Monday, October 10, 2022

Jenga Economics: A Basic Tutorial of Where We Are.......and Why


DISCLAIMER:  I WRITE THIS BLOG TO ENTERTAIN AS WELL AS TO INFORM.  FROM TRAVEL TO FOOD AS WELL AS OPINION, THIS IS A JOURNEY OF LIFE.  ALTHOUGH BASED ON FACT, THESE ARE MY OPINIONS.  I SHARE THEM TO INFORM AND EDUCATE.  

      It's been a while since my last soapbox blog chapter so I thought with the mid-term elections on the near horizon, this might be appropriate.   The country is in a mess right now and there seems to be a never-ending supply of blame to go around.  The current administration is continuing the unfortunate trend undoing all the good the previous administration tried to accomplish.  Notice I said, "....continuing the unfortunate trend" Although President Trump tried and did many good things, his handling of Obamacare was a 'backburner mess'.  He did make us energy self-sufficient and tried to answer America's call to secure the border.  As I see it his biggest negative is that he could have been much more 'Presidential'.....staying the hell off social media. Yet the current party loves to blame all of our current problems on him, although none of this began till they got in power.  

      The mainstream media hasn't been a friend of America since the beginning of Vietnam.  They only survive to sell what sells and avoid a lack of this by creating more.  This has been becoming more common since the Spanish American War and the beginning of Yellow Journalism.  The vast majority of news these days is completely taken out of context.  The only difference between their work and outright lies is a spinning Thesaurus. 


      I make it no secret that I do not like the current administration or their party.  I am not going to blame one man just their entire philosophy.  Their 'bastardization of the constitution and economics' should be our biggest fear.  Democrats LOVE to spend money.  The real problem with this is that is your money, not theirs and they only get it thru a stranglehold of taxation.  Yet with all this influx of cash, nothing ever gets done unless, of course, you are the Ukraine or an illegal immigrant flooding across our southern borders.  The issue of 'pork barrel' has been around for years and this party thrives on it.  They promise relief thru their programs, yet the vast majority DOES NOT go the Americans.  This is simply defined as a legislator slipping funding of a local project into a larger appropriations bill.  If you look at POTUS' current Inflation Reduction Bill, much of it is actually diverting funding into the 'New Green Deal' brimming with a boat load of new taxation.  At least it's keeping AOC quiet these days.  

     Yet, I finally digress.  Although there have been many advertised or mentioned over the years there are 3 main types of economic theory:  Keynesian, Neo Classical, and Marxian.  I am not going to go into DEEP analysis of each, but just state the main points and pros/cons, keeping it as hopefully understandable as possible.  You can decide what type most applies to us and where we've been and where we're probably headed.  Regardless the government can and does influence the economy by changing the level and types of taxes, the extent and composition of spending, and the degree and form of borrowing.  


KEYNESIAN ECONOMICS

      Keynesian economics believe that, because prices are somewhat rigid, fluctuations in any component of spending-consumption, investment, or government expenditures cause output to change.  They believe that demand drives supply and that healthy economies spend more than they save.  Demand is more likely than supply to be the primary cause of inflation or recession.  This theory has driven America for majority of our history, but in light of the recent COVID pandemic, the supply chain 'hangover' has resulted in a pretty dangerous situation.  

NEO-CLASSICAL ECONOMICS

      This focuses on supply and demand as the driving forces behind the production, pricing, and consumption of goods and services.  It is simply just that.  The consumer determines what the demand is, and industry is driven to supply it.  This includes choices of style, etc.  For example, if you desire to purchase designer apparel because of the attached brand label (i.e., Jordache) the value exceeds the cost of production, rationale, and actual utility.  Neo-classical probably affects more of the upper class while Keynesian affects us all at one time or another. 

MARXIAN ECONOMICS

      Obviously, this is the result of Karl Marx 19th century Russian revolutionary policies. It focuses on the role of labor in the development of an economy and is critical of productivity but emphasizes the role of the specialization of the labor force, coupled with a growing population, pushes wages down, adding that the value placed on goods and services does not account for the true cost of labor.  We cannot let this result in the 'nationalization of anything'.  

      You can see that all of these theories have had a significant place in our history.  The labor movement owes its beginnings to the Marxian style, but has also significantly affected all 3 prices, supply, and demand.  I harbor no ill will towards unions, but unfortunately, union labor costs also drive up the cost of living as well.  It's a vicious one-way uphill struggle.  

MY CONCLUSION

      Current events, most notably the issue of COVID and its lingering supply chain hangover is the most notable.  However, Keynesian policy of going into debt has resulted in America borrowing trillions of dollars from China over the years.  Also consider POTUS decision to stop the Keystone Pipeline and seriously reduce or stop government leases for further oil exploration or production has further crippled our economies 'catch up' efforts.  POTUS has tapped our National Petroleum Reserve for millions of barrels to help with the rising gas prices, but over half of that was sent to China.  So much for self-sufficiency not to mention integrity.  All they did was further a demand for us, but from outside sources.  The equation of gas production/prices + regulation + supply chain strangulation + increased costs and prices + labor issues + Jenga Economics = disaster.  Additionally, the monumental influx of illegal immigrants only adds to our debt to support them.  Now for the final 'cherry on the cake' add the restless labor faction ready to stop our entire country with airline strikes, railway strikes, and teacher strikes.  I use the term 'Jenga Economics' to illustrate a pretty simple concept to grasp if you know the game.  These actions are simply of individual or party interests, not the best interests of the American people.  We have very nearly stopped being a nation dedicated to the best interests of us all, just an ever-increasing horde  of selfish individuals scrambling to 'get theirs' before it's all gone.  The hole is being dug from which there is no escape.  You don't like the word socialism, then show me a better term for where we're headed.  Apathy is just a word till you realize that is what they are counting on from us.  The current policies of the last two years are responsible, there is no other explanation.  They are blaming the past but paying the resultant debt forward for all of us badly.   We each have our own minds and opinions, just vote.  REMEMBER NOVEMBER. 


"I believe now, as I always have, that America's strength is in We the People"

Ronald Reagan

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