The New Economics – Post 10

Thoughts looking forward to Labor Day … a ways away.

Some concepts that should be considered by our brilliant economic intelligentsia?:

- Human demand for goods and services cannot keep pace with their supply if human demand depends on the purchasing power provided from wages for human labor. (Note: In today's Westernized economic globalization scheme.)

- The huge fees for predictive analysis and other financial services now being extracted from the economy amount to a huge tax on market transactions of real goods and services.

The combination in this country of (1.) the drop in consumer demand facing us because of the drop in mean family purchasing power based on wages for human labor, and (2.) the drag on the economy by the imposition of financial services fees, portends an economic correction of significant magnitude ahead.

While we conceivably have ways and means to wring the exorbitant financial services fees out of our economic system fairly quickly, we do not have ways and means to efficiently adjust mean family purchasing power without significant social/political upheaval. (Note: We have gone about as far as we can with inflating home property values.) This is one of the problems of Westernized economic globalization in third world countries: there is no efficient mechanism in the touted (and dramatically misnamed) “free” market system to allow the basic unit of society, the family, to efficiently adjust purchasing power as needed to stay afloat in a Western-style (“money” and banking) market.

The United States is now on its way to becoming a banana republic with its chasm between rich and poor. Before we get there, a populist leader will arise to challenge us to alter course. As we go through our next sociopolitical-economic interregnum, China will be observing our course with a hammer-lock on much of the world’s resources and much of our cash.

Fasten your seatbelts, folks. This is going to get interesting.