The dreaded “d” word

By Dale Cooper

Confused, perplexed and upset by the economy? Wondering just where your country’s headed? The answer is, in short, off a cliff.

The global economy, led by the US, which in turn is led by lawyer legislators and a corrupt congress, has entered an economic no-man’s-land, a place littered with shrinking economic activity and diminished opportunities. It’s what our parents and grandparents called a “depression.” How long it might last is moot.

Worst case would be continued deflation. Nobody, especially in the media or the political class, wants to mention that “d” word. However to believe that we’re not already there is to deny reality. When’s the last time you went to your Albertson’s or Home Depot and did not see so many red or yellow tags proclaiming a “NEW LOW PRICE” that the place looked like a used car lot on the 4th of July?

Of course our political class doesn’t mention the “d” word because they’re afraid … very afraid of the other “d” word, deflation. Deflation is the engine of economic catastrophe. It’s self-accelerating, and ultimately self-consuming. It’s caused by a contraction in the size of the market, which creates a “buyer’s market.” This lowers prices as merchants chase a diminishing number of customers. It also makes dollars or Swiss francs or gold or whatever more valuable, which consequently causes people to delay purchases today in the expectation that prices will be lower tomorrow.

Sure there are exceptions to this, but they simply mask the myriad of small, every day transactions that collectively can have a devastating impact, such as deflation’s unsavory traveling companions. The first of these is called “unemployment.” He’s young fellow who gets fired-up easily. But he’s not nearly as fiery his other friend, the one called “hatred.” This guy loves violence and likes to visit places like Greece, England, Wisconsin and Longview, Washington.

Add to this deadly duo politicians with plans and weasel-words crafted to sound good in debates, but do no one any good other than the politicians themselves.

These politicians have a few traveling companions too. “Ineptitude” is one. He somehow always exacerbates a bad situation by making it worse, like the pursuit of health care reform during the early stages of the “great recession” instead of focusing on jobs; or the squandering of blood and treasure in foreign wars; or an impotent economic stimulus plan based on the premise that you can spend your way out of debt. That’s ineptitude in its finest … and the roadmap to a very steep cliff.