Banking, Education...and Islam

Despite Ben Bernake’s news of increased consumer spending, things are not what they appear. According to The Economist, consumption will remain in a depressed state for years. Why?

Since the early 1980s, spending by households on goods, services and homes has grown faster than GDP, making it the locomotive of American—and global—expansion. By 2006 it accounted for 76% of nominal GDP, the highest since quarterly data begin in 1947.

It will likely remain depressed for the same reason we got into this mess: an ever increasingly credit driven economy. And that problem, by the way, is not one that governments are addressing. Instead, they are trying to increase the amount of available credit. Granted, there is a need for that in the short term. But, the long term solution for the credit mess is not being addressed at all. And that is going to be very bad.

Ultimately, it’s why the Chinese and other Asian countries own so much of America. And, lest we forget, so do the Arabs. Unfortunately, with their continued investment will likely come more Sharia Law requirements which banks will undoubtedly go for. Don’t think they will? Think again. Profits alone will drive them there. But, the western world is not being threatened by Islamic rules just in banking. Germany is facing this issue in their schools. But, that is nothing new. It’s been an ongoing battle in the U.S. for a few years. It was an unintended consequence of 9-11, to be sure. Of course, educators and teachers unions deny this is some soft form of indoctrination, but…