On September 9 I posted here a diary titled "Our Savior Coming Soon". Which made the point that by this time all other issues would be overwelmed by the evolving economic crisis. Sadly, this forecast has more than come true. What we need to make sure happens going forward is that the correct interpretation of why this had occured becomes a dialogue in the media and in our culture. The economic education of Americans to the truth is paramount to making constructive changes in our economic system. The body of this diary is an example of the argument our Democratic leaders must make to the people.
The so called "Reagan Boom" was actually the result of the recognition by his policy makers, that the acceptance of US Treasury bills as a substitute for gold would allow for the funding of "prosperity" by issuing high levels of debt and selling it, under duress, worldwide. Our strength militarily and economically allowed for this type of economic blackmail to succeed.....for a time. Unfortunately, it sowed the seeds of our current problems. No nation, not even this one, can expect to succeed for long when so much of the "wealth" being created is the artificial variety of financial products and asset appreciation. The housing boom is the outcome of there needing to be somewhere for the vast sums of dollars being exported to find a way to return to their place of origin. Since we didn't produce enough goods to offset that flow of dollars overseas the "product" of debt became the substitute.
It doesn't take an economist to see the rot at the core of this distorted economy and it just as easy to see why it wasn't addressed. Our businesses and government have both adopted a model of addressing issues for the next quarter, or the next election cycle, over the long term interests of their constituents or stockholders.
Self deceit is the secret weapon of Reaganomics and it succeeded remarkably well. Each President has in turn, been forced to follow the clarion call initiated by the self congratulatory exceptionalism espoused by Reagan and so gleefully taken up by his successors the Bushes. Jimmy Carter was the first victim of this weapon and anyone who goes back and listens to his speeches today with the benefits of hindsight will see how remarkably prescient his comments were.
Lastly, the distorted "statistics" so often used by the right wing economic pundits, which freely manhandle the truth by using unadjusted measures of income and other slight of hand, serve only to show how easily numbers can obscure what one can see with their own eyes when driving through middle America.
I titled this diary the "full flowering of Reaganomics", but we are not there yet. We will see that full flowering in the decade to come, as the bill for our foolish unwillingness to face the facts, comes due.