I’ve just got to say what I’m about to say, because it’s gnawing at me from inside, and I need to have it out. I’m not going to pretend I’m some economic guru, and I’ll use plain words.

My thinking on economics is simple. I understand tangible products. If an economy makes stuff I can touch and see, if it manages to sell that stuff both inside and outside the country, and the unemployment rate is low, then things are well.

I think things started to go sour when our industries decided to shift manufacturing to third-world countries. The thinking was that cheaper labor would result in cheaper products and lower prices. The truth was that it took jobs away from our country and it really only resulted in higher profits for the investors, not lower prices for us. As more companies would announce they were moving factories abroad, I would wince, because I knew our economic power was decreasing with each and every move. When you’re making less stuff in your own country, it’s plain common sense to realize that your economy is weaker.

As our economy started to move away from manufacturing and toward the service sector, I winced again. If you’re not making tangible products, what are you really making? Services? Knowledge? That’s all nice and good, but you can’t base an economy on intangibles. You just can’t. You have to have a good, healthy mix. I suppose I shouldn’t complain about this so much, since I work in IT. Still, at least what I make is tangible. I make websites and web systems. You can see and touch those, or click on them anyway. But not everyone can be a knowledge worker. It takes a certain amount of dedication, interest, perseverance and education, and many people simply don’t have the inclination to do that, or to be knowledge workers. That’s where having a good mix of jobs to offer your people is important. The more manufacturing jobs you move away from the country, the less variety you can offer your people. Plus, what do you do with all the folks you’re laying off as you “restructure” your economy?

When real estate prices started going up like crazy, I knew they’d come down, hard. They were bound to do so. When a pathetic little townhouse with a few tiny rooms, made out of plywood and fake brick cladding, cost over $400,000, that couldn’t be good. As prices kept going up, and people bought up multiple properties using ARMs, banking on the hope that the values of these properties would continue to grow, but no regular person could afford to actually own one of them, that was just plain wrong. When the home prices in most neighborhoods are so high that they’re out of reach for most, that’s asking for trouble.

Then I heard about the gaming that went on behind the scenes, as loans were approved by mortgage companies which seemed to sprout out everywhere. We knew someone who worked at one of these companies, and that person was just shocked at what went on. Executives would push employees to approve more and more loans only so they could get fat bonuses and afford McMansions and Mercedes cars. Meanwhile, the employees got nothing but low pay and long hours.

What’s more, I also heard about investment firms buying up groups of mortgages left and right, and re-selling them, and creating ridiculous layers of investments and speculations on top of these (mostly) insecure loans, in order to squeeze as much profit from them as possible. I’m sure that if you go back and check most loans, you’ll find 5-6 layers of additional financial speculation on top of the original mortgage. That’s insane and it makes me sick when I think about it. Instead of letting someone borrow money and charging them the set interest fee for the life of the loan, banks were selling these loans left and right as soon as the papers were signed, not caring where they ended up, letting others take the fall when and if the loan defaulted, etc ad nauseam. I knew that wasn’t going to end well.

Fast forward a couple of years to where we are today, and is it really any surprise that we’re here? Is it? And what’s being done about it? The government wants to bail out the banks and give them insane sums of money. You can’t do that! If they’ve mismanaged their own money so badly over these past several years, while their executives got filthy rich, let those same “smart” executives figure out how to fix their own problems! But no, what we’ve got now are scare tactics employed across the main stream media, where politicians and bankers are trying to scare us into giving in and allowing the bailout plan to go through. We’ve got bankers lobbying politicians to get the plan passed, and we’ve got them salivating at the thought of getting a piece of the bailout pie. This is ridiculous and irresponsible!

I keep thinking about Bush’s televised speech when he wanted to go into Iraq. And then I think about his speech just a few days ago, where he used the exact same scare tactics and language to try and get us to agree to the bailout plan. Jon Stewart did a great job of contrasting the two speeches on The Daily Show [reference]. Here’s a man that’s derailed our country, our economy, our international standing, and our military over the past 8 years, and we get to see his scare tactics in use once more. He’s clearly beholden to special interests, and they write his agenda. They wrote his agenda when he said we should go into Iraq, and they’re writing his agenda now that he wants to bail out the corrupt bankers. Given his track record, does he really deserve any credibility? I don’t think so.

So what should we do? Ride it out. Let the bankers suffer and cry. Let’s take our proverbial castor oil, let the crap pass through the system, and move on. They said it would be a disaster yesterday, when the stock market tumbled 778 points, and yet it jumped back up by 485 points today as investors gobbled up stocks while the prices were low. I think we all need a serious round of belt-tightening. Many Americans need to learn a hard lesson, namely that life doesn’t work on credit, that you need actual, real money to buy stuff. People and politicians and banks everywhere need to learn real fiscal responsibility. They need to learn that they can’t run up bills on credit cards and loans and credit derivatives and bond issues and not expect them to come due at some point. They need to learn that saving is more important than spending, and that a healthy economy means an economy that keeps its jobs inside the country, and makes most of what it needs inside the country as well.

It is truly unfortunate that none of the candidates running for president is saying this. I support Obama on my website, as you can tell by the Obama button in the sidebar, but that doesn’t mean I agree with him on everything. I think he’s the better choice out of the two, but he’s pretty short on substance when it comes to what needs to be done about our economic crisis. And he actually supports the bailout plan — probably out of fear, because he doesn’t want to be saddled with a big recession should he win office. I honestly wish Ron Paul was still running for president, because he’d get my vote, solely for his common sense approach to this whole mess.