Does Supply Drive an Economy or Does Demand?
by
David Schlecht
We’ve discussed supply side economics many times on this blog and there are countless websites that compare the two economic models, Keynes vs Friedman. But this time I’m going to add a bit of history to the discussion. After all, if we can’t learn from our mistakes, we’re doomed to repeat them, and repeating them we are.
Supply Side Economics
Probably the best way to describe Supply Side Economics is Voodoo economics. This is the idea that if you give money to the rich, they will hire people and pay a good wage and the heavens will open and the angles will sing and leprechauns will dance. It’s also referred to as trickle-down economics.
In other words, people will run out and buy just because the stores are full.
Keynesian Economics
This is the old model of economics where demand drives the economy. In other words, when people have money they will buy.
Now this is obviously just broad strokes and there is a whole lot more involved in each of these models of economics. You may find yourself interested enough to learn economics and get into the nuts and bolts of these, but this is as technical as I plan to get.
Alright, so here’s the little bit of history I promised you. Neither of these perspectives of economics is new. Since the beginning of economic times, the concept of supply and demand has been the fundamental core of the study of economics.
However, back in the early days of America, the concept of unfettered free trade was the approach the government took and this freed up the companies to be as greedy and they could. This allowed America to become quite wealthy, or at least our wealthy became wealthy.
Of all the leading countries, we were becoming the most wealthy. This seemed to convince many people that if a little free is good, oh my gosh, totally free trade must be the be-all end-all of wealthy. So, in the late 1800s and early 1900s, America decided to pull all the plugs and let the rich get as rich as they wanted.
So by the 1920s we saw the roaring 20s when the wealthy were insane with their greed and wealth. At lease back then, they were smart enough to protect our industries through tariffs.
Then, the big crash.
Following the Great Depression, many economist admitted that the whole idea of completely unregulated greed was bad for America. At this time, Keynes came back to the idea that maybe really, demand drives the economy. This wasn’t the first time economics thought of this, but it was back in vogue.
Then, about 50 years ago, Friedman brought back the greed and supply side economics.
So, fast-forward to today and we’re all the rage back into supply-side economics and unfettered free trade. Of course, we’re also seeing the return of the economics of the Great Depression.
When will we learn from history? When we start exposing the idiots who keep pushing failed economic policies on us. When we eject the same people who got us in the First Republican Great Depression. The Republicans.
Unfettered Free Trade doesn’t work. All it does is impoverish a nation and make a handful of greedy people insanely rich.
Free trade doesn’t work.
Supply Side Economics don’t work. It’s a myth.
Voodoo Economics always brings disaster. Read your history.
Looking for a Leader
Friday, October 28th, 2011Looking for a Leader
Dave Speck
There’s an old joke, “Republicans want a leader, Democrats want a meeting.”
Jokes are seldom funny unless there’s a grain of truth to them.
Stop. Before you read any further, answer the question, do you think the joke is true about your political party?
Now that we got that out of the way, let’s get to the point.
Go find yourself a copy of the US constitution and find who is supposed to be the leader of the people. It’s a short and easy read. The president? Congress? But if you don’t want to go check it out for yourself, I’ll give you a clue. There isn’t one!
The framers of our constitution and the forefathers of our country didn’t want there to be leaders. It is We the People who is supposed to lead the government.
And, what’s the best way to lead the government? Through meetings, negotiations, and compromise.
Got that? The Republicans make lousy American politicians because they try to be leaders. Take George W. Bush as an example. He acted like a leader. A lousy leader with all the wrong and stupid ideas but the Republicans loved him. Why would Americans love a leader who did the damage that Bush did to America? Because they have the mistaken belief that they need a leader. That’s what makes it so easy for a strong leader with destructive ideas to become the leader of the Republicans.
America doesn’t elect leaders. If you’re electing a leader, you’re doing the thing that our founding fathers didn’t want you to do. Don’t be a follower. Be a leader and tell your REPRESENTATIVES what to do.
Tags: conservative, constitution, republican, tea baggers
Posted in Politics | Comments Off