This was the week that World War III was supposed to erupt across Europe if you listened to the most alarmist reaction to the Russian occupation of Crimea. Ukraine mobilized their reserves and prepared for the worst while the whole world held its breath. So far, however, nothing has happened.
That is, the missiles aren’t flying and the troops aren’t advancing. There has been action, which is to say a lot more than a visit to Kiev by Secretary of State Kerry and some sternly worded European Union (EU) missives. The money has clearly been bet that there won’t be a war and even more money has been put down on making sure it doesn’t happen.
Think of it like the currency war that is going around the globe right now. This is the primary way that wars are fought now – with money.
While Syria and Ukraine have the world worried about war, a much cooler war continues across the world. This is the one fought not with bullets or missiles, but instead with big wads of cash. The currency war that has swept the globe since 2008 is continuing on many fronts, as we have discussed before.
It’s time for an update. Who is winning the currency war? Right now, the answer appears to be Japan, but China has more than a few tricks it is working on. Europe remains a big loser and the US is pretty much holding even.
President Obama came to St Paul to propose an aggressive new investment in transportation infrastructure, $300B over 4 years. It was a good show that messed up traffic throughout the city, which was only fitting. That increase of $75B per year comes on top of the current $48B per year, or a 150% increase. It’s needed, and as we’ve noted before investments in infrastructure have a great payback for the economy.
But what’s new about this is that the money to pay for it is to come from an overhaul of the corporate tax system, which is also badly needed. The details have yet to be announced, but the overall hike is $150B per year, with half going to infrastructure and the rest to deficit reduction. So what’s not to like about this plan?
It’s a half-step at best, and in so many ways.
If you pay attention to social media, or even just talk amongst your friends, you may have heard some awful things about the economy. Many people, Republican and Democrat, are convinced that things are simply not improving. The feeling tends to be stronger among Republicans, especially Tea Partiers, who believe that socialist policies are still killing us. But the mood crosses party lines rather fluidly.
It boils down to six persistent myths about our economy today. Some are based on old news, taken from horror stories from the depths of this depression around 2010. Some are simply wrong. But all of them reinforce the emotional reason why this is indeed a depression, a dark feeling shared across society. It’s also rather wrong. Let’s run them down.
Where are the jobs? There is no doubt that the lack of full employment is holding the economy back more than anything else. Money in the hands of working people tends to turn over very quickly, since so many people live paycheck to paycheck, so when the poorest are pinched the effects are much bigger than their comparatively low wealth might suggest. Given the system we have, nothing will change that quicker than a lot more work for quickening hearts, strong arms, and active minds. Work is always the source of all wealth.