It has recently come to my attention (thank you, George Warren http://goo.gl/Sj1nz) that the economist Steve Keen has proposed a solution to our economic woes: the government should give people money to pay off their debts. According to Keen it is the high level of private debt (about three times that of annual U.S. GDP http://goo.gl/5JxK0 ) that is causing the economy to move so sluggishly. While enormous artificial debt creation did indeed foster the previous boom and our current bust, Keen has erred in both identifying the root cause of this debt explosion as well as an appropriate solution.
According to Australian economist Steve Keen, capitalism’s crises have always been a product of the financial sector funding speculation on asset prices rather than just funding business expansion and innovation. Regardless of the endless inducements from the finance sector to lead the consumer into debt, commitments by the public to necessary personal debt are generally related to and regulated by their personal income. Commitments to debt for the purchase of speculative assets, on the other hand, are related not to personal income, but to expectations of leveraged profits on rising asset prices–when the factor most responsible for causing the growth in asset prices is accelerating debt. In the early 2000s, homes became such an asset.
This allows financial sector profits to grow far larger than is warranted, on the foundation of a far larger level of private debt than society can support. That is where we are now with total private debt of $45 trillion, about three times our Gross Domestic Product. Such lending led to a positive feedback loop between accelerating debt and rising asset prices; leading to both a debt and asset price bubble. The housing debacle of the early 2000s is a prime example. The asset bubble must always burst–because it relies upon ever accelerating debt for its maintenance–but once the asset bubble bursts, society is still left with the mountain of debt. When asset prices fall, and the debt remains constant, this is referred to as being “under water.”
I had a strange dream last week. I was racing down a road on a runaway horse. When I reached for the reins, there were none because the horse was dragging them. This was a strange dream because I don’t ride horses and I never dream about horses. Also, most of my dreams have no rhyme or reason, but when I thought about this dream it suddenly became crystal clear. The horse was our government which is barreling down an unfamiliar road. It is not a road to prosperity but a road where the government is intent on income redistribution and is strangling our free enterprise system with rules and regulations.
Even the missing reins are obvious. Our founding fathers were very concerned about an oppressive government and gave us two protections to prevent this. One was the Constitution which divided the power between the Legislative Branch, the Executive Branch and the Judicial Branch. And even with this separation of powers, there are many other checks and balances. For example the President is the Commander in Chief of the military but only Congress can declare war. The President has the power to make treaties but two thirds of the Senators must concur. Presidential appointments, likewise, must be approved by the Senate.
The Constitutional reins to government are missing. The President uses czars to bypass Senate approval. The President ordered an attack on Libya, firing hundreds of cruise missiles into the country without notifying Congress. The administration declared that it wasn’t a war; it was a “kinetic military action.” Last week the President issued an executive order that Federal employees and Vice President Biden get a raise. The Constitution states that spending bills originate in Congress.
“The majority of us lead quiet, unheralded lives as we pass through this world. There will most likely be no ticker-tape parades for us, no monuments created in our honor. But that does not lessen our possible impact, for there are scores of people waiting for someone just like us to come along; people who will appreciate our compassion, our unique talents. Someone who will live a happier life merely because we took the time to share what we had to give. Too often we underestimate the power of a touch, a smile, a kind word a listening ear, an honest compliment, or the smallest act of caring, all of which have a potential to turn a life around.”
Lots of people ask when they should cut back their roses, when they can prune their shrubs or fertilize their lawns. So I thought I would share some monthly highlighted events that should occur in each month; and January is the perfect place to get started.
We are very fortunate to live in the South where Mother Nature is very lenient with us. For 10 months or more we can get some manner of blooms, and in those two remaining months, we will have berried shrubs along with those fragrant winter bloomers like Lonicera fragrantissima (winter honeysuckle). Our open winters make it more difficult to grow shrubs that need hard cold to force their blooms, like lilacs; although there are a few varieties that have been bred to deal with our heat and humidity. Check out ‘Miss Kim’ lilac if you miss that beautiful scent from your home place.
Even though we don’t often get hard freezes here, it is a good idea to check around your plants for soil heaving; and add additional leaves or straw around tender plants, but never cover cold-loving plants such as peonies. If we should get ice or heavy snow, resist the temptation to shake it off the branches. Japanese maples have particularly fragile branches and they will break off easily, destroying that beautiful shape you paid for.
We inevitably will get a mild spell when you can sow hardy annuals like poppies and sweet peas. Other annuals can get a head start in a cold frame or indoors. If the ground isn’t frozen you can move perennials if you need to, although I’d rather be indoors planning the new garden. There is still time to plant viable bulbs, provided you have given them “chill time” in the refrigerator or purchased “pre-chilled” bulbs (BrentandBeckysBulbs.com does sell them).
These days, it seems that everyone is trying to cut costs, which sometimes has the result of leading otherwise sensible people down strange avenues.
William Escobar, 40, of Moorpark, Calif., attempted to capitalize on consumers’ weakness for a good deal by offering discounted dentistry – from his bathroom.
Allegedly, Escobar offered a number of services, including cleanings, extractions, and “illegal orthodontics” (Escobar’s specialty), all within the friendly confines of where his family typically frees themselves of their daily burdens.
Personally, I consider Escobar’s innovative change of venue to be quite clever. After all, where is personal dentistry practiced on a daily basis?
Yep, think about that for a while...
Dentistry wouldn’t be singular among the sciences by attempting to simulate the comfort level of home for their patients. Psychiatrists have offered their guests couches since the early years of the discipline to promote relaxation.
Bathrooms could become busy places if more specialties fully recognize Escobar’s ingenuity. Urologists, OB/GYNs, and (shudder) proctologists could all lay equal claim to the porcelain paradise’s soothing pleasures.
Can’t you just see a rash (or any other type of infectious symptom) of similar practices springing up elsewhere?
Sadly, Escobar suffered the fate of many trailblazers in history; he was charged with several charges, including felony practice of dentistry without a license, after a month-long investigation by the authorities in Moorpark.
According to Sgt. Victor Fazio of the Moorpark Police Department, an ungrateful, cut-rate customer ratted on Escobar.