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June 24, 2016



Uncharacteristically, this will be a short blog to followers who are joining the paper panic on Wall Street, an economy in which most of us are absent since we live in the real economy producing tangible goods and services. The Dow has dropped several hundred points as I write this, a common response to disturbances in the status quo, but to my followers I say this: Cool it on selling investments and sleep tight tonight. I foresee no big problems to the economy you and I live in as a result of yesterday’s UK vote to leave the EU. Why?

Well, just how much of our export and import trade do we conduct with the UK? Not so much, and there is minimum exposure to loss except marginally to our export trade. The greater damage to our export trade is the decreased value of the British pound (which makes our export prices higher to the British) and perhaps a new British mindset to pull in their horns (loss of aggregate demand) and not buy much of anything until the storm is over and their currency values improve. Even so, I think damage to our export trade should be minimal and no cause for panic, which should be reserved for the paper shufflers on Wall Street, London, Frankfurt et al.

Cameron with his austerity economics is largely responsible for yesterday’s vote and should resign immediately. He has promised in view of the vote to resign this fall and I say that is not soon enough. We don’t need any more damage to the British economy and uncertainty around the world’s financial markets under his leadership; he should resign and resign now.

Our austerity-minded Republicans in the Congress should heed what happened yesterday in view of their current austerity tactics which are keeping our economy from performing up to snuff. In view of the vote yesterday (which was largely a result of Cameron’s austerity tactics) and the example it affords us, it is clear that it is long since time to abandon austerity economics and embrace Keynesian economics in this country; to put our people to work again on all our neglected infrastructure projects such as roads, ports, airports, bridges, and public buildings along with funding for education both vocational and academic, among many other desperately needed federal initiatives – and to those who say we cannot afford it, I say we cannot afford not to do it.

The costs of such efforts can be offset by the surging demand in the marketplace, the ultimate benefit of such improvements to the economy and a new look at fair taxation of the rich and corporate class. All we need is political will, and that means that we have to change those policymakers in the Congress who are apparently willing to live in an underperforming economy forever at the expense of ordinary Americans whose wages have been stagnant for decades. Let’s change those policymakers this fall.   GERALD     E

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