Why Japanese People Don't "Want" Things Anymore

His explainations make a lot of sense, as do his conclusions. And we don't have to choose between the extreams of Diogenes and Alexander. There is plenty room in between to make authentic choices.

Euro Crisis an excuse for consolidation of power?

A Greece euro exit could make Lehman's collapse 'look like a tea party'

London (CNN) -- The wheels are coming off the wagon. The fat lady is about to sing. The proverbial is about to hit the fan. It doesn't matter which saying you use, the facts are inescapable. Greece's membership of the eurozone is untenable under the current conditions and everyone knows it. Some like Hungary's finance minister say openly Greece will leave the euro. The only question is what catalyst will force it out and when. The nearest deadline to hand is the country's June 17th elections, when the Greek voters will decide whether to support parties who will adhere to the bailout agreements or those who want to tear them up.

[...]

Obviously now everyone has Spain in their sights. And there is where the real problem lies. Spain is too big to fully bail out a la Greece and definitely too big too fail. If Spain gets into too much trouble "Project Euro" is likely over. From all my private talks with European officials it has become clear -- Spain is the line in the sand. Greece may be too far gone and be allowed to fall, but Spain will be defended till the bitter end. So I fully expect European leaders to give Spain something to take the boot off the throat of austerity in the coming weeks. Probably the same for Portugal.

European officials have made mistakes in their dealings with Greece. The austerity measures were too harsh. They shouldn't have been nearly so brutal, and that lesson has been learnt. Now with the election of Francois Hollande as France's new president everyone can change course slightly and pretend they meant to do it all along (they didn't). Expect a growth pact to be agreed between Germany and France to sit alongside the main Fiscal Compact, which Germany will not allow to be re-opened.

I could speculate for hours about which solution will be found, what formula they will adopt to keep the whole thing moving -- and frankly, it would be useless. This crisis is now moving too fast and has taken on a life of its own. The firewall is starting to smolder. The austerity plans are starting to fray. The European Central Bank is cutting loose several Greek banks it does not consider solvent. The eurozone is all but back in recession. There are some uncontrollable aspects (the Greek voters for instance) which make forecasting the future direction just about impossible.

I still believe that the single currency will survive in some shape and form. I just cannot see the eurozone surviving in its present form -- not without the most drastic re-organization towards fiscal union, a federation of states with a central bank and treasury. [...]

The crisis they themselves created, becomes the excuse to tighten their grip and consolidate their power.
     

Could the Financial Crisis have been avoided?

Yes! But a number of things happened that assured it would NOT be avoided. Was that by design? Consider the facts:

Was the Economic Crisis Manufactured?

In the summer of 2008 as McCain and Obama were in the midst of their campaigns to capture the presidency, a series of events dramatically changed the focus of the campaign from Iraq to the economy. From that point on, Obama took the lead and eventually won the presidency.

Now, a full two years later, the Pentagon has issued a report on the series of events that led to the 2008 economic crash.

[...]

Notable for its absence is any suggestion that the economic events that arguably catapulted Obama into the White House may have originated in our own political system.

[...]

The series of 'inadvertent errors', deliberate obstruction, political shenanigans, behind the scenes manipulation of the money markets and non-stop calls for immediate infusions of taxpayer cash brought the U.S. to its knees by February 2009. And continues to this day.

The newly issued Pentagon report, along with the media and our elected officials, seem intent on not connecting the dots, considering only foreign enemies as the possible cause of the financial meltdown:

[...]

This author believes there is enough information to at least consider that this crisis was manufactured for political gain. Right here at home.

Read the whole thing, it's brief. Connect the dots. Look at the time line of events, and who the players were. Clearly there were several opportunities where Democrats should have zigged, but zagged instead. Creating a crisis that they exploited, and continue to exploit even now.


Also see:

The Triumph of Propaganda
     

They used to call it "Fascism"

But now, it's somehow OK? Because Democrats are doing it?

The New American Corporate State
A troika of big government, big business and big labor is attempting to run the country to its own advantage.

Opponents of President Barack Obama and the Nancy Pelosi Congress will often accuse them of being "socialist." I find that this term is unhelpful, as many folks use direct government takeover of industrial enterprises as the litmus test for socialism, and thus will reject this hypothesis about the president. It is more useful to think of this administration as pursuing a European-style corporate state, a form of political economy that allows the state to exert strong control in the economy while maintaining a nominal façade of private ownership.

While the intellectual origins of the corporate state go back much further, the first serious attempt to implement such a system was in 1920s Italy by Benito Mussolini. Under that system, state-sponsored industry cartels programmed every aspect of economic life, from wages and working conditions to prices, production levels and product specifications. Nearly every commercial action required a government license, which would be denied to those who showed insufficient loyalty to the state and its goals.

[...]

In their current form, European corporate states tend to be more informal than their predecessors, drawing on mutually supporting networks of labor, industry and government leaders without the explicit structure of Mussolini's cartels or Roosevelt's code authorities. These networks are driven by an implicit deal by each of the three groups to protect their mutual interests and to recognize specific obligations.

In this three-way arrangement, unionized workers in key industries get high wages, guaranteed employment, rich pension systems and government protection from competition from younger and foreign workers. In return, they promise labor peace (barring the occasional strike to demonstrate their power) and tremendous election-day muscle.

Favored businesses (and by these we are talking about the top 20 to 30 largest banks and corporations in a particular country) get protection from competition, both upstart domestic entrepreneurs as well as any foreign rivals. In return, they provide monetary and political support for politicians' pet projects--from recycling to windmills--with the understanding that politicians will give them legislative back doors to recover the costs of these programs from customers or taxpayers.

In return for granting this largess to selected corporations and unions, government officials get to remain in power. Typically this arrangement appeals to parties on both the left and the right, such that the nominal ruling party may change but the core group in power remain the same.

The losers in all of this are ... everyone else. In effect this corporate system is just another age-old, historically time-worn effort to cement the power of a small group of elites. Entrepreneurship and innovation are often impossible, as incumbent businesses can call on tremendous state powers to stifle competitive threats. The unemployment rates of the young and unskilled can be astronomical, even in rich nations like Germany and France, as older unionized workers have worked to calcify labor markets to their own advantage. In the end, consumers and taxpayers pay for the whole system in the form of reduced growth and economic output, higher prices, higher taxes and less mobility for those not already in power. [...]

I see the same thing happening here. The article goes on to show the how and why of it.

It's not as direct or oppressive as Hitler's or Mussolini's type of fascism, though it does embody many of the same elements. Some would argue that the European Model is more flexible, and therefore more benevolent. Ironic then, that even the Europeans are now are cutting taxes, and urging the US to do the same. But their pleas are falling on deaf ears, as the Democrats seem hell-bent on moving us to the European Model. Or perhaps even something much worse.



   

Is the Global Financial Crisis the beginning of the "brave new world" of life in America?

The books on Amazon.com are often reviewed by customers who also know quite a bit about the topic a book is about. Reading the customer reviews can be a real education in of itself. There are a lot of books appearing about the financial crisis, and what it means.

Below is a link to one book I read about recently. The first link is to the book, with the publisher's description. The two links that follow are from customers who read the book, and then gave their opinion. I thought it made a pretty interesting read:

Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown

Product Description

A practical guide to preparing for the next phase of the financial meltdown

From the authors who were the first to predict Phase I of our current economic downturn-in their landmark 2006 book, America's Bubble Economy-comes their insightful sequel discussing their predictions for the next phase of the Bubble Economy.

It may seem like the worst has come and gone, but it hasn't. With their proven track record of accurate predictions-which most financial professionals and economists missed-the authors explain how and why the next phase of the financial meltdown is about to hit. Things are not going back to how they were before. Instead, we are moving through uncharted territory, with new challenges and opportunities that few people can anticipate. Written in a straightforward and accessible style, Aftershock shows readers how to seek safety and profits in these dynamic economic conditions.

* Discusses how to protect assets, businesses, and jobs before and during the second wave of financial meltdown

* Provides clear and accurate advice on how to profit from the collapsing bubbles

* Offer focused guidance regarding real estate, which will continue to be a pressing concern for many

The authors' first book was chosen by Kiplinger's as one of the 30 Best Business Books of 2006, and its accuracy has been hailed by Paul Farrell of Dow Jones MarketWatch when he said "America's Bubble Economy's Predictions, though ignored, were accurate." Don't miss out on these time tested author's proven advice for how to mange your money during the coming financial meltdown.

Ok, so that's how it's being presented. Now here is a 5 star review from a customer:

"Don't Worry, Not a Single Penny of your Tax Dollars Will Fund the Bailouts."

"That's right. The bank and corporate bailout money is not coming from our taxes. Instead we're just borrowing it from foreign investors. We're also printing some of it...Of course, we will never, ever have to pay it all back, because even if we tried (and we won't), we never could."

That is why the U.S. Government will eventually be unable to borrow money and the nation will have to start living within it's means. That will be the beginning of the brave new world of life in America. This book is how we are speeding toward this "Bubblequake" and its "Aftershock." Although somewhat depressing (like all bad news is), this book also tells people what they can do to survive this worldwide depression and how to actually be able to make money during the painful readjustment of the world's economies. While this is a scary book because of what is happening all around us, it is also a hopeful book. The nation will survive after the country stops ignoring the basic laws of economics. The three authors are optimistic (maybe overly so) that the American people will be able to make the adjustments needed to achieve economic survival without having to become survivalists who have to grow their own food and defend their homes from roving mobs with guns. They feel that even dictators will be unable rise from the chaos because Americans will be changing its government officials as soon as it's obvious their policies don't work. There will be frequent changes in elected officials.

The nation will survive because basically the country is wealthy and will still be so after the economic bubbles have all popped and forced everyone and their government to live within their means.

These authors "are not bulls or bears or gold bugs, stock boosters or detractors, currency pushers, or doom-and-gloom crusaders," and "have no particular political ideology to endorse, and no dogmatic future to promote."

The goal of this book is "to tell you more details about the next round of bubbles to fall while there's still time to protect your assets and position yourself to survive and thrive in this dangerous, yet potentially highly profitable new environment...Although much of what we predicted in our first book that hasn't happened yet because most of the impact of the multi-bubble collapse is still to come. This is good news because it means you still have time to get prepared."

It's impossible to do justice to this book's message in a short review. The review copy I worked from is now practically destroyed by so many dog-eared pages and underline and highlighted passages. The three authors share a theory of the economy having being boosted by six economic co-linked bubbles. They are: The real estate bubble, the stock market bubble, the private debt bubble, the discretionary spending bubble, the dollar bubble and the government debt bubble. Four of those bubbles have already burst or are still in the process of collapsing. With the collapse of each bubble it puts more pressure on the remaining bubbles, and the two most important bubbles are in dire danger. The dollar bubble and government debt bubble collapses will change the face of America and the world. America will be bankrupt.

In their first book, "America's Bubble Economy" the authors accurately predicted the economic chaos of 2008 and 2009. This book picks up developments in 2010 and the following years and predicts the next economic bubbles that will pop. In the coming much worst economy, the book shows readers the best ways to protect, their jobs, businesses and assets. It explains how the housing crisis isn't "a sub prime mortgage problem whose contagion spread to other mortgages; it is a `housing price collapse.'" The number of home owners with mortgages that are underwater has risen from 14.3% in Q3 2008 to 33% in Q2 of 2009." Since 70% of the American Economy is based on consumer spending, the bubbles that have already popped or are still in the process of deflating won't be able to re-inflate. When the dollar loses it's value and the government can no longer pay its loans, and therefore won't be able to get any credit. America's golden age will be over.

Inflation, resorted to by the desperate government, will rack the nation bankrupting most businesses. "40 to 60%" unemployment may become the norm. There will be so many people seeking jobs that wages will tank. Everyone will be on Medicaid, not Medicare, and all the unemployed will be on welfare. The rich will have left the USA or be broke and all the government's taxes will come from the working people--the middle class. Since as much income as possible will be hidden, there will be national sales taxes and Value Added Taxes on every product or service. Family members will return home to live together with their extended families in order to control housing expenses.

After I finished this book I went home and made some of the changes suggested by this book. They include such obvious things as selling real estate if a buyer can be found and getting rid of variable rate mortgages if you can't sell the real estate. Variable rate mortgages are absolute poison. Selling off stocks is another suggestion. It doesn't have to be done all at once, it can be done over the next couple of years, but most stocks should be sold because the dollar bubble collapse will destroy stock market values. Collectables and art will be non-liquid and will drastically drop in value (90%) for the long term. Gold, and silver to a lesser extent, will retain its position as a hedge against inflation as well as a protection against the dollar bubble collapse. The authors also list the types of jobs that will be in demand during the coming perilous times. As one might expect some job categories will boom while the unnecessary ones will disappear. For example construction workers may want to start looking for jobs that repair existing structures rather than build new buildings. You'll have to read this book to get the answers to many of the questions that reading this volume will provoke.

The thing this reviewer liked the best about this book was the carefully explained logic of it's predictions. It provides a much better overview of the current economy. The readers will discover lots of new information that they've probably never heard or read before, but that the reader's gut instinct and personal experience will tell him or her is obviously true. While the authors may be wrong on some of their predictions, most of them will probably prove all too accurate. At the end of each chapter the authors list a website where more current information on that chapter's point can be gleaned before the next volume of this continuing series is published. This is a page turner, but it will be slow reading from the standpoint of having to constantly stop and make notes in the margin or pause to see how a particular point directly effects the reader's own situation. Reading this book will make you aware of economics like you've never previously been aware. Depending on your age, you may well recall your parents or grandparents advice that they'd learned during the Great Depression of 1929. The coming bubble bursts are going to be a more society-changing depression than the one 1929, although "few will suffer like they did in the Great Depression." The safety net will allow everyone to survive at a low standard of living. While the book didn't make this comparison, while reading it, I could easily visualize the United States as a colder, slightly wealthier version of Cuba. As I read it I also saw some visions of the movie "Dr. Zhivago" pop into my mind.

A "slightly wealthier version of Cuba"? Dr. Zhivago? UGH! Yet I have to wonder if there aren't some people in the current administration who would like to see exactly that. Their policies sure seem to be aiming for it.

Now for contrast, a one star review:

Interesting initial concept, but does not help investors

The book starts with the premise that there are six major "bubbles" that will combine to create great stress in the economy. OK, I'll buy that, but what I was looking for was helpful investing tactics to get through the bubble bursts ok. Written in mid 2009, the book failed miserably in providing tactical investment advice. For example:

o They suggest shorting the market with inverse ETFs. That strategy would have been a disaster in the year after March 2009 when the stock market soared.

o They write that the Euro community will be much more solid than the US dollar in the near term. Now we see the Euro in collapse with the US dollar doing fine.

Also, I find it extremely annoying that the authors constantly point to their previous book and say "We got those predictions right, so you should look carefully at what we have to say now." Such hubris usually leads to unfulfilled predictions.

Particularly with this constant pointing to their previous clairvoyance, I was really disappointed that there was nothing in this book (other than "buy gold"--surely not a new idea) that I found helpful in my investing tactics. I was disappointed in myself for wasting time reading most of the book.

The dollar may be doing better than the Euro at the moment, but I doubt that it's "doing fine". His comment about gold is no doubt true enough. I've found it a common criticism with these kinds of books, that they all say "buy gold", but don't offer much else in advice.

I'm going to end this with one more 5 star review, but THIS one goes into detail about some things he didn't like about the book:

In its field: Outstanding; Outside: Not so good

Although I don't particularly like the way this book is written and disagree with most of the irrelevant asides offered in support of the analyses: I find this to be the most complete and comprehensive analysis of America's ongoing economic problems that I have thus far encountered. In addition: the reasoned deductions which the authors draw from their analyses are far ranging and logical; and, for the most part, the conclusions which they reach are well justified and difficult to dispute. So, if you are looking for a book that will give you some valuable insight into what is happening to the U.S. economy today, and why; which explains how the ultimate collapse of that economy and the U.S. dollar will take place; and which forecasts what the United States and the world at large will be like following that calamity, then this is certainly a book which you should read.

I won't attempt to outline the book since other reviewers have probably done that already; and besides that might spoil the fun for you, the reader. But I would like to point out some of the seemingly gratuitous "asides" [not pertaining directly to the analyses] with which I disagree.

On page 170, the authors praise Franklin Delano Roosevelt (FDR) for freeing the U.S. from the requirement to back its currency with gold, instead backing in by "the full faith and credit of the United States government." In my view, no praise is warranted, since FDR's actions helped set the U.S. on the path toward to its own economic destruction. Also on page 170, the authors state that in 1973 the United States went off the International Gold Standard [stopped redeeming foreign-held U.S. dollars for gold in accordance with the Bretton Woods Agreement signed in 1944] because that was the only way we could continue to buy foreign goods. In reality, the U.S. was forced to stop redeeming foreign-held dollars for gold because by 1973 we had inflated our currency to such an extent that France and Great Britain began to question the safety of our currency and there was a run on our gold reserves. On page 188, the authors once again praise FDR for crossing over political boundaries to push through his New Deal policies. It is fairly common knowledge nowadays, however, that FDR's policies helped propel what is thought to have been a probable recession into a thirteen year depression ended only by America's entry into World War II.

On page 195, the authors use the example of an independent physicist who, following the Challenger Accident in 1986, performed a simple experiment to show NASA why the accident occurred. In reality, Thiokol engineers pleaded with NASA not to launch STS-51L because the O-rings were colder than 53 degrees Fahrenheit. The decision to launch was made for political reasons not out of ignorance. On page 196, the authors praise the book "Silent Spring." That book, of course, misrepresented the science concerning DDT leading to its being banned and resulting in several million deaths worldwide due to malaria and other diseases. On page 200-201, the authors contend that gold is not a good store of value since its price fluctuates. In reality, the price of gold doesn't fluctuate. The price of various nation's currencies fluctuate relative to gold. To illustrate: The oil cartel members (OPEC) routinely adjust the price of oil, in terms of U.S. dollars, such that their return remains fairly constant in terms of gold. (Are they smarter than us, or what?) And, last but not least, on page 217, the authors praise Barack Obama for trying "to contain the growing blaze" [of uncontrolled government spending]. As we all know: Nothing could be farther from the truth.

But, one last thing: On page 187, the authors theorize that, at some far distant future date, some international assemblage will devise an international monetary system, independent of gold or any other metal, that "will be inflation-free because the system that controls the supply of IMUs [International Monetary Units] will be set up to avoid it." In all of man's history, gold is the only standard which has ever met that requirement! And human nature being what it is: How naïve can you get?

Regardless of all this: I can't help but offer my thanks and praise to the authors of this book for their in-depth assessment of America's troubles, particularly at this unique point in America's and the world's history. One can only hope that their work and this book will help bring more Americans to their senses and encourage them to take whatever steps they can to protect themselves and their families. Bottom line: This is a truly outstanding book in the field of economics, but outside that field, as demonstrated by the above noted "asides," it leaves much to be desired.

The interesting thing about customer reviews on Amazon.com, is that people can also leave comments on the reviews. Here is one comment on this last review:

Excellent review of this book. Glad to see someone else take issue with the authors' obsession with FDR, and their general economic illiteracy (even if their specific predictions concerning the economy are spot on). Also happy to see someone point out the obvious flaws in an international monetary system - after all, the whole point of an international monetary system is to increase the control a privileged elite have over spending power (the same function the Federal Reserve serves today). To assume that international currency would prevent economic depressions is naive indeed.

What I would like to add is that the authors mistakenly attribute the cause of the coming "aftershock" to Reagan's presidency in the 1980's. They attempt to paint the origin of our debt problem in his presidency, when in fact it stretches back to the president they so admire: FDR. Between FDR's New Deal and LBJ's Great Society we are left with the real reasons for decreasing productivity growth: government healthcare, welfare programs and social security. By artificially limiting the number of people who need to work, and how long they need to work, the government has decreased the rate of productivity growth. Culturally other problems are also present (declining birth rates being one of them). So, instead of saying that the problem is merely the deficit, the authors should have focused on how government incentivized laziness through its welfare and social security programs.

Excellent! And the author of the review also gives an excellent reply to this comment. But I can't be printing it all here, so if you find it interesting, check it out. There are lots more reviews and comments.

As for the false premise that Reagan's presidency is the cause of the financial crisis, anyone believing that needs to disabuse themselves of that notion, with some facts:

Busting the Bank Deregulation Myth

If you want to look for root causes of our financial crisis, look to FDR, LBJ, and the “Reinvestment Acts" of three Democrat Presidents.

Some Republicans did their best to stop the damage before it reached critical mass, but they were stopped by Democrats:

Our Democrat-Created Crisis: They blocked a Reform bill co-sponsored by John McCain

The Republican's aren't without blame. We had 8 years of George W. Bush, and his spending like a Democrat, and keeping war debts off the national budget figures. I can make no excuses for it, because it is inexcusable. But two wrongs don't make a right, and now we have a Democrat Administration that seems intent on pushing us over the edge of the cliff, instead of guiding us away from it.

Where Republicans have erred, is in going along with the Democrats financial policies. And unfortunately, the Democrat's understanding of economics tends to be very poor. We are seeing the proof of that now.

But the voters choose the politicians, and the blame ultimately rests there. The electorate needs to make better choices. If these problems can be fixed, the voters may have their last chance to do so this November.


Also see:

Has US Currency already "collapsed"?

What would a U.S. currency collapse look like?

What happens when Tax Cuts Expire in 2011?

# Our true national debt: $130,000,000,000,000.

Argentina's Example: Are we heading there?

     

Brand Names dissapear as the economy flounders; it's survival of the fittest. Or is it?

Many long established companies are going under, except of course for some who are favored by government, and kept going on taxpayer's money:

24/7 Wall St. Ten Brands That Will Disappear in 2011

24/7 Wall St. has created a new list of brands that will disappear, which includes Readers Digest, Kia Motors, Dollar Thrifty (NYSE: DTG), Zale (NYSE: ZLC), Blockbuster (NYSE: BBI), T-Mobile, BP plc (NYSE: BP), RadioShack (NYSE: RSH), Merrill Lynch, and Moody’s (NYSE: MCO).

[...]

Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) were on our earlier list. We were wrong about them closing. They have become “wards of the state,” kept open by the US government to help maintain an orderly mortgage market. It is estimated that keeping the two firms open costs taxpayers about $7 billion a month. The companies lost a combined $291 billion in 2009. Members of Congress are pushing to have the companies shuttered. It is almost certain that they will not be around, at least in their current forms, much longer. One estimate is that the cost of supporting the two companies will total $1 trillion, making it more likely that they will be closed in the favor of other alternatives to maintain the mortgage market. [...]

In a sensible world, Fannie and Freddie would be shuttered, but economic sensibleness seems nowhere in sight, so I'm not so sure. Fannie and Freddie are government created entities, and the government has their own reasons for maintaining them, at any cost, apparently.

Read the whole article for other companies that are about to disappear. Some of them, like Newsweek, I won't miss. But who knows, they may get a bail-out too? More money taken away from the productive people who earned it, and given to unproductive people who squander it? And the surviving, profitable companies who are paying their own way, are then forced to compete with the unprofitable, government subsidized ones? How fair is that?

Rewarding failure, and punishing success. Change You Can Believe In.
     

Why the "Recovery" is stalling

We need real job creation, but it isn't happening. Guess why:

Barack Obama: The great jobs killer

[...] It's time to call Obama what he is: The Great Jobs Killer. With his massive spending and tax hikes -- rewarding big government and big unions, while punishing taxpayers and business owners -- Obama has killed jobs, he has killed motivation to create new jobs, he has killed the motivation to invest in new businesses, or expand old ones. With all this killing, Obama should be given the top spot on the FBI's Most Wanted List.

Meanwhile, he has kept the union workers of GM and Chrysler employed (with taxpayer money). He has made sure that most government employee union members got their annual raises for sleeping on the job (with taxpayer money). He made sure that his voters got handouts mislabeled as "tax cuts" even though they never paid taxes (with taxpayer money). And he made sure that major campaign contributors collected billions off government stimulus (with taxpayer money).

As far as the taxpayers -- the people who actually take risks with our own money to create small businesses and jobs and pay most of the taxes -- we require protection under the Endangered Species Act.

[...]

I've polled all my friends who own small businesses -- many of them in the Internet and high-tech fields. They all agree that in this new Obama world of high business taxes, income taxes, payroll taxes, capital gains taxes, and workers compensation taxes, the key to success is to avoid employees. The only way to survive as a business owner today is by keeping the payroll very low and by hiring only independent contractors or part-time employees provided by temp agencies.

The days of jobs in the private sector with big salaries, full benefits, and pensions are over. We've all seen where those kinds of jobs get you as a business owner -- in Bankruptcy Court or surviving on government welfare like GM and Chrysler. Or in the case of government itself -- completely insolvent, but surviving by ripping off taxpayers and fraudulently running printing presses at the Fed all day and night to print money by the trillions.

Unfortunately, small businesses don't have the power to impose taxes or print money. So unlike government, we'll just have to cut employees and run lean and mean.

[...]

The days of believing the Obama propaganda about a jobs recovery are over. The trillion-dollar corporate handouts (neatly named "stimulus") may have kept big business in the money for the past 18 months, and artificially propped up the stock market, but small business is the real canary in the coal mine.

My small business-owning friends aren't creating one job. Not one. They are shedding jobs. They are learning to do more with fewer employees. They are creating high-tech businesses that don't need employees. And many business owners are making plans to leave the country. In a high-tech world where businesses can be run from anywhere, Obama has a problem. His one-trick pony -- raise taxes, raise taxes, raising taxes -- is chasing away the business owners he desperately needs to pay his bills.

So who is going to pay Obama's taxes? Not his voters. They want government to pay them. Who is going to create Obama's jobs? Not his voters -- they've never created a job in their lives. [...]

But what can you expect from an Administration that is openly hostile to the private sector? Who's leader has referred to it in his books as "the enemy"? What can you expect from an administration whose members keep insisting that "Capitalism has failed". They are doing their best to make sure that it does, so they can replace it with something else.

And it's having repercussions globally:

With the US trapped in depression, this really is starting to feel like 1932

[...] Investors are starting to chew over the awful possibility that America's recovery will stall just as Asia hits the buffers. China's manufacturing index has been falling since January, with a downward lurch in June to 50.4, just above the break-even line of 50. Momentum seems to be flagging everywhere, whether in Australian building permits, Turkish exports, or Japanese industrial output.

On Friday, Jacques Cailloux from RBS put out a "double-dip alert" for Europe. "The risk is rising fast. Absent an effective policy intervention to tackle the debt crisis on the periphery over coming months, the European economy will double dip in 2011," he said.

It is obvious what that policy should be for Europe, America, and Japan. If budgets are to shrink in an orderly fashion over several years – as they must, to avoid sovereign debt spirals – then central banks will have to cushion the blow keeping monetary policy ultra-loose for as long it takes. [...]

And yet, government seems to be doing exactly opposite of what they need to be doing. How much time is there left to turn it around?
     

“In a time of universal deceit, telling the truth is a revolutionary act.” - George Orwell

I found the above quote in this long, rambling post by Takuan Seiyo at the Brussels Journal:

From Meccania To Atlantis - Part 16: Exodus 1: Reality for Radicals

[...] Insane governments have turned a crisis of imprudent banking into a crisis of imprudent sovereign debt. To cure a disease of debt they have issued more debt. To address a fundamental crisis of insolvency, they are pumping the stock Keynesian emetic as though this were a crisis of liquidity. Like Michael Crichton’s environmentalists (1), destroying Nature they arrogantly wanted to manage, pedigreed economists at the helm of the West’s fiscal and monetary destiny have engaged in ignorant, incompetent, and disastrously intrusive intervention that will be followed by attempts to repair the intervention, followed by attempts to repair the damage caused by the repair.

One after another, fiat currencies are catching fire, as all paper promises by lying governments must. Flight into the perceived safety of U.S. Treasury bonds buys the debt paper of the biggest Greece of them all. Stocks have crashed. If money printing brings them up again it won’t last, for consumer demand itself has cratered. Flight into gold leads into a blind alley foreclosed by the evil vampire squids either through naked shorts that suppress the price as a favor to Leviathan or through fictional fractional business that allows them to sell 100 bars of paper gold against each one they own.

Naked shorting, i.e. selling commodities you neither own nor borrowed is simply a con job akin to selling the Brooklyn Bridge or Eiffel Tower. That such an institutionalized swindle is allowed attests to the fundamental disconnect from Reality and moral bankruptcy not merely of the greedy Crooks but of the governments that have abandoned their few needed and legitimate functions, salient among which is being the honest cop in the bustling marketplace.

Instead, governments are busy pulling off their own mega-swindles, such as promising too many costly entitlements to too many people and misspending enormous funds on social engineering at home and stupid pet causes abroad. Those funds are raised through confiscation from legitimate citizens via onerous taxation, borrowing in international Ponzi schemes, and diluting the currency through “quantitative easing.” The latter forfeits the government’s second needed function: to preserve the value of the currency it issues.

Throughout the West, Karl Marx is smiling even as gangster financial manipulators loot the world with impunity. It’s from each according to his ability, to each according to his need.

In the U.S., the government has coerced banks to grant mortgages to millions of favored minorities, irrespective of prospects of repayment. When, inevitably, the mortgages went sour and the banks crashed, the government transferred all that fictional finance onto its own books underwritten by the taxpayers’ money. In Europe, the Northern people who work, produce and save have been forced out of their sound currencies to enable their Body Snatcher (2) elites to subsidize via the common euro the Southern people who play, consume and borrow. When the inevitable happened, the Eurocrats are transferring further trillions from the Northerners, to bail out the Southerners.

As each level of fiction collapses before the onslaught of offended Reality, many more levels of lies remain. The massive foundation of social, economic, cultural, biological, political and geopolitical illusions on which the modern Western state perches as though on a layer of sweet and airy meringue is already so pitted and fissured that all but diehard Snatchers perceive it. Alas, frank public debate of the underlying phantom crossbars is proscribed by Snatcher laws and speech codes. Moreover, the majority of the population is hostile to such debate, for it’s guy-wired by Pod mental chipsets implanted by the state’s compulsory education and remotely controlled by all other major social institutions nonstop for the last 45 years.

Unlike in the financial area, social and martial crashes are still avoidable in theory, but will not be avoided because the ruling elites refuse to discern their true causes and the majorities that vote them in are too far-gone to change that. In the decohered Inverse Reality foisted on the West by its ruling class, nothing can make sense or is ever predictable. It’s all a series of random events while we, free of the burden of facts and their patterns, can proceed gloriously toward a vision of ever more perfect Justice, Equality and Peace.

[...]

To discuss Reality, one does not have to deploy polysyllabic words with Greek and Latin endings. A PhD dissertation written in German is not needed. Reality is what is. We have known for a hundred thousand years what is.

Repeat empirical evidence of Reality is programmed into our genes; for instance the “flight or fight” response. Your body will rarely make the error of trying to wrestle down a grizzly bear, yet your postmodern nation is committed to spawning horrific grizzly bears forever and forcing you at the point of the government’s gun to wrestle them every day of your life.

Reality is also encoded in our cultural legacy. Consider Genesis 3:15, God’s curse on the serpent: “I will put enmities between thee and the woman, and thy seed and her seed: she shall crush thy head, and thou shalt lie in vain for her heel.” I call it time-tested advice for survival, if needing some caveats for various garter and black (e.g. Coluber constrictor) snakes. But modern-day Loons would call it prejudice, racial profiling and hate speech. And Gnostic Loons who hold the levers of power will deliberately force you to venture barefoot among the vipers, to cure you of your prejudices.

Reality does not need a battery of sociologists to tabulate and ameliorate it. Hear the Welsh priest George Herbert, who counseled in his 1651 Jacula Prudentium, "He that lies with the dogs riseth with fleas." How do the liaisons of your country with the rogue nations of the Third World look in light of this apothegm? Or consider what Benjamin Franklin wrote in Poor Richard's Almanack sometime in the 1740s: "Nine men in ten are suicides." How does the theory and practice of the neo-socialist “social justice” redistributive state look in light of this six-word crystallization of Reality?

[...]

Reality Renaissance

The title of this Part, “Reality for Radicals,” is a play on the title of the book Rules for Radicals – the clever manifesto by Saul Alinsky at whose virtual feet sat the leaders of the ruling elite, starting with the Community Organizer in Chief, B. H. Obama, America’s Secretary of State Hillary Clinton, and probably the entire nomenklatura of Socialist International.

Nevertheless, this opinion channel, this writer and these readers are no Radicals. They are Regulars. On the major issues of life and society they stand roughly in the same zone where stood the Greatest Generation -- their Nazi-smashing grandparents. It’s just that the Snatchers have snatched the goal posts too, and moved them to the far left corner of the field.

The Regulars are radical only in the sense that George Orwell prophesied when he wrote in 1984: “In a time of universal deceit, telling the truth is a revolutionary act.” [...]

And telling the truth is what we must do. Someone's gotta do it. What's the alternative? We can see where the lies are taking us. It's not sustainable. Reality will only continue to be offended for just so long, before it strikes back.


Also see:

This is not a Depression or a Recession

Modern Gnosticism's disregard for reality

The wind caused by the slamming shut of one door often opens another door
     

Modern Gnosticism's disregard for reality

Is that what's driven us to this financial crisis? There is a case to be made for it:

From Gnosis to Sepsis

[...] Bertonneau adduces the current American economic crisis as an example of modern Gnosticism, where “the magical spending of money that does not exist [snip], stubbornly fails to result in the rescue of an economy whose collapse stems, in the first place, from pathological, non-reality-related super-spending of money that did not, even then, exist.” But here I take exception. With respect to the profession of economics, addled by the Keynesian opium that prosperity ensues from spending money one (including government) does not have, yes, that is pure Gnosticism. But with respect to the governing elites that have pushed the U.S. and Europe into this miserable mess, no. The fingerprints of the Crooks on this thing are much bolder than the Loons’ are.

The illness that’s crippling the Western colossus derives from three main pathogens: greed, cowardice and lying. All three are an eternal part of the human condition. What’s unique now is that up to 100 years ago every Western country had an elite bred to suppress those vices as a matter of noblesse oblige. But the elite now is the locus where greed, cowardice and lying fester and from which they flow downward.

The lies allow the Loons -- and they are the majority -- to cover up their cowardice and to perpetuate their Gnostic illusions. Latching onto the same lies enables the Crooks to rule and steal. The result is the same: sepsis.

Sepsis, a Greek word implying a process of rotting, is a medical term denoting the penetration of harmful bacteria or other pathogenic organisms into the body. The lies on which the Progressive’s Gnosis is based are the infection paths by which Western society has become riddled with pathogens. The lies have been pointed out by several reactionary-conservative writers, including in the previous chapters of this work. But that won’t be enough.

It cannot suffice, because the ruling elite is wedded to the lies. [...]

There are so many lies, false premises being promulgated, that's it's becoming impossible to fix problems because so few are looking at the reality that underlies them. We disregard reality at our own peril.
     

“Reinvestment Acts" of Carter, Clinton & Obama

It's the history of the Democrats, and it keeps on repeating itself, and landing us in sh*t street:

Barack Obama, Propaganda, Jimmy Carter, Inflation, High Interest Rates “Reinvestment Act” and The “Misery Index.”

[...] If you look back in history to the Jimmy Carter Administration you will find that during Jimmy Carter’s Reinvestment Act, much the same as Barack Obama’s, we went into years of double digit inflation because the dollar was so devalued (The fed printed a hell of a lot of money to fund the Reinvestment Act). To combat high, runaway inflation the Federal Reserve kept raising interest rates. Now, much to Jimmy Carter’s credit there were 10.5 Million Jobs created under his presidency. However people could not afford to buy anything because the price of merchandise and interest were well beyond the average person. The end result was the economy did not grow thus we had “STAGFLATION.”

Here is an interesting page from the Wall Street Journal:
http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/

Note that during the George W. Bush years there was the lowest unemployment and the the lowest interest rates. One may argue that George W. Bush only created 3 Million jobs. But wait…. almost everyone was working. But as the economy began to collapse because of Bill Clinton’s expansion of the Community Reinvestment Act in 1997, the unemployment number skyrocketed in the last months of George W. Bush’s term. This was not George W. Bush’s fault at all.

Carter: Interest rate, 21%. Inflation, 13.5%. Unemployment, 7%. The so-called “Misery Index,” which Carter used to great effect in his 1976 campaign to win election.

Reagan’s last year: Interest rate, 9%. Inflation, 4.1%. Unemployment, 5.5%.

George W. Bush: Interest rate, 8% down to almost 0%. Inflation, 2.6%. Unemployment, 4.5%. [...]

And it was Clinton's Community Reinvestment Act in 1997 that made all the bad loans, the sub-prime mortgages, that led to the meltdown. And once again, it looks like there is inflation in our future.

We are told that 10 million jobs were created during Jimmy Carter's presidency, but the benefits of that were negated by high inflation, which ran the economy into the ground, ending his presidency with a recession.

Obama has started his Presidency with a recession, and hasn't created any significant number of jobs. He has continually attacked the private sector, increased taxes, created uncertainty in the market place, and added enormously to our already overburdened national debt. When inflation comes, it will be worse than Carter's presidency, because we won't even have the jobs people had back then; it will be high unemployment AND inflation. And if we continue on this path, we may even be facing a U.S. currency collapse.

Think Cloward-Piven strategy. The hard-core Marxists are. I don't claim that everybody in the Obama Administration is a hard-core Marxist; some are just Marxist sympathizers, or useful idiots. But in the end the distinction won't much matter, if the end result is the same.


Also see:

Has US Currency already "collapsed"?

What happens when Tax Cuts Expire in 2011?

# Our true national debt: $130,000,000,000,000.

     

Spain: caught between a rock and a hard place

Spain: A Political Risk Analysis

Spain is in the throes of the worst economic crisis in its recent history. Reeling from the collapse of a debt-driven construction boom, Spain entered recession in the second quarter of 2008 and posted six consecutive quarters of negative growth. Although the economy grew by 0.1 percent during the first quarter of 2010, Spain’s growth prospects are poor and any pick-up could be short lived.

Spanish GDP fell 3.6 percent in 2009, and a package of harsh austerity measures announced since then will undermine any economic recovery during the foreseeable future. The International Monetary Fund (IMF) says there will be no positive GDP growth in Spain until 2011, at which point it will still be below 1 percent. The Spanish Finance Ministry on May 20 said it now predicts a 0.3 percent contraction in 2010. It also cut the forecast for Spanish growth in 2011 to 1.3 percent from 1.8 percent.

Meanwhile, Spain now has the highest unemployment rate in the European Union. More than 20 percent of working-age Spaniards (or 4.6 million people) were without a job during the first quarter of 2010. That compares with an average rate of 10 percent among the 16 countries that use the euro currency. Persistently high unemployment presents an obvious threat to political stability in Spain.

As unemployment soars, Spain is also facing an exploding budget deficit. The collapse of the labor market, which has resulted in a steep drop in tax collections, and the Socialist government’s spendthrift policy response of increasing unproductive public sector stimulus spending skyrocketed the deficit to 11.4 percent of GDP in 2009 (or five times higher than in 2008).

The combination of negative GDP growth, rising unemployment, and a high deficit has raised concerns about the sustainability of Spain’s finances. Indeed, two international ratings agencies, Fitch and Standard & Poor’s, have recently lowered Spain’s long-term sovereign credit rating, citing the risk of a prolonged period of below-par economic growth and persistently high fiscal deficits.

The downgrades will make it more expensive for Spain to finance its debt, and increase concerns over Spain’s overall creditworthiness. Indeed, investors anxious that a debt crisis in Greece could create a domino effect in Spain are already demanding higher interest rates to hold Spanish debt.

Although Spain’s problems have been known for years, concerns about the Spanish economy were thrust into the international spotlight in January 2010, when noted New York University Professor Nouriel Roubini said Spain posed a major threat to the stability of the European single currency. Speaking from the World Economic Forum in Davos, Switzerland, Roubini warned: “If Greece goes under, that’s a problem for the eurozone. If Spain goes under, it’s a disaster.”

A debt crisis in Spain would make the problems in Greece look tame by comparison. At €1.3 trillion, the Spanish economy is more than four times the size of Greece’s. (While Greece represents about 2.5 percent of eurozone GDP, Spain accounts for about 11.5 percent.) Spain is also the fourth-largest economy in the 16-nation euro zone, the eighth-largest in the OECD, and the tenth-largest in the world. Many analysts believe Spain is simply too big to be bailed out, and that a Spanish default would almost certainly lead to the breakup of the euro zone.

Fearing for the future of the euro, the European Union and the IMF have put intense pressure on Spanish Prime Minister José Luis Rodríguez Zapatero to implement a series of austerity measures aimed at bringing the public deficit down to a eurozone limit of three percent of GDP. [...]

Read on to see the many reasons why that can't happen. The current government won't survive if they do what they need to, but if they don't do it...
     

Big Government is OUR fault?

Apparently, there is a case to be made for it:

What Made the U.S. Government So Big?

If you're going to argue that the size of government is the defining debate in modern politics, you should probably explain why the government is so big. It's not because of new laws. It's because of old laws.

David Brooks latest column argued that "as government grew," moderates and independents recoiled and conservatives revolted. Brooks is right that people are angry. Four out of five Americans don't trust the government according to a new Pew poll, the highest level of public dissatisfaction in history. But that anger has much more to do with the recession -- plus a dash of complex conservative angst -- than with Obama's new spending initiatives.

[...]

In short, our government is growing because of what past presidents have promised and voters have consistently supported at the polls: Medicare, Medicaid, Social Security, the Federal Unemployment Tax Act. Clive Crook put it nicely: "Big Government is no longer a prospect to ward off. That choice has been made."

That statement is powerful, and it has at least two implications. First, we need to stop pretending that Democrats suddenly "have become the government party." Every party is the government party when it controls the government.

Second, now that we've made the Big Government choice, we have to pay for it. The David Brookses of the world need to explain to Americans that this isn't about Obama. It's about all of us, collectively, making decades of promises that we haven't promised to pay for. We will need new taxes, or dramatic and potentially painful reforms to our entitlement programs. That is where this debate should be.

I'm afraid that it's all too true that people are only worried about big government now because the economy is in bad shape. But it's still true that we can't keep spending money we do not have. We have to get spending under control. The government needs to stop wasting money. It's the wrong time to be expanding government even further, unless your goal is to collapse our economy and destroy our political system.
     

Letting Banks Fail "Gracefully"

The Myth of Too Big to Fail
When it comes to banking, size isn't the only thing that matters.

[...] When the news of Wachovia's failure first reached Federal Deposit Insurance Corporation (FDIC) Chair Sheila Bair, she wanted to liquidate the bank and cut into the pocketbooks of its investors -- as she had done with Washington Mutual, the largest U.S. bank failure ever, a few days prior. But Tim Geithner, then president of the New York Federal Reserve Bank, argued strenuously for Bair to invoke her agency's "too big to fail" exception and spend more money to cover the costs of the bank's sale. He worried another collapsing bank would only intensify the financial panic at a time when the government's hands were tied. (While the FDIC can liquidate a commercial bank like Wachovia, the Fed doesn't have the tools to shut down financial institutions, only the ability to prop them up with loans.)

Geithner, now the Treasury secretary, made the right decision at the time, but it was a terrible precedent to set. Sending the message that the government won't let large banks fail in a crisis gives them an unfair advantage over their smaller competitors. Worse, if bankers are rewarded for success and insulated from failure, there is little incentive for prudence and smart management -- the problem of moral hazard.

Of all the Orwellian phrases to arise from our financial crisis -- "troubled assets," "stress tests," "capital infusion" -- "too big to fail" is perhaps the most hated and least understood. Many populists and progressive economists have called on the Obama administration to bust up the banks and make them smaller. "Just break them up," economist Dean Baker argues. "We don't have to turn Citigroup and Bank of America into hundreds of small community banks, just large regional banks that can be safely put through a bankruptcy."

The administration hasn't pursued that course of action, in part because of the political power of the banks and in part because breaking them up isn't as easy as it sounds -- it is hard to know what the right size for a bank is, especially in an increasingly global financial market. Further, the importance placed on the issue of size is deceptive: The problems that caused the 2008 crash also had to do with leverage, liquidity, and the complex connections between banks. The banks tied themselves into knots neither they nor their regulators could untie.

"The problem we have had isn't that institutions were too big -- it was that there was no uniform way to let them fail without causing an absolute market meltdown," Arthur Levitt, the widely respected former Securities and Exchange Commission chair, told the House Financial Services Committee in September.

If we want to clean up the financial mess, we have to realize that the size of institutions is a secondary problem. We must also accept that some facets of our current system are here to stay. Shrinking the financial sector will be slow going, so we're best off watching it more closely, forcing institutions to put stronger safety nets in place, and, most important, helping them fail gracefully when they make mistakes.

[...]

Perhaps the kind of restrictions that progressives wanted to put on the initial bailout loans -- strict compensation limits, firing existing management, and even more stringent rules -- should be codified so they will be clear if and when bailouts are needed again. The goal would be to penalize executives, not institutions, so the people at banks have the incentive to perform.

Regulatory reform is not just about providing new structures and tools. Reform is also about putting in place politicians and regulators who are willing to take the banks to task. The administration's proposed approach to the problem of systemically risky institutions would require the secretary of the Treasury to green-light any response to their failure, whether that response is bankruptcy, government-assisted liquidation, or even another bailout. That means direct political accountability to the president instead of the "Republic of the Central Banker" that we saw in 2008 as the Fed single-handedly undertook massive efforts to protect the financial system without any checks on its power -- or its spending.

Looking back on last fall's argument between Geithner and Bair over what to do about Wachovia, it's clear that Bair was right in principle -- using federal money to keep bad banks alive isn't a good idea. Geithner was right in practice -- letting another bank fail would have only intensified the financial panic at a time when the Fed didn't have the right tools to solve the problems further bank failures would cause. What we need is a rulebook that doesn't force regulators to choose between those two approaches. We need a system designed by someone like Tim Geithner -- and run by someone like Sheila Bair.

This was an interesting article. It's about creating a system that allows banks to fail gracefully when they screw up, to suffer the consequences for their bad decisions, but without dragging down large sectors of the economy with them. This article was about finding solutions to achieve that, not partisan bickering. I appreciated that.

     

California continues to screw itself

Like a man with one foot screwed to the floor, it goes around and around in circles, unable to accomplish anything, unable to help itself:

Will California become America's first failed state?

[...] California, which has been a natural target for immigration throughout its history, is losing people. Between 2004 and 2008, half a million residents upped sticks and headed elsewhere. By 2010, California could lose a congressman because its population will have fallen so much – an astonishing prospect for a state that is currently the biggest single political entity in America. Neighbouring Nevada has launched a mocking campaign to entice businesses away, portraying Californian politicians as monkeys, and with a tag-line jingle that runs: "Kiss your assets goodbye!" You know you have a problem when Nevada – famed for nothing more than Las Vegas, casinos and desert – is laughing at you.

This matters, too. Much has been made globally of the problems of Ireland and Iceland. Yet California dwarfs both. It is the eighth largest economy in the world, with a population of 37 million. If it was an independent country it would be in the G8. And if it were a company, it would likely be declared bankrupt.

[...]

Michael Levine is a Hollywood mover and shaker, shaping PR for a stable of A-list clients that once included Michael Jackson. Levine arrived in California 32 years ago. "The concept of the Californian dream was a certain quality of life," he says. "It was experimentalism and creativity. California was a utopia."

Levine arrived at the end of the state's golden age, at a time when the dream seemed to have been transformed into reality. The 1950s and 60s had been boom-time in the American economy; jobs had been plentiful and development rapid. Unburdened by environmental concerns, Californian developers built vast suburbs beneath perpetually blue skies. Entire cities sprang from the desert, and orchards were paved over into playgrounds and shopping malls.

"They came here, they educated their kids, they had a pool and a house. That was the opportunity for a pretty broad section of society," says Joel Kotkin, an urbanist at Chapman University, in Orange County. This was what attracted immigrants in their millions, flocking to industries – especially defence and aviation – that seemed to promise jobs for life. But the newcomers were mistaken. Levine, among millions of others, does not think California is a utopia now. "California is going to take decades to fix," he says.

So where did it all wrong? [...]

I lived in California for 23 years. I'll tell you where it went wrong. Too many Californians want to "Have their cake, and eat it too". They want a "Utopia" where everyone gets goods and services, but nobody has to pay for it.

I've posted about this before:

Harsh Truth About California. And Our Nation?

Californian's keep voting for entitlements and benefits without providing the money to pay for them. And this is where it has gotten them.

If we, as a Nation, continue to follow California's example, as we seem to be doing, we can expect a similar result for our country, even worse if it leads to a currency collapse. California today is a warning for our tomorrow. Will we heed that warning in time?

     

Far Left Dems: Lie, Sabotage, and Replace...

I've been saying it for years. They want to destroy capitalism and our Constitutional legal system, and replace them with something else. Here's proof. I've copied this from Nealz Nuze:

[START]

HEARD OF PROFESSORS CLOWARD AND PIVEN?

By Neal Boortz

Both were at liberal Columbia University professors in the '60's. (I know, "liberal Columbia University Professor" is redundant). These two professors put forth their Cloward-Piven strategy in an article in The Nation magazine. The issue date was May 2, 1966. David Horowitz summarizes the strategy thusly:

The strategy of forcing political change through orchestrated crisis. The "Cloward-Piven Strategy" seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.

Hmmmmm. Does that sound at all like our current "crisis" in health care? I mean, how many people do you personally know who are in the throes of despair right now because of some needed health care service that is beyond their reach? Oh sure, I know that there are lifeboat cases; there always are, in any society. But do the relatively small percentage of people out there who are facing some sort of unmet medical disaster constitute an entire system in "crisis?" Certainly not. So why the huge push? Why the asinine idea that our economic recovery is dependent on developing some form of national healthcare? Why is this all being painted as a crisis that to be solved right-by-God-now or our entire society is endangered? Well ... Obama and the Democrats, of course, are anxious to get this segment of the economy under their absolute control before next year's mid-term elections. Time is really of the essence for them. Consider also that if you're going to use the Cloward-Pivin Strategy of manufactured crisis, you have to treat it like an actual crisis, and that means dealing with it NOW!

Here's a bit from The Nation article: The essential features of a campaign using the Cloward-Pivin Strategy.

1. The offensive organizes previously unorganized groups eligible for government benefits but not currently receiving all they can.
2. The offensive seeks to identify new beneficiaries and/or create new benefits.
3. The overarching aim is always to impose new stresses on target systems, with the ultimate goal of forcing their collapse.

Needless to say we're going to be discussing my "find" here (thanks to a listener email) in coming days and weeks. But first, perhaps you would like to learn more on your own. Go ahead .. use Google. But here's two links to get you started:

1. Barack Obama and the Strategy of Manufactured Crisis, from American Thinker.com
2. The Cloward-Piven Strategy, from Discoverthenetworks.org

What do you think? Could the Democrat-Socialist party be intentionally trying to collapse our system?

[END]

Hell yes. Not all Democrats think like that of course, but the hardcore leftists, and even much of the party leadership, yes. They want our economy and our system of government to fail, so they can replace it with their totalitarian... "vision". They would call it a dream, but many of us would call it a nightmare. Most of them would not admit it publicly, but they don't have to. They know where the road will take us, they just have to prod us all down the path, till it's too late to turn back.

Pat also posted about this:

The Cloward-Piven Strategy
     

Understanding the meaning of "Trillions"

Nowadays we are seeing numbers mentioned in government spending, that should belong in astronomy rather than accounting. They are so HUGE, it's hard to grasp. Here are some sites that can help:

What does one TRILLION dollars look like?

All this talk about "stimulus packages" and "bailouts"...

A billion dollars...

A hundred billion dollars...

Eight hundred billion dollars...

One TRILLION dollars...

What does that look like? I mean, these various numbers are tossed around like so many doggie treats, so I thought I'd take Google Sketchup out for a test drive and try to get a sense of what exactly a trillion dollars looks like.

We'll start with a $100 dollar bill. [...]

It's a good visual presentation. Here is one example of what One Hundred Million Dollars (in $100 bills) would look like, stacked on a palette:



Follow the link to see what a Trillion Dollars would look like in $100 bills. It's mind boggling. Then multiply THAT by 10, and you will have our current National Debt. Unbelievable... and unsustainable.

HT: Walker at Subtle oak flavor; Pleasing finish


Here's another article that tackles the topic:

Obama’s dangerous budget leaves GOP at loss for words

[...] Insensitivity to scope is a major obstacle to understanding the Obama administration’s $3.6 trillion 2010 budget. People simply have trouble understanding a number so big. A recent poll asked Americans how many million are in a trillion. Twenty-one percent of respondents got the answer right — it’s a million million. Most people thought it was a lot less.

Republicans are facing that obstacle as they try to explain the dimensions of Obama’s spending plan. The GOP pollster told me he tries to explain it by asking people to think of a dollar as a second — one dollar, one brief tick of your watch. A million seconds, the pollster explained, equals eleven days. A billion seconds equals 31 years. And a trillion seconds equals 310 centuries.

The task of educating voters got a little more urgent Monday, when the government announced the not-terribly-surprising news that federal tax revenues will be smaller this year than previously thought. After a review of the Obama budget’s numbers before formal submission to Congress, Budget Director Peter Orszag said this year’s deficit will be $1.841 trillion — $89 billion more than previously estimated. If you’re listening to the ticks of your watch, that’s about 570 centuries. [...]

570 centuries worth of seconds... dang. Such numbers, applied to currency and accounting balance sheets, are very scary indeed. And for good reason.
     

Can the Dow Jones Industrial Average and Age Demographics foretell Economic Depression?

What do the DJIA and the demographics of people between the age of 45 and 54, and a financial depression all have in common? Quite a bit, according to Daniel A. Arnold, author of:

The Great Bust Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away.
This is your Concise Reference Guide to Understanding Why and How Best to Survive It (Paperback)

Product Description
The Great Bust Ahead is a concise, straight to the point short book laying out in stark terms the case for a coming depression of historically unprecedented magnitude. It will be worse than the 1930s, beginning nominally in 2012, but perhaps as early as 2009-2010 and lasting up to thirteen years.

Centered on hard fact demographics, the book boldly claims that the data presented are so irrefutable, that the outcome predicted by the book is equally as irrefutable. The compelling proof presented accurately accounts for the detailed trend of the economy from 1920 to today (something never before accomplished), and projects out to 2030.

The book is very easy to read and understand, and requires no prior knowledge of economics. Down to earth things the average person can do to prepare for what is coming are covered. A summary of the catastrophic domestic social and international consequences is offered.

January 2009 Update:

1. First, read the 2007 Update below.

2. 2008 was the victim of a self inflicted sub-prime financial crisis. This has nothing to do with the demographics based massive depression that is yet to come, as described in the book. The sub-prime consequences are however very similar though mild so far compared to what is coming our way. The book clearly spelled out that along the way unpredictable short-term (1 to 3 years) disruptive events could happen. The sub-prime crisis is just that. It should be regarded as the warmer upper or hors d'oeuvre for the big one that is now rapidly closing in on us all.

3. The great unknown at this point is whether the sub-prime based crisis will drag on beyond 2009 and then blend into the demographics based massive decline which, per the book, could begin as early as 2009-10. Being short-term by definition, this period is totally unpredictable.

4. There is the strong possibility that we will see an interim recovery manifested as a last hurrah rally in 2009 of perhaps 30% on the Dow after a new low of around 7,000. However, this is very speculative. The only historical certainty is that in the long-term the Dow always returns to the demographic. This lends some credence to such a rally as the immutable demographic, as you can see from the chart, remains in a very strong upswing as it moves toward its 2012 peak before crashing. Also waiting in the wings ready to surge back into the markets are trillions of dollars earning very little in money market funds.

October 2007 Update: In 2002 when this book was published, in addition to the massive depression beginning around the end of the decade, it forecast:

1. The economy, as reflected by the DJIA, would resume its upwards march in late 2002 or 2003. This is exactly what happened.

2. The DJIA would have a snapback to 13,000 to 14,000 and the FTSE to 6,000 to 7,000 by 2004, but delayed possibly by wars/politics/terrorism/scandals. This is exactly what has happened. Although the full snapback has been delayed for the reasons described, the DJIA has now closed over 14,100 and the FTSE over 6,700.

3. The DJIA returns from 2003 to 2012 would average a historically long-term normal of 7% to 8%. So far, with the delayed full snapback for the reasons described, DJIA actual returns have averaged a more modest 5.8%, as would be expected.

4. Interest rates would increase from 2003 onwards. This is exactly what has happened.

From the Publisher
If there ever was a book that should be read by the entire adult population, this is it. The events described in The Great Bust Ahead will be the greatest story of the first quarter of the twenty-first century, if not the century. All of our lives are going to be dramatically affected beginning in just a few years from now.

The depression of epic proportions that is predicted has THIRTY MILLION unemployed and stock market losses of over eighteen TRILLION dollars. The book leaves you with the conviction that for the first time you understand what the economy is all about. Everything presented in the book is so factual, so unchallengeable, it is hard to know what to say other than "go read it" and then start preparing as best you can.

Well, I've had this book for a while, and last night I read the whole thing. It only took an hour and a half to read, because it's only 64 pages long, and printed in large type.

I tend to regard most of these kinds of books with a lot of skepticism. I find reading the customer comments section for such books very helpful. Often, people who have read the book already can give you a very good idea of whether or not the book is even worth bothering with. Some very sharp minds often tear these books to shreds, exposing their bias, bad research and inaccuracies, saving you the time and trouble. But this book got a higher approval rating than similar books; the comments were intriguing, and since it only cost $8.95, I decided to give it a try.

The comments on this book were varied and interesting, and even most of the author's critics didn't completely disagree with the his contention that there is a relationship between the DJIA and the most productive age demographic. The thing they most argued with were about some of the conclusions that Arnold formed based on this data.

I would also question some of those conclusions, for the same reasons others have mentioned in the comments. But the Demographic data is fascinating, and I've yet to see a really effective rebuttal to it.

It was easy to read and follow Arnold's explanation of the data, and his premise takes into account a lot of variables such as immigration, wars, etc. He also shows how there are a number of short term factors that can cause the DJIA to waver temporarily from the demographic, but it always returns to the demographic.

Fascinating stuff, but what it all means for our future financial planning isn't so clear, as the conclusions are open to interpretation, and influenced by short term variables that we can't predict. For instance, Arnold recommends putting your money in U.S. Federal bonds. But with the huge deficit spending we are experiencing now, how safe are those going to be?

He has some interesting ideas about real estate and some other options, but it's late in the game now. The book was written in 2002, and if he's right we may already be on the brink.

The author also has a website, at TheGreatBustAhead.com.


Related Links:

Global Banking Crisis? Leading to...?

An Economic 9/11? A Depression? Trends...

What would a U.S. currency collapse look like?
     

Democrat Gamble makes Republicans Scramble

Harry Reid has criticized Republican's for not being bipartisan enough, claiming that they want President Obama to fail. But how can they be "bipartisan", if by definition it means jumping off a cliff with the Democrats? Is not agreeing to mutual suicide really "wanting Obama to fail"?


Ironically, I think if the Democrats would have worked on a truly bi-partisan approach to solving the crisis, they could have, with Republican help, insured Obama's success for improving the economy and creating jobs. Instead, they are taking a terrible gamble that seems suicidal to many of us.

This article in the San Francisco Chronicle attempts to make a very positive pitch for Obama's budget and the Democrat's agenda. But even with all the gushing and praise, it acknowledges many of the risks being taken:

Obama taking big political risk with budget

[...] After two years of protecting her conservative Blue Dog Democrats by signing off on farm subsidies and avoiding immigration votes, Pelosi has signaled a leftward shift, warmly embracing the Obama budget as the culmination of a vision she has fought years to achieve. "We are very excited, I guess is the word," Pelosi told liberal media representatives last week. "Now we have a president who shares our values and has the right priorities."

Like former President Reagan, who inherited an economic calamity from a deeply unpopular predecessor, Obama is using the crisis to change government's role in the economy. "We are at an extraordinary moment that is full of peril but full of possibility," Obama told PBS' Jim Lehrer, "and I think that's the time you want to be president."

If the polls are accurate, the economic meltdown has altered public attitudes about government, be it the appetite for health care reform, regulation of banks or higher taxes on the wealthy.

"What you've got is a context that makes a very ambitious budget strategy possible in a way that wouldn't be possible in times we would call normal," said Bruce Buchanan, a presidential scholar at the University of Texas. "This is a rare moment." [...]

I read the whole thing. I can follow the logic of the arguments being put forth in favor of what's being done. Yet I can't see that it's going to work, because it's the same flawed logic that got us into this mess. Even the article warns there are a number of pitfalls that could cause it to fail:

[...] Historically, a president's first year is almost always his most productive. "If you can't do it in your first term with your first budget, you almost never get a chance to do it later," said Stan Collender, a veteran budget expert now with Qorvis Communications, a Washington public relations firm. And when a new president comes from a different party than his predecessor, big changes are expected. [...]

President Obama's $3.6 trillion spending and tax plan is the most ambitious effort to shift the federal government's role in the economy since former President Ronald Reagan's in 1981. But instead of rolling back government, Obama advocates spending in three key areas, each dependent on the others. If Congress declines to raise taxes on carbon emissions, for example, money for the middle-class tax credit vanishes, forcing the deficit even higher. [...]

If Obama would only cut taxes to create jobs and increase investment, he would increase the tax revenue from new and expanding businesses, which could fund many of his programs. A true bi-partisan compromise could have achieved that. The problem is, in the name of "fairness", he's instead punishing business with higher taxes, causing investors to sit on their money, shrinking the tax payer base, and borrowing trillions to pay for the Democrat's massive budget agenda. It's growing a bubble that's bound to burst.

Debt is the problem, not the solution. Many Republican's turned against George Bush and the Republican Party for continuing to spend money we don't have, increasing our debt massively and weakening the dollar. And now ironically, Obama is compounding that problem.

If it works I'll eat these words, but I honestly don't see how it can. Jimmy Carter threw endless money at problems, with very bad consequences. It's looking more and more like Barack Obama intends to do the same.

This Administration is still new, and they could conceivably learn from their mistakes. Carter didn't learn from his mistakes, and had one term. Will Obama?


Related Links:

More than a bad day: Worries grow that Barack Obama & Co. have a competence problem

Is Obama taking on too much at once, at economy's expense?

President Obama: a "Leader" or a "Figurehead"?

Does Obama Know What He Is Doing?

HANSON: Maxing out a crisis card
     

Harsh Truth About California. And Our Nation?

Accounting for California’s Suicide: A weird sort of utopian mindset.

Victor Davis Hanson at National Review describes the healthy and prosperous California of two decades ago, and compares it to the flailing and swiftly deteriorating basket case it has become today. Then he gets to the crux of the reason why:

[...] If we can agree that Californians have somehow squandered a rich natural and inherited wealth, what were the root causes of this collective suicide?

Critics disagree. Some cite expanding but inefficient state government, out-of-control state pensions and oppressive taxes. Or are the chief problems costly prisons and astronomical rates of incarceration, illegal immigration, unchecked welfare, and excessive regulation and environmental restrictions?

All these explanations may be valid. But less discussed is the underlying culprit: a weird sort of utopian mindset. Perhaps because have-it-all Californians live in such a rich natural landscape and inherited so much from their ancestors, they have convinced themselves that perpetual bounty is now their birthright — not something that can be lost in a generation of complacency.

Californians count on the wealth of farming but would prefer their rivers to remain wild rather than tapped. They like tasteful redwood decks but demand someone else fell their trees for the wood. Californians drive imported SUVs but would rather that you drill for oil off your shores rather than they off theirs. They pride themselves on their liberal welfare programs, but drive out with confiscatory taxes the few left to pay for them.

Californians expect cheap imported labor to tend their lawns and clean their houses, but are incensed at sky-high welfare and entitlement costs that accompany illegal immigration. Lock ’em up, they say — but the state is bankrupted by new prisons, constant inmate lawsuits, and unionized employees.

In short, after Californians sue, restrict, mandate, obstruct, and lecture, they also get angry that there is suddenly not enough food, fuel, water, and money to act like the gods that they think they have become.

This is spot-on in so many ways. When I moved to San Francisco in 1981, California was the strong and prosperous state Hanson describes at the beginning of his article. Over the twenty four years I lived their, I witnessed the deterioration he speaks of in the middle of his article.

One of the reasons I had moved to California was to further my education. I had gone to a very expensive college in Boston for a year, and was extremely disappointed in the quality of the education. California colleges and universities were supposed to be good, and less expensive.

I enrolled in SF city college a couple of times, but always ended giving up on it. The quality of the education was inferior. At best I felt it was a dumb-downed grade factory for functional illiterates; at worst, a politically correct brainwashing camp. I couldn't bear it.

I could earn such fabulous sums of money going to work at jobs most people didn't want to do, that school seemed like a waste of time. Bothering to show up for work and speaking English were job skills that served me well, I didn't need the brainwashing, thank you.

But unfortunately, the brainwashing had an effect on much of the population, and the "good life" that people had to work for in the past, suddenly began to be talked about as a "right" that everyone was entitled to, rather than a goal to work towards. I watched California become a land of spoiled people spoiling a once prosperous and healthy state. Hanson observes:

[...] Biannual state proposition initiatives, often put on the ballot by narrow special interests, allowed voters to vote for additional entitlements and benefits without providing the money to pay for them. Yet Californians are not an informed electorate, as the state’s mediocre public high schools experience 30 percent dropout rates. [...]

California lost the capacity to maintain that prosperous and healthy state, by killing the heart of the engine that drove it. And the "Utopia" mindset is the dagger that was used to do it.

San Francisco is full of people who "live for today"; they are mostly renters, and they spend their money on fancy cloths, cars, electronic gadgets, concerts, movies, vacations, restaurants, etc. They lavish all their money on themselves, or even worse, live on extended credit, so they can "live the good life" to the maximum, while simultaneously complaining about people who have more than they do. People like Pat, Andy and me, who worked hard and saved money, bought a house and built up a business. They would whine that "it's not fair" that we have what they don't.

We sacrificed, we did without all the above luxuries, so we could attain the things we wanted. They could do the same too, if they wanted. But if you were "rude" enough to point that out to them, they would start screaming at you, "What are you, some kind of REPUBLICAN?".

Those are the same people Hanson describes in his article. People who feel they are entitled to that which they did not earn. People who live on credit. People who have voted for entitlements and benefits without providing the money to pay for them.

Is it any wonder that people like us, who worked and saved, sold up and left? And Hanson points out that educated people with job skills are still leaving California in droves. The state is teetering on financial collapse. But unfortunately, I don't think this problem is limited to California. The mindset that Hanson speaks of is taking root elsewhere, and spreading across the country, like so many California trends do.

Today the Democrat Party is being led by San Francisco (Pelosi) style Democrats. I've posted about what they did to San Francisco, and much of the rest of California as well. I've posted about how the radical "Greens" among the Democrats caused California's energy crisis, which plagues the state to this day, and how Obama and the Washington DC Democrats are adopting a similar plan for our nation, which will likely have similar consequences.

Please read the entire article by Hanson, it's not very long but well worth your time. We have a lot to learn from California. Mostly, not to follow their example of the past two decades. Entitlement utopianism and people living beyond their means on credit ruined California, and now that same mindset is threatening to ruin the rest of our country. And it will, if we don't stop the rot now.

I see the same trend happening here in Oregon, and many other states that are accumulating debt by passing entitlement legislation without financing to support it. If that trend continues unabated, the consequences will likely be devastating.


Related Link:    Daily duh! - debt is the problem not the solution