We Can't Compare Now to 2007

Just a little spiel about the economy: the economic crisis and virtual collapse that occurred in the early fall of 2008 actually started out as a downturn in late 2007.^ Escalating housing prices, called a "bubble," as well as escalating stock prices, ah... called a "bubble," escalating oil prices, ah... called a "bubble," escalating personal debt of all types, and escalating government debt at all levels, which helped "cover up" the true weakness in the American economy, all contributed to an economy ripe for a major collapse. While unemployment was relatively low, many workers were struggling to meet obligations, as debt and low or stagnant wages put a crimp in the pocketbooks of many Americans, although not the wealthiest among us, who continued to reap the rewards of all of the above named problems, as they continued to "rape" the rest of us.

With the collapse of a couple of big banks and the teetering on the brink of collapse by others, the "bubbles" burst, and the economy and the stock market took a downward plunge, as unemployment went in the opposite direction, an upward spiral. The administration of President George W. Bush, previously devoted to "free markets," suddenly, but CORRECTLY, saw the need for GOVERNMENT ACTION. Thus began a period, which continued and escalated in the Obama administration, of action by the federal government to halt and stabilize the economy.^^

Now in the spring of 2012, we are better off, but problems remain, as we are tied more than ever to outside influences. History shows us that the effects of such dramatic downturns linger for years, and this downturn has been no exception. The reasons are really common sense. People defaulted on all sorts of loans, including millions of mortgages, and the use of credit actually shrank, sometimes by consumer choice, sometimes because terrified credit providers would not grant credit. Unemployment has declined, but it is still relatively high, and it may well remain that way for a while, even if economic matters continue to improve. One of the key problems worldwide will be how to reduce government debt and wean the world economy off of deficit spending by governments. The wheels could come off again, if some nations are unable to deal with their debts in a responsible way. American deficits have been declining, but they are still high. No one person or group of people have the answer to these problems, and don't believe anyone who says they can snap their fingers and all will be well. There are many irresponsible people who want to do away with the minimum wage, cut wages and benefits for workers, pretty much outlaw unions, etc, etc. If you notice, these are things about non-wealthy people. As soon as someone mentions tax hikes on wealthy people, these same people go ballistic, claiming the economy can't take any tax hikes. Folks, many of the wealthiest Americans have been doing better in the last couple of years than EVER, and this has been in a slow to moderate economic recovery. The idea that the rest of us can give up things, and that doesn't hurt the economy, but that a few hundred thousand dollars in taxes on people making millions will somehow bring the economy to a standstill is NONSENSE. We heard all of this before, and not all that long ago, in the early part of the Clinton administration, which proposed higher taxes on the well off. The doomsayers and protectors of great wealth told us the end was near, but the economy did the exact opposite, it BOOMED! Don't be fooled.

And another thing, we can't compare the economy of 2007/2008 with the economy in 2012, unless we're all ready to go on another credit binge. HOPEFULLY, many people have learned some lessons, so don't be fooled by those who say, "but in 2007," or "in 2008." Do you want to revisit that perilous time? Further, the devastating earthquake in Japan and the Gulf oil spill hurt the American economy at a time it was seemingly on the mend. Debt problems in certain European countries have made world financial markets jittery, as has a slowdown in China's economy, so continued progress for the American economy is far from certain.

^ The Great Depression started as a downturn in the early summer of 1929, but it didn't begin to turn into a rout until October of that year. For more on the Great Depression, see my series on the subject beginning with: http://pontificating-randy.blogspot.com/2007/08/great-depression-part-one.html

^^ There were similar actions taken in other countries, as the economic collapse was not just in America, but worldwide.

WORD HISTORY:
But-This little and very common word is actually from a compound, "be," not the modern word, rather what became modern "by," and "utana," a Germanic relative of "out," which meant "out, outside." I covered "by" elsewhere, http://pontificating-randy.blogspot.com/2011/10/german-military-leadersnazi-erajodl.html . "Utana" traces back to the Indo European root "ud/ut." West Germanic* had the compound word "bitana," which meant "by the outside, at the outside." This then gave Old English (Anglo-Saxon) "butan," which meant "outside of;" thus also, "besides, except." It wasn't until the 1200s that the word gained more popular usage as a conjunction, as it previously was purely adverbial. Later the word became "boute(n)/buten," before the modern version. Low German Saxon and Frisian have "buten," which still means "outside;" Dutch has "buiten," with the basic meaning "outside," although also with the meaning "but," in certain circumstances. High German once had a form, BUT it died out before the modern era.

* Germanic has three branches: North, East and West. English is West Germanic, and therefore its closest Germanic relatives are German, Low German, Frisian, Dutch, and Afrikaans.