Inflation and Recession

Economically speaking, the aggregate demand for the U.S. economy represents the quantity of domestic products in general that are demanded at each possible value of the price level. If there is too much money being printed and in circulation, an increase in the aggregate demand pushes the price level up. If the aggregate demand continues to increase month after month, the economy will suffer from inflation – a sustained increase in the general price level.

When production falls and people lose jobs, two consecutive quarters to be exact, the economy experiences a recession.

The mainstream media pundits, who are not economists, but communication or English majors, are twisting themselves into pretzels, trying to redefine the term recession to spare embarrassment to their favorite Democrat president, Joe Biden, and his disastrous economic policies. They are counting on most Americans, with or without a college degree, not knowing basics of Macroeconomics.

If recessions are deep and sustained, they turn into depressions. Here are events in economic history that had affected American families deeply:

-          the depression of the 1890s after the rapid industrialization and railroad prosperity

-          the panic of 1907

-          the postwar depression following WWI

-          the Great Depression of the 1930s

-          the postwar recession following WWII

-          the 1974-75 recession with serious stagflation in the U.S.

-          the 1982-83 recession

-          the 1990-91 recession 

-          current inflation and recession under President Joe Biden

The economy also experienced dramatic deflations, sustained decreases in the general price level, such as the post-Civil War deflation, in the 1870s, the 1880s, 1921-1922, and 1929-1933.

The decline in economic activity during the Great Depression was the most severe in our economic history until the lockdowns of Covid-19 in 2020 from which world economies are still struggling to recover from due to the disastrous government interference in the free markets.

The Great Depression taught us that recessions and inflations take a long time to self-correct, and the right combination of economic policies, fiscal and monetary, must be adopted by governments. Are these economic policies successful? Not all the time.

To power large economies, crude oil and coal are necessary for energy and economic growth, not the unreliable green energy, solar and wind. Governments are expected to manage their economies so that “recessions do not turn into depressions and depressions will not last as long as the Great Depression.”

When rapid inflation occurs while the economy is growing slowly (“stagnating”), or in a recession, then we experience stagflation such as that experienced in the 1970s in the U.S.

The Federal Reserve, which is neither federal nor a reserve, but a private corporation since 1913, controls monetary policy, money stock and interest rates. When a competent person is at the helm of the twelve regions’ federal reserve banks, the Federal Reserve (Fed) can take actions to influence aggregate demand by changing interest rates up or down, making borrowing more expensive or cheaper, or by altering the money stock (supply). The Fed engages in buying and selling of securities and the printing of new fiat (Latin for “let it be”) money not backed by any goods or services, to control interest rates and the money supply.

Can the government stabilize the economy with its fiscal policies (federal taxation) or even manage it correctly? As history shows, the answer is no. One of the reasons is the out of control spending that Congress engages in which requires more money that we do not have enough of from taxation, money which then must be printed by the Federal Reserve’s printing presses or borrowed from countries like China.

Printing so much money without the backing of goods and services devalues the currency, i.e., the dollar. During the American Revolution, one dollar was worth 2 ½ cents. The Bureau of Engraving and Printing runs the printing presses since 1862 and produces dollars (“greenbacks”), using the same magnetic ink and special cotton (75%) and linen (25%) paper made by Crane and Company since 1879.

So, is inflation bad for everyone? It is if you look at it as unlawful taxation forced upon all Americans because they must pay so much more for their food, gasoline, medical care, travel, entertainment, housing, energy, etc. It is worse for the elderly and people living on fixed incomes who do not qualify for or are too proud to ask for welfare.

Debtors can come ahead in an inflationary environment. Earning $100 you borrowed two years ago becomes easier. What you repay in real terms is much less than the $100 because the money you use to repay the lender will not buy now what it would have bought two years ago.

 

Economic Miseducation

I have taught basic principles of economics for thirty years to groups after groups of college students who were often cross-eyed, bored, running late, playing with their phones, angry that I gave them too many notes, “hard tests,” and too many assignments which interfered with their busy social lives.  

Many students were there just to get a grade and to complete their useless social studies degrees on the way to an advisor’s assurance of a six-figure salary job on day one, an offer that would never materialize on their limited horizons. They did not care that their parents went in debt to pay for this college miseducation they received or that hard-working taxpayers funded their federal grants for four years. Most of them had no clue how the economy ran nor did they care.

It is painfully obvious that today students and college graduates are just as woefully incompetent and uninformed. They are voting in droves for their Marxist/communist of their choice, falling for empty promises of free education in their communist utopia of free birth control pills and free legalized drugs.

None of them paid attention in Economics classes that in communism abortion is not a choice, birth control pills are not available or expensive, and drug use is punishable with hard time in jail.  Education is free technically but there is no room to educate everybody in the halls of higher learning, so only a select few are chosen, usually the elite’s children are picked first, regardless of grades. If there are places left, then those with the highest scores are admitted.

Someone who spends a lot of his time running computer models to predict economic downturns, upturns, bubbles, crashes, and collapse, attempted to educate the audience on Facebook. Most of his advice fell on deaf ears because people are tired of listening to anybody, they know it all already, and have already made up their minds to go full speed ahead off the cliff, they want to try things for themselves, why listen to reason and rational thought. Repeating failed history in hopes of a different result seems enticing to most people.

In his analysis, in an economic environment of “120 percent debt to GDP ratio, we have less than five years before economic implosion.” He defined “Point Zero” as the point where the national debt becomes 120 percent of GDP, an unsustainable scenario that would cause an unrecoverable spiraling downturn of the economy. A black swan event would make things much worse.

In order to make sure the economy becomes sustainable again in the face of a 19 trillion national debt, “entitlements” must be reformed, spending and waste must be cut, some regulatory burdens on corporations must be reduced or eliminated, and taxes must be raised.

And this does not even begin to address unfunded liabilities such as Social Security and Medicare. Entitlements comprise 70 percent of the budget and debt servicing is 10 percent. This leaves just 20 percent of the budget that can be cut. Is that sufficient to even begin reducing the huge national debt?

Cutting the corporate credit card will force Congress to balance the budget. They cannot spend more than they take in from Treasury auctions and taxpayers. How many Congressmen will risk their careers in order to do what is right? Congress does not seem willing to address any of the above because they do not want to compromise their political careers and thus destroy the power they yield in Washington.  

Even though both spending cuts and tax increases are necessary, Congressmen fight and politically posture on both sides of the isle while nobody’s pet project or state funding gets cut. Why are Congressmen unwilling to cut pet projects? When they do, they know their constituents will vote them out of office.

We keep giving money to the U.N., we fight unwinnable wars with strange rules of engagement, and we waste more money on our political friends and foes overseas at a time when we can ill-afford it.

To make matters worse, inflation is looming on the horizon because of the three quantitative easings (QEs), printing money without the backing of goods and services in order to purchase our own debt.

The corporate mandate of the Affordable Care Act (ACA) has not even taken full effect yet. We are not sure if Congress will repeal Obamacare without a replacement. The preexisting conditions’ feature of ACA is a good idea.  In spite of dishonest political rhetoric, nobody will die in the streets without medical care.

But there is rationing occurring already due to the burgeoning and very expensive bureaucracy. We cannot offer care to more people and illegal aliens without substantial costs to the nation which so far seem to be far greater than if we would have given free premiums to the millions of uninsured who, before ACA, could not secure nor afford medical insurance. Some of them were already recipients of Medicaid.

We are sitting on a social unrest powder keg as evidenced by Ferguson, Baltimore, the Black Lives Matter, the collegiate race-baiting violence, and ISIS coming to our shores via unprotected borders. The social cohesion is breaking down faster than you can say All Lives Matter.

Even though our national debt to GDP ratio is quite high (104.7%), our economic situation is slightly different than Greece’s because we can print our own dollars. http://www.tradingeconomics.com/united-states/government-debt-to-gdp

Our fiscal policy is in a mess. Taxation burdens the middle class and favors crony capitalism while spending is out of control.  Almost 50 percent of the country does not pay any taxes and crony corporations move their headquarters to other countries to avoid paying proper share of taxes. Because corporate tax in the U.S. is one of the highest in the world, Congress enabled corporations to move overseas via Congressional bills.

The burden of taxation falls on the middle class yet again. TPP is going to move most of the remaining manufacturing sector overseas, transforming U.S. into a service economy and destroying many blue collar and white collar jobs in the process.

Congress originates the spending bills and approves them. The President can express what he wants and signs or vetoes bills, but the ultimate spending power and control rests with Congress. Congressmen are few and far between who have strength of character or the will to do what is unpopular. Nobody wants to be perceived as hurting parents trying to feed their kids, put a roof over their heads, or as “throwing grandmas over a cliff.” So the out-of-control spending continues to balloon.

American citizens themselves do not want to give up their instant gratification and suffer without their Starbucks coffee and the pain or indignity of a less than 75-inch TV or other electronic gadgets that are creating the blue screen hunchback nation. Why bear responsibility for yourself when Uncle Sam can do it for you?

Presidential hopefuls make promises to the electorate that will not reduce debt substantially in the absence of a robust and sustained economic growth that would bring in additional revenues. Some talk about “entitlement” reform by increasing the retirement age. Proposals to create economic growth are not very encouraging. There is no magical pot of gold at the end of the rainbow, nor another bubble that would bring in enough revenue to offset the very large budget and reduce the unpayable national debt.

Climate Change Causes Everything So Let's Fundamentally Change Our Economy

Photo: Ileana Johnson 2014

As the global warming alarmists tell us that the science is settled, there is no debate, and government bureaucrats are going full-speed ahead with taxation plans that will further weaken our already suffering economy, honest and wise politicians like Delegate Scott Lingamfelter of Virginia ask, “let’s see the physical science, not the political science before we strap Americans with huge taxes as the Obama Administration wants to do.” We should not formulate public policy such as carbon tax when the real science is constantly changing.

Hurricane Central has reported that “The 2014 hurricane season has fallen into a slumber heading into the final days of the season’s peak month.” http://www.weather.com/news/weather-hurricanes/atlantic-hurricane-season-2014-update-quite-20140922

However, we don’t want to mix catastrophic weather events with climate as the global warming alarmists do. We could have a late arrival hurricane like Sandy.

The planet’s climate has been changing for millions of years yet, if you ask a climate change alarmist, they are unable to tell you what the appropriate temperature of the planet should be or what it was 200 years ago. As it stands, the earth has been in a cooling period for the last 18 years. It explains why the enviro-globalists have changed the name of their taxation and control agenda from global warming to climate change.

Scientists are constantly revealing the negative and dirty cost of clean energy promoted by enviro-bureaucrats; renewables like wind, solar, and biofuels have negative effects on humans and animals who happen to exist in the vicinity of such sources or depend on food produced from corn.

The Smart Meters controversy is finally reaching a fever pitch with the battle moving into the mainstream. Consumer advocate Ralph Nader called smart meters a “step toward technological despotism. http://www.takebackyourpower.net/news/2014/10/02/ralph-nader-smart-meters-a-step-toward-technological-despotism/

The Wall Street Journal stated that “one in 10 cell/grid towers violate FCC’s safety guidelines.”  According to the FCC,  radio frequency radiation is a serious problem since at very high levels, “RF can cook human tissue, causing cataracts and temporary sterility and other health issues.” http://online.wsj.com/articles/cellphone-boom-spurs-antenna-safety-worries-1412293055

The FCC set two limits “to buffer people from these ’thermal’ effects, limits on how much radiation frequency people can absorb—one for the public, and one “occupational” limit five times higher for people who are trained to work near antennas. “ Perhaps their skin cooks five times slower? “A German study in 2013 found higher emissions from 4G antennas.” http://www.mcf.amta.org.au/newsletters/Mobile.InSite.May.2013?Article=39384

Cash-strapped families in Ireland had to pay water bills in excess of 240 euros a month thanks to smart water meters. http://www.irishmirror.ie/news/politics/outrage-revealed-politicians-wont-pay-4354752

Citizens who refuse smart meters for health reasons and privacy issues have to pay higher upfront fees and monthly reading fees that vary from state to state, anywhere from $35-$95 per month. Other customers are abused by a system that uses the police state to force citizens into compliance.

Customers who had their traditional meters replaced by smart meters are now paying much higher electric bills although their consumption has not changed. Some customers lost their homes to smart meters that caught fire or exploded.

According to the Chicago Tribune, Malia “Kim” Bendis of Naperville, Illinois, after being arrested on January 13, 2013 for filming the installation of a smart meter at Jennifer Stahl’s home, was recently acquitted of the charge of “misdemeanor of resisting or obstructing a peace officer.”  http://www.chicagotribune.com/suburbs/naperville-lisle/chi-jury-gets-naperville-smart-meter-case-20141001-story.html

While we are trying to be conscientious protectors of the environment and want clean air and water, we are not interested in destroying our economies and our way of life for the unfounded fears and exaggerations of those who stand to gain from their draconian environmental agenda.

The World Council for Nature’s mission statement explains, “But our interest in the conservation of nature does not mean that we forget about people: we shall also defend human populations against aggressions that have the same origin.” http://wcfn.org/

Mark Duchamp, President of WCN, fights in particular against the health damage that wind turbines and solar plants cause animals and humans. In his October 6, 2014 press release, Duchamp stated that “health authorities refuse to measure accurately infrasound and low-frequency noise emitted by wind turbines; they are obviously protecting the wind industry.”

Wind turbines blast nearby residents non-stop with low frequency sound (LFS). Lack of restful sleep causes exhaustion coupled by, according to testimony, a “deep, drumming, rumbling sensation in the skull behind my ears which is like pressure and often a pulsating, squeezing sensation at the base of my skull. I also experience irregular heartbeat while I am trying to sleep and while I am relaxing (sitting or reclining) in our house. I did not have any trouble sleeping before the turbines started operating.” http://waubrafoundation.org.au/resources/david-mortimers-statement-cherry-tree-hearing-at-vcat-jan-2013/

Mark Duchamp cites Dr. Marcus Drexel of the University of Munich whose study found that “low frequency sound can affect the active micromechanics in the human inner ear.” http://en.friends-against-wind.org/doc/140166.full.pdf

As much as 30 percent of the population is sensitive to LFS. Some individuals have persistent headaches, insomnia, and depression.  http://www.dailymail.co.uk/sciencetech/article-2775222/Could-living-near-wind-farm-make-DEAF-Low-frequency-hum-damage-inner-ear-experts-warn.html#ixzz3FQeQO7B3

Mark Duchamp said that we live in “a world where the wind/climate coalition has successfully blocked official research on LFS emitted by wind turbines since the Kelley Studies in 1985-1987.”

It is hard to understand why governments subsidize and investors throw money into bigger and bigger wind farms and solar plants when the energy is unreliable, expensive, insufficient to satisfy our large economy, a health hazard to humans and to wildlife, and it requires the use of such vast swaths of land.

The thermal flux from the solar panels fries millions of birds in mid-air and even evaporates them completely. Birds mistaken the huge mirrors for water and dive to their deaths. The huge wind turbine blades chop up millions of birds and bats.

Dr. Klaus Kaiser described how Germany’s Bard 1 wind farm became finally operational in March 2014 following years of delay. After connecting to the grid and beginning to deliver energy, the AC-to-DC converter station experienced a “meltdown.” The replacement converter was shut down a few days later. http://canadafreepress.com/index.php/print-friendly/66002

The EPA is closing our coal power plants with their outrageous regulatory demands while China, India, France, and Hungary are building new power plants and nuclear ones. We are destroying our economy in order to satisfy the environmental lobby’s ever more onerous regulations to protect Mother Earth which is already pretty clean in the U.S., while other countries like China and India are polluting away.

©Ileana Johnson 2014

 

 

 

 

 

 

 

 

 

 

The Climate Change Industry

"The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.” 
-  John Adams, a Defense of the American Constitutions

Sunset on York River Photo: Ileana Johnson, 2014

I am not sure who coined the term “climate change industry” but it is an apt description of the snake oil salesmen who have become billionaires on the unfounded fear of debunked global warming and of climate change based on manufactured consensus science.

The climate has been changing for millennia in cyclical periods dominated by either unusually cold or unusually hot temperatures. It is convenient to the promoters of the climate change industry to deliberately confound weather events with climate.

Having declared that the “science is settled,” the global warming scaremongering environmentalists are moving on to the next target of limiting our property rights and freedoms via taxation. Case in point, the Washington Post reported that the “U.S. Forest Service wants to charge $1,500 to take photos on federal wild lands.” https://www.washingtonpost.com/blogs/govbeat/wp/2014/24/us-forest-service-wants-to-charge-1500-to-take-photos-on-federal-wild-lands/

U.S. Senator Ron Wyden stated that “The Forest Service needs to rethink any policy that subjects noncommercial photographs and recordings to a burdensome permitting process for something as simple as taking a picture with a cell phone. Especially where reporters and bloggers are concerned, this policy raises troubling questions about inappropriate government limits on activity clearly protected by the First Amendment.” http://www.oregonlive.com/environment/index.ssf/2014/09/forest_service_says_media_need.html

The “climate change industry” is admitting through a Freudian slip that their agenda of climate change is “disrupting national economies, costing us dearly today and even more tomorrow.” OK, they were referring to the fact that global warming/climate change is affecting our lives. Of course climate has been changing and we are in a cooling period now but truth cannot impede the liberal political advocates’ agenda of taxing rich countries more, spreading the wealth, and destroying our economy in the name of protecting Mother Earth.

The “climate change industry” has managed to transform a natural phenomenon of climate change into a global disaster that needs to be addressed by bureaucrats through taxation and through weather modification spraying of chemicals into the atmosphere. This spraying of chemicals (chemtrails) is really affecting the weather and the growing season for agriculture, reducing yield.

Electricity costs are going up, smart meters that catch on fire have been installed everywhere in order to control people’s energy consumption and in-home ambient temperature, and many electricity generation plants are scheduled to be closed due to EPA regulations passed under the guise of climate change. The government’s all-out assault to redress climate change through regulatory and financial control is having a serious impact on our economy, the coal industry, the oil industry, and on everybody’s lives.

The “climate change industry” has become such a religion of environmentalism gone berserk that they are now trying to ban farming.

Because the Commonwealth of Virginia passed a law in 2014, also known as the Boneta Bill, named after activist farmer Martha Boneta, a law meant to protect small farming but highly opposed by conservationist activists and environmental NGOs, a “land war” is taking place in the historic York County. According to Watchdog.org, “more than 130 Dandy residents have signed a petition asking the Board of Supervisors to ban commercial farming.”

The “land war” started with a court challenge by Anthony Bavuso, a local oysterman, who is of the opinion that York County cannot require him to purchase a special use permit for his oyster-farming operation at York Point.

York County Attorney James Bennett believes that local officials can obstruct the law, “asserting that the county of 66,000 people could cite lot sizes and other considerations to quash farming activities.”  www.watchdog.org/170548/county-farming-ban/

Martha Boneta told watchdog.org that “Property rights and freedom are inseparable, and I am heartbroken that family farmers may no longer be able to engage in farming on their land.”

Joel Salatin, a farmer and farming rights advocate, said, “I think we have too many people trying to tell other people what to do.” That is exactly the intent of the environmentalist/property rights control agenda.