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Election's Economic Fallout

This is the text of a letter I wrote to an activist friend in Yakima who, like me, teachs economics. The analysis that follows is shared by others who know the economics of empire. These two urls link to corresponding and background information:  http://www.thenation.com/doc.mhtml?i=20020923&s=greider
 http://www.cepr.net/new_economy_goes_bust.htm
As I said, the Euro will reach par and displace the dollar, and it already has only one day after election: rate at end of 11/5 1.0029 Euro per dollar, as of 11/6 99.2457 Euro per dollar. The other part of the impact I mentioned was capital flight. The spin for the markets' poor performances today on a day they should have soared on news of the 50bps cut by the Fed was very interesting to read. The reality of capital flight is something the vast majority of financial world pundits, let alone speculators or most members of Bush's administration, have never contemplated, except, maybe, as something that happens to other countries viewed as "unstable." The overseas person or institution with serious money here knows just what a Republican victory actually means: absolutely no reform of a system that is out-of-control and the institution of policies ruinous to the primary factors of any economy's performance. So what does this mean? With the prime consuming season upon us, the balance of payments skyrockets and the current account must be balanced with new inflows of capital; but what happens when there's not enough inflow to balance the account? The whole financial market's current condition will be turned on its head, with resulting pandemonium, and we only need to look at Argentina or Brasil for examples of this. Add to the mix the fact that the government is running close to record deficits and the Fed's rate cut looks laughable because interest rates will skyrocket as businesses and consumers get crowded out as the Treasury scrambles to cover a $1/4 trillion combined *quarterly* deficit--and it can't print money its way out of the situation because of the nature of the trade deficit. Can you spell CRISIS? Being simpleminded and focused on global control instead of the means for doing it, Bush and company will start their conquest of the middle east. This results in both deficits spinning even farther out-of-control. Where this will end up is anyone's guess, but it won't be pretty as the empire implodes from the economic weaknesses of its own design and an economic winter of vast proportions engulfs the world.

Those who support the election results and the current administration should do a quick hard think on just what they really mean. But if any real thinking was done by folks, then we wouldn't be facing the above situation would we?
Additional link 07.Nov.2002 17:10

karlof1

This item provides additional analysis of the empire's aims and critical economic information underlying my own analysis.

 http://www.atimes.com/china/DD19Ad01.html

Oh Me...OH MY! 07.Nov.2002 17:44

Happy Republican

These are the kind of Jack-asses who are teaching our kids?????

The sky is falling, and the Hordes of Hell, led by the Anti-Christ: G.W. Bush are gonna take over the world!!!!

Get real, Jag-off!

Typical liberals....they lost big-time and they are trying to justify that MAIN-STREAM America is nothing but a bunch of White-trash(or any colour you chose), low-life, illiterate, zombies...trolls(as you leftists on this site love to call conservatives).

If you try and use that little peanut of a mind sometimes, and quit thinking about conspiracy around every corner...maybe you should consider this!

Gephardt stepped down today, and it is a sure bet he is looking for running for prez in 04! He threw the 2002 elections, in favor of his own political aspirations(stabbing you lefters in the back). The Senate/House was not in Grid-lock as they would like to to believe.

Now that the Demos have suffered a major blow, this will fire-up all youse Socialist/Commie bastards, to beat GW come 2004!

You have a purpose now! Get rid of the HATED Republicans!

So you better pray(sorry, you don't belive in God), and hope that the Republicans screw-up big time in the next two years...cause if the economy does good, and the terrorist/Iraq thing goes good...

You can kiss the 2004 elections goodbye! We will have Republicans everywhere!

Probably the best thing to come out of the 2002 elections is that the BITCH "Babs" Sreisand, and some of the Baldwins have said they are moving to France!!! They are so ashamed to be an American! No doubt to live a very modest life helping the poor on the French Riveria.

Now if we could get rid of more of these Pampered, Self-important Hollywood types...it would be great!

But, getting back to these Economic professor wanna-be's.

Why don't you move to France and see what you can buy with your Euros?

Bunch of Jag-offs!

Hey, Fuckhead!!!! 07.Nov.2002 19:27

Happy Republican=braindead fuckhead

Your post was just so much maggot-ridden shit and pus that it's difficult to know where to begin.

Why don't you back to the so-called "Free Republic" site where you can impotently whine about "liberals" to your heart's content? You add nothing of value here. You add nothing to the debate. You are only here to cause as much disruption as possible. Your presence is as worthless as you are, you whining, flacid, shithole waste of skin. Go back to sticking your little tiny dick in your dog and taking it up the ass from your wife. Come back if you ever learn to be a human being instead of a walking pile of diseased vomit.

Rebuttal 08.Nov.2002 00:09

karlof1

First of all, mr happy republican would certainly be very unhappy to know that the tenets he espouses are in actuality liberal tenets dating back to England of the 1850s, excepting his intolerance of course. And as most of his ilk, he is truly clueless about the current economic situation, thus the flummery of his remarks. As for conservatives, the ones I know are a far more nobler type than this poster, who certainly earns the epitaph "troll" by his behavior. Indeed, many are just as worried about the state of the country as I am. You need not be on the so-called left to be an activist. (It was activists on the "right" who got Pitt to resign from the SEC.) As for what I would label myself as politically, I would be a small d democrat-populist and would never ever allow myself to be called a liberal.

Now, as for the mess we're in, there happens to be some precedence historicaly: 1966-1972, in relation to deficit spending and crowding out, and the current problems faced by Argentina and Brasil, among others, mentioned above regarding the inability to meet current account balances and capital flight. The problem is that there are no easy solutions at the macro level, and those that might actually do some good will be anethema for the current administration. So, that leaves us with solutions that can be implemented on a local or perhaps statewide basis; in essence, a form of autarky presents itself as the best bet both before and when the current system crumbles. Some locales already practice this type of economy that promotes a more equitable distribution of capital and keeps the vast majority of it confined to the locale, so the locale is enriched instead of some distant center. For this to work, communities must relearn how to run small economies of scale that are intra and interdependent--symbiotic--within and with each other and wean themselves of the myth that bigger is better. And for this to work, people must reaquaint themselves with their neighbors and communities to establish a discourse that promotes positive solutions. In this sort of an environment, attitudes displayed by mr republican just won't do; and as in the 1930 Hoovervilles, people who behave that way will be ostracized.

Admittedly, there is much more that could be written about regarding solutions to the crisis that confronts us, and some has in the links I provided and in many more that are available if one chooses to look. Nothing magical changed with the election results; the problems that existed before still exist and will probably be exacerbated. Many people were working toward solutions prior and will continue to work just as hard after the polling. Some will remember the story about the grasshopper and the ant and understand how it applies now as then. People learn from the past and apply its lessons to the present to affect the future. The kids I teach deserve a better future than our present; but better certainly doesn't mean more stuff, a poisoned ecosphere, constant war, and the further atomization of society.