SEARCH BLOG: GOVERNMENT
We are in crisis mode:
- Housing and banking
- Oil and gasoline
- Climate and CO2
- Terrorism and war
- Food and the poor
But if we step back and look at these crises, we might get a better idea of the underlying causes.
Housing and banking: the normal dynamics of buying, owning, and selling homes were affected by non-market actions. First, banks were bludgeoned by the federal government to accept shaky loans in areas they would normally "redline"... avoid or have very restrictive conditions. Then the federal government, by way of the Federal Reserve, lowered interest rates to practically nothing and encouraged all sorts of free-wheeling lending and reselling of mortgages to spur on the economy. Then the federal government, again through the Federal Reserve, quickly raised interest rates to the point that those risky borrowers could not repay the loans and caused a banking crisis. Finally, the federal government, once again through the Federal Reserve, rescued the banks, but left the housing market a shambles.I'm sorry. I just can't seem to find a common thread among all of these crises. We'll just have to contend with these issues as best we can, knowing there is nothing that we can do to improve the situation.
Oil and gasoline: as the world population has grown and the need for energy grows dramatically with the emergence of new economic powers such as China and India, the normal market response to the situation has been affected by the federal government's reluctance to permit exploration and drilling in areas of known reserves. Then the federal government investigates oil companies because the artificial shortages have driven up the price of oil worldwide and the profits of the oil companies regardless of where they are located. Then the federal government places the burden for correcting the shortages on the automobile companies by requiring them to create expensive, small alternative vehicles for the marketplace which creates economic hardships for both the companies and the consumers who own older vehicles and cannot afford newer, expensive ones.
Climate and CO2: a simplistic model of earth's climate based on the assumption that increases in CO2 will create a crisis of global warming was created by an employee of the federal government and promoted by a former employee of the federal government [to his vast enrichment]. Despite challenges by scientists worldwide, the federal government has taken the position that CO2 is, indeed, a threat to our climate and has been officially labeled a pollutant by the U.S. Supreme Court... the Judicial Branch of the federal government. Subsequently, the projected cost to constrain additional CO2 in the atmosphere has been set at tens of trillions of dollars, but the federal government is committed to actions such as the expansion of ethanol production which will not abate CO2 production and the reliance on non-nuclear, non-fossil fuel sources of electric power generation placing future economic growth at risk.
Terrorism and War: despite a direct attack on the U.S., many officials within the federal government contend that the threat by Islamic extremists is overstated and military actions in the middle east unwarranted. A large portion of Congress, the Legislative Branch of the federal government, has attempted to block funding, personnel, and necessary equipment to properly and successfully fight these forces. A candidate for the President of the United States, head of the federal government Executive Branch, continues to minimize the value of the military efforts and has stated his intention to end U.S. efforts to keep the fight with the terrorist organizations overseas.
Food and the poor: in conjunction with the federal government's requirement to expand the use of corn and sugar, basic foodstuffs, as a source of ethanol to offset the federal government's restriction on exploration and drilling for oil in areas with known reserves, the price of food has become prohibitively expensive for the poor in the U.S. and around the world as food supplies have been diverted to non-food purposes and other food costs have increased with the dramatic price increases in oil and gasoline.
Maybe we can pressure the federal government to do something. There is obviously a secret conspiracy out there...