Financial panic changes politics in this country
By Doug Rich
The economic situation the U.S. finds itself in today is a direct result of the financial panic in the fall of 2008, according to Stuart Varney, Fox News analyst. Varney was the featured speaker at the Cattle Industry Conference on Feb. 7 in Tampa, Fla.
That panic resulted in a $700,000 billion bailout of Wall Street. The financial crisis spread to Europe where they passed their own bailout program worth $2 trillion euros.
"Everything flowed from there, changes in the politics, changes in the regulatory environment, you name it changed," Varney said.
How did the major media outlets treat the panic in 2008? Varney said they were negative on capitalism. The media said it was the fault of capitalism. Markets don't work and America has failed was the message, Varney said. According to the media it was the naked pursuit of money and profit that caused the panic.
"They were totally negative," Varney said. "The outrage over excess by CEOs stirred the anger and it is still there today."
Varney said within three weeks of the panic Barack Obama was elected president. Obama held back during the panic and was perceived as calm, aloof, but knowledgeable. That changed our politics completely, Varney said.
Starting with Ronald Reagan, Varney said we had a market economy that was for growth, expansion, and optimism. That changed because of the panic.
"We became an economy where it is all government all the time," Varney said.
Out of this change in politics came a huge stimulus program and increased spending in every single government department. Along with the stimulus came much more far-reaching regulation. The national debt skyrocketed after Obama was elected from $10.6 trillion to $16.5 trillion as of today. Varney traced this explosion of red ink back to the panic and the changes in politics and policy in this country.
"We changed the way we think about money," Varney said. "The watchword of the day in America is fairness."
Varney said America is beginning to look more like Europe with weak growth somewhere around 2 percent, a real unemployment rate of 14 percent, and this massive rise in debt.
Another concern for the global economy is the falling fertility rate in developed countries. The magic number in fertility studies is 2.1. Countries must maintain a fertility rate of 2.1 to keep a population stable. In Italy, Greece, Rome and Russia the fertility rate is 1.2. In Germany, Spain, and Japan the fertility rate in 1.3. In all of Europe it is 1.8 or lower.
"There is not a single European country with replacement level fertility," Varney said.
The situation is very much the same in the Far East. Varney said the fertility rate in South Korea is 1.6, Japan 1.3, Taiwan 1.5, and in Singapore 1.1. There are 24 countries around the world that are losing population.
Today Germany has a population of 82 million but by the year 2035 it will be down to 60 million. It will lose a quarter of its population in one generation. In Russian at the end of communism in 1993 there were 149 million Russians. Today Russian has 139 million people.
At the same time that fertility rates are dropping the average age of these populations is going up. Life expectancy of a Japanese female is 82 and for a Japanese male it is 80. In America a female can expect to reach 79 years of age while males in this country live to 78. Varney said when Social Security was started in this country the life expectancy of anyone 65 years old was 14 months. Today the average 65-year-old can expect to live another 14 years.
"Demographic shift means a whole lot more people retired who are living on the pensions and health benefits supplied by an ever shrinking group of people," Varney said. "This is a demographic clash."
Varney said those are the headlines of the future. These demographics are our destiny and it is a huge problem, Varney said.
Doug Rich can be reached by phone at 785-749-5304 or by email at email@example.com.