This was submitted before the market downturn last spring but I think its still relevant....J.W.
Still scratching your head over claims that the economy is booming? Are you one of the growing number of people asking themselves why Wall Street celebrates with another record-breaking rally whenever unemployment rises? Does the hair on the back of your neck prickle when Federal Reserve Tzar Greenspan says that "wage pressures" are the cause of inflation? In other words...when you get a raise it's your fault that prices go up, and not the fault of your phenomenally profitable employer, who passes the cost of your raise onto the customers! The fact that so many people believe this hokum is a tribute to the power of corporate P.R. And the Fed, an independent banking institution, is strongly motivated to go along with the scam. Here's why: As loaning institutions, banks make their profit from the interest they charge borrowers. If they charge a fairly hefty percentage interest, they can make a substantial killing...unless the economy is "inflated," prices and wages are going up, and the percentage charged for interest remains stationary. When that happens, old loans become less and less profitable, because the principal amount borrowed becomes de-flated by the devaluation of cash in an inflationary period. That's good for the wage earner, even though his growing pay check doesn't buy any more than his smaller one did, due to escalating prices. But borrowing at reasonable interest rates is a better deal for the average worker in times of inflation (unless you get hooked by "adjustable" interest rates).
So what happens when inflation is kept "under control?" The answer: just what we see today. A booming investor market (unearned income rises) and an increasingly marginalized workforce that sees no wage increases, is thus forced to borrow more and more to maintain a standard of living, more unemployment, which guarantees wages will remain low since competition for jobs is keen, increasing pauperization and the creation of debt slaves unable to make career or lifestyle choices because they pay most of their income to maintain the interest burden on the never-lessening debt they have accrued. The solution is not inflation, but anti-usury laws that have teeth and will make predatory banking policies ineffectual. Effective anti-trust enforcement, the elimination of welfare for corporations and wealthy individuals, the imposition of an income tax on investment earnings, and the strengthening, not the elimination of capital gains taxes to ensure a fair distribution of responsibility for funding the programs supported by the American people (not corporate lobbyists.)
The airbags in the driver's seat of our national economy need to be put on a crash course with democratic reality: Inflate Here!