A depression on the horizon?

So, how is the recession doing? Some say it has improved. Albeit, a majority of these are Obama fans. Some say it is lingering on. Albeit a majority of these are Obama haters. So to find out where the recession stands you have to consider the statistics.

Yet stats are all over the place too. The unemployment rate continues to be 9.7% in the U.S. It is up to 14% in Shoreline, Michigan, and in Detroit it's just under 30%. Every week you hear reports of 100,000 more folks who sign up for unemployment.

However, some jobs are created. Albeit, a majority of those jobs are those temporary type that are created by the stimulus. I think it is these jobs that sort of make the unemployment number look better than it really should.

Another thing that makes the economy look pretty short term, or as though it's getting better, is the fact that the Bush tax cuts will expire in 2011. It is for this reason that many experts are calling for the recession to look like it's getting better until 2011, when it will collapse.

This is the prediction because any businessmen who have any money to spend are doing it now, before their taxes go up. This is making the numbers look "falsely" good. Thus, since they know their taxes will go up, they want to buy what they need now before the hike.

Then, once the Bush tax cuts expire, and the American people feel the largest tax increase in the history of the United States (which is basically what will happen), Americans will stop spending altogether. A true recession will occur. A real crash might come. A depression maybe.

Albeit, this is the prediction of some. Albeit some disagree with this, and say the recession is getting better. Obama recently even went as far to say, "We might come to expect a high unemployment as the new normal." He says this as though he's accepted economic mediocrity.

Historically speaking, he may be looking back at FDRs history, where the unemployment rate was still 15-20% nine years into his term. Back then, the tax on the upper class was nearly 90%.

If you look at stats, the unemployment rate didn't start to soar upward (it was less than 5% when Obama was elected), until after Obama was elected. It went up because bosses started letting people go because they expected Obama to raise their taxes, which he did. They knew if they wanted to make a profit, they'd have to make cuts now.

Right now we have 6 million American workers who have been unemployed for more than 6 months, and may never get their jobs back. This has not happened since... the Great Depression. A grim statistic for those who think the economy will recover under Obama.

In 1983 long term unemployment was 26%, and we pulled out of that recessin after, you guessed it, tax cuts. In 2010, this long term unemployment rate is 44% of the 15 million unemployed.

The Seattle Times, in this post, quotes Fed. chairman Ben Barnanke, who said, "I'm particularly concerned about that statistic, because long spells of unemployment erode skills and lower the longer-term income and employment prospects of these workers."

History shows, taxes determine the rise and fall of the economy. I've written about this over and over on this blog. See economics 101 tab above.

The people of the U.S. know this. Americans are not stupid.

Recently a poll was done by Rassmussen in which 75% of Americans think they are being taxed too much. When people think they are taxed too much, they don't spend, it's historical fact.

If history is any indicator, I think the high government spending, and higher taxes, will stall the economy even more. Thus, if Obama wants to get the economy rolling, he best cut taxes, cut spending, and, thus, encourage inventors to invent, and investors to invest.

Albeit, I don't think that's his plan. Thus, it's quite possible a greater recession is on the horizon, and perhaps even a depression. As a humble American I hope not. Albeit history tells no lies, and history also predicts the future, especially when one fails to heed it's wisdom.

As you can see by this Wall Street Journal post, it was not FDR who ended the Great Depression, it was tax cuts after WWII was over. The author notes FDR created "road blocks" to recovery, just like Obama is doing.

Albeit this is one opinion. Albeit a wise one.

U.S. economy worse than media says

So I'm watching the evening local news at 6 p.m., and the newscasters are talking about how there are signs that the economy is improving. They note housing sales that have improved three months in a row, "greater than expectations."

However, how hight were the expectations in the first place. That's what we are being told by the media on the local news, as well as on the national scene. I'm wondering, is it true? Is the economy really on the up-swing.

Here is a recent expert quote:

"The first 12 months of the US recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed. The world’s largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008. 'The current downturn beginning in 2008 is more pronounced,' Steven Landefeld, director of the Commerce Department’s Bureau of Economic Analysis."

Here is what Reuters has to say about the economy:

"US Economy Fares Better Than Expected In Latest Quarter. "'US Economy Fares Better Than Expected In Latest Quarter' -- The US economy contracted at a slower-than-expected pace in the second quarter, government data showed on Friday, but a sharp drop in consumer spending fanned fears that recovery would be sluggish."

Newsweek ran on their front cover, "Recession over?" Time magazine wrote about it.

So, what is the truth? Is the economy improving?

The best indicator according to economists is GDP (Gross Domestic Product), and this has actually contracted for the 4th straight quarter. Yet instead of telling us this, the media points to increased home sales that had no where to go but up and uses this marker to tell us the economy is improving.

They say this, and then they say the U.S. economy shrank less than 1% this year, less than expected. Okay, that's fine, but it is still a shrinkage. And we still have more people unemployed than during the Great Depression.

So, according to the media, the recession is getting better because the "shrinkage" was better than expected. And major companies are still laying off people left and right.

Now, is the economy getting better or worse. In think if we analyze the statistics and forget about what we hear everyday by the media of which, according to polls, is 90% liberal and supporters of the democratic party, we can get a true picture of what the economy really is like.

Six reasons why liberals caused this bad economy

You know the day investors realized McCain was not going to win the election is the day the stock market crashed, and it's been on a downward spiral ever since. And the fact that this inauguration day represented the largest stock market decline in inauguration history just feeds into my theory.

Which is funny when I hear my friends complaining that conservatives were blaming Obama for the bad economy even before he was nominated.

Now we here at Freadom Nation know that Obama alone cannot drag down the economy, but we also know that his liberal cohorts in the White House before him and in the Senate and in the House and sitting on living room couches around the world have created a huge government that has dragged down the economy.

Here are five reasons why liberalism has failed Americ and is dragging down the economy (Notice I say liberals and not democrats):

1. Liberals have forced banks to give loans to people who could never possibly afford them.
2. Liberals have refused to allow the Bush Administration to guarantee that the Bush tax cuts would never expire. When people know their taxes will go up they have a tendency to expect a bad economy to come, and thus they sell, sell, sell.
3. Liberals have increased government regulations on businesses so high that many of them are forced to lay off workers, move to areas where taxes are lower, or close their doors. For a perfect example of this see Michigan.
4. Liberal programs give Health Care to people for free. When you give something away for free to the poor the cost goes up to those who do pay. Thus the Health Care Crisis. The number one reason people go bankrupt is because of this. While Conservatives get blamed because people say they don't care, liberals are the real culprits.
5. Obama says over and over again that he wants to create a New Deal program. When the 1st New Deal program was passed, seven years later we were still in a depression, which means the New Deal did not work. So fearing another New Deal, nobody wants to touch the stock market.
6. The fear of a slower economy like Europe has, which occurs when you have a socialistic style, anticapitalistic style governemnt (hence the auto bailout), has resulted in fear of good economic prospects.

Of course there are more reasons, and we will add to this list in the days to come. Help me out here folks.

You don't have to participate in recession

Five years ago I listened to Dave Ramsey for the first time, and since then I have at least made a gallant effort to participate in the Dave Ramsey get out of debt program. Of course my wife and I have always been frugal, so we didn't have to make too many cut backs.

Now we are in a recession, and you see all these people who have been living above their means in a tizzy because they all of a sudden are "forced" to make cut-backs in their style of living. You see a perfect example of this in the way so many people were living above their means and bought houses they could not possibly afford.

Nothing like that would ever happen to me, even if I did lose my job. My wife and I have a plan and money in savings just in case, and we do not in any way live above our means.

We do not live paycheck to paycheck. We do not buy things that we want unless we can pay for them with cash. We are still in debt, and with a new baby and seasonal stress factors we have decided it will be several years before we are ever out of debt.

However, when the recession hit, we simply "do not participate," as Dave Ramsey says often on his program. "Do not participate."

Now someone is going to email me and say, "Well, what if someone loses his job?"

Then you live off the emergency fund you created when the economy was good until you get a new job. The emergency fund was created by you instead of purchasing that boat you wanted but didn't need. The emergency fund was created because you didn't buy that big screen TV you wanted but didn't need.

The problem with America is way too many people live above their means. And it's those people who will hurt the most during a recession. It's those people who will be forced to make changes in the way they live.

Not us Dave Ramsey or Susie Orman followers. Not us frugal Americans who live the way our grandparents did and live a parsimonious love while living rich in love as opposed to a material world.

That, my friends, is the thought of the day.

FDR made the Great Depression last a lot longer, and Obama is set to go the same route

I have written on my blog before how I honestly and truly believe that the great depression was made longer by government intervention. I debated this even with my very own brother -- and he called me an idiot.

Okay, so he is more civil than most liberals, and did not call me an idiot. In better terms, we joked it off and changed the subject faster than a mouse can run when you spot it.

But during the 1800s there were several depressions, and the President was encouraged to intervene all of those times. Grover Clevelant was President one of those times, and he said it is not the role of government to intervene, that economies go up and down NATURALLY.

Hence, with government intervention, we are playing with fire -- making a problem worse. When you make a problem worse it takes twice as long to put it out. And that is exactly what happened during the great depression.

Herbert Hoover raised taxes on the rich and used every government means to force businesses to this or that, and the end result was that those businesses were forced to go out of business. He turned a recession into a depression because he thought he HAD to do something.

And that's exactly what we don't want during a recession. Obama seems to not have heeded a lesson from history and is doomed to repeat the failures of the past. Obama might be HOOVER all over again.

Yes, it is true, FDR made what Hoover did even worse. Well, I'm not going to go over this proven again and again theme that government cannot solve problems and usually make them worse again on this blog -- been there and done that.

However, I would like to link you to an excellent blog post today that does just that. Here, click here and I'll morph you over to Z's blog.

Thugs on same page as libs on economic crisis

I'm reading the news today and learn that the leaders of Iran say what liberal democrats in this nation think but will not say.

Iran's ayatollah Ali Khamenei said that "the school of Marxism has collapsed and the sound of the West's cracking liberal democracy is now being heard."

Hardline President Mahmoud Ahmadinejad said, "it is the end of capitalism."

Liberals have been trying to end capitalism in the United States for decades by imposing regulation on businesses, high taxes, and government programs to take from the rich and give to the poor -- a form of socialism.

Liberals have been trying to change our capitalistic system to a socialistic system similar to what they have over in Europe. Yet, what they don't say, is that many people in Europe are becoming more conservative because they are tired of socialism.

Now, keep in mind that the democratic party is saturated with liberalism, but there are many liberals on the republican side too, hence all the increased federal spending the past eight years under republican leadership.

They are tired of taxes being so high they now have limited freedom. Sure they have free health care, but they have to pay for it with high taxes. Thus, the more taxes, the less freedom the people have to do anything else with their money.

Yes, it surely does sound good to take from the rich and give to the poor, but when capitalism has made us the truly greatest nation in the history of the world, when capitalism in its purest form has made many rich people richer and poor people richer at the same time, it still feels better to believe in liberalism.

The claims that liberalism works and socialism works and capitalism is unfair is absolutely not true. And, likewise, (and again) the claim that this financial crisis is in anyway occurring because of a failure of capitalism is itself a farce.

The truth, again, is this financial crisis is the direct result of too much government imposition on the markets. In a true capitalistic system, if people cannot afford loans they will not be given loans. But, as per Jimmy Carter and Bill Clinton, banks were forced to make such frivolous loans.
And the result was the housing bubble with its inflated housing prices, and now the bubble bursting because all those people, after all, could not afford to pay their loans.

So don't listen to the like of liberals and socialists and Iranian totalitarian thugs who will continue to chime that socialism is a failed system. It is not. The truth is, the current crisis is proof again that socialism has failed and capitalism wins again.

It's scary that one of the main political parties is not only on the same page with terrorist, totalitarian thugs when it comes to the War on Terror is also on the same page economically.

Thus, another reason not to vote for liberalism this November 4, 2008.

The thought of socialism is scaring people

Rush Limbaugh made a good point on Friday's program, and that is that the stock market is crashing partly because investors are afraid of what might happen to the markets when the tax rate is 50%, corporate and capital gains taxes are increased.

Of course we all know this is what's going to have to happen in order for Obama to pay for all his socialist programs he says he's going to initiate.

Obama says he's going to cut taxes for 90% of Americans. But, at the same time, 40% of Americans don't pay taxes. So, that means that a large portion of Americans aren't going to get a tax break, they are going to receive subsidies. And subsidies is a payment from the government to the poor.

Still, while he says he's going to cut taxes, he keeps talking of all the programs he's going to start to help people, such as a nationalized health care system.

No, mind you, his health care proposal pales in comparison to Hillary's, but still his proposal calls for a socialistic program. And, to do what he wants to do, the money has to come from somewhere. He can't simply create all these programs and not fund them.

Well, even the No-Child-Left-Behind program isn't funded enough, according to Ted Kennedy. So you can only imagine all the money that will be spent by the government in an Obama administration.

And, while Obama chides that his tax and spend programs are what is needed to save the economy, McCain actually has what it takes to save the economy. McCain is talking capitalism, and how we need to keep taxes low to allow capitalism to prosper. He is talking economic growth.

Rush wrote, "McCain should just tell everybody that a vote for McCain could save the market."

On an opposing note, Rush writes that many in the Obama camp are happy that the economy is doing so bad:

There are a lot of people in Obama's orbit who love seeing the capitalist system teetering like this. This is a scary thing, folks. The Washington Post today has a story: "The End of Capitalism?" And it's not the first such story I have seen. The end of capitalism? Well, this is what Bill Ayers is all about. ACORN is all about the destruction of capitalism and the Democratic system of fair elections. There are a lot of people on Obama's side that are loving this. There are a lot of people on Obama's side loving that you're in pain, loving that you're anxious, loving this crisis, loving that you're suffering, loving it, 'cause they think two things. They think you deserve to suffer because this is such an unfair, inequitable country. It's not fair anybody has any more than anybody else, and so those who are suffering, good for them. I'm telling you, there's some people in Obama's camp that are doing cartwheels. Not publicly of course, they won't say this stuff publicly. The other reason they like it is that they think it's going to propel Obama over the top.

Rush left one thing out, though. He left out that Osama Bin Laden and his terrorist thug friends want capitalism to fail too. They love this.

Well, as I've written before, capitalism is not what is causing the current financial crisis. It is a failure of liberalism. It's socialism. And more socialism is scaring people. It's partly responsible why people are in such a panic. They fear the Messiah.

Obama could be Hoover all over again

I think voters should take light of what has happened in Michigan before they vote in November. This state is a perfect example of what would happen if Obama is elected.

Take note that Granholm (our Governor who was born in Canada), increased taxes and government programs and told us that we were going to have increased revenue and an improving economy in no time.

Well, that was several years ago now. Our economy is still the worst in the country.

Consider five years back at the height of the Bush economic boom. While every other state had growing economies that completely recovered from the Clinton recession, Michigan's economy sputtered.

All those government programs aimed at helping the poor have not helped the poor. The taxes that were raised on corporations have also decreased the number of jobs available. What money might have been available to hire more workers now has to be paid to the state.

Likewise, because corporate taxes are so high, many corporations just up and left the state. That is one of the reasons our unemployment level is one of the -- if not THE highest -- in the country.

Now we have a sputtering economy, and you have Obama saying that he will not raise taxes on the middle class but he will raise corporate taxes, the death tax, and any other tax he can get his hands on.

When he raises the corporate tax, well, I'm sorry to say this, but the same thing that is happening in Michigan will happen on a much larger scale. The rest of you guys will be dragged down with Michigan.

What we have going on in this state is our own fault: we elected a tax and spend liberal to lead us. (well, I didn't vote for her, but many people were convinced she was our savior.)

I want to leave this message for all you liberals and independents who are seriously thinking about voting for Obama:

You can lower taxes on the middle class. But if you raise corporate taxes at the same time, and this results in fewer jobs and more industries moving to Asia, be prepared for an even higher unemployment rate and a heck of a lot more poor people to deal with.

And then you're going to have Obama creating a whole bunch of liberal feel good programs to help all the new poor that he created by increasing corporate taxes in the first place. And he will say they are all needed; that government is needed to get us out of this rut.

It will be Herbert Hoover all over again.

What we need to do right now is not panic, not vote for a tax and spend liberal, but for a candidate who will cut capital gains and corporate taxes to give corporations and individuals an incentive to go out and spend right now.

Unfortunately, I'm not certain McCain is the right man for the job either. Yet at least we can be assured he's not a tax and spend man either, and won't raise taxes and take more money out of the pockets of people who already don't have any -- like Hoover did.

Come on Washington; you can do better than this

One of the things we like to do on this blog is correct people when they are wrong, even when it comes to the Maverick.

He said today that Obama is wrong on the economy, and his tax and spend policies "will deepen our recession."

I hate to be the one to break it to you, Mr. McCain, but we are not yet in a recessoin. In fact, the economy grew 3% last quarter. To be a recession the economy has to fall 2 consecutive quarters, and it fell only one quarter this past year.

I'm not saying we're not in economic trouble, we are. We are in economic trouble because of policies adapted by politicians in Washington. We are in trouble because politicians in Washington made decisions that effect the economy without involving economists.

It's kind of like when we go to war, or when we are managing a war, we need to listen to troops and generals on the ground and not leaders in Washington. The same thing goes for the economy.

When are our politicians going to get it. They are tinkering with our money. Many of them have no clue what they are doing. And yet they still tinker with our money.

I'm talking about the bailout. I'm talking about the legislation they passed that forced banks to loan money to people who couldn't possibly pay off the loans.

Today I was talking with a bankruptcy lawyer friend of mine and she told me she blames part of this financial mess on the 2005 bill that made it harder for people to file for bankruptcy. So, intead of filing, they had to default.

It's all because politicians in Washington who didn't know the slightest thing about banrkruptcy and the economy and banking passed this law, even before one bankruptcy lawyer read it.

Bush has done many good things, but he is not the conservative King we were looking for. McCain is even more liberal than Bush. Obama is the King of liberalism and leader of the modern Socialistic movement. Congress, including 1/3 of republicans and 60% of democrats who voted for this bailout bill have no clue either. Hence the 9% approval ratings.

You want to know why Bush's approval ratings are so low, it's because of stuff like this. You want to know why Congress's approval ratings are so low, it's because of stuff like this.

I can tell you guys that I'm adamantly opposed to this bill. I think we can put our intelligent minds together and come up with a solution far better than this. But Washington's desire to do something stupid just to show that they are doing something seems to be at the top of their list.

Which seems funny to me, considering a huge majority of Americans are opposed to this bailout plan. Did you know that 700 billion dollars will pay the yearly salaries of more than 20 million Americans.

If Obama was so for the middle class, he'd can this bill and propose giving this money to people like me and you -- not that I'd be for that either even though it might benefit me for a year. Well, it would benefit me for only a year, and that IS why I'd oppose it.

This bailout bill is pure D demogoguary.

If I were a member of Washington, I'd rather be the most unpopular goon on top that hill rather than do something stupid just to get re-elected. But that's just me.

Financial Crisis: Capitalsim -vs- Socialsim

So you know by now that I am not a fan of the financial bailout. I have a proposal, though, that I think would encourage people to save and invest, and would also give banks the confidence and incentive to give out loans and save the economy from an all out shut down.

I am not a fan of the government buying all the failed loans from banks with the money that belongs to hard working Americans who are not corrupt. Of course the goal here is that freed from the burden of failed loans, banks will stay in business and start loaning again

However, there is no guarantee this will work. Because it is a Socialistic program, if it fails we will not be able to undo it. Yet, if we do the capitalistic solution, and it fails, we can easily undo it.

The capitalistic solution, though, has never failed. And that's why I think we should try that first before we do something stupid. Or, as I like to say, doing nothing is always better than doing something stupid.

Here is my proposal. I think the President and John McCain should get together and propose eliminating the capital gains and corporate tax for two years. Then you just wait and see how long it takes to make the $700 billion Washington is now proposing to bail out failed banks.

I'd recommend for Obama to do this too, but we all know he is a big government and high tax kind of guy.

We do not need more politics, more regulation, and more federal involvement. What we do need is to deregulate and allow these complanies to do what they need to do to stay in business

We do not need to increase taxes on corporations like Obama wants to do when he gets elected because all that will do is slow economic growth and make the American economy more like France.

But nobody in Washington is talking about capitalism here, they are talking socialism -- even George Bush and McCain.

They are doing that because liberals are in charge of the House and Senate. The same liberals who caused this problem in the first place.

And, as typical politicians, they believe that being seen as doing something, even if it is something stupid, is better than doing nothing at all. Because if you do nothing, people are going to think you don't care.

This is the way liberals think. Liberals want to make decisions that make people feel good rather than making decisions that are sound.

We are at a crosswalk right now. We can choose to go backwards economically and solve this financial crisis in a panicked way with socialism, or we can take the capitalistic route.

Still, if this bill passes, I will be gung ho behind it, because as a good American, I want what's best for my country.

That, my friends, is the thought of the day.

Capitalism not to blame for economic woes

The stock market crashed over 500 points today. Lehman brothers went bankrupt. Many others are scared that the market will crash even further. Some are worried the economy will crash. And, worse of all, many people are blaming the free market here.

The truth is there is no free market when it comes to financial institutions. These financial institutions are run by the government, and mainly by liberals in Washington. They decided a few years back was to make it easy for poor people to get into homes. So it is the government, not the free market, that is dragging the economy down.

The housing market was doing just fine until these businesses made it so that people could get into houses they could not afford. They could buy a house with no down payment. And this drove up the price of houses.

Then one day the housing market crashed because all of a sudden these people who couldn't afford homes in the first place were not paying their mortgages. So then you have a record number of mortgages because the market is correcting itself because of the inflated market that was tampered with.

And president Bush is blamed for it. He is blamed for the economic slump.

The real blame, however, is not Bush nor Bush policies. The blame is liberals who are in charge of the financial institutions. They are the ones who should get the blame for the economic woes we are facing today.

Yet the media will refuse to understand this. They will mis-educate the people, and the people will continue to believe them. In that sense, the media is just as guilty as liberals for this mess we are in.

Even John McCain is running around saying that we need more government regulations, we need reform (and we know that reform and government regulations are the same thing). However, he is right that we should not bail these failing companies out.

We have to remember that the free market will have its ups and down, but when the government imposes regulations, when the market is tampered with the way the financial institutions were, bad things happen.

That is exactly why we cannot afford to have liberals in the Washington. They do not understand how the economy works. They fail to see that every time Washington has tampered with the market it has failed.

A great example is the Great depression. Here the economy was sputtering, and politicians in Washington just had to do something to show that they cared, and the economy sputtered into the worst depression ever.

A good example of the opposite is Warren G. Harding, John F. Kennedy, Ronald Reagan, and George W. Bush who all inherited recessions and allowed the markets to correct themselves. They all ended their respective recessions and a boom ensued.

The housing bubble burst not because of Bush's policies, and the economy is not sputtering because of a failing free market, it is sputtering because of liberals who continue to think that they need to tinker with the free market to the benefit of the poor.

However, when the economy sputters as a result of these bad policies, more poor people are created as a result, which is just what the democrats want. Remember folks, the democrats can only prosper as a party when bad things happen in America. They have positioned themselves as the party of failure.

And when the economy fails, when the number of unemployed go up, and inflation goes up, people cry to liberals to bail them out. And things only get worse.

So then you have people saying that we have to bail these failing institutions out. Yet, if they get bailed out the people who made the bad policies, who allowed all these bad loans to happen, will never be punished. Instead, they will be rewarded.

And if we keep bailing companies out, they will not be responsible and try to run their businesses with sound policies. If I know the government is going to bail me out, why would I not take the risk. If I do well, I get richer.

If I do poorly, then the government will bail me out. If there is no risk for me, then I don't need to be responsible. I mean I would, but some people place money as their number one priority. Some people don't have the conscience of you and me.

Hey, it's easy to play with money when it's not yours and you know you won't be punished for doing something stupid.

So, the free market and capitalism are not to blame here. It is those who feel they have to tamper with the free market, with Capitalism. I said it before and I'll say it again, sometimes it is better to do nothing than to do something stupid.

But, some will never learn. And the wrong people will be blamed for their stupidity.

Good economic news bad news for Obama

I doubt that Obama will mention this in his speach tonight (which is going on as I write this), but the GNP grew by 3.3% in the April-June quarter, "the fastest pace in over a year," according to Yahoo news.

That means that we are definitely not in a recession.

Obama can't mention this in his speach because in order for the democrats to get elected, the economy has to be positioned as bad as possible. That way people vote for him and not McCain.

To be honest, I think a better message for Obama would be, "Yes, it is true that the economy has grown in the last quarter by 3%, and that is good news for America. Still, I think that I can do better. By voting for me, we can have an even better economy for America."

Obama will not say this. He won't because his entire strategy has been to make America look as bad as possible. His strategy is that the bleaker America looks, the more people he will get to vote for him -- for change.

The irony in this was the report I read that informed me of this "Good" economic news, Yahoo news, had the following headline: "Spring's economic rebound unlikely to last."

That's their way of editorializing good news so it reflects how they want to picture the news, in their attempt to make it look as grim as possible, in their attempt to get their candidate elected (That's Obama by the way.)

All is fair in love and war. Yet, if I were running for President, I would as either a republican, democrat or as an independent, I would prefer to have a more positive view of the nation, and go with the "America is the best, and we can make it better," strategy.

That's just me though.

The 1950s-1980: Kennedy's boom to Stagflation

Today I'd like to continue my history of American economics that I started a while ago. I reviewed the road to the roaring 1920s and later the New Deal, and left you off with Harry S. Truman as president.

When it came to the economy, Truman basically rode the wave of the post war boom. But he was actually more concerened with other matters around the world, like receiving the unconditional surrender of Germany, the decision to drop the Atom bomb over Japan, and then the reconstruction of Europe.

At this time in American history, where the economy had nowhere to go but up after the Great Depression and WWII, the economy did continue to improve.

Dwight D. Eisenhower was provided an economy that was on the upswing amid a post-war boom. While the highest taxes rate remained at 90%, Eisenhower refused to cut taxes.

But he didn't need to, as his two terms in office, "produced eight years of growth and relative prosperity," according to PBS.org. "Nearly every indicator of economic health -- GNP, capital investments, personal savings and income -- showed substantial upswings."

Eisenhower was given credit for keeping the world at relative peace nationwide for seven years, as well as providing over a pleasant economy.

Yet, by the time John F. Kennedy became president in 1961, the high tax rates were starting to catch up with the economy, and a brief recession ensued.

John F. Kennedy was educated on the benefits of cutting taxes to create an incentive to save and invest and stimulate the economy.

With that in mind, he, despite many who told him not to do so, including his economic advisor John Kenneth Galbraith (who wanted to raise taxes, run up a debt and increase government spending to improve the economy) Kennedy cut taxes from 91% down to about 70%, which was actually less than his original proposal of 65%.

While the tax cuts were not enacted until after his death in 1964, they resulted in an economic upswing that allowed Lyndon Johnson to preside over a country in economic prosperity.

According to Wikipedia, while Johnson was president "GNP rose 10% in the first year of the tax cut, and economic growth averaged a rate of 4.5% from 1961 to 1968. Disposable personal income rose 15% in 1966 alone. Despite the drop in tax rates, federal revenues increased dramatically from $94 billion in 1961 to $150 billion in 1967.

Thus, the result was an economic boom in the 1960s instead of a deeper recession or even a depression which would have occurred had Galbraith had his way. And we would not be thinking of Kennedy in the same light as we now do. If Kennedy had listened to his advisers, we'd be talking about Kennedy in the same light as we talk about Carter.

Richard Nixon won in a landslide in 1968 and decided he was going to continue to ride the wave of the good Johnson economy (rather, the Kennedy economy) by "playing it safe."

However, due to factors beyond Nixon's control, the economy was sputtering by 1971, Nixon announced a 90-day wage-price freeze, stimulative tax cuts, a temporary 10% tariff, and spending cuts.

The economy recovered enough by 1972 and Nixon won again in a landslide.

But, according to countrystudies.us, "In 1973 the war between Israel, Egypt and Syria prompted Saudi Arabia to impose an embargo on oil shipped to Israel's ally, the United States. Other member nations of the Organization of Petroleum Exporting Countries (OPEC) quadrupled their prices. Americans faced both shortages and rapidly rising prices. Even when the embargo ended the next year, prices remained high. Higher energy prices affected all areas of American economic life: in 1974 inflation reached 12 percent, causing disruptions that led to even higher unemployment rates. This era of recession and inflation ("stagflation") brought an end to the unprecedented economic boom America had enjoyed since 1948."

While Carter complained about inflation being so high when he was elected in 1976, it was even higher when he left office in January 1981.

With the country now mired in a recession, the window was now open for a the first successful trial of supply-side economics, which would end the era of high taxes.

What interesting times these are

Hillary and McCain have made calls recently for Congress to get rid of the gas tax over the summer season in order to give consumers a break and, hopefully, boost the economy.

Obama doesn't want this tax. This only makes sense, considering he's probably going to be the democratic presidential nominee, he doesn't want to take a chance the economy will improve by November. While Hill is a dem, she still wants to become president, and if McCain wins, that sets her up pretty for a 2012 battle.

You know what Hillary says, "We Clinton's never quit."

Republicans love this. So long as the dems are spending all their money beating each other up, McCain can stand by on his high horse and watch. And since Hill will never give up, she will do everything in her power to destroy Obama, even after he gets the nomination.

Hill would normally side with the rest of her dem friends on this matter, but when it comes to winning, those Clintons do whatever needs to be done -- even if that means pretending to be conservative.

This is why Hill agrees with McCain on the gas tax holiday.

For the time being dems have turned their backs on Hill, and are complaining that Washington won't be able to do without the revenue generated by the gas tax; that this money is used to repair bridges and roads.

Now, you mean to tell me that the government can't go one summer without spending money that isn't theirs. They can't do what the rest of us good Americans do when we are in financial difficulties, and stop spending money.

What interesting times these are.

From the new deal to a broken system

John Maynard Keynes warned that as soon as the depression was over the government would need to scale back government programs, and cut spending. He warned about what might happen if people took his economic policies too far.

FDR, too, was not a proponent of big government. He wanted to create programs that would help the poor until they were able to get back on their feet (welfare), and help the elderly with a program that was supposed to be self sufficient (social security).

However, both these programs have spun out of control by greedy politicians eager to get more and more control of your money. More accurately, these programs are run by greedy bureaucrats who are more concerned about getting their paychecks than taking care of the people they are supposed to be serving.

Politicians keep adding more and more benefits to these programs, and keep giving more and more power to the bureaucrats, and keep increasing your taxes to pay for them. Technically speaking, the majority of Americans get nothing in return for flipping the bill.

Social Security, the way FDR had written it, was supposed to be self sufficient. It has become anything but, while middle class workers of today have to pay the benefits of the workers of yesterday.

And, while Baby Boomers are starting to retire, the entire system is expected to go bankrupt in less than ten years. But, since most of the voters in the U.S. are the elderly, no politician wants to risk alienating these voters by making much needed changes. Unfortunately, people are afraid of change, even when change might be for the better.

So, what do politicians do? Instead of fixing the broken system, or scrapping the old and trying something new, they add more programs, as George Bush added the Prescription Drug Program to the welfare program so that elderly no longer have to pay for their medications. Sure, as all of the welfare program, it seems like a noble idea, but how do we pay for it?

Here’s how politicians pay for it: they raise the taxes on the middle class. You, my friends, are the ones who get shafted. Not only do you get your taxes increased, you get no guarantee that the benefits of these programs will be there when you need them most.

That’s right: it’s the middle class citizens who are losing out. Eighty percent of all the money in the economy is owned by the middle class. Thus, when the government needs more money to pay for more programs, you guys have to pay for it. We have to pay for it.

And while it’s the young in this country who will end up having to feel the most heat from programs that may no longer exist when they become sick or elderly, 80% of the people under the age of 35 do not vote. If they did, if they kept up on politics, politicians would be forced to do something about these failing programs.

However, as it stands, the programs keep getting bigger, and you keep getting taxed more, even though history has proven that increasing your taxes only increases revenue up to a certain point. At this point the system reaches a point of no return. And, if taxes are not cut, a recession will ensue. If you don’t believe me, just ask Hoover or Carter.

So, while the Social Security program, as written by FDR, was supposed to be totally self sufficient, it is anything but. And, while the welfare state was intended to help the poor, it has made circumstances for them worse. Not only are they poor, but many are trapped in poverty.

And, while programs aimed at ending poverty, such as the war on poverty, were supposed to reduce or even end poverty as we know it, the statistics do not show improvement. But what do our politicians do? They continue to fund them, and in many cases expand funding to them as though more money will make the problems go away.

It‘s to the point now that we have families living on the government dole for generations. These people have become dependant on government. When these people have children, they grow up knowing nothing else but how to live off the government, so they live that way too.

While social security may not be around when they retire, people are depending on it for their retirement instead of preparing for retirement on their own accord. While I have a nice plan that will allow me to retire when I’m 58, most people will have to work until the government says they can collect Social Security, which, for most people under 30, is now 72.

Who wants to HAVE TO work until they are 72. Not me. I want to be living in Florida in the winter and golfing for a living.

Here’s the deal: before the New Deal, poor people had to either work hard, or they would starve. This was their incentive to improve their lot in life. When times got hard, they had to work even harder. When times got touch, the government made a few minor changes, and stepped aside and let capitalism work. While there were a few recessions and depressions under this mindset, they were very short lived.

Since the New Deal, some people have become too comfortable getting that free check. Since they only get this money when they are not working, this ultimately takes away the incentive to work, and these people become lazy. When times get tough, as what occurred during the Great Depression, instead of working hard to make their lot better, they turn to Uncle Sam.

This, I am sure, FDR did not envision.

Imagine how great America would be today if, instead of creating big government, FDR would have simply assured the government would monitor big business, the stock market, banking and the like, and left Capitalism to do the rest of the work in ending the depression. I bet, and we may never know if I’m right, that the depression would have ended a lot earlier.

Not only that, but we wouldn’t have a bloated government about to burst apart at the seems. We wouldn't have poor people with no hope of ever getting out of poverty because they have no incentive to get off welfare. We wouldn't have retired people who go to the polls to make sure a broken Social Security system stays afloat, at least long enough for them to reap the benefits (who cares whether it will still be there for the kids).

Here’s a news flash: The government sucks at running a business. There is simply too much red tape and to many bureaucrats. When a good idea is thought up, by the time it gets to bureaucrat #22, that good idea is lost in the clutter on his desk, and forgotten forever.

Yes, it is great to want to help the poor, and the idea behind programs such as Medicaid, Medicare, Social Security and the Prescription Drug Program are very noble, especially for a government with an economy as rich as ours. But, as we have learned from history, the government sucks at running them.

Thus, the protective umbrella the government has placed over you and me once again has gaping holes in it. If FDR were alive, he’d be working on a concoction to solve this conundrum.

The current group of law writers seem to be more interested in getting re-elected and making money than doing what’s best for you and me. And I'm not just talking about liberals here, but many of the good men and women in Washington of both parties.

That, my friends, is the thought of the day

Another optomistic economic spin by the Times

The New York Times must really be trying to shed the "bias" shadow, as it has released another article today about the economy, and instead of starting with evidence that the country is near or heading into a recession, it started with the good news first.

So here, in my investigation to show that the New York Times has a liberal slant, I'm almost tempted to say it doesn't exist. Still my sample is small, but I'm impressed at this point in time.

It always seems that in the past few election cycles when a republican is in office, the media tended to try to make the economy look worse. They can't really lie about the news, but they can shape their articles so that the worse news comes first and then, later in the story, get into the news that makes the economy look good. They shape the story this way because they know that most people, as I stated yesterday, read the first few paragraphs of a story and then move on.

In trying to think of a reason the NYTimes reporters would want to make the economy look good, if that is in actuality what they are doing, I'm now forced to wonder if maybe they think that Americans might not necessarily blame the republican president for the ailing economy but the democrats, who control both the House and the Senate, who do have the power to make some changes that would in effect benefit or hurt the economy.

One of the things we learn as journalists is that when we start our stories we start with the most important news, and in a reverse pyramid form, end the story with the least important. The purpose of this is because if someone only reads the first couple paragraphs, which happens most of the time, he will get the most important news. And, if something has to be cut to fit the story in the press, the editor simply starts cutting from the bottom up.

Thus is why it is impressive as the times article starts with the unfortunate note that 20,000 more workers lost their jobs in April, which is evidence the "economy is ensnared in a recession." But, it sets a more positive note in the next paragraph:

"But the size of the loss was significantly smaller than many analysts predicted, and the unemployment rate nudged down to 5 percent, sowing hopes that the economy may not suffer as severely as some have feared."

Then, as the Times did in yesterdays optimistic story about the economy, the reporter reiterates the "optimistic" economic picture with a quote:

“The good news is it strongly argues that this downturn will be mild and short lived,” said Mark Zandi, chief economist at Moody’s Economy.com. “As long as businesses hold the line on their layoffs, the economy will weaken, but it won’t unravel.”

While this more optimistic trend is true, the Times EASILY could have started this story with more pessimistic news, which it got into as the article wore on, as it was noted later that the average weekly wages fell $3.55 to $602.56.

That, coupled with the fact that the number of people taking on a second job, are proof that inflation, rising food, and rising gas prices, plummeting real estate prices, and rising foreclosure rates, and "and tightening credit conditions as jittery banks hold on to their dollars," are forcing Americans to "feel the pinch."

This "feeling the pinch" is also evidenced by the rising number of people who are now working part time jobs, which is something I myself have been pondering.

Plus, the article could have started with the FACT that the unemployment rate does not necessarily represent the number of unemployed, as the number of people who have simply given up looking for work rose to 412,000.

Yet, while there was a ton of pessimistic news about the economy that would have allowed for this reporter to set a more pessimistic tone regarding the economy, the reporter was fair in his reporting once again today and reported the news in a positive way.

Thus, as the election dawns closer, this reporter sees no evidence yet of media bias, at least as it comes to the economy. Thus, once again, I am impressed.

The NY Times upbeat about economy today

Perhaps the NYTimes.com reporters read my last post, because there is a really cool article today, "Economic Clouds? Wall Street Sees Signs of Sunshine that was quite optimistic by Vikas

Bajaj, that is very optimistic about the economy.

For the record, I implied yesterday that by their post about the latest economic report, the Times seemed to make sure no reader saw anything optimistic about the economy (perhaps for political reasons).

This recent article about the economy has the exact opposite effect, as it makes the economy look good, making up for the last article. That is what you call fair and balanced reporting.

The article started like this:

"Despite a drumbeat of bad economic news, the stock market is up — almost 11 percent in the last few weeks. Junk bonds, those risky corporate I.O.U.’s, are rallying. The value of financial shares, bank loans, tricky credit derivatives — up, up, up.

"Many on Wall Street, the epicenter of the credit mess, seem to think that the worst is over. For the first time in months, analysts and executives sound upbeat again. Many of them see a broad, sustained recovery in both the economy and the financial markets coming in the second half of this year, a prediction some market strategists call hopeful at best."

This article made no attempt to make the economy look bad. I'm very impressed. It actually has a pumped up feel to it.

Non only is the market surging, the article notes, oil prices fell for the third day in a row and the dollar strengthened.

Some experts say this might be a sign of brighter things to come for the economy, as the reporter notes, "It is, of course, not uncommon for Wall Street to run ahead of the broader economy. Investors, after all, make money by anticipating the future. The job market, by contrast, improves more slowly than other aspects of the economy."

"But, "Bajaj continues, "specialists say the two sides will eventually converge. Either the markets will give up their recent gains or, if the optimists are right, the broader economy will show greater strength as tax rebate checks and lower interest rates stimulate the economy."

Now economic experts note that we are not "technically" in a recession after the economy grew at a meager 0.6% in the last period. However, economists contend that a recession is defined by two consecutive periods of economic decline, and that has not happened. So, technically, we are still not in a recession, and there is a possibility that there is hope the economy is improving.

However, we'll still have to be humble about these signs, as they could be premature as "foreclosures are climbing at a strong clip and the decline in home prices has picked up speed in recent months."

Either way, the Times has impressed me today by starting an article with the good news first, and putting the gloomy stuff at the end of the article. This is important, because most people read the first few paragraphs and move on to the next article.

Again, I'm very impressed. Perhaps the Times is making a gallant effort to improve its declining market share by no longer being bias. Then again, let's not get carried away.

The media can shape the economic mood

The way people perceive the news is often determined by how the news is reported. A perfect example of this was presented to me today as I was perusing the media outlets at my fingertips here on the Internet.

First I went to Breitbart.com and read one story about how the economy is bruised and battered, and "growing at just a 0.6 percent pace as housing and credit problems forced people and businesses alike to hunker down."

However, these statistics "did not meet what economists consider the classic definition of a recession, which is a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if modestly."

Then they reiterated that there was hope with a quote:

"The economy is weak but not collapsing," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group. "A recession can't be ruled out, although the stars are not lined up at this point to definitively say one way or the other."

Not the best economic report ever, but it's still holding above water.

On the other hand, one clicks on over to the NYTimes.com, and one gets a different picture from the same economic report, as the report there starts this way:

"Consumer spending barely budged in March, the fourth lackluster month as Americans grappled with higher food and energy prices amid an economic downturn.

"Spending grew 0.1 percent in March when adjusted for inflation, after staying flat in February and recording a slight rise in January, the Commerce Department reported Thursday. At the end of last year, spending actually declined.

Then, to reiterate how bad the economy is, the Times reporter adds in a quote: "“What you’ve got here is a very dramatic consumer slowdown,” said Ian Shepherdson, chief United States economist at High Frequency Economics in London. “It’s much more severe than anything we saw in 2001,” he added, referring to the last recession.

Thus, while the Breibart.com post made me feel slightly hopeful that the economy is moving in an upward direction, barely, but still going in the right direction, the NYTimes article makes me feel grim about the economy, that there is little hope that we will avoid a recession.

Not only that, but the Brieibart article mentions that the economic figures do not meet the criteria for a recession in the first few paragraphs, while the word recession is not even mentioned in the NYTimes article until paragraph 13. Thus, the later reporter certainly didn't want you to get the idea that we are not in a recession, if you by chance didn't already think of it on your own.

Are we in a recession? Are we going to go into a recession? I don't know. I'm no economic expert. However, the reporter of the Times article wanted to make sure you did not get a glimmer of hope in reading his article, and the author of the Briebart article did.

Just another example of how a story is written can effect the mood of the person doing the reading, and perhaps even the confidence in the economy. If people aren't confident in the economy, they will hunker down and stop spending. When that happens, a recession is bound to happen.

Thus the media can effect the mood of the country.

Which is what liberals who hate George Bush and want to see a democrat win the office of the President in November want to happen. Conservatives want the opposite. Good journalists try to simply report the news, and how the news is perceived is representative of reality.

Now is this shoddy reporting by both media outlets? Was this done intentionally? Again I have no idea. More than likely, it was just human nature to spin the news so it represents that hidden agenda the reporter has pent up deep inside his head. Or perhaps its the respective media outlet catering to its audience.

All reporters are guilty of it to a certain extent I am sure. And this is a perfect example of why we need to make sure we get all our news from more than one source. Unfortunately, however, most of us do not -- we tend to get our news from the sources we agree with.

Increased demand increases price of gas

(I wrote this column in May 2007, but it still holds true today, so I thought I'd post it here.)

A boycott of gas the other day reminded me of the time when I was a kid and decided to boycott air in my own attempt to gain the sympathy of my mom. She never even batted an eyelash.

In the same way, gas companies and gas stations never even batted an eyelash when sales were down that one day. In fact, they probably enjoyed the slow time. Like my mom knew I’d eventually be forced to take in a breath, the gas sellers know people will need to fill up sooner or later too.

People were complaining at my work about the price of gas being $3.50, and it not being fair that politicians and gas companies were setting the price of gas so high nobody can afford it. I listened to this conversation for several minutes, holding my tongue the whole time wondering if the price of gas was really effecting the way Americans live.

True, 30% of Americans admit that they have gone shopping less often since gas reached current levels. Then again, on the other hand, “if people can’t afford gas, then why are gas company profits hitting record highs?”

Yes, prices are record highs (not really if you adjust for inflation. Adjusted for inflation, they gas prices were much higher under the Carter Administration in the late 1970s.), but 70% of people admit gas prices have not effected the way they live.

What my good friends failed to recognize is that there isn’t one person sitting in a chair someplace with the sole job of increasing and decreasing the price of gas. The price of gas is set mainly by the free market.

You have to think of it this way. There is only so much gas to go around at one time, which means supply of gas will remain at a relative constant. The only thing that changes is the number of gallons of gas sold per day, and this is called demand. Therefore, as far as gas is concerned, demand for gas determines the price of gas.

Thus, when demand for gas increases, the price goes up. The opposite holds true too, so that when demand for gas decreases, the price will go down. This is mainly true, mind you, when the supply stays the same. If there was a way to increase supply, such as with more refineries, then an increase in demand might not effect the price.

Anyway, with supply at a constant, when demand increases, so to does the price.

This is why the price of gas in Alpena, Michigan is usually lower than the price of gas in Detroit, because demand for gas is greater in Detroit due to the greater population. Likewise, some states and some cities have gas taxes, and that too can effect the price you pay for gas. In most cases, state and local taxes raise the price of gas 20-30%.

There are a few things that could be done to decrease the price of gas. Other than cutting taxes, the most obvious would be to become more self sufficient, and produce more of our own oil. Congressmen in Alaska want the U.S. to dig for oil in their Tundra, but a other Congressmen decided this would not be a good idea.

“We don’t want to ruin all that nice natural reserve. We don‘t want to hurt the animals there.”

The truth is, the land set aside by the government for oil drilling is a swampy, treeless flatland infested with mosquitoes during the short 70 day warm season and frozen over the rest of the year with temperatures down to 70 below zero, as the Alaskan Congressmen have attested to. Plus, the land needed for oil drilling consists of a mere 0.00007% of the 19 million-acre wilderness, which is about a fifth the size of a city Airport.

"Alaskans understand better than most Americans the necessity of maintaining the health of our land. At the same time, we do not fear extracting the resources found within it," wrote Alaskan Governor Tony Kowles in a letter to members of the U.S. Senate in March, 2001

But, for whatever reason, other congressmen think they know better, and we have to suffer at the pump as a result.

The fear that wildlife will be effected is based on mere speculation, as Governor Frank Keating of Oklahoma states: "Opponents warned that poking new holes in the tundra would ‘devastate’ this ‘cathedral of nature.’ In Oklahoma, which has been a top-five oil producing state for more than 80 years, most people are puzzled by these apocalyptic predictions, as they live in harmony with more than 100,000 oil and gas wells."

According to Charli Coon “Supply = Security,” The Heritage Foundation (http://www.heritage.org/Press/Commentary/ed100703c.cfm), May 7, 2003, “When the pipeline opened from Prudhoe Bay on the north slope to Valdez in the south, alarmists predicted a quick end for the porcupine caribou herds that inhabit the area. In fact, their number has tripled in the 25 years the pipeline has operated.”

He also adds that ANWRs “1,500 inhabitants—who have seen their neighbors to the near north become economically comfortable from a quarter-century of safe, clean oil exploration at the Prudhoe Bay, Sourdough and Kuparuk oil fields—support drilling by 4 to 1.”

Even Bill Clinton’s Department of Energy reported that oil drilling in ANWR would be environmentally efficient. Since drilling is mostly during frozen seasons, roads are made of ice, and simply melt away in the spring.

And, while 75% of Alaskans favor drilling in ANWR, your congressmen are preventing it.

Despite what people might think, most of the money made from the sale of gas goes to local or state governments via taxes. So, if you really want the price of gas to go down, talk to your Congressmen.

One of the easiest things you as an individual can do is conserve energy. I was informed by an email that you can do this by many means, which include: riding your bike to work, taking the subway, car pooling or simply walking.

Heavier objects use more gas, so the less gas you have in your tank the less gas you will be using. So, it’s better to have only half a tank than a full one.

That’s a good fact, considering many good folks can’t afford to fill their tanks more than once a week, especially when it’s $50 or $60 bucks a stop. So they end up letting it go all the way to “E” hoping the price will go down before the inevitable fill-up needs to occur.

And then, hoping that gas will go back down tomorrow, I usually limit myself to $25 worth, which gives me about half a tank -- if that.

If new oil refineries were built in the U.S., supply would indeed go up. However, there has not been one new refinery built since 1976, and in 2007 oil refineries are at full capacity. Based on fear that oil drilling will pollute land and hurt wildlife, these environmentalists have lobbied Congressmen to set the criteria for building new refineries so high, and therefore no one wants to pay for a new one.

We suffer at the pump as a result.

The truth is, the technology for oil drilling has come a long way in the past 20 years so that the land needed is extremely small, and the risk of environmental messes a meager fraction of what they were even yesterday. However, environmentalist groups like the EPA and people who support them refuse to acknowledge that fact.

Of course environmentalist groups wouldn’t exist if they didn’t create fear, and the fear that oil drilling seems to work wonders for them. It’s this kind of ignorance that brings in millions, if not billions, of dollars yearly to their cause.

Right now 57% of our oil is imported from foreign nations. That oil is subject to price manipulation by OPEC, threats from dictator run nations like Iran and Syria, sabotage of pipelines by terrorist thugs in an attempt to drive up prices and negatively effect prices in free nations they abhor.

Likewise, as is probably the case right now, every time there is a broken pipe, a power outage, an act of nature, or any other problem at one of our old refineries, the price of gas increases.

Booming economies in China and India, where people are demanding new cars and need gas to fill these cars, have caused world demand for gas to top record breaking levels. Since the United States is not self sufficient, this increase in world demand for oil directly effects the price of oil that you and I see at the pumps.

And every time something scary happens in the Middle East, and people rush to the pumps in fear prices MIGHT go up the next day, the price will go up. The price may or may not go up if people did not rush to the pumps, but the simple fact that they do increases demand.

The same thing happens as a result of a boycott. When people rush to the pumps so they can have a full tank prior to the boycott, demand increases and the price increases.

Thus, if we had more oil reserves, and if we drill for oil on our own land using our own recourse's, demand for foreign oil would greatly diminish, and the U.S. wouldn’t have to be concerned about what thugs and dictators and OPEC do to effect the price of oil. And we also wouldn’t have to be concerned about an increasing world demand for oil, as we’ve seen since more countries are accepting capitalism, and, as a result, have benefited by booming economies. And gas prices won’t go up every time one of our refineries has to close its doors for a day.

It’s obvious what needs to be done: the U.S. needs to provide incentives for building new refineries, and we need to take Alaskans up on their offer to drill in the Tundra. There isn’t really much the federal government can do regarding state and local gas taxes, but you can get those taxes lowered by your vote and by calling your local congressmen and women today.

There is another option, and that is to purchase fuel efficient cars or hybrids. Hybrids are not an option for people like me who have big families to lug around, and the price is often way to high for most middle class people.

However, I’m very confident the high price for gas will tick-off one of our great inventors enough that he will work overtime trying to get his next great gas-less invention on the streets. Wouldn’t it be cool if we all had electric cars that we simply plugged into an electric outlet in our garages, or used ethanol, a hybrid, or dumped our garbage into a fuel converter like in the Back to the Future Movies.

Bill O’Reilly of “The O’Reilly Factor” on Fox News agrees with me that environmentalist groups might be one of the reasons no new refineries have been built, at least according to his latest column. He writes, “There is some truth to that, but the biggest problem in building more refineries is money. Big oil doesn’t want to spend billions on a new facility because they are making record profits now and alternative energies may be coming.

Likewise, the New York Times (Jad Mouwad, "Oil Industry Says biofuel Push May Hurt at the Pump," May 24, 2007): "And some oil executives are now warning that the current shortages of fuel could become a long-term problem, leading to stubbornly higher prices at the pump.

"They point to a surprising culprit: uncertainty created by the government’s push to increase the supply of biofuels like ethanol in coming years."

Hopefully, those electric cars will be arriving soon. Where’s Henry Ford when you need him?

In 1900, environmentalist groups said the world will run out of oil by the 1920s. So, you can expect, when electric vehicles become a mainstay in every American garage, these groups will start proclaiming that if people don’t start conserving, we will run out of electricity.

(Then again, these cars will probably too expensive for ordinary folks form many years after they are invented anyway.)

And when we try to build new electric facilities to increase supply, they will tell you of all the environmental hazards of doing this. And you can expect millions of Americans will literally buy into their fear tactics, just like they are today.

That’s simply the way the world works.

The U.S. is not quite in a recession yet

I never bring it up, but many of my friends and family members and fellow bloggers keep bringing up the economy, and mentioning that we are in a recession and, in a few instances, a depression.

Two of my brothers over the course of the past few weeks have told me that the economy is so bad right now that we are in a depression. I never said anything either of these times, however much I wanted to refute that claim, because I am no expert on the economy.

So, are these people right? Are we in a recession right now? Are we in a depression? If not, then why do so many people talk as though we are?

I can answer the later question easily: because there is an election looming, a republican president is in the White House, and the media will do everything in its power to make that president look bad, and the best way to do that is to plaster every little piece of bad economic news all over the the place. The old saying goes, if you repeat something often enough, people will believe it, no matter how true.

It is possible that we could be headed into an economic recession. However, and technically speaking, we are not yet in a recession. According to InvestorWords.com, a recession is "a period of general economic decline; specifically, a decline in GDP for two or more consecutive quarters."

As of right now, there has only been an economic decline of one quarter.

That said, according to various news outlets (here's one random one)there is a growing number of economists who now believe that the U.S. is headed into a recession. That number has grown from about 25% in September, 2007, to 45% now. Still, 55% of economists think we are not headed into a recession.

Still, most economists expect there to be an economic slowdown this next year whether or not we enter a recession. And, still, most economists, even among those who say we are definitely headed into a recession, believe it will be short lived, perhaps similar to the recessions of 1991 and 2001.

Still, when it comes to the economy, nobody really knows. Most of what we know about the economy is simply based on theory and a historical analysis of past economic events. So, there is a possibility we could go into a recession, and there still is the chance we could fall all the way into a depression.

However, as of right now, despite the indicators, despite the job growth falling, and consumer confidence plunging, despite a slow rise in unemployment and inflation, we are not in a recession yet, unless someone wants to come up with a new definition.

And, we are definitely not in a depression yet.

However, by watching the news, and listening to the presidential candidates, you'd think we were in a full blown depression. No wonder consumer confidence is so low. No wonder so many people are mislead into thinking we were in a depression.