The chart that tells the whole story...

[Kurt_and_Hunter]

Ever since the internet/stock bubble became apparent in the late 1990s I gave up entirely on the prevailing theory of the time, call it Greenspanism, that we had learned to control the economy.

A combination of Reagan, Volker and Internationalism really changed the game in the 1980-1984 period. It was a major, deep, fundamental change in the economy. And since that time the economy had performed very well under duress.

We had a stock bubble and the Crash of 1987. Greenspan cut rates and the market bounced back in record time. Saddam Hussein invaded Kuwait creating the event-driven recession that bounced GHW Bush from office. (Ironic... he ran off, defeated Saddam and came back for the parades all before the recession rippling from the initial invasion of Kuwait played out.) The economy rebounded very well from that recession.

The internet bubble burst in 2000. Given the size of that bubble it should have taken down the US economy, but it didn't. (I believe that we will someday consider the internet bubble and the housing bubble to be parts of one 1996-2006 meta-bubble that did, in fact, take down the economy.)

9/11? Ha! Cut rates, stock market rebounds. Cut rates and everyone owns a house like magic!

But we eventually ran out of rates to cut and ran out of bubbles.

We maximized profit from capital by reducing inflation at the cost of wages and employment. Enough of the middle-class gained from the periodic bubbles to maintain public support for the enterprise.

Look at the chart and it is plain that WWII-1980 was one distinct economic period and 1980-today is a very different period.

Ask yourself, "Which of the two periods saw big advances in the welfare of average Americans?"

[Kurt_and_Hunter]

1. ---

[Warpy]

2. Liberals had pretty much learned how to control the economy

so that recessions, while they still occurred periodically as a side effect of capitalism, were short and shallow.

Unfortunately, liberals went out of power in 1969, so we've had 42 years of unbroken conservative rule by both parties. The economy we have now, with wealth concentration, high unemployment, and depreciating assets, is all due to conservative dogma.

I don't know what it will take to throw conservatives out of power. I guess it takes a critical mass of people who have nothing left to lose who are willing to get violent, but I sincerely hope that guess is wrong.

I do know that until and unless conservative dogma is once again banished, we will continue to be in this mess.