We Have Met The Enemy, and He Is Us (2)

aaa.again is the nom de plume of a frequent commenter who has agreed to be a contributing writer.  He writes from the perspective of decades of success in business, finance and entrepreneurial enterprise.   Learn more about him on the About Us page.

Voters: Short Memories, a Selective View of the Facts

and a Strange Fascination


In any number of newspapers you might pick up today, letters to the editor decry the current “economic mess.”  The mass media similarly have proclaimed imminent recession and economic disaster for over a year now.  For over a year!!  The fact is that a crucial measure of economic well being, the unemployment rate, during the full tenure of President Bush’s term is essentially indistinguishable from the unemployment rate cited as evidence of the Clinton “economic miracle” in the 90’s.

What about the current housing and financial market “crisis” you ask?  Yes, there is a very real and considerable issue in the financial sector.  But have we forgotten that as Bill Clinton exited the stage in 2001, to a crescendo of media adulation, he left a crashing stock market, the tech sector dot.com bubble, and a looming recession?

Asset bubbles happen; slow economic growth follows.  It’s an empirical fact.  But we recover.  Anyone who bought a house for the long haul will do just fine.  The median home price is still 50% higher than five years ago.  Think about that for a moment.  Investors, and those who just want to own their own home, will do just fine.

Voices of doom also tell us that despite GDP figures or unemployment rates we have a loss of manufacturing jobs, shrinking wages and the loss of the American dream.  Serious issues, indeed.  But do those apologists, and do voters, realize that these are very long term (think multiple decades long) issues that transcend the term of a particular President or Congress?  Apparently not.

This crisis-mongering is simply not justified, nor should it be stoked by a sensationalist, agenda driven media and opportunistic politicians.  Objectively, are we soon to actually enter recession?  Will roiling credit markets, issues in the financial sector, the correction in housing, and energy costs finally convey that fate upon the next President?  Perhaps.  The last time I looked the business cycle and episodic economic upheaval had not been repealed, and such a recession would indeed be unfortunate.  But can we have some perspective?

Some would accuse me of being “out of touch.”  But America, an “economic disaster?”  Are you hunkering down in your cellar this weekend, storing water and foodstuffs?  Or are you planning a normal weekend?  C’mon, get real.

Switching emphasis, the voter’s fascination with the government based solutions promised by politicians is quite odd.  The record of government quite simply is just not good.  However, the alternative, private enterprise, although not even close to perfect, is quite satisfactory.

If we review just a few of the changes private enterprise has brought to our standards of living in the last 50 years, and those standards do improve inexorably and measurably decade by decade, we can in no time assemble quite a list.  Let’s start with a few basic items like food, clothing and shelter.  Travel to any city and drive through what was the “middle class” housing area in the 50’s, 60’s or 70’s.  If the proverbial middle class “Average Joe” owned a home at all, it was most likely one of these small, modest little boxes. Today, more of the middle class own homes, and they are bigger and better homes, with air conditioning and full of furniture.

And clothing?  Does anyone really want to compare the price and quality compared to 10, 20 or 30 years ago??  Care to know how many people wash those clothes in their own washer and dryer, and not at the Laundromat like years ago??  How about the quality and choice of foods in the stores?  Fresher produce, higher quality meats and a fabulous selection unimaginable years ago.  We are nation of plenty.  Hunger is not a central focus today, obesity is.

How about health care, a favorite whipping boy of politicians, compared to 40, 30 or 20 years ago? We now effectively treat our high blood pressure and cholesterol.  It used to be the case that if a man had a heart attack at fifty the reaction was, “well, he was fifty.”  Now, it’s “what happened?”  Survival rates for cancer are increasing.  We control our diabetes, our arthritis and even our day-to-day anxiety with effective, and cost effective medications brought to us by the drug companies.  While politicians rail against the drug companies, the reality is that morbidity and mortality have been greatly reduced.  Need a fancy image study to diagnose a problem?  CAT scans and MRI’s now do what used to require exploratory surgery.  And the available surgical procedures of today stretch the imagination.

Turning to everyday creature comforts, the list is almost endless.  We love our rooms full of flat screen TV’s, our cell phones and other consumer electronics.  We used to have only our radios, and maybe a color TV.

How about transportation?  More people today own cars.  Perhaps two or even three.  And they are nicer, safer and more reliable.  Speaking of transportation, how many of those middle class Average Joe’s who used to drive or take the bus or train on a trip now fly?  Off to college?  Spring vacation?  Visit grandma? Christmas?  The big Bowl game?  Off to the airport we go!

I haven’t even mentioned perhaps the biggest change of all: personal computers and the associated information revolution.  Politicians keep telling us we need government.  The private economy doesn’t work, the middle class is hurting and has to choose between putting food on the table and health care, gas or some other vital need.  I don’t know about you, but I’ve actually been outside my house in the real world recently.  From what I see the real choice seems to be between cell phones, or ipods, or a nice dinner in the city, or the tickets to this weekend’s baseball game – and health care.

How about government?  Politicians have promised a lot from government.  How has government performed?  Politicians declared a “War on Poverty” 45 years ago, and yet are still able to run today on anti-poverty platforms, despite billions and billions of expenditures.  I guess government didn’t win.  Further, government seems to have created a permanent and dependent underclass in the process.  Interestingly, no politician in this election cycle has talked about “ending this costly and un-winnable war.”

How about infrastructure, a function most would agree is a legitimate government function?  It’s an overcrowded, crumbling and neglected mess.

Health care?  That’s a big issue this year.  All the candidates profess they will fix it.  But how have government’s initial entries into the health care field, Medicare and Medicaid, performed?  Answer: miserably, and getting worse to the point of driving the nation towards insolvency.  Look at the numbers.

Politicians have promised industrial competitiveness for years.  Did they prevent the steel mill jobs from leaving?  No. Did government create the wealth and prosperity associated with Microsoft, or Google?  No.  Today we routinely hear politicians wringing their hands over “energy independence” and the “trade deficit.”  But the truth is that politicians stand in the way of solutions like nuclear energy and domestic oil exploration.  The result?  American consumers pay $4 bucks/gallon for gas and must keep sending their dollars overseas to hostile governments.

And lastly, lest one ask about government’s role in regulation and the current turmoil in the financial markets, I simply note that these markets are among the most highly regulated in our economy.  Further, if regulation is your proposed solution, please go look at two key pieces of legislation and regulation that started this whole mess: The Community Reinvestment Act, and the post Enron “mark to market accounting rules.  No, politicians and government won’t come out smelling very good here either.

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