The American Dream – Part 3 — The Couth Hillbilly

Every time I try to get to other issues inherent in The American Dream the financial aspects keep intruding.

Even though I was on the road on a genealogical trip, the talk of a double dip has been unavoidable these few days past. I feel compelled to respond.

Once again, most of the commentary you’ve been hearing makes as much sense as gibberish. Need I say why?

Is this in any way related to The American Dream? You can bet your bottom and your dollar.

Let’s just quickly remind ourselves that our all-time favorite double-dip was in 1937. After using a watered-down form of Keynesian Economics to almost pull us out of the recession, FDR was convinced by the scaredy-cats to balance the budget. Just look at the graph.

Here it is in a capsule: In bad times the economy suffers from a lack of cash flow. You can’t supply it. The banks (presently sitting on $2 trillion) refuse to supply it and business either can’t get a loan or is afraid to supply it until the economy recovers (hurray for the capitalist risk-takers).

That means government goes into debt during the bad times. The Republicans’ and Blue Dog Democrats’ economic ignorance insists on a balanced budget, as they did in 1937. No one who believes what they profess to believe belongs in a responsible position in government or the private sector. Take one daily, or as needed.

Anyway, this time, that is only a part of the problem. Japanese refer to the 1990s as the “Lost Decade.” They went into a recession that lasted for about 10 years. We seem destined to do the same, but only in a small part for the same reasons.

I just couldn’t resist the juxtaposition of the expected economic results of a major party responsible for it with his identifying initial.

The fact that a graph of the actual results of his incompetence won’t really match his initial doesn’t detract from the humor. We can’t afford to let any chance to smile pass us by, even if it comes from a sort of gallows humor. Well, back to predicting the future.

While there continues to be the very real danger from the Neanderthals, what should be seen as our major problem is The American Dream. What is everyone saying is our primary priority? Jobs.

This week’s stumble in the stock market is based on the latest housing report. Last month saw the biggest decline in housing since we moved out of caves. It isn’t just the number of people working in the housing sector, as noted in a previous part, it holds the biggest part of our financial system hostage.

Until the housing market rebounds, or slowly crawls back up on its walker, the economy can’t recover; at least recover the way we prefer.

Obama made a major mistake. He compromised on the stimulus and cooperated with his predecessor on crafting the bailout. He should have held out for a rational stimulus program. The $250 rebate was not stimulative. Every compromise he made to get votes for the bill weakened its ability to stimulate.

If he had stood his ground and let the professional simpletons block the stimulus we would have seen, have experienced the results of the block-heads. It would have been a great object lesson. He would not be bothered any longer by the little pests snipping at his heels. He could have actually increased his majorities in the House and Senate.

But, you say, it would have caused great pain to the general population. True. The fact is that we have luxuriated in the debt economy for 30 years. We have to pay the bill. It is way past due. Pain will accompany the necessary corrections. The pain can come quickly or slowly. It can come now or later. Whatever, whenever, it must come. The devil wants his due.

I was just trying to express the point that by letting the people whose bizarro economic nonsense got us into this mess try to get us out, the point would be made so clearly only the 18% that doesn’t hate Congress would fail to be disabused of these irrational, perverted verities. It would be painful but help us avoid so much more pain in the future.

The odds are that you know someone who wants or needs to sell their house but can’t in the present market. You may know or know of someone who has lost their job. There have been millions of foreclosures. There are millions more in the pipeline. Each one was The American Dream. Each one represents a dream lost, a dream replaced by a nightmare.

The dream is so deeply ingrained in us that it is entangled with our psyche. It is tied to our perception of our own worth. We lose the dream, we see ourselves as a failure.

Others see us as a failure; even our loved ones. Moving into a rental or an apartment that better suits our needs cannot assuage the hurt, the loss.

But, let’s return to those millions and millions of houses flooding the market. There aren’t enough buyers. Qualified buyers with access to mortgages are even rarer.

This being the case, how do prices rise to boost our economy? They don’t; at least not for a long time. Remember Japan. The government can allay some of the worse aspects of this mess. The government can eventually get us back to what can be described as a recovery but not today, not tomorrow, not in time for the next election.

The American Dream had, indeed still has, its appeal but that appeal comes at a steep price. Our mistake was in only looking at one side of the coin, the shiny side. The housing market has become not the engine that drives our economy, rather the drag.

As a supertanker may take miles to make a U-turn, size similarly bars any degree of agility to the housing market. Our economy is not sufficiently diversified. There are no other sectors that can readily compensate.

We used to have a large manufacturing base. We starved it, then shipped it overseas. I often wonder why those who saw industry moved from the rust belt to the bible belt never realized just how movable our jobs were.

As an aside, the latest surveys show that American-made cars are in the lead for quality. That may be temporary or not. The lesson to be learned is that no one stole manufacturing from us. We gave it away.

Actually, that particular we should be defined as all of the greedy, self-congratulating, overly well-remunerated idiots in charge of our corporations and their toadies inside the Beltway. Manufacturing, on a base as broad as this country, was so diversified as to avoid the concentration of the financial engine that we have with housing.

How we accomplish the blood-letting necessary in our real estate market to rid ourselves of that burden I don’t know, beyond patience. At some point we will need to refocus the economy to metropolitan centers and rural towns.

We will need to develop more urban transit. We will need to address other needs of infrastructure. We will need to change the face of America. We will need to change The American Dream.

Forget all of the talk about a double dip. That may happen. It may not. Either way the recovery will be long. Think in terms of a decade, not in quarters.