Archive for April 12th, 2013

April 12, 2013

Austerity Bursts Our Bubbles!

by Teréza Eliasz-Solomon (HeiressMommy™)

Liquidity BubbleMortgages, School Loans, Auto Financing, Retirement Investment plans and so on and so on – are all a matter of “spending money to make money” type scenario. We each – in one or another form – do just that. I wrote a blog during the 2012 Presidential campaign, “Why Little Billy and Susie REALLY Want You to Vote for Obama 2012!” [1 November 2012] which expresses in a rather satirical tonality this same idea – it was and still is a REAL and true fact that families and nations need to extend themselves financial in order to grow and even more importantly, so that they do not contract – no make that not collapse.

All economies are REALLY nothing more than a “swap and trade” program … you know what I mean: I “swap” you this money [pay for something] and then you “trade” with me [sell me that thing or service]. I see all economies – personal, national and international as nothing more than a barter system – yes indeed,  we are negotiating trades at many levels but now so called “Austerity Plans” are disallowing entire constituency purview at that table. What is one to do when they have nothing to offer as an exchange tool – easy answer is nothing at all. Hence the cycle seizes to exist and the economic platform collapses. I am not suggesting nor does current and not even historical evidence support unbridled or unchecked expenditure as the path to economic growth – no, instead a measured and deliberately planned out budget that includes seeding the economy is the REAL answer. America did just that under FDR to reverse The GREAT Depression in 1930’s … there were government work programs that not only gave salaries to previously desperately unemployed people but also infrastructure developments funded by the government that until today benefit us all financially. Think of roads, buildings, public works that still give access to businesses and more – all here today because the FDR plan spent money then.

Just this past week our U.S. Treasury Secretary, Jacob Lew met with the European Union to suggest their austerity program be more “growth friendly“. See – told you – friendly means not contracting drastically by pulling funds from that particular nation’s working economy. One ask then, “Where do you get that money to spend in the first place?” Obviously nation’s borrow from others more wealthy – no one REALLY calls in those bank debts as it is obvious the symbiotic relationship makes those bank notes not easily foreclosed on. Yes it is a “wink and note” interplay – nothing REALLY wrong with that as long as no one cheats, steals or obfuscates the truth of the matter. In other words, when the country who is the borrower takes the “loan” from those in lending position, transparency must rule the day. Problems like the Bubble in Ireland or here this past decade in the United States was with those amongst us not adhering to honest practices and procedures. Simply put – it must be the old case of “dollar in, dollar out” to REALLY work. There is plenty of money on this planet – corporations are well entitled to profits, as are their shareholders, however the almost “hoarding” current status that companies are demonstrating is not acceptable – baby we need to circulate the currency or everyone will eventually lose out.

I like to think of myself as Liberal capitalist … yes a bit conflicted in current rhetorical definition. As my parents before me, I REALLY believe in wealth and growth – the entrepreneurial spirit a part of my DNA to be sure. But also like my parents before me, I also REALLY believe in fair tax paying – all contributing a fair share and not earning or gaining wealth by denying others theirs. A “living wage” and not a minimum wage is needed so that working people can not only survive but thrive and thus spend in venues that then earn and pay taxes. An easy – almost childlike – “round robin” plan.  It is important for me to state here that I am not a fan of the self titled  “Occupy Wall Street” movement/ideas and conversely, I believe that if a bank or any one else is REALLY “too big to fail“, then that entity might just be “too big to exist“. Still I favored the Auto Bail-Out, as well as the bank bail out [TARP] that this last decade presented – I REALLY feel that both President Bush and President Obama did the right thing, for otherwise [well documented] we would have slipped – no make that fell hard into another BIG Depression – possibly full throttle economic collapse.

Look folks – this is hugely complicated and panic, blame game and certainly not finger pointing will serve any of us well. Studied and cautious processes must be instituted and monitored – largess between countries must be the tone. We are on a proverbial “slippery slope” as nation’s contract into jingoism and nationalistic fervor – often used by the politicians to scare their populace into support of plans not necessarily viable. In the mean while, what is needed are REAL employment opportunities and well managed social safety net programs expanded that will stay the tide of misery among the world’s population. Think of it this way – if I pay you decently today, you will buy my stuff tomorrow and then I purchase that which others produce and so on and so on and so on … see – spending it to make it is the REALLY correct theme needed here and now!!!

P.S. In my year end (2013) memoir, Heiress Mommy … A Modern Super Woman Life! I will detail all the wonderfully REAL facts of how my business owner Father unionized his own company – the magnificence of that and the gloried result, that I and my children have as a proud legacy. Hint: it worked out quite well for all involved !!!

%d bloggers like this: