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Why We’re Broke

Posted on November 28 2010 8:00 am
Has been a computer programmer/consultant for 25 years. Now turning to writing -- author of "A Critical Inquiry into The Case Against Capital."

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Salvation Army Toys

Salvation Army thrift store.

As a rule, whenever things look bad for the retail industry overall, things tend to perk up for less expensive venues like secondhand stores and thrift stores. That is the situation now, according to Consumer Reports:

[S]econdhand stores are getting in on the Black Friday selling-spree this year. Due to the Recession and general belt-tightening, thrift stores are an attractive option for shoppers looking to score an affordable gift. The National Association of Resale & Thrift Shops says that while retail sales have been down, resale is up.

That is just one sign of the weakened condition of our economy. A more serious  symptom is the decreasing value of the dollar. China and Russia have abandoned the buck, as reported in this article (“China, Russia quit dollar,” by Su Qiang and Li Xiaokun, Asia News Network article, Nov 24, 2010) :

China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.

The dollar is being abandoned like a sinking ship – the latest indication that we’re on the skids. In addition there are problems like unemployment, gigantic deficits both in trade and the budget, loss of manufacturing jobs, and crushing debt.


What the well-dressed middle-class American is wearing.

We’re broke, and Obama and his advisors are flailing around in search of a solution, or even a correct diagnosis. Various villains have been identified as the root of the problem — China’s manipulation of its currency, George Bush’s failure to regulate businesses, predatory housing loans made by greedy banks, etc. And various solutions have been tried: flushing away massive sums of “stimulus” money, bailing out “too-big-to-fail” companies, printing money to “monetize the debt.”  None have helped, and none will solve the problem.

Flailing Around

Flailing around.

Our leaders won’t solve our economic crisis, because they will never abandon their economic dogma about off-shoring, or rather, about “protectionism.” They insist we must passively accept the loss of our manufacturing sector – a loss which has nearly destroyed our economy. The sound of our economy disintegrating is that same “giant sucking sound” Ross Perot predicted years ago.

But all the “experts” keep fighting the last war, analyzing the situation through the prism of times past, and clinging to the conventional theoretical framework. In one opinion piece after another, they beat up on “protectionism,” give the Smoot-Hawley Tariff a sound drubbing, and crush the Great Depression. They have constructed a Maginot Line of rhetoric to defend against “protectionism,” while disinvestment, or the loss of productive capital, is destroying our economy.

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