Punchinello’s Chronicles

September 20, 2008

Bush says ‘Return to the Past’

Get some credit cards and run them up to their limits. Go apply for a consolidation loan to pay all those cards to zero, leaving a single “easy payment.” What do you think will happen next? Will you cut up your credit cards and never use them again? Or will you figure you’re now rollin’ in the dough, and start using those credit cards again?

History shows that most people will simply consolidate their credit card debts, then start using the cards again, doubling their overall debt and exponentially increasing their interest payments. They want to “go back to the past” of continued growth in spending and lifestyle. It’s a basic problem, founded on a false set of premises, that credit cards are the same thing as income.

There’s a common description of insanity as being a continue repetition of failed actions, expecting the outcome to be different. Keep doing the same thing that’s failing, hoping it’ll somehow succeed. True, there are times in individual lives where we try and try again, to eventually succeed. But it’s based on making changes and modifications, no matter how small. More importantly, those situations include analysis of what may be wrong.

Today, President Bush said that this proposed economic bail-out plan isn’t a partisan problem. He’ll work with Democrats and Republicans to go back to a past of continued economic growth. The obvious solution is to go back to the way things have been, repeat what we’ve been doing, and focus entirely on never-ending growth as the foundation of a national economy.

“Our system of free enterprise rests on the conviction that the Federal Government should interfere in the marketplace, only when necessary.”

Hmm…actually, I don’t think that free enterprise rests on this conviction. In fact, it’s been federal interference that’s caused much of the current problem. Policies enacted to increase the number of home-owners have directly helped cause the high-risk loans in the mortgage industry. Trade protection for industries such as textiles, automobiles, and steel to name a few, also have helped cause the problem.

But the main problem is that we can look at the current situation in two ways. One way, the accepted way, is to say that there’s nothing at all wrong with our concept of economics. We have a glitch in the system, a problem of some sort, and we need only to fix that problem to return to a great economy.

The other way of looking at things is to examine the fundamental concepts that go into a modern economy. Are the principles put in place in the early 1900s and following the Great Depression still workable? Has the country remained pretty much the same in 100 years? Do we still make the bulk of our production in agriculture and heavy industry? What about electronics and service?

If the basic assumptions and premises of what makes a corporation are wrong, then to go back to the past will simply cause the same problem to take place, over and over again. We could call it cyclical downturns, periodic recessions, statistical ups and downs, or whatever else we want to call it. Or, we could call it stupid!

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