Posted on 12/22/2012 4:08:31 AM PST by Kaslin
We need a new foreign policy and we need to spend a lot less money.
That’s the message stock market is telling us.
It’s a message painted in big bold letters and we’d be wise to read it.
We need a foreign policy that uses the proven lessons we learned from the Cold War; a policy that pares back our commitment of troops to combat operations.
We need a fiscal policy that we learned during the 30 years from the 1960s to 1990, when our economy only did well as we restrained government spending to an amount affordable by our GDP.
During the Cold War we fought wars by proxy, generally speaking, or we committed a limited amount of troops for a short period of time.
When we didn’t do that, we lost local wars- a tie being the same as a loss in my book.
It was called containment. It was predicated on the belief that our system was superior to Communism and so, in the long run, our system would prevail. It was an optimistic way to wage war.
During the same period, we learned that when we restrain spending as a percentage of GDP, the economy does much better. It’s a fiscal policy that could also be known as containment. We contained the amount of power the government had and maintained the power of individuals by limiting spending. It too was an optimistic system because it bolstered the freedom of the individual to make choices.
When we expanded the power of government and spent more money on government the economy didn’t do well as all. It was kind of a self-starting restraint on government.
The lesson came home to me as I was looking at a chart of stock market activity from 1950 to 2010. (See chart below).
I was struck by the similar patterns stock prices made from the period from about 1966 to 1980 and the period from 2001 to the present.
Both the period from the mid-Sixties onward and the period from 2001 onward show significant stock market corrections, followed by a period of sideways stock market action, followed by other, more significant market corrections.
When you look at the similar patterns they make on a chart, it’s spooky. One could practically lay one chart over the other
In market lore, the period from the mid-Sixties until about the time Reagan was elected is known as the “lost decade.” And yes, we know it’s longer than ten years.
It followed a similar pattern that markets saw from 1929 to 1942 which was the original “lost decade.”
There were several components that made up the lost decade in the 1960s, some that correlate well to the 1930s, some that don’t. But generally these components correlate very well to our current lost decade.
There was an unprecedented expansion of federal spending from 1965 to 1980. Federal spending went up 500 percent in that period. By 1983 it took up 23.5 percent of GDP. Spending as measured by GDP then started to move back downward, reaching a low of 18.2 percent in 2001. Then the trend began to reverse itself. The federal budget now stands at 24-25 percent of our GDP, with most of the increase coming in the last two years.
In the lost decade of the Sixties and Seventies we fought a war in Vietnam that commanded a sizable commitment of US troops- and US dollars- a war without an exit strategy. Obviously there is a correlation between wars we fight today in Afghanistan and the middle and near East.
There was a polarization of political opinions back then too, with no room for compromise between socialist-Marxist ideology and conservative Capitalism; with the party of Aquarius asking “Can’t we all just make love, not war?”
No, we couldn’t.
Today we have the same three-sided argument between Islamists, western Capitalists and multicultural Internationalist. The multiculturalists, who also happen to be socialists, will stand up for every right, except for the right to defend ourselves: “Can’t we all just get along?”
No; no we can’t.
But we can battle in smarter ways.
Stock market prices say an awful lot about where we are as a country beside just how profitable companies are. It’s a kind of rolling opinion poll where investors express themselves with their money.
Over a long period of time, the stock market tends to be correct in their expressions of confidence in government.
A decade and a half of not hearing them is long enough.
Agreed because it is not as profitable to make love as it is to rebuild that which war destroys!!!
The Cold War is exactly like the fight against Muslim extremism? Enough so that we should fight it the same way?
Let's see:
Opponents in Cold War: Ideological governments controlling well over a billion people and posing a major existential threat by conventional military and an even greater one from nuclear attack. Distinct possibiity of a major controntation resulting in total destruction of USA and/or end of civilization or even human life. Possible death toll within hours of all out war starting: Billions.
Opponents in war against Muslim extremism: Loosely organized NGOs posing zero conventional military threat or nuclear threat at this time. Maximum possible threat: They get their hands on a few nukes and take out six American cities. Possible death toll: 1M? (in America). Could be much higher in an countries held responsible for assisting in the attack.
There may be excellent reasons for not trying to remake countries as we see fit. That our present situation is "the same" as that in the Cold War is not one of those reasons.
One of the reasons conservative vs. liberal arguments about the fight against Muslim extremism is so sterile is that we are constantly trying to make the conflict "just like" some previous war.
Conservatives (or possibly just the neo version) think it's always the 1930s and appeasement must be avoided. Liberals always think it's 1965 and we need to avoided being dragged into "another Vietnam."
How's about we try recognizing that Muslim terrorists are neither Hitler nor Ho? That new problems require new solutions, not tired recycling of what would supposedly have prevented the earlier problems?
You make it sound like the muslim threat is trivial... With the rates the muslims are breeding and migrating at they are likely to take over Russia and western Europe, including all its military might. The EU is likely to become the kernel of a future Khaliphate with the native Europeans becoming an oppressed minority like the copts and other natives in muslim occupied territories. And the same *will* happen to the US unless you close your borders.
The muslim threat is far more serious than communism. It too can end our civilizations, our way of life and slaughter billions. It may be a longer term threat, but unlike communism there is little chance of the religion dying... We are in a fight for our lives, and most people don’t even realize it much less put up any resistance...
“In the lost decade of the Sixties and Seventies we fought a war in Vietnam that commanded a sizable commitment of US troops- and US dollars- a war without an exit strategy. “
A sentence that illustrates the western problem with conflict all too clearly... The problem wasn’t the lack of an exit strategy. The problem was the lack of a victory strategy...
That's because that's what I belive.
The Muslim threat is only serious because we refuse to address it.
Once we do the threat is over.
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