The Economy

It is sometimes so darn confusing, The stock market is near it's four year high, yet unemployment rose in 44 out of 50 states.  Yet not all states are suffering high unemployment rates.  The drought has ravaged the mid section of the country, yet food prices seem to be going lower.  We have an election in November, yet the economy seems to languish.  Tech stocks like Face Book and Groupon are tanking, yet Apple is climbing.  What an incredible time we live in!  The Dollar showed gains against the Euro and the Pound Sterling, and is showing weakness against the Yen.  It seems no one knows what to expect.  Oil is just under $100 per barrel, and gas prices are in the mid $3 range per gallon. 

The first and last are probably the most important.  Unemployment is a problem that just won't go away.  High gas prices keep more money out of the economy, as people have to buy gas to get to work.  They are putting off the purchase of other things, especially higher priced consumer goods.  And it is these goods that for the most part indicate the health of our economy.  However, high gas prices are also encouraging domestic oil drilling.  Those states that seem to be in a better position with their unemployment rate, for the most part are resource rich.  North Dakota has the lowest unemployment rate at 3%.  This is the state that is finding oil reserves in shale deposits.  That part of oil is growing, while OPEC tries to control traditional supply.

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Until the United States regains control of our natural resources, and no longer have to depend on foreign supplies, we will continue to see wide swings in our economy.  The US was built by cheap energy, primarily oil.  We can not survive economically when the prices go too high.  We do not have state sponsored 'slave' labor.  We are still isolated from Europe and Asia by oceans.  We need high productivity, but we also need to be able to ship our products as cheaply as possible.  Exports rely on low cost shipping to compete in foreign markets.  One question we always seem to ask is, how can China make a product, put it on a ship, land that ship in California, then truck or rail road it to New York, and still be cheaper than a plant in upstate New York?  In China's case they have low paid employees, they use their resources, and their monetary policy is unjust.  Their central government controls resources and prices them to encourage the use.  They have much more lenient environmental laws than the US or Europe.  And they seem to not care about working conditions in their factories.  Here in the US we do care.  Our resources seem to more and more to be abandoned.  And our employees tend to make more.  That is why emerging countries like China and India can compete in our country.  While there are some things that are important, like a clean environment, it seems we need to level the playing field, and take our reliance off other peoples resources.

The bottom line is, we need to build our ability to tap our resources, whether it is oil, or rare earth elements, or people as effectively as possible to compete in the world economy.  That can be achieved in a number of ways.  Currently, we seem to favor letting market forces decimate our people and keep us from obtaining our own resources.  Maybe it is time to consider new trade policy that might level the financial side.  If a country is polluting their air, it eventually gets here.  Perhaps import duties that allow us to clean our air would be appropriate.  If a country uses prison labor or other low paid labor, perhaps a duty to compensate our unemployed.  If a country allows poor infrastructure, perhaps a duty to help the refugees.  It is time to reconsider everything, the status quo no longer works.