Economics 101 And Angry White People

I have had it.

I have had it with the ignorant mother fuckers, and angry white people. I have had it with the politics of hate, and this effin goddamn "Tea Party", a movement born of hate and fear and steeped in so much mis-information, the more these people talk, the more foolish they sound.

And it's not just the Tea Party yahoos either, but this entire "populist" mentality, the seems to have taken over the lunatic fringe of BOTH parties.

And there in lies the danger. The extreme of anything is a bad thing. Read your history. When you step out beyond the edge of reason, and science, of intellect, and just plain common sense, there is nothing left but fear. And Master Yoda was right. Fear does lead to the dark side. Follow fear and an agent of evil you will become.

And so what are all these "Tea Baggers" and "Populists" so mad at it? Well I will leave the really crazy shit alone here, such as death panels,the racism crap, the hatred, and the "Obama is destroying the Constitution" stuff. I am pretty sure there are not many constitutional scholars in the crowd anyway.

But I do want address the economic part of this.

Now, see I'm not a constitutional lawyer either, but unlike most of the pundits on Fox, or even CNN or MSNBC for that matter, I do actually have a degree in Economics from a respected University. And I did work in the Wall Street world (yes that evil entity responsible for all of our ills) for fourteen years. So while I am no Paul Volcker, I am willing to bet I have a deeper understanding of macro economic issues theory than your average M-16 carrying, Luger packing, Obama-hating, Sarah Palin-loving Tea Bagger.

So here we go, just the basics.

Economics 101:

All monetary activity in the economy can only come from one of three places.
1) Consumers
2) Businesses
3) The Government

Now when the economy is in a severe state of contacting, consumer spending, and business investing dries up. That leaves only one place where economic activity can originate, the government. And financial activity can be stimulated by the Federal Government in one of the three ways:

1) Tax cuts
2) Fed lowering rates
3) Spending

Now lets remember back to September 2008 when the Economic crisis hit.

It was a severe shock wave that nearly crippled the financial system. All monetary activity instantly dried up. Banks were in survival mode instead of lending. Businesses had no way of securing loans for even basic payroll let alone investment. And consumers saw their retirements vaporize overnight in plunging stock market, and their home values crash as much as fifty per cent in the worst real estate meltdown in American history.

The bubble had burst, and devastation was upon us.
Drastic action had to be taken and taken fast.

There was no supply side solution to this crisis.

With a collapsing banking system,a stock market on the verge of testing 5000 on the Dow, and foreclosures running amok across the country, tax cuts were impotent in the short term (and 30% of the Economic Recovery plan was tax cuts btw), and there was no more room to lower the fed funds rate already hovering near zero.

There was only one course of action to be taken.

The financial system had to be stabilized.
City and State governments on the verge of shutting down from a dwindling tax base had to be saved.
The confidence of world markets, and consumers had to be restored

And the Federal spending was the ONLY possible way to do it.

Did it work?

The financial system is stable.
Corporate and business spending is back on the rise again.
Consumer confidence and spending is up dramatically from a year ago.
The latest GDP numbers show a 5% plus accelerating economic growth rate from year to year fourth quarter.
The stock market is up over 40%.

And by the way, a rising stock market is a GOOD thing.

Historically it is always an indicator of the FUTURE of the economy. Yes we do need to reform and Glass-Steagall needs to be reinstated and should never have been repealed. But Wall Street is not the enemy people. Just put some simple rules in place so banks and mortgage companies can go back to being banks and mortgage companies and not speculators trading like a drunken sailor in the derivative and option markets that should be entered only by risk taking Gordon Gekko wannabes adrenaline junkies like me.

The stock market is the very first thing that turns bullish during a recovery, then GDP, and the very last lagging indicator is always jobs. And in a recession this severe, that is going to take awhile no matter how robust the recovery becomes, especially in an economy with so many transitional industries where people must be re-trained and often re-educated to obtain a new set of skills.

So are we better off today than we are a year ago?

The GDP says so.
The stability of the financial markets say so.
The stock market says so.

And at least where I live, the real says world so.
A year ago, it was a ghost town in the metropolitan area where I reside. And this past holiday season, it was humming with activity like I had not seen in several years.

Maybe the teabaggers would have preferred that the financial system collapse and the banks shut their doors, and chaos and anarchy reigned. After all, they are the ones with the arsenal of automatic weapons stashed away. They are the ones who would have been in power in post-meltdown Road Warrior scenario.

Maybe that is why they are all seething with such anger.

They had their chance for power and it was snatched away from them, and now Sarah Palin is their only hope.