Friday, March 28, 2008

Europeans are Coming to New York to Shop

"Europeans are coming to New York to shop" -- Chris Matthews, Hardball

There's something appealing to me about politicians talking about politics, especially in layman's terms. I hear so much arguing about this or that person's record and this or that person's plan, but I rarely hear them duke it out over ideology in practical terms. I was watching hardball, and in the course of the conversation on economics and the drop in value of the dollar, the above quote was stated. It made me laugh, so I thought I'd write about it. The short debate was interesting, because they talked about the mortgage crisis and the supposed recession(s) we're having, and the talked about them in tangible ways. It felt like a conversation we could all join into (if they'd slow down and stop interrupting each other).

So really, should the government "bail people out"? Is it the government's job to stimulate the economy? I think it was Henry David Thoreau who said that the government that governs least is the one that governs best. Why can't we have republican treehuggers today?

Honestly, I really like the idea of helping the poor and those in crisis, but should it be the government that does it? And where do you draw the line? The free-market advocate claimed that the people stuck in the mortgage crisis are mainly those who made bad financial decisions, and if the government bails them out, it would be an encouragement to repeat those mistakes. In my opinion, he has a point, despite the numerous exceptions of people who made decent decisions and just got in a bind that they couldn't have foreseen. And the argument from there was, why should the american people, 90% of whom are not making those kinds of awful financial decisions, be responsible for bailing out those who are? The response is that it's in everyone's best interest for the nation as a whole to be doing well economically. Your neighbor forecloses on his home and your home goes down in value as a result, stuff like that.

Shift focus: the dollar. The Bush administration gets us into this war (approved by a majority of congress, lets not forget), and then cuts taxes, meaning we're going to war, but we're not paying for it ourselves - instead we're going to borrow money from China. Result that a twelve-year-old probably could have figured out: dollar loses value and "Europeans are coming to New York to shop." Okay, so props to McCain on this one, a republican who voted against the Bush tax cuts, claiming that if we're going to cut taxes we need to pay for it (ie. cut spending, which was not done) - seriously, other republicans criticize him for this? I don't know exactly what I'm getting at, but I think I'd mainly like to point out that we really need a sense of balance.

When I play monopoly, I borrow money all the time. I'll mortgage a property just so I can buy another one, because in the long term, it will pay off to have as many properties as possible. So I understand the idea of borrowing money. The problem I see is that people borrow money without the promise of that money making more. Kind of like how we borrow money (via credit cards) to buy ourselves "stuff." We borrow money to buy cars, which plummet in value the minute you drive them off the lot. If you borrow to start a business or to invest in a home or something that will raise in value, then it's understandable. So the question is: how much of the borrowed money the government accumulates is actually going to turn a profit in the long term. Considering the fact that we're funneling that money into war, education, health care... road construction? Who's to say what kind of profits those activities will turn? It seems to me that most of that money is basically being given away, kind of like buying a car. If the government buys bombs, it's not like they're just going to turn around and sell them for a profit. They're going to turn around and drop them in other countries. So buying bombs helps us carry on the activity of making war on other countries, which may or may not allow us to benefit financially through resulting economic deals or lack thereof. But there's no measurable expectation for profic, so what the hell are we doing borrowing money for it? It's ridiculous to me, and that's just in the economics of it. Keep praying for the end of all these conflicts. God save us.

So now the Canadian dollar is worth more than the American. Hmmm... it amuses me that we find that to be so ridiculous. The power of the Euro didn't really bother us, but the Canadian dollar? Now we know something's wrong. So... how do we get out of this mess? I honestly don't know, but I think a balanced veiw of our nations leaders is also called for. Just from this small glimpse of what's going on, I get the picture that there are numerous factors to watch out for, to manage. Sometimes we bring a lot of criticism to politics. I know I just said that what's been going on in the past several years is ridiculous, but let's remember that even the best economists in the world would be hard-pressed to manage it all properly, and we don't have control over all the factors that decide our fate. So I say we pray, we love one another, and we hope for the best.


the Eubanks said...

Hm... good thoughts on economics and politics. it's all very confusing to me. I wish we could all just get along.

Josh Fuller said...

What I usually like to say is, it would be great if individuals and churches and other volunteer organizations would take care of the poor, but they just don't. Not in ways that are comprehensive enough and effective enough. So until that day, I want (and will vote for) a government that will do it, because that's the kind of country I want to live in. And really, when I look around the world at other countries with higher taxes and universal health care programs and good welfare programs, it's just what works. It's not perfect, but it does work. Fewer kids go hungry, more kids go to better schools, less families live in cardboard boxes, and on and on. I'll allow that we could argue that point, but when I look at Canada and most of Europe, I just think, it works. We should try to do it, at least a little bit more than we are.

Speaking of Canada, before 1976 it was quite normal for the Canadian dollar to be worth more than the US. Take a look.