4
     
    
   
   
    
     
      Politics
     
    
   
   
    
     
      Sunday,
      Feb.25th
      -
      Fumigation
      Day
     
     
      in
      Main
      Building.
      Nobody
      is
     
     
      allowed
      in
      because
      they
      are
      killing
     
     
      vermin
      of
      all
      kind.
      Wonder
      if
      they
     
     
      will
      get
      around
      to
      the
      student
     
     
      union?
      But
      fumigation,
      in
      a
      way,
      is
     
     
      kind
      of
      like
      cleaning
      pigeon
      shit
      off
     
     
      your
      car.
      Apply
      poison
      and
      scrub,
      it
     
     
      is
      bound
      to
      come
      off
      but
      the
      stink
     
     
      will
      always
      be
      there,
      and
      in
      a
      way
     
     
      that
      relates
      to
      what
      I
      want
      to
      talk
     
     
      about
      today,
      the
      effect
      of
      the
      rise
      on
     
     
      energy
      prices
      on
      _
      consumers.
     
     
      Western
      economies
      are
      being
     
     
      severely
      impacted
      by
      this
      and
      are
     
     
      creating
      the
      right
      conditions
      for
      a
     
     
      recently
      coined
      economic
      phenom-
     
     
      enon,
      stagflation?
     
    

    
     
      That
      is
      right
      boys
      and
      girls,
     
     
      that
      is
      right...
      Stagflation.
      The
     
     
      biggest
      reason
      for
      this
      is
      lag
      time.
     
     
      Basically,
      this
      means
      it
      takes
      time
     
     
      to
      measure
      the
      impact
      of
      change
      as
     
     
      it
      filters
      through
      the
      system.
      The
     
     
      rise
      in
      energy
      prices
      is
      starting
      to
     
     
      affect
      the
      cost
      of
      goods.
      The
      price
     
     
      of
      oil
      has
      also
      risen
      gradually
      and,
     
     
      aside
      from
      its
      direct
      impact
      on
     
     
      motorists,
      is
      forcing
      the
      fixed
      price
     
     
      manufacturers
      pay
      per
      unit
      pro-
     
     
      duced
      to
      rise
      as
      well.
     
    

    
     
      As
      the
      price
      shock
      increase
     
     
      levels
      off,
      the
      price
      per
      unit
      for
      the
     
     
      manufacturer
      rises.
      With
      energy
     
     
      prices
      that
      means
      almost
      all
      goods
     
     
      and
      some
      service
      industries
      are
     
     
      impacted
      by
      this
      price
      shock.
      The
     
     
      rise
      in
      the
      prices
      of
      all
      of
      these
     
     
      goods
      leads
      to
      inflation.
      The
      econ-
     
     
      omy
      is
      showing
      signs
      of
      slowing
     
     
      (we
      are
      producing
      less
      than
      we
      did)
     
     
      and
      is
      faced
      with
      the
      worst
      possible
     
     
      scenario
      when
      the
      present
      President
     
     
      of
      the
      United
      States
      believes
      we
      are
     
     
      in
      a
      recession
      (although
      he
      proba-
     
     
      bly
      has
      his
      own
      reasons).
     
    

    
     
      But
      whether
      stagflation
      will
     
     
      stick
      withthe
      same
      impact
      it
      did
      in
     
     
      the
      1980’s
      is
      a
      different
      question
      or
     
     
      even
      a
      race,
      if
      you
      will.
      Back
      in
      the
     
    
   
   
    
     
      The
      Cadre
     
    
   
   
    
     
      a
      ©
      *
     
     
      Se
      Pebiead
      BPare
     
    
   
   
    
     
      80’s,
      stagflation
      reared
      its
      ugly
      face
     
     
      through
      a
      lens
      that
      saw
      high
      rates
      of
     
     
      unemployment,
      high
      levels
      of
     
     
      inflation,
      high
      interest
      rates,
      and
     
     
      low
      levels
      of
      economic
      growth
      (rel-
     
    
   
   
    
     
      ative
      to
      inflation).
      This
      combo
      had
     
    
   
   
    
     
      a
      devastating
      impact.
     
    

    
     
      High
      interest
      rates
      mean
     
     
      that
      it
      is
      difficult
      to
      stimulate
      the
     
     
      economy
      because
      money
      is
      too
     
     
      expensive
      to
      borrow,
      so
      no
      invest-
     
     
      ments
      are
      made.
      At
      the
      same
      time
     
     
      those
      high
      rates
      are
      driving
      people
     
     
      out
      of
      business
      as
      they
      can
      no
     
     
      longer
      afford
      the
      high
      cost
      of
     
     
      financing
      debt.
     
    

    
     
      This
      leads
      to
      a
      rise
      in
      the
     
     
      unemployment
      rate.
      More
      people
     
     
      looking
      for
      jobs
      also
      impact
      the
     
     
      economy
      because
      competition
      aris-
     
     
      es
      for
      whatever
      work
      is
      left
      and
      the
     
     
      employers
      are
      in
      the
      enviable
      posi-
     
     
      tion
      of
      hiring
      from
      a
      large
      pool
      of
     
     
      candidates
      and
      possibly
      giving
     
     
      them
      less
      than
      the
      job
      deserves.
     
     
      This
      tends
      to
      freeze
      income
      growth
     
     
      for
      the
      public
      overall.
      Meanwhile,
     
     
      everything
      that
      is
      purchased
      is
     
     
      more
      expensive
      which
      means
      peo-
     
     
      ple
      are
      relatively
      poorer
      with
      the
     
     
      same
      amount
      of
      money
      they
      had
     
     
      before.
      Basically,
      an
      unattractive
     
     
      picture
      is
      painted.
     
    

    
     
      How
      to
      get
      out
      of
      it?
     
     
      Reducing
      interest
      rates
      is
      the
      best
     
     
      way
      to‘do
      so,
      but
      again
      any
      reduc-
     
     
      tion
      takes
      time
      (lag
      time)
      to
      filter
     
     
      through
      the
      system.
      Control
      of
     
     
      wages
      and
      prices
      is
      a
      good
      way
      to
     
     
      combat
      inflation
      but
      it
      takes
      the
     
     
      invisible
      hand
      out
      of
      its
      role
      as
      a
     
     
      guide
      to
      the
      economy.
      Further,
     
     
      freezing
      wages
      tends
      to
      aggravate
     
     
      the
      public,
      who
      always
      have
      the
     
     
      option
      of
      fleeing.
      Either
      way,
     
     
      things
      are
      not
      pretty.
     
    

    
     
      Today’s
      situation
      is
      starting
     
     
      to
      have
      scary
      similarities
      to
      the
     
     
      80’s.
      Rising
      energy
      prices
      are
     
     
      beginning
      to
      impact
      inflation.
     
    
   
   
    
     
       
     
    
   
   
    
     
      The
      Bush
      boys.
     
    
   
   
    
     
      Prices
      are
      rising
      yet
      wages
      are
      not
     
     
      keeping
      up.
      This
      means
      that
      we
      are
     
     
      relatively
      poorer
      than
      we
      were.
      The
     
     
      upside
      for
      some
      is
      that
      the
      govern-
     
     
      ment
      is
      imposing
      a
      serious
      tax
      cut
     
     
      with
      the
      hope
      that
      the
      cut
      will
      put
     
     
      more
      money
      into
      the
      economy
      and
     
     
      at
      least
      gloss
      over
      this
      loss
      of
      rela-
     
     
      tive
      income
      by
      putting
      a
      few
      more
     
     
      dollars
      into
      taxpayers
      pockets
      (this
     
     
      is
      key
      because
      many
      who
      live
     
     
      below
      the
      poverty
      line
      do
      not
      get
     
     
      this
      benefit
      and
      the
      relative
      changes
     
     
      on
      prices
      impact
      those
      with
      the
     
     
      least
      money
      the
      most).
     
    

    
     
      After
      a
      booming
      economic
     
     
      cycle,
      where
      we
      enjoyed
      some
      of
     
     
      the
      lowest
      unemployment
      levels
      in
     
     
      a
      generation,
      we
      are
      starting
      to
      see
     
     
      that
      numbers
      creep
      up
      again.
      While
     
     
      this
      is
      bad,
      it
      does
      usually
      create
      a
     
     
      reaction
      and
      at
      least
      one
      of
      them
      is
     
     
      positive.
      Basically,
      that
      is
      the
      num-
     
     
      ber
      of
      those
      employed
      in
      entrepre-
     
     
      neurial
      ventures
      increases,
      and
     
     
      these
      are
      the
      pistons
      behind
      an
     
     
      economy.
      The
      days
      of
      working
      for
     
     
      huge
      companies
      are
      over.
      For
     
     
      many,
      the
      best
      scenario
      is
      creating
     
    
   
   
    
     
      your
      own
      job
      through
      entrepreneur-
     
     
      ship,
      and
      the
      more
      enterprises
      that
     
     
      come
      out,
      the
      better
      it
      is
      (in
      the
     
     
      long
      term)
      for
      employment.
     
    

    
     
      But
      all
      of
      this
      is
      neither
      here
     
     
      nor
      there
      because
      all
      vitals
      signs
     
     
      seem
      to
      point
      to
      a
      possible
      relapse
     
     
      of
      the
      cancer
      known
      as
      stagflation.
     
     
      But
      one
      big
      indicator
      has
      not
      been
     
     
      discussed,
      the
      Bush
      factor.
      Some
     
     
      might
      wonder
      what
      I
      mean
      by
      this
     
     
      so
      let
      me
      clarify
      right
      away,
      simply,
     
     
      George
      W.
      Bush,
      43rd
      president
      of
     
     
      the
      USA.
      He
      has
      been
      saying
      for
     
     
      almost
      a
      year
      that
      we
      are
      heading
     
     
      toward
      a
      recession.
      Talk
      about
      a
     
     
      self
      fulfilling
      prophecy.
      Why?
      The
     
     
      biggest
      reason
      was
      to
      get
      elected.
     
     
      How?
      Simple,
      people
      need
      massive
     
     
      tax
      cuts
      to
      avoid
      a
      possible
      reces-
     
     
      sion
      because
      whatever
      is
      returned
     
     
      to
      them
      will
      go
      back
      into
      the
      econ-
     
     
      omy.
      For
      Joe
      Q
      Taxpayer
      that
     
     
      sounds
      good.
      But
      when
      a
      recession
     
     
      occurs
      we
      can
      also
      call
      it
      a
      bad
     
     
      time,
      and
      when
      times
      are
      bad
      in
      a
     
     
      country,
      the
      best
      thing
      to
      do
      to
     
     
      unify
      the
      people
      is...