Forecast for 2008
We are living in a period of unprecedented corporate wealth. This is similar to the 1890s and the 1920s, but the extreme disparity is far worse today. We have a growing number of billionaires in our society and the numbers of the poor and homeless are growing. Most people are in debt with credit cards and mortgages and car loans. There are few people with substantial savings. Labor unions are weak and most Americans like to ignore the realities of class in our society.
Consumerism is the engine that keeps the cornucopia flowing and consumerism is having a head on collision with the environment. Global warming is a real phenomena and that is why the oil and energy companies are denying it. They know that it is real, but their business depends on selling oil. Their main partners the automobile companies are trying to get the public to ignore the global warming activity that is caused by carbon burning vehicles, aircraft and ships.
I think we will need to break out of the old ways of doing things. Corporate capitalism is the main problem and governmental intervention is the only way to rein it in. I don’t see Hillary doing this. Edwards and Obama have the potential to change things. I think a major economic shock will be necessary to reorient the economic system. Cf. The 1930s.
We still have a number of New Deal era reforms in place to cushion the shock, but the Reagan/Bush era has waged an outright war on the New Deal and the usefulness of government in peoples’ lives. The Reagan/Goldwater ideology opposes the welfare state in the name of liberty. But in the name of security it asks the federal government to support a bloated military machine. This military machine is the main reason we have international trade with cheap goods from abroad. It requires massive amounts of oil to run on and that is why we are in the Middle East with guns blazing away. Our oil based war machine is designed to protect oil and to continue using massive amounts of it in ships, planes, tanks, etc.
2008 will be a turning point because of the mortgage crisis, decline of housing starts, decline of housing market values. The price of oil will continue to rise.
I think we are headed for a serious recession and the Federal Reserve will not pull us out of it. A change in fiscal policy, not monetary policy, is required. Fiscal policy involves raising or lowering taxes and initiating expenditures. The right wing fears fiscal policy because it is a threat to their privileged inequality.
I see the Democrats building a larger majority in both houses this Fall. The Democrats will win the Presidency. Getting out of Iraq will be a consensus position, if it is not already. (The military is having serious problems recruiting soldiers and retaining existing ones.) The future health of the economy will be the main concern and this will require a greater role for the federal government.
To conclude, there are similarities with the 1890s and the 1920s and both of those boom eras ended in serious recession/depression. We are headed for a serious accounting for the past 8 reckless years of Bush and Company. Not exactly a rendezvous with destiny, but very similar. My main worry is whether we will remain a democracy as we go through the crisis.
I see this as a realistic, not a pessimistic, analysis of our current situation.