PUKE AND RALLY by T. Edwin Perry
Anyone who has ever attended a weekend-long Fraternity Party has likely had this experience. You drink…not because you like what you’re drinking, but as part of a party game or simply to get trashed…and you Drink…because everyone is drinking and the music is loud…and you DRINK…even though you’re already drunk and can barely stand…and you DRINK…even though your gut is swirling, your head is spinning and your liver is screaming “STOP!!!!!”
It is at this point that you have one of two distinctive choices: The first is to stop drinking, go to sleep and likely wake up with a hangover. The other option is to Puke & Rally, to take a break and let your body respond to the command of “Everybody out of the Pool!” And once the pool is empty, you go back to drinking like a fish, continuing to rack your body with enough alcohol to kill a normal person. (And yes, folks, that can happen!)
When the first option is taken, the person wakes up in the morning, usually with a hangover, and has to face the consequences of their actions. They drink water, take an aspirin, and swear never to drink again. (At least until the next time, but that’s another story altogether.) The alternative is to take “The Hair of the Dog,” start drinking early & often, and keep drinking until the pain stays away. (This, by the way, is called alcoholism, and it never ends well.)
In many ways, our economy is a lot like a drunken frat party, and the current party has been going on since George H.W. Bush, only it hasn’t been alcohol so much as Uncontrolled Spending. From H.W. Bush, through Clinton, “Dubya” and Obama, the Party Drink of Choice is the Keynesian Economic Policy that Government Spending will stimulate the economy, and, keeping with that drink of choice, our spending has increased and accelerated for more than 20 years! Over this period of time, our economy has been forced to “Puke and Rally” a few times. The economy declines for a short time, and then rebounds with more Government spending. The S&L Crash of 1989? Puke & Rally! The Dot Com Bubble Burst? Puke and Rally! The Mortgage Crisis and Wall Street Crash of 2008? Puke and Rally!!!
In each of these cases, the economy has declined, people have panicked, the Government has spent, and the economy has rebounded; however, Government spending is unsustainable without increasing taxes, which always results in a negative impact on Free Market Capitalism. The taxes bite into the income stream of the individual and business, and as that bite gets bigger, businesses lose their ability to maintain their employment levels, their productivity, or their profit margin. When all three are impacted, the overall market falls, and the income of individuals fall, either through unemployment or a reduction in compensation.
Right now, some very smart people have reached the conclusion that three successive quarters of nominal growth (marginal, at best; essentially stable; and dependant on the accuracy of numbers that are CONSTANTLY being revised) means that the market is in recovery. I hope they’re right; however, I somehow doubt it. If anything, I believe that this “positive” movement in the market is nothing more than another “Puke and Rally.”
Since our Government has continued to spend without regard of the consequences, there’s no logical reason to conclude that the worst is over. Sure, we’ve puked, as our economy has contracted, and we’ve rallied, as our economy has begun to rebound, but what happens when the market begins to contract again? I don’t deny that opportunities exist, and that things could SEEM to be getting better, but unemployment remains very high, and the only substantial growth in employment has been in the Public Sector (ie: Government Jobs), which means more Government Spending. The Government is continuing to push greater Regulations on everything from Wall Street to Energy Production with no clear understanding of what has caused the problem or how to fix it, and the answer to every problem they choose to address comes with a price tag that we simply cannot afford to pay! Sure, we’ve puked and rallied…but we haven’t sobered up enough yet to deal with the hangover, and, until we do, our “National Liver” keeps screaming “STOP!!!!!!”
The simple fact is that if we, as a Nation, don’t stop drinking soon, I’m afraid it may become fatal. (Hi. My Name is the United States, and I’m a Spendaholic!)
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