Economic Crisis Spills into Politics all over the Globe
Posted by Michael A. Kamperman on August 31, 2009
Is Japan the canary in the coal mine? On Sunday the Japanese elections swept out the ruling LDP, who has held power since 1955. The consensus opinion is the voters are not embracing the message of the winning Democratic Party; the voters are embracing trying something else…anything else. Such change swept many ruling governments from power in the 1930’s. In the U.S. FDR seized power. In Germany it was Adolph Hitler. While in no way am I suggesting a Nazi regime is waiting in the wings, I am suggesting change is waiting in the wings. Such is the price of a debt-induced inflationary depression on the current leaders. The people know things are not going in the right direction. However, most of the people don’t know what change of direction things should be going in. They only believe it is better to try the devil they don’t know rather than keep the devil they know. The next major industrialized nation up for potential electoral change is Germany. Right now the polls believe Chancellor Angela Merkel’s ruling coalition will prevail. But this expectation has been thrown into doubt by the gains made in elections over the weekend by leftist parties. Like the policy proposals that swept Japan, the left leaning Free Democrats in Germany are the only major party to run on cutting taxes and the federal government bureaucracy. And in both Japan and Germany this platform gained votes. The economic crisis is causing social upheaval to sweep the globe, and it is prevalent in the U.S.
In the U.S. in 2007 less than 1 in 12 Americans were on food stamps. Now the number has risen to 1 in 9. In the middle of 2007 about 1 in 100 Americans with prime mortgages were 30 days delinquent. Today, the number of Americans with prime mortgages that are 30 days delinquent, or more, is approaching 1 in 10. Such devastating personal financial tragedies have consequences. In democracies these consequences are expressed at the ballot box. The economic uncertainty in the U.S. has spilled over at Town Hall meetings held by members of the House and the Senate across the U.S. What is specifically troubling is how easily the depressed and confused electorate can be drawn to ideas that are frankly dangerous to the economic health of the U.S. For example, my own Congressman Chet Edwards held a health care Town Hall meeting in Waco this weekend. Three times questioners suggested we would be better off eliminating Social Security, Medicare, and Medicaid. What panics me is not that an individual in a crowd of over a thousand would stand up and say this. What panics me is the individuals who expressed these viewpoints received standing ovations from large segments of the audience.
In no way would the U.S. be better off eliminating these programs. In fact, during times of debt-induced deflationary depressions the federal government would be wise to expand these programs. But a false fixation on balancing the budget and having fiscal discipline in times of economic crisis risk throwing the U.S. and the world into a new depression greater than the Great Depression. I hope President Obama is paying attention to the economic pain the country is feeling. If not, he will certainly go down in history as President Herbert Hoover II.
