Zodiac Times

In this post, I am going to deviate a bit from the main theme of the blog in order to put in my 2 cents as to what is going on this Monday, 9/15 – which is surely to become a historic date with Lehman Brothers declaring bankruptcy, AIG struggling to hold on and begging for government to save it, and Merryl Lynch being bought out by surely overextended Bank of America that just gobbled up Country-Wide and another bank.
This is American economy tearing up at the seam.
In fact, it is in the contracting stage that may take us into black hole of true depression.
It goes like this:
Fuel + Energy go up -> food + other consumer goods go up -> discretionary income goes down -> affluent consumer dependent businesses go down -> unemployment rises -> discretionary + necessary income evaporate -> housing market that is undergoing righteous correction dips further -> more banks go down -> credit tightens further ->new ventures and investment in start ups go down ->market stagnates at the bottom
Is there a way out? GOVERNMENT MUST STEP IN to reverse this chain of events, but not by bailing out greedy investors or by expanding social welfare system.
When businesses begin to fail and unemployment rises, the government should increase its payroll and spend on infrastructure, and energy R & D. Then unemployment goes down -> discretional spending goes up -> more business thrive -> more people are employed -> more $ for everyone.
None of presidential candidates talk about the U.S.’ failing infrastructure. In fact McCain wants to rein in the government spending. THIS IS NOT THE TIME TO DO IT. Let our deficit grow, let us borrow money to keep the economy going, or the big U.S.A. can also become bankrupt. THIS IS VERY POSSIBLE!
In fact, as an astrologer, I certainly look at 2010 – 2011 as the time of economic earthquake of huge magnitude in this country.
I have business education, and have been in business all my adult life. My common sense and my experience both say that tightening of credit during economic downturn is the recipe for disaster.
One fact is particularly scary: McCain’s main adviser on economy is the mastermind of chopped up and repackaged mortgages – the investment instrument of “financial destruction” that got our economy into hot water in the first place.
Even though I stand by my prediction that McCain is going to be our next president, I do not favor him. He is planning to continue the Republican party economic policies, which, essentially boil down to trickle-down-economics theory.
This theory does not work because in reality it works like this:
With global markets and labor pools wide open, outsourcing lowers the wages ->the middle class and poor grow poorer -> the pool of unemployed and desperate rises -> more people would take low paying hard jobs ->the rich may lower the wages and demand more-> the rich grow richer -> the poor grows poorer.
If you don’t believe it, go back to history books: that’s how it has been throughout history, which has always had trickle-down economy. The middle class rose to empowering numbers in this country during the middle of the twentieth century only, and only thanks to FDR’s policies set to end depression – which was exactly what I advocate: spending government money, lowering credit and putting people to work.
Obama does not have the right solutions to problems of American economy either. But, at least, he is planning on spending. He also wants to tax the rich, while bringing welcome relieve to the middle class.
I don’t know how about you, guys, but I am voting for Obama as for lesser evil!
P.S. Hail to the Chief! After 8 years of stripping the country of much of its democracy, getting us involved in the war on 2 fronts, ruining economy by allowing unprecedented speculation in real estate mortgages, he now refuses AIG the bridge loan it needs to survive. AIG’s demise would send such ripples through the world economy, that would send American economy over the tipping point. SOS!
P.P.S. 9/16
Well, here we go: McCain just announced that he would create a special commission that would study the current financial problems. As we don’t know what got us into the hole. But it would certainly create another 2 years of government inaction. By that time, we all are going to be in the poor house, because McCain also thinks that AIG is expendable (just when they finally found a semblance of a brain in the White House and are considering helping AIG to stay afloat).
The reason we all are heading into the poor house once AIG sinks is because it insures and underwrites many, many other banks and such entities as NY state and NYC!…
And, just think, I have once considered voting for McCain! Shame on me for giving Bush the Third a benefit of a doubt…
Honestly, I don’t think this country’s economic infrastructure could take another 4 years of no brains at the top…
P.P.P.S
So the White House has borrowed the brains and lent AIG staggering amount of $$$. It also looks at owning 80% of AIG. So it would become insurance Fanny or Freddy… And then, maybe, it would be able to pay its debt to China )