Life on the Road – Trucking News Blog

During conversation and when writing I often say “Back before the Democrats wrecked the Economy”.  That is a true statement.  It is, however, not the WHOLE truth.  To explain everything would take a vast amount of time, even if I did understand it which I don’t pretend that I do.

What I do understand, or think I do, is this.

Some while ago, back before the Democrats wrecked the economy, the democrats were WORKING on wrecking the economy.  With the best of intentions of course.  They were doing many things at once. One thing they were doing was called the Community Reinvestment Act.  This goes a long way back, maybe before Clinton , perhaps even to Carter.  What it did was to force the banks to lend money to people who were a HUGE credit risk.  The  stated purpose was to buy homes. Incidentally a lot of “officials” became wealthy..purely coincidental I’m sure.

Very upstanding and all.  People should have homes.  Should it matter that they can’t afford them?  It didn’t seem so.

While this was going on serious “stuff” happened overseas.  The Soviet Union collapsed for one.  Less publicized was China.  To make a long story short China became more capitalist and finally got it’s economy going.  Similarly so did India. We’re talking several Billion people here.

The emerging economies of China, India, Indonesia and to some extent Russia caused a demand for energy.  Over time this demand grew. It grew dramatically.

Now skip back to the United States.  Recall the term “SubPrime Lending”.  This was a carry over from the Community Investment Act.  It get’s really complicated (perhaps purposely so) and government agencies such as Fannie Mae, Freddie Mack and various Politicians figure prominently.  The upshot of it is that there was all this money,in the form of mortgages,  just sitting there.

Tooooo much temptation.  Certain wall street investment firms couldn’t take the temptation and started playing games.  The technical term was Mortgage Based Derivatives.  The way it works was that these firms would corral a large number of risky mortgages , say magic words over them and behold, a new financial instrument.  These instruments were then sold “as if” they weren’t, in fact, based on a risky base. (mortgages to folks who couldn’t afford them).  We’re talking Trillions of dollars here, circulated throughout the world.  An analogy would be concrete with too much sand and too little cement.

Now recall the growing overseas economies of China, India, etc.  The demand for energy is continueing to increase.  Other Wall Street Stinkers saw an opportunity.  They were called Speculators.  Useing various financial tricks they caused the price of oil to increase over and above what it was doing anyway.

And the price of Gasoline went up.  And the price of Diesel went up.  We’re talking Asymptotic curve.  An asymptotic curve is a mathematical term describing a curve which starts off sloooooowly rising but then takes a sudden turn.  Straight up.  That pretty much describes the cost of Diesel.  Diesel doubled in price in a short period of time.

This caused a chain reaction.  Other prices went up.  All over the world and especially in the United States people suddenly found that they were living beyond their means.  Waaaaaay beyond.  Gradually and then in increasing numbers people began to default on their obligations.  Houses were foreclosed on.

The “Housing Bubble” burst.  This was bad news.  Really bad.  The financial derivatives based upon the subprime mortages suddenly were worth pennies on the dollar.  These derivatives were themselves the base for other financial structures.

It was like a building made from the above mentioned concrete received a shock, and having insufficient cement, began to collapse.

This was a recursive process.  A chain reaction if you will.  China and India’s economies were based on selling to the United States.  The United States stopped buying.  China and India suddenly didn’t need near as much Oil anymore.  The price of oil collapsed.  The speculators took a bath.  The drilling industry shut down…

One thing led to another thing which led to another things….

It was and is a mess.

Back before the Democrats crashed the economy there were folks in washington who might have done something about it.  Not since last election .  The folks in office now are what’s called “Keynesians”.  In other words they adhere to the teachings of a long dead economist named Keynes.  The same Keynes who advised President Roosevelt back during the Great Depression.  The reason it was the Great Depression and not just another recession was because of what then President Roosevelt did on advice from Keynes.

Get the Picture?

Add to that the biggest Hoax In the History of the World.  It’s called Global Warming.  What’s it’s supposed to do is “Save the Planet”.  The planet doesn’t need to be saved.  What it’s really doing is transferring huge sums of money to various people, most of whom are democrats.

What it’s ALSO doing, added to Keynesian Economics is absolutely preventing any chance of economic recovery.

And…..just to brighten your day.  It’s been over two years since the Sun has had any Sunspots.  Sun Spot cycle 24 is way over due.  There hasn’t been any global warming, at all, in ten years.  This has happened before.  Most recently a few hundred years ago, they called it the Dalton Minimum.  Minimum referring to sunspots.  Coincidentally ,I’m sure, but they also called that time the Little Ice Age.  Two hundred years ago a wagon train crossed the frozen Mississippi in December in Missouri, just south of where St. Louis is now.

I’m sitting just south of Toledo Ohio.  It’s almost June.

It’s a little chilly outside.