Thoughts from Croatia

I have a friend who lives in Croatia and she is well educated and well informed and she asked me for my thoughts on the election and I thought you might be interested in the view of what I think is a smart middle class European. First I will show you what I sent her and then her answer. When I was growing up my mother used to say that the rich get richer and the poor get poorer. It was obvious to her and others like her that the government in cahoots with big business was funneling money and favors to the rich. In an ideal situation the poor people would have risen up and demanded that this favoritism come to a stop. The less rich had this idea in their hearts but they were unable to change the system, so they decided to try a new approach. Instead of fighting the corruption, they decided to demand their fair share of the government largess and with the election of President Obama they got the opening they needed. His main theme was the redistribution of the wealth based on the concept of fairness and this is a euphemistic way of saying he would take money from those who have a lot and give it to those who have little. With the re-election of Obama this plan was approved by the American people and we have now cemented the path we have been on for the past 50 years but at an accelerated pace. The people have realized that they can get gifts from the government just like the rich and powerful have been getting and this trend will continue and the demographics of the continued growth of minorities will add to the momentum. The problem with this is that there are too many non-rich and there is not enough money to go around. This is what a number of famous people meant when they said something to the equivalent of: A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses. With this past election the majority has discovered it can vote itself benefits and the phrase loose fiscal policy means going in debt to pay out the benefits to get more votes. This has been going on for most of my life and will now continue at a faster rate. The national debt has been slowly rising since our founding in 1787 from zero to 8 trillion in 2005. The past seven years it has grown to 16 trillion. This means that in seven years we have added to the debt as much as we ran up in the first 221 years. Experts tell us that you can’t keep spending more than you earn but I have been hearing that for 50 plus years and we just keep on going so who knows if this will ever reach the breaking point. I have an idea this point will be tested sometime in the next ten years. I see two possible ways out of this mess. The first and by far the best is to grow the economy through innovation and the second is inflation. Maybe there is a third way that I am unaware of and time will tell. Jack Hello jack thanx for ur thoughts on election. I am glad that u recognise the problem of social unequality whic now can be , again, adressed in marxist term of gaps between two social classes, the ruling class of owners of productional means and the class of producers (the rest of population which is not rich and existentially depends on opportunity to produce eg. will of the ruling class to give them job and exploit their productional resources for social and economical unjust fee). I am also glad that you recognised Obama's effort for social redistribution of wealth which is neccessary and would not get his attention and support if he wasn't aware of painful unlimited concentration of wealth in hands of small amounts of people that started to hurt economy in scale that we didnt witness in modern histiry of mankind since fall of feudalism and slavery. They endager economy by blocking circulation neccesary level of their profit so that economies would survive. They squeezed all the money and resources in hands of one small minority to such extent of greed that economies won't survive unlese something is done and done quickly. In my opinion first neccessary step is redistribution of social wealth e.g. sucking some of that money back for neesds of economies and with this guaranting them to survive. Another step is, i agree, boosting up investments and invetions but we may disagree in way how to do that. If i understood you well you support more friedmann's and hayek's model, which, in my opinion, leade exacly where we stand now - into sucking more and more money to small group of people which were supposed to inject extra profits back to economy and open new jobs but are instead keeping all the profits for themselves. Since this is exactly what caused world economical crysis i say the only way to save our economies is to limit that flow of money from private pockets and inject it back to economy to open new jobs with it. That' exactly the model whicg france stands for and i believe that thist model will be histirically proven as correct one. Of course, "everybody" opposes but who are those "everybody" really? They are exactly the same minority who caused the problem and refuses to share even minimum necessary for economies to survive. Popolation has grown to such extent that they stopped carrying how to feed labour force in order to keep them in condition to produce; they now have comfort to close and not pay millions of jobs in usa and europe and simply move production to other part of world and circulate it around without paying minimal share to labour force as long as pool of labour force that can be exploited around the globe is full and ready for their needs. In more misery they push people, for lower price they are willing to produce and if this destroys economies around the world, which already happened, they dont care as long as they make profits. And they wont stop unless they are forced to. I believe this is exactly what obama tries to do - stopping more damage. I doubt that he can be succesful because that minority is so powerful that it can decide who will lead national states and what national and global laws will be on force; but i think he can be successful with help from within that small group because even some of the richest men on earth have recognised that current situation puts us all in grave. I am reffering, for example, to words of american multimillionare warren buffet (i hope that i remember his name correctly) who have publicly asked for more taxes for the rich and through this for redistribution of social wealth in order to keep economis circulating and enable them to survive.