 1973. Tax cuts only help the rich and endanger the nation with the hidden burden of debt. This is the present US economy.
Enter CORVID-19
The virus and ways to limit its effect has created a nightmare for our economy. This is not a creative destruction. but an invisible weapon of mass destruction(WMD) to the economy. The government was forced to do something. The problem for America is republicans only seek to help big corporations which is in their ten commandments. The democrats at one time was the working class choice. Today, they only seek power for their egos with no real ideas to help workers or citizens. If they protect workers, they fear criticism of protectionism. If they halt immigrants, they lose Hispanic votes. It is all about votes. They have no real values or ideas. Both political parties rely on excess fiscal spending as their political norm. The stimulus package will come and go just like the virus, but the debt will remain. It could get worse as new stimulus packages are on the table. This is the real disease. It spreads like the interest it generates. It is becoming unrepayable. The Federal Reserve is a bankrupt mechanism. The only reason that it cannot default is due to the fact that it can print more to any previous printing. Someday, the world will look at it like the Weimar Republic or Zimbabwe with its trillion dollar note. It will end ugly.
