Donate to JWR

Home
In this issue
December 2, 2014

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Nov. 28, 2008 / 1 Kislev 5769

The free market consensus 1989-2008: RIP

By Dick Morris & Eileen Mc Gann


Printer Friendly Version
Email this article

http://www.JewishWorldReview.com | The subprime mortgage crisis is only the Sarajevo which caused the financial collapse. The real reason is the massive explosion of debt at all levels and in all forms that has engulfed the world. Since 1992, the total of debt in the world has gone from a level equal to global GDP to a level that is now 3.7 times as much as global GDP. This debt explosion, explained in Charles Morris' book (no relation) The Trillion Dollar Meltdown, consists not only of mortgages, but bonds for corporations that can't repay them, credit cards for consumers who are neck deep in debt, car loans for drivers who can't meet the payments, student loans that are swamping young couples, and default insurance sold by companies that can't make good on their commitments. This massive debt has to be sweated out of our global economic system like a heroin addiction.


But we won't have to go cold turkey. Governments around the world are committed to mitigating the pain. They are not about to ask us to go through the agony of another Great Depression. They have learned the lessons of the 30s. So government will ease our pain with stimulus packages and corporate bailouts to protect us and the companies that sustain our employment base. These bailouts and stimuli will not solve the problem. They are simply pain killers - methadone - designed to mitigate our suffering. It is only the private sector shakeout, "creative destruction" in the words of Joseph Shumpeter, that can eradicate the bad debt and bring the economy back to health. To fail to go through this process would put us in the same situation as Japan, which evaded a reckoning with its bad debt crisis and has suffered with twenty years of stagnation as a result. But to go through withdrawal, even with methadone, will be a long and painful process.


Liberals — demand siders — and conservatives — supply siders — disagree on the remedies for the crisis. The demand siders feel that we need to stimulate demand by passing out checks and cutting middle class taxes. The right points out that this will only be a drop in the ocean of global demand and that much of the money will be used for debt reduction and to buy Chinese products. The supply siders plead for a cut in corporate taxes and capital gains levies. Critics say that the current lack of confidence in the economy inhibits investment no matter how much the tax code incentivizes it. Both solutions and both criticisms are correct. The proper medication - the right methadone - is a balance between the two.


But, conceptually, what is happening is the end of the consensus around free market economics engendered by the fall of communism. The era of free market consensus lasted from 1989 through 2008. It is now over. Bush and Obama will leave us with a legacy of government regulation, at a minimum, and control, at the maximum, over the economy. When the Republican version of the bailout, calling for loans and insurance instead of outright grants of money to corporations, was rejected (thanks to John McCain), the fate of the free market era was sealed. With the bailout cash came the reasonable demand for "equity for the taxpayers" in return. Enter the government. Now the federal government is the major shareholder in most of our important financial and insurance companies and in many of our manufacturing corporations. Now we hear this leverage articulated in reasonable demands for limits on corporate executive bonuses and compensation. But soon it will metastasize into calls for a public voice in lending policies and government management and control. Obama and a top heavy Democratic Congress will accelerate this trend and there is nothing the Republican Party will be able to do about it.


In the meantime, Obama will pass his entire radical agenda by dressing up the expansion of health insurance and his other schemes as part of a "stimulus package." Thus sanitized, the most massive pork barrel in history will be rubber stamped in a matter of days by the new Democratic Congress.


Obama will be freed from the discipline of the balanced budget. With a bi-partisan consensus t hat deficits are vital in fighting the crisis (or mitigating the pain) there is no constraint on Obama and his party. The sky is the limit on spending. Indeed, spending is now a national duty.


The inevitable result is massive inflation. And since the deficit spending will have been simply to reduce the pain of the depression and not to cure its cause, it will be a stagflation beyond anything we have ever known. A depressflation.


Then the question will be: When will we realize that government controls are magnifying, not solving the problems that caused the depression? When will the patience of the public with Obama's remedies run out? When will we realize that the inflation the deficits are causing are more painful than the unemployment they are mitigating? Eventually all this will come to pass. Our guess is 2010. But maybe it won't be until 2012 or alter. In the meantime, the era of big government is back!

Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.


JWR contributor Dick Morris is author, most recently, of "Fleeced: How Barack Obama and Hillary Clinton, Media Mockery of Terrorist Threats, Liberals Who Want to Kill Talk Radio, the Do-Nothing Congress, Companies ... Are Scamming Us ... and What to Do About It". (Click HERE to purchase. Sales help fund JWR.) Comment by clicking here.



Dick Morris Archives


© 2008, Dick Morris

Columnists

Toons

Lifestyles