What seems like just yesterday but in reality was more like 23 years ago, I was mirth college graduate, working in the Public Accounting profession and nearing completion of an MBA program. I was required to produce a thesis as part of the program and I was desperate for ground breaking concept that would demonstrate to the erudite echelon just how brilliant a candidate I was.
I don’t recall exactly where I read it or who rightly deserves the credit for it but at the time I was impressed by a comment that stated “…the true sign of genius is taking the irretrievable complex and expressing it through the calm of simplicity…” or words to that effect.
Now not knowing whether this ideal was achievable I nonetheless began the search for a subject sufficiently unique to apply this precept. What better prospect than the subject of Economics! This was the era of the Reagan administration and much of the media was consumed with David Stockman and Reaganomics accordingly, it seemed an appropriate topic.
Now, to be sure, Economics as a science is, in my opinion, akin to the predictive study of cat herding primarily as the only thing one can safely predict is the fact that there will, in deed, be movement but where, when and by how much, in practical reality, caries with it so many variables that producing a functional, qualitative (and quantitative) formula with predictable resolve is, well, not feasible. Still, I needed to tackle it and synthesize the concept to its simplest form. The result was quite ingenious (indulge me!) or so I thought, the Academicians didn’t.
Where is this heading you might ask? Well, there’s so much fodder in the media about the Economy, Interest Rates, Booming and Besting and so on that it really engaged my thinking to what lies back of the overall Economic Picture and what faces this Country, Economically speaking, that I sat down, pondered the subject for a moment and what stumbled across was this question. What constitutes a vibrant Economy and what is its converse? Well as fate would have it curiously, the Paper I wrote so long ago discussed this very issue!
Quite simply put, a Vibrant Economy is one that is Wealth Creating, a Dying Economy is one that is Wealth Consuming! In other words, when wealth creation is greater than wealth consumption, you have a productive and sustaining Economy, conversely, when you have wealth consumption greater than wealth creation, you have a dying economy!
I find it impossibly to separate Politics from Economics and I believe that if one looks throughout history, you’ll find the cycle of a Nations life and death follow this very cycle. In other words, Nations (Civilizations) sustained themselves so long as there was Economic Health but once the Nation began to feed on itself (particularly and most notably evident in the 19th Century to the present) they began to falter and eventually collapse. Reading this the temptation to take exception and to draw comparisons to defeat the pretense of my statement is largely wasted effort. I’m clear that introducing the components of war, famine, etc. might offer tantalizing argument but I think if you follow these to their logical conclusion, you’ll discover they become more contributory to the theory than a detractor.
The U.S. as an Economic/Political engine has been, largely, unstoppable for the better part of 80 years ushering in an era of scientific, industrial and agricultural productivity unequalled in history and largely done by the Economy of expansive productivity (wealth creation) unencumbered by Political meddling (aka “skimming”) of the Engine! Primarily beginning with the Socializing of the Economy by Roosevelt, the Great Society of Johnson on down to the blunderings of Bush,II the “feeding” of Collectivist (Socialist) ideologies have saddled the Engine to the point of stalling! It was only the pure strength of the System (Engine) that carried it to the Nixon administration when the first signs of death began to surface and Nixon removed the last vestiges of Economic Sanity, the Gold Standard.
Without a functional Monetary Policy the System was free to continue the Feeding to such a degree that it began leveraging it’s own vitality right on down to the shores of economic oblivion! Oil Companies consorting with Middle-Eastern Nomads to restrict oil supplies to drive prices up so that the Oil Co’s could generate more currency to flood the Banking System (remember, no monetary standard to restrict currency supply), basic consumables cost skyrocket and we’re off on the INFLATION ride of a lifetime!
As a Nation that fundamentally became a horde of over-feed lapdogs we said, did and do nothing! Through the dogs a bone keeps them quiet!
Industry seeking to protect its profits and escape Government “skimming” starts a calculated process of de-industrializing and rectification! We now call it “outsourcing”!
But this is the new Economy right? A friend of mine and I were talking about a personal issue that was troubling him. In the course of the visit he said to me, “you know, holding a grudge is like drinking a poison and expecting the other guy to die!” How right he is!
The “Poison” in our New Economy is the illusion that Inflation creates and at the same time is a measure of spendable wealth. You doubt this? Have you seen the numbers on “Consumer Spending” as function of Debt-Equity (that’s my reference to debt created by leverage on home equity. And how is equity created, that’s right, spiraling inflation!)?
You can not have a Wealth Creating Economy through Inflation and Debt Based Spending. The only analogy I can come up with the at the moment to illustrate this idiotic notion is to imagine the sinking Titanic and the Captain on the Bridge issuing orders to drill holes in the hull of the ship so that they can drain the water! Doesn’t make much sense does it!
I can go on and on with this subject it, however, will not make the point any more clear!
We have become and are a Nation struggling with an Economic/Political Identity Crisis and I see not a one on the Political/Economic horizon with any force of will or understanding to confront the forces opposing a more sane Nationalist Policy. The only parties I hear touting the New Global Economy are those standing at its trough!
Rest assured, I can make a great deal of sense out of all of this and I can explain the motive force that lies back of all this but I promise you, you will not like it! But I will give you a hint. Find a dictionary and read the definition of the word “parasite”! Unless you plan on being considered a food source, I suggest we’d all better wake up!
Curtis C. Greco, Founder