The Root Cause of Recession

Why is there recession? What made it happen? We heard on the news that people went into debt to deep. Bought big houses because the banks made it easy. That's not it. Why would people just stop paying? Interest went up and flexible rates made the payments to high. That's not it. Yea you can say all kinds of things that are happening but what's the root cause? Interest rates go up if inflation goes up. Inflation goes up because oil goes up. But is that the root cause? If oil goes up gas goes up. Oil makes all kinds of products. Gas gets us to work. Every ones costs go way up. Interest goes up with the inflation so mortgage goes up. People buy less so companies make less and their costs are way up. They lay off people so lost jobs lead to less buying, more foreclosure but is that the root cause? No it's not. Why did oil/gas go up? It's said to be supply and demand. China, India and all kinds of countries are booming. Their oil demand goes way up. Global oil demand is up so price has to go up. Is that the root cause? No it's not. Why are China and India and all these other countries doing well? It's called the Free Trade Act, put in place by US. Both Democrats and Republicans supported it. That Free Trade Act allowed other countries to sell their goods here with no tariff. For them they get an unfair competitive advantage to take a chunk of the great American market. We buy the products for less, they get our money and jobs. We've watched one business after another go out over the past years until they now say "What do Americans produce? It's easy, The American dollar" We still need the hands on service industry. You can't put up a house here if you're in China. That Free Trade Act caused growth in other countries and shrink in America. We all did OK until the demand for gas/oil shot up fast. The price shot up and the whole world slowed down causing the oil and gas to go down. Now we're all trying to recover. The root cause is The Free Trade Act. It's easy to fix but President Bush is pushing for more. Now it's with Columbia. More unfair competition for America. Why you ask would we have a Free Trade Act. We'll save that for the next Post. Come back soon.