Photobucket Poisonous Demagogues
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Even More Demagoguery

If you read this via RSS, it’s fair to get you up to speed, and if you read this on the site, you can look to the bottom left of our posts and see a comments link. That’s right, after almost a year, some debate, and a few technological advances with respect to tumblr, we’ve decided to let you comment straight away on our work. Let us know what you think.

-Dack

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A Recession Without Consequence: Introduction

Obviously, this title is not entirely accurate, for the folks that have lost their jobs, the reason being given usually is the recession, and that is surely a tragic consequence. I wonder though, as I read about these layoffs, about the state of these companies if the economy wasn’t “tanking”. The auto industry, which has been particularly hard hit, were already having trouble selling cars in a car saturated market, before people started banging the drum about this financial “crisis”. As for other layoffs? Well I ask you to examine what happened to companies that performed them, how many are still operating, how many are still paying large bonuses to the boardroom? The answer is many, they took an excuse and used it to  raise profit margins higher. The question is why? This recession apparently only demands stopping non-essential work(of which the question what is non-essential has become akin to the poli-centric questions of war, abortion, and global warming), not making hard decisions across the corporate landscape. Really, how much of a recession is it? 

My point is thus, we are in a recession that is unlike anything approaching the great *depression*, the recession of 1987 through 1992, or other times when the US markets have “crashed.” Not because it it worse, but because our lack of perspective has placed it in company that neither deserve. To use the Dow Jones index, which is admittedly, a simplistic and error prone measurement, as of this last Friday, February, 13, 2009, the Dow stood at  ~7,850. Black Monday of 1987, which is what some people compare this to, lost 500 points to close at 1739. Think about that, our index is about 4.5 times larger(and the loss over time while larger, about ~40% since August, has not had a day near where it lost 22% in ‘87, which would in my estimation be considered catastrophic), 20 years later, and this environment perpetuates fear, that this economy is worse than 1987. How about another metric, one that impacts the every day worker. Unemployment is at 7.6 for the month of January 2009. Is this high? Yes, it is, but no higher really than 1992, when the value peaked at 7.8%. My point? Unemployment is very high, but for that same period, the Index was around ~3,280, certainly something is different, and it isn’t just inflation of 17 years.

To state it explicitly, it isn’t to say that the economy isn’t struggling, or that people aren’t affected by this drop, but rather, this recession in another time period, would be considered merely an adjustment. Due to the people however who have gotten burned the most, which are the banks who played with too much risk, and the people who got burned working for the companies that know how to exploit workers to boost margins, we sit with three forces aligning the stars against our favor. The first is the companies themselves(Banks, Auto to the front of the line), who use the pity, the free money, and the excuse of this economy to last long enough to restructure themselves for a stronger position when we pull out of the slump. Second, the politicians, who are beholden to making America stronger, by giving tax cuts, lots of which still went to people who ought to be paying them, as they are “recession” proof, and thus making the government weaker. The weakness derives from the other side of the aisle, as they boost government projects which cost a lot of money, and are inefficiently priced. Finally, the media, whose relentless pursuit of stories without facts, and emotion without rationality, have created ironically, a market for recession. I ask, how much of a market was there in 1932 for a depression, when 23% of the people were unemployed, and those who did, weren’t treated fairly to begin with, thus projecting the universal misery that most people associate with that time. The media thusly, has found their story, and instead of evolving with the people, they will milk their story, until the signs of improvement eradicate the seeming necessity of it all.

This is my introduction to what I hope is a longer series. One where I will begin to describe in more detail, how our country while not strong economically, is really more in a state of “containment”. Just like containment fires, the economy is burning off that which is already set to burn, to keep the valuables(the parts of the market we need) from burning along with the garbage. 

-Dack

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