Tuesday, August 19, 2008

Tuesday, August 5, 2008

Your Presidential Candidate Doesn’t Matter (Subtitle: You’ll Be Worse Off Economically in 2016 No Matter Who Gets Elected)

That’s right – it doesn’t matter who’s elected President of the United States this coming November. At least it doesn’t when it comes to the economy and our present difficulties therein.

I’ve been in various social and professional circles where I hear a great deal of enthusiasm expressed for one candidate or the other. Invariably, I have provided the individuals participating in those discussions with much the same message as you see reflected in the title of this blog entry. As long as a country maintains a central bank that practices inflationary monetary policy, particularly as a tool for resisting recessionary forces, that country will experience growing economic pains, a weakening currency, and a widening gap between its haves and have-nots.

To quickly summarize: when inflationary policies are instituted, and money is created out of nothing, that money flows to entities that can utilize it before its price-raising effects seep into the larger economy. These entities (investment banks, corporations, the wealthy) can invest it or capitalize it in a fashion that is advantageous to them, such as by investing in real estate, stocks, derivative investments (options, collateralized debt obligations), or anything else for that matter. Then when the added money trickles down to the consumer (read: you and I), we are left with one thing: higher prices. Less purchasing power. Smaller paychecks. Whatever you want to call it, it’s not good.

Given the above, here’s a question for you: which candidate is talking about the activities of our central bank in the context of our economic woes? Which candidate has come out denouncing the inflationary policies of the Fed Reserve? Which candidate has advised against resisting the natural, corrective recessionary forces underway in the US market? You guessed it…none of them.

So where does that leave things? Well, it basically means that your economic situation is going to deteriorate over the next few presidential administrations, no matter which one of the candidates is at the helm. The underlying, root cause of our economic distress is not just absent from today’s political discourse -- if it is broached it’s met with mockery, disgust, or apathy (exhibit A: former candidate Ron Paul in any Presidential debate from the last year or so). Worse, our society discourages reading in favor of mind-numbing entertainment, so it is unlikely the masses will independently awaken to the effects of central banking anytime soon. Educating oneself in the area of financial literacy is also difficult, due to the complete lack of outlets for this subject. (Anyone still wondering why our schools don’t teach basic financial literacy?) Efforts in this area are left to the self-directed (see previous comment re: reading vs. entertainment).

Allow me to proclaim with even more emphasis the following: no matter who becomes President – Barack Obama or John McCain – your economic situation will be worse after the presumptive two terms that individual will serve. By worse, I mean some combination of the following conditions: less home equity, devalued investments in stocks and bonds, lower purchasing power, less available savings, more reliance on credit to buy the essentials, you name it. It won’t be pleasant.

Wednesday, June 11, 2008

David Walker Doing Yeoman's Work

David M. Walker, the former head of the Government Accountability Office, has been conducting a "wake-up tour" across America, attempting to shine a light on the fiscal challenges facing our country. I encourage you to watch his appearance on 60 Minutes, which occurred last year, at the following link:

http://www.youtube.com/watch?v=QxoP_9W6FC8

Also, check out this link:

http://www.petergpetersonfoundation.org/

Walker is currently leading the Foundation's broad efforts in the areas of enhancing "public understanding of the nature and urgency of selected key sustainability challenges that threaten America’s future, to propose sensible and workable solutions to address these challenges and to build public will to do something about them."

Friday, May 16, 2008

The UN Got it Right

I hate to admit it, but it's true. I read an article today titled "World economy on thin ice - U.N." with the accompanying subtitle "The United Nations blames dire situation on the decline of the U.S. housing and financial sectors." What is the significance of this, and how accurate is the assertion?

To answer these questions, one must go back at least as far as to the 1944 Bretton Woods conference, at which the US was granted the status of holding the world's reserve currency. As mentioned in a previous posting on this blog, the reserve currency status essentially translated into the fact that foreign currencies would be linked, or "pegged," to the US dollar; commodities such as oil and gold would be priced in dollars; and these dollars would be redeemable in gold if a country so chose to make the conversion. An advantage of this system for the US has been the fact that we are allowed to maintain a "current account deficit" -- mainly, carry a trade imbalance by importing far more goods than we export. (In even more simplified terms, consuming much more than producing.)

In the 1960's, the US underwent a significant increase in federal spending, as Presidents Kennedy, Johnson, and Nixon indulged in "guns and butter" programs that ratcheted up the federal budget deficit. These expenditures included the Vietnam War, Medicare and Medicaid, various other Great Society initiatives under LBJ, and so on and so forth. With all this spending, and not enough economic output to match it, the US went to the tried and true method of simply printing the needed currency.

This decision did not sit well with foreign countries that, by way of the Bretton Woods system, were forced to accept US dollars as their reserves. You see, with all of the money-printing occurring in the '60's, the dollar was steadily being devalued, thus decreasing the value of foreign countries' monetary reserves. It was then that many of these countries approached the US government and demanded redemption of their US dollars in gold. The problem was, there wasn't enough gold in our possession to redeem all of our creditors.

So how did we solve this dilemma? Simple: President Nixon simply decoupled the dollar from the gold standard in 1971. This action amounted to the US government telling members of the world economy "trust us" when it comes to our currency; in other words, trust us that our word is good when we say the currency is viable, and can be accepted as a legitimate form of payment with the backing of the full faith and credit of the US and its Treasury.

Fast forwarding about 35 years, and here we are with foreign countries stockpiling US dollars in their reserves, with little choice but to trust the US that our economy and our currency are healthy and able to withstand the recent perturbations in our financial system. As the article pointed out, these perturbations include the overall credit and housing crises that have wracked our economy. Both of these crises can be traced back to the monetary policy of the US Treasury and the Fed, due to the expansion of credit and the money supply, and the resulting debasement of the currency as inflation naturally follows.

Or is the only choice to trust us? The dollar as reserve currency is not carved in stone, and already, entities like the economic Group of 7 (G-7) have hinted that extreme weakness in the dollar could lead to significant changes in the global economic system. Change such as de-emphasizing the dollar as reserve currency, and possibly switching to another, stronger alternative. If this becomes the case, the consequences for our economy will be dire in comparison to what we are experiencing today. The reason being, once other countries are no longer obligated to accept the dollar in their economic transactions, there will be little reason to accept it at all, as it will be worth so little these countries will have lost any incentive to deal economically with the US. And why should they? We hardly produce anything anymore, and our massive appetite for consumption could gradually be replaced by other emerging economies with more robust currencies and trading potential. It will be at that point that the standard of living for Americans will plummet, and our economy will resemble those of third world nations. Then we will understand what the term "Great Depression" really means.

Saturday, May 3, 2008

Al Qaeda Understands the Gravity of Our Economic Situation

Now that I have your attention...

I'm posting an excerpt from the 2004 book "Imperial Hubris: Why the West is Losing the War on Terror," by Michael Scheuer. The book is an incisive examination of US foreign policy in the Middle East, but that fact aside, and given this blog focuses on economic issues, I want to hone in on a 2002 quote by al Qaeda's Abu-Ubayd al-Qurashi as provided by Scheuer. This quote appeared in the al Qaeda publication Al-Ansar and augurs prophetically as our economy teeters in 2008:

"On the other hand, we find that God has graciously enabled the mujahedin to understand the [American] enemy's essence and nature, and indeed his center of gravity. A conviction has formed among the mujahedin that American public opinion is not the center of gravity in America....This time it is clearly apparent that the American economy is the American center of gravity. This is what Shaykh Usama bin Ladin has said quite explicitly. Supporting this penetrating strategic view is that the Disunited States of America are a mixture of nationalities, ethnic groups, and races united only by the 'American Dream,' or, to put it more correctly, worship of the dollar, which they openly call 'the Almighty Dollar.' May God be exalted greatly above what they say! Furthermore, the entire American war effort is based on pumping enormous wealth at all times, money being, as has been said, the sinew of war."

Food for thought...how does America sustain a war that costs anywhere from approximately $500 billion to $1 trillion a year, while simultaneously meeting enormous fiscal social obligations to its populace and funding a gargantuan bureaucracy...while producing and saving little if anything?

Fire Up the Printing Presses

So this past week the government distributed tax rebate checks to the populace early, in order to attempt to jump start the ailing economy. The checks, part of an "economic stimulus plan," have made the whole of our citizenry unwitting participants in their own economic distress.

Before examining that statement closer, let's begin by firmly establishing the fact that any classical economist must surely be rolling over in his or her grave right now at the notion that an economy can be stimulated by the printing of fiat (paper-not-backed-by-anything-but-forced-to-be-accepted-by-government-decree) currency, thus adding to already staggeringly high levels of inflation. This illusion of wealth has consistently proven to be the downfall of once-vibrant economies and nations, yet our country remains in a halcyon state of economic perception.

Let's discuss inflation for a moment. Inflation is good...if you're one of the first entities to receive the freshly printed paper currency. This is because you have the transient opportunity to spend or invest that money before the effects of the inflation have seeped into the economy and prices have subsequently risen. A very good analogy here -- albeit one borrowed liberally from "The Creature from Jekyll Island" -- would be manifest in a game of Monopoly. Assume there were two participants in the game, and one of the participants opened a second Monopoly board game and took all the money from it for his own. By doing this he would immediately have magnified his purchasing and investing power. It's likely he could buy up all the real estate on the board before the other participant even had a chance to compete. Now consider what would result if both participants got their hands on the money simultaneously. Given the theoretical perfect timing of this event, all of the prices on the board for real estate and luxury items and whatnot would rise in unison. Thus, the extra money would have allowed for nothing but the payment of higher prices for the desired assets.

The problem with the second part of the analogy is that, in America, the average taxpayer doesn't even get that much of a break. You see, you and I are the last to receive the money on the financial totem pole in the form of our paychecks, and therefore, we are indeed left with the risen prices. But unlike the Monopoly analogy, we do not have the benefit of receiving a commensurate increase in wages to cope with the inflation. So each year, prices rise, goods become more expensive, and our wages fall further and further behind the price curve. Eventually, we turn to credit to be able to afford the things we want in life. When was the last time your friends, neighbors, or family members bought their car in cash? Or their plasma TV? New furniture? Vacation? Anything? The reality is, if you're anywhere near the median income in America, you buy necessities with your paycheck and finance almost everything else by loan or credit card. And now, with the latest financial debacle left steaming on middle America's doorstep, even the necessities like food and gas are rapidly cutting deeper and deeper into household budgets.

I'm sure by now most of you have seen the video clips on TV of US Treasury checks rolling hot off the printing presses in voluminous sheets. Those who save their check will soon regret it, as spiraling inflation will make the saved money increasingly worthless. The 2% the bank is giving you in your savings account will hardly make a dent in the 8-15+% inflation we're experiencing. Sure, the economic data like the Consumer Price Index (CPI) -- the official government barometer of inflation -- tells you that inflation is only 2-3%. (Isn't it amazing how the CPI is always either 2 or 3% every month? It hardly ever changes...in the context of a $14 trillion economy, shouldn't it fluctuate just a little bit?) The problem with this statistic is that it does not include the three things you care most about: food, gas, and the cost of your home. Interestingly enough, home prices died a recent death vis-a-vis the CPI...by 2006 they were going so high so fast the government just excised them from the CPI lest it end up skyrocketing. (They replaced them with rent prices.) Presto!...a little accounting adjustment here and there and we're right back at...2 to 3%.

Hopefully I've talked you out of saving the welfare check you just received. (If I haven't, save yourself the cost of an inflated postage stamp for mail-in deposits and just stuff the check under your mattress...same deal.) No, these checks are more likely to be spent by consumers on everything from the necessities to luxury items. And you might ask why I said earlier that these consumers are unwittingly participating in their own economic distress? The government printed this money with nothing of value backing it; therefore, the paper money will circulate into the economy, eventually raising prices and leaving cash-strapped consumers shaking their heads at the gas pumps and grocery aisles in 6 months, wondering how gas and food prices just jumped another 20%. The consumer has become the method of delivery for the inflation in this scenario: the government printed the worthless money, you spend it and inject it into the money supply.

Lastly, as if the above weren't bad enough, most of the items Americans will be buying with their checks at Wal-mart, electronics stores, and so forth are made in China or by other burgeoning economies. So not only will taxpayers be facilitating higher prices to be paid at a later date, but they will also aid in the enrichment of foreign countries. This is the reality within the US economy, one that is based 70% on consumer spending with a hollowed-out production base that has largely relocated to distant shores.

Sunday, April 27, 2008

You and I Aren't Part of the "Economy"

Or at least not in Mr. Don Luskin's mind, or most other pundits for that matter. You see, for these experts, the economy is already rebounding, earnings reports from major corporations like Google are beating estimates handily, the housing market is poised for an upturn, and the Wall Street investment banks are raking in profits again.

Consider the following quotes from Mr. Luskin's piece dated April 18, titled "Economic Recovery Already Underway." This piece was unfortunate in that Mr. Luskin has been known for libertarian economic views and overall support for the ordinary citizen from an economic perspective...thus making this piece all the more puzzling:

"And yet now, a month later, the economy has not gotten worse. Compared to the bleak expectations then, even just hanging in there would have been an upside surprise. But it's more than that. Things actually are getting better."

"Other than [GE's earnings disappointment], the news has been terrific. Look at what's come out of the technology sector the last couple days. Intel (INTC3), IBM (IBM4) and Google (GOOG5) all surprised big time on the upside. No falloff in world-wide technology demand at Intel and IBM. And no falloff in the consumer sector for Google."

"Industrial production was reported as rising 0.3% last month, when it was expected to have declined. That's a key recession indicator and it's just not indicating. The high-tech component of industrial production has been especially strong, currently at all-time highs."

"The worst is over. It's more than over. Consider what's happened in the banking sector. With Merrill Lynch's big write-off yesterday, and Citigroup's (C6) this morning, cumulative bank and broker losses from subprime lending and related credit craziness has come to something like $250 billion."

"They'd like you to believe that America has no economic future, that our best years are behind us, that we've run out of tricks. But it's not true. And Google's big earnings report yesterday proves it."

And the most inane...

"So what if there was some excess home building and home buying? So what if some stupid banks made some stupid loans, and some stupid home buyers took those stupid loans and now can't pay them back? It's a problem, I suppose. But in the end it's a side show. The economy marches on."

First and foremost, we need to find out where Mr. Luskin buys his gas and groceries. Apparently, it's much cheaper than where you and I are buying it. Or maybe people like Mr. Luskin are paid so handsomely that 100+% increases in their grocery bills don't register when they balance their budget. The fact that the above-quoted commentary makes nary a reference to spiraling costs of consumer staples is a startling omission to say the least. It's as if the daily challenge faced by the American consumer to make flat or only slightly increasing wages extend far enough to purchase the essentials is inconsequential to the economic state of affairs in America.

Having said that, let's examine some of the statements from his piece.

"No falloff in the consumer sector for Google." Of course there isn't...or at least not yet. What is being ignored here is that consumers are relying on credit, probably nearly exclusively, for buying the things that they want. Budgets are strained by the purchasing of food and gas, as well as paying the mortgage and car note, so the credit card becomes the only means of acquiring what the middle class desires. Eventually, as the credit crisis trickles inevitably down to the consumer level, the bridling of consumer spending will show up in Google's numbers. Plenty of other sectors have already begun feeling the crunch from less spending by their usual customers. In fact, the WSJ just reported on this phenomenon in the restaurant sector last week.

Mr. Luskin points to the industrial production indicator as a sign that there's just no recession in sight. The problem with this assertion is that it ignores the fact that the production in question may not necessarily be aimed at US consumers; the production output may very well be aimed at selling the products overseas to healthier economies. Even more so, to suggest that no recession is upon us simply because an economic production indicator rose by 3 tenths of a percent is bordering on irresponsible. Perhaps Mr. Luskin could sit down with and convince middle and lower income families of this fact...but I doubt it.

Regarding the Merrill Lynch and Citigroup write-offs, it's as if Mr. Luskin is celebrating the fact that another $250B of investment banking sludge has been successfully sloughed off and dumped onto the shoulders of the American taxpayer. Only in the world of the monetary elite is this an accomplishment worth touting. You see, the $250B that was "written off" is really handled roughly in the following fashion: the banks declare the loss; the Fed assumes the responsibility for the debt; the Fed monetizes it through the printing of money and addition of the loss to our overall national debt; the taxpayer experiences rising prices from the resulting inflation and higher taxes to pay off the burgeoning government debt.

"And Google's big earnings report yesterday proves it." So goes Google, so goes America. This facile connection between a Google quarterly earnings report and the state of the US economy belies the fact that the average American is meaningless when it comes to the perceived strength of the US economy.

As if the previous resolutions regarding US economic growth were not enough, the piece ends with a declaration of minimization of the housing bubble and the resulting credit implosion that it manifested. What Mr. Luskin and other experts fail to realize is that the credit crisis' worst effects have yet to find their way into our economic system. The bulk of ARMs have not reset -- but they will do so over the next 18 months. The impingement of people's budgets by higher mortgage payments has yet to be fully realized. The aftershocks will spread to their ability to purchase food, of which prices are already rising sharply; buy gas to get to their jobs or travel destinations; pay off car loans and credit card balances; and ultimately, stop buying the goods and services that are considered non-staples. This last item will show up in reduced consumer spending numbers, of which 70% of the US economy is based upon. When this occurs, the economic stagnation fostered by the housing bubble and credit crisis will be upon us in full force.

Before closing this entry, it is important to analyze another of Mr. Luskin's points. Early in his piece, he references the Bear Stearns collapse in the following paragraph:

"Just a month ago yesterday, markets opened to the news that the firm Bear Stearns (BSC1) had been vaporized and for no better reason than that investors had arbitrarily lost confidence in the venerable brokerage firm and all withdrawn their money from it at the same time. It was only the Federal Reserve stepping in with $30
billion in risk capital that prevented the Bear collapse from taking down world capital markets."

For no better reason than investors lost confidence? Amazingly enough, Mr. Luskin has found a way to foist the blame for the bank's failure onto you and I. Perhaps it was not enough to suggest throughout the piece that nothing is amiss in the economy while ordinary citizens struggle -- rather, adding insult to injury was called for as well. Bear Stearns' collapse is rooted in faulty investment decisions and downright financial alchemy that produced securitized debt that had no legitimate underpinnings for being packaged and sold to investors in the first place. To blame the BS collapse on investors is like blaming the Titanic sinking on the ship's wait staff.

Mr. Luskin doesn't stop there, however. He goes on to say that the Fed saved the day by injecting "$30B in risk capital" into the firm to prop it up. First off, what does he mean by "risk capital?" This term evades my understanding; perhaps the reader can illuminate it for the good of all. That aside, this comment makes forfeit any possibility that Mr. Luskin understands how the Fed works. The Fed has no capital in its "vaults." What it does have is the obligation to monetize US government debt and print money. Apparently, it now has the obligation to save any and all irresponsible large banking institutions as well. So the $30B of largess that the Fed supposedly provided to BS was simply a fresh sheet of money rolling off the printing press, creating the dual effect of rescuing a Wall Street titan while resulting in inflation in US and world markets. In other words, the taxpayer, not the Fed, unwittingly bailed out BS by shouldering higher prices and a greater tax burden.

I would close by asking the reader, the next time he or she is hearing or reading some report on the state of the US economy or the plight of the consumer, to listen for the reasons being given as to the current state of affairs. More importantly, pay attention to those reasons not being provided.

Saturday, April 26, 2008

Watering the Garden While the House Burns Down

As mentioned previously, the US central bank, or Federal Reserve as it's known, has the power to expand the money supply through the monetization of US government debt. This is a complex way of saying the Fed prints money against the amount of government debt it assumes on behalf of the US Treasury, and subsequently injects the printed dollars into the money supply. (Read "Creature from Jekyll Island" for an excellent description of how this literally occurs.) The result is that, with the increased amount of dollars circulating through the system, prices respond accordingly and move upward in reaction to the increased amount of capital in the economic system.

By now you've likely heard about the rice rationing at Costco and Sam's Clubs in the US, and the soaring commodities prices around the world that are causing food riots. These events are directly related to the Fed increasing the money supply and expanding credit through the artificial lowering of interest rates. But how, you might ask?

To answer this, we must go back at least as far as 1944. (1910 might be more appropriate, as that was the year the Federal Reserve Act was formally conceived of by several bankers and one US Senator; or even to the late 18th century when Thomas Jefferson and Alexander Hamilton stood on opposite sides of the fence regarding central banking; but to do so would be to digress too far from the topic at hand.) In 1944, with WWII nearing its conclusion, the world powers who were the presumptive winners of the war convened at Bretton Woods, New Hampshire to discuss the economic world order post-WWII. One of the major decisions made at this conference was that the US dollar would be the world's reserve currency. Other foreign currencies would be pegged to it, and commodities would be denominated in it. Thus, today you see oil, as well as commodities such as wheat, corn, sugar, coffee, rice and so on, priced in dollars. It should be relatively clear then that any significant fluctuation in the supply of the US dollar would cause noticeable price movement in commodities. As the Fed prints dollars, these dollars eventually make their way into global circulation, affecting markets all over the world. The more dollars in the system, the greater the share oil and other commodities producers will claim through the act of raising their prices.

Lately, there have been a few events that will precipitate the printing of more dollars: the $150B economic stimulus package (many taxpayers will be receiving their checks this week), the $200B Bear Stearns bailout, and various bailouts aimed at homeowners facing foreclosure due to the credit crisis. Of course, one must also take into account other massive federal expenditures, such as the $3 trillion Iraq war, to even begin gauging the total debt that must be monetized by the Fed.

Therefore, it should be no surprise that oil and commodity prices are spiraling upward, leading to cost pressures in third world countries and subsequent shortages and riots. For more well-off countries such as ours, it means potential rationing, longer lines at grocery stores, and a larger percentage of our personal budgets being allocated to the basic necessities such as food and gas.

Amusingly enough, none of the so-called experts on television, or in the print media, are applying the appropriate degree of focus to this aspect of the problem, if they are even mentioning it at all. (Exception to this rule: Peter Schiff of EuroPacific Capital. Catch him every time he is on CNBC, Fox and the like and you'll get an accurate dose of reality.) In fact, the Wall Street Journal has taken to describing the problem as "inflationary psychology," as if the rising prices were a result of some form of mental perturbation amongst consumers. CNBC panelists speak of the soaring prices as if they were caused by voodoo magic, outside the realm of basic economic principles. Any and every other plausible explanation is posited -- unusually high demand, bio fuel consumption, production shortfalls -- besides the one that is right before us: the expansion of the money supply by the Fed.

And so as the title of this post suggests, the focus is being placed on the wrong, or certainly less important, areas when attempting to answer the question of where the rising costs at our gas pumps and grocery stores are coming from. Until we can recalibrate this focus, the situation will remain a mystery to our populace and the wrong remedies will be prescribed by those with the power to alter the status quo.

Welcome

The author of this blog is not an economist nor do I pretend to be. Rather, the inspiration for this blog is derived from two places. The first is from reading several books on the subjects of economic theory, monetary policy, and investment-related topics. These books include "The Road to Serfdom" by Friedrich August von Hayek; "Wealth of Nations" by Adam Smith; "The Creature from Jekyll Island" by G. Edward Griffin; "Crash Proof: How to Profit from the Coming Economic Collapse" by Peter Schiff, as well as numerous politically-themed books such as "The Greening of America," "The Ninth Wave," "The Fifth Estate," and others. The second inspiration is from being a first-hand witness to the gradual deterioration of the state of the US economy. As a consumer, taxpayer, and patriotic citizen, it has become increasingly difficult to observe current and past economic events without attempting to contextualize them.

You may be curious as to the title of the blog. The Austrian School (AS) of economics is described, among other ways, in the following manner on Wikipedia: "Austrians view entrepreneurship as the driving force in economic development, see private property as essential to the efficient use of resources, and usually (if not always) see government interference in market processes as counterproductive." Since becoming familiar with the AS over the last couple of years, I have begun to look at the happenings in our economy through this lens. If you are willing to apply the proper scrutiny to the US economy, you will see that the AS principles are de-emphasized at best, non-existent at worst.

One of the great AS contributors, and a renowned economist of his own right, F.A. Hayek was "known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought in the mid-20th century." I strongly urge anyone reading this blog to read "The Road to Serfdom," Hayek's seminal work.

A core principle espoused by Hayek is that the expansion of credit, or the money supply, by central banks causes inflation and the "boom-bust" monetary cycle. In the US, our quasi-private central bank known as the Federal Reserve, sets interests rates artificially in response to perceived market conditions, and prints money that is ultimately injected into the monetary system. The process by which it does this will be discussed later in this blog; for now, it is simply important to understand that the inflation that we experience in our economy is caused by this debasement of our currency by its creation out of thin air.

As a counterpoint to the AS and Hayek's views, I encourage the reader to research the Keynesian view of economics, as espoused by its purveyor, John Maynard Keynes. This economic way of thought more closely resembles the current US system. The reader will find that this blog often contrasts the AS and Keynesian schools of thought, through real-world examples and instances in today's economy.


In closing, it is not realistic nor feasible for me to attempt to summarize or describe all of the pertinent details and concepts surrounding the above topics. Rather, the above should serve only as an entree to the overall subject matter, and hopefully encourage the reader to examine these items in greater depth. In providing the above summary, the reader can now view future posts on this site in the proper context.