Obama Summarizes Economic Policies, Misses Several Key Points

In a speech this week summarizing his administration's economic policies, President Obama grossly overstated the support these policies enjoy by claiming, "economists on the left and right agree that the last thing the government should do during a recession is cut back on spending." There are a great many economists who were surprised to learn that, apparently, they now agree with the President.

Reading straight from the Keynesian playbook, Obama justified the creation of multi-trillion dollar deficits by asserting that the government must fill the spending void left by the contraction of consumer and business spending. As one of those mythical economists who do not agree with the President, I argue that it is precisely this type of boneheaded thinking that got us into this mess, and it's the reason we are now headed for an inflationary depression.

We do not need, nor should we attempt, to replace lost demand. As Obama himself pointed out in the same speech, Americans have been borrowing and spending too much money. These actions created artificial demand, underpinned by the illusion of real wealth in overvalued stock and real estate markets. Given his intelligence and rhetorical training, it is hard to fathom how President Obama cannot notice the inherent contradiction in his argument.

While Obama commended millions of American families for making the hard choices to reduce spending, pay down debt and replenish savings, he later outlined the government's intention to spend every American household deeper into debt, thereby undermining all the good that personal austerity would have otherwise produced.

Obama also made the clear-eyed observation that the foundation of our economy was unsound and that a sturdier one needed to be laid. To do this, he even asserted that we need to import less and export more. This has been one of my fundamental points. Our economy is unsound precisely because it is built on a foundation of consumer debt. Instead of spending for today, we need to invest for tomorrow. However, we cannot save more unless we spend less. Production requires capital, which only comes into existence when resources are not consumed.

However, by interfering with this process, Obama prevents the very transformation he acknowledges must take place. When the government spends what individuals save, private investment is crowded out. Society is deprived of the benefits such savings would otherwise have brought about. How can we lay a solid foundation if the government takes away all our cement?

This brings up an oft-repeated, but oft-forgotten, point: government does not have any money of its own. It only has what it takes from the rest of us. If individuals repay their debts, but their government takes on additional debt, we are all simply swimming against the tide. All forward progress is lost as private debt is replaced by public debt, which must be repaid by private individuals. Whatever gains individuals hope to achieve are negated by the higher taxes or increased inflation necessary to repay their share of a larger national debt.

Obama claims that much of the additional debt is not going to finance consumption, but rather "critical investment". This is a vain hope. In the first place, much of what he categorizes as investment, such as additional spending on education, is not investment at all. Yes, an educated workforce is important, but throwing more government money at education will do nothing to achieve this goal. Spending money on education and calling it an investment squanders resources that otherwise would have financed real investments. In the second place, to the extent some government money is invested, those investments will likely be less efficient than those the private sector might otherwise have financed. There is absolutely no evidence that governments have the foresight or incentives to make investments that facilitate real economic growth. "Five year plans" didn't work in the Soviet Union and they won't work here. If the government simply builds bridges to nowhere, society gains nothing.

If we are going to rebuild our economy on a solid foundation, the market, not the government, needs to draw the plans. When private citizens invest their own capital, those who invest wisely are rewarded with profits, while those who do not are punished with losses. Bad investments are therefore abandoned, with capital reallocated to more successful ventures. Conversely, when governments invest money, these checks and balances do not exist. There is nothing to correct bad investments, as losses are endlessly subsidized by taxpayers. In fact, the more a government plan fails, the more it tends to be funded in the hope that additional resources will finally achieve success. Obama himself proves this by allocating still more funds to government-run schools and student loan subsidies. Other examples, such as Amtrak, the New York MTA, the U.S. Postal Service, Fannie/Freddie, and countless others, prove this process is never-ending - until perhaps the bureaucracy collapses under its own weight.

When it comes to government making tough choices, Obama talks a good game, but refuses to actually make any. However, once the dollar finally begins its collapse, he will have no choice but to match his rhetoric with action. It's unfortunate that we cannot make these tough choices on our own terms, rather than waiting for our creditors to force our hand.

Comments

[sticktoitiv...:]

economists on the left and right = Bernanke & Gietner

Apr 19 03:26 AM

[Dave Wrixon:]

Pretty much agree with the majority of that, but there are a few issues that have been glossed over and some emphasis is misplaced.

Most importantly one must understand that not only does investment capital need to be available but the US economy needs to be an attractive destination for that capital. This has not been the situation for a generation and something drastic needs to change and eduction is certainly one aspect of that. Americans need to come out of school having some concept of global geography and economics. They need to be divested of the impression that their obese, often arrogant and certainly poorly educated society is some kind of master race. It isn't, and such an over-paid and pampered workforce is of not an attractive destination for capital investment. That needs to change.

On the bridges to nowhere, it is also clear that the US transport infrastructure is decrepit. I agree you should not construct bridge to nowhere, but an awful lot could be done to ensure that your transport infrastructure meets the needs of a 21st century economy. It is clearly the remit of government to come up with the policy and the funding for this essential pillar to a vibrant economy. Even online commerce ultimately has to deliver physical product.

The biggest deficit in the US currently is the political will for real change. Obama talked much about change in his election campaign but it would seem that it was largely empty rhetoric.

Apr 19 03:37 AM

[Steven Hansen:]

when the government is creating such massive debt, it soaks up the capital which would otherwise be used by the private sector for investments (or some other purpose).

the crux of the dilemma today is that obama is acknowledging he understands all the issues, but is continuing on the course of bush economic response to this financial crisis. it is telling me that he believes bush's approach to this crisis was correct.

obama is betting the farm the economy improves before the mid-term elections.

Apr 19 04:02 AM

[conceptwizard:]

I concur, a very good article. The administration is not following policies laid out for them. There is legislation in place to handle these banks. Hard decisions are not being made.
This is what happened in the great Depression to tackle the banks, and it still took 10 years and a war to get out of. Keep in mind that this was after FDR tackled the problem head on.

On March 4, 1932 (one year to the day before FDR took office), a majority-Republican Senate Banking, Housing, and Urban Affairs Committee established it to investigate the causes of the 1929 crash. It was little more than a fig leaf until Democrats took over, appointed Ferdinand Pecora as special counsel, and made a real effort for banking and regulatory reform.

Straightaway, Pecora looked into Wall Street's seamy underside by placing powerful bankers in the dock, holding them accountable for their actions, and doing through hearings what would have been impossible in open court given their ability to "buy" justice.
He confronted Wall Street's biggest names. Years later in his book, Wall Street Under Fire, Pecora wrote:
"Undoubtedly, this small group of highly placed financiers, controlling the very springs of economic activity, holds more real power than any similar group in the United States." Morgan called it performing a "service" and exercising no more control than through "argument and persuasion."

Roosevelt encouraged him in his March 4, 1933 inaugural address saying:

"there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people's money, and there must be provision for an adequate but sound currency....the rulers of the exchange of mankind's goods have failed through their own stubbornness and their own incompetence, have admitted their failure and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men...."

"They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish. The money changers have fled their high seats in the temple of our civilization. We must now restore that temple to the ancient truths. (Doing it requires) apply(ing) social values more noble than mere monetary profit."

Imagine Obama saying this, followed by strong policies for enforcement under Roosevelt-style officials.

Its amazing the simlarities 80 years later. By the way the US defaulted on its debt in 1932 under FDR at least once already.

Apr 19 08:25 AM

[Steve in Gr...:]

Obama is a lawyer. Economics, business, he does not understand. He is doing what Larry Summers and Bernanke tell him to do (spend and print USD like crazy). If that was all the government did, we might get another house-of-cards recovery, like we did after the 2000-2002 dot-com bubble burst.

But there is another factor in the current environment.

The U.S. hard left control the Legislature and Obama is a man of the left, so we will get carbon dioxide taxes, nationalized healthcare and higher marginal tax rates. This will offset (and more than offset) any recovery engineered by the conventional thinkers Summers and Bernanke.

Sorry, but we voted for it.

Apr 19 08:31 AM

[yellowhoard:]

I've been saying for months now that, regardless of what becomes of the economy over the next several months, in a year or two we will have confiscatory tax rates.

It is unavoidable given the enormous short and long term obligations being heaped upon our backs.

Small and large businesses are hanging by their fingernails now. How many businesses will fail when their taxes double?

Apr 19 09:17 AM

[collegestudent:]

peter schiff for president 2012

Apr 19 09:22 AM

[D. McHattie:]

Schiff hits the nail on the head once again.

Obama mentions 'tough choices' in just about every speech but takes the easy way out every time.

What is so 'tough' about a $700B+ spending bill to be paid by a future generation?

Apr 19 09:52 AM

[surgcare:]

There are only two possible out comes . Either the congress and president wil have to raise taxes on any living thing including plants and animals to pay the enormous debt or the government will nationalize the entire country and confiscate all of what people own to pay the debt .

Apr 19 09:53 AM

[FDNY RET:]

Obama gives a wonderful delivery, of words written by gifted writers.
What's missing from the equation is a gifted economic-"Thinker".
Thanks Peter for, pointing out that fact.

Apr 19 10:17 AM

[fireball:]

obamamama may need to build that wall on the southern border after all-to keep the productive in instead of the illegals out.
he promised socialism.
how long until property taxes to pay for government (unconstitutional programming, conditioning centers) schools make private property impossible for the middle class? they already seem to be inflating. i have yet to hear one citizen say my property taxes went down in accordance with the real estate devaluation. of course the abolition of private property is one of the ten planks. how can we be good little socialists if we own land?
they finally are attempting it. cap and trade will be a tax on air. the increased expense will come to rest on the overburdened shoulders of the middle class.
mr. schiff once again thank you for another article.

Apr 19 10:32 AM

[johmw:]

I could name quite a few economists that think the direction this administration is going is the wrong one. But given the people he has chosen to assist in running it, is it any wonder they are making the same mistakes of the previous one. More bailouts will come, the commercial real estate market last year was predicted to crash in 2009 and with the bankruptcy of GGP last week it is now starting to unfold. The residential market shows some signs of starting to recover but has a large amount of ARM loans which will continue to reset all the way into 2011. And if unemployment continues to rise and most feel it will even more mortgages that were not previously in peril will become so.

Apr 19 10:37 AM

[ferguson:]

College student thinks Peter Schiff should be president. I agree he should be president of something. Just like George Bush, he should be the permanent president of his college fraternity where the power of the president to do damage to the nation and the world is suitably contained.

Apr 19 11:16 AM

[Ergo:]

Excellent article. Too bad there isn't much discussion like this on the national stage. I notice that people are still voting "thumbs down" for anyone who criticizes Obama. It's just that kind of refusal to consider opposing views that will cause the crisis to get worse.

Apr 19 11:22 AM

[jksisco:]

Making Government bigger than it already is, will certainly compound the economic problem. Lowering capital gains and dividend taxes would immediately release billions in capital, that is if one is serious about fixing the economy, rather than controlling it.

Apr 19 12:07 PM

[MarkitWacha:]

I watched Obama's address to the nation recently. I sincerely hope that this president grows a pair, and eliminates broken programs in favor of something that has a chance. This is what he stated in his address. Mr. President, here's a list:

* Privatize Social Security somehow. When the old ladies protest this in the street, break out the water cannons.
* Privatize Fannie Mae. Keep the politicians completely at bay, and it would work.
* Privatize Amtrak. Cellphone spectrum is auctioned off, do the same with rail capacity.
* Privatize EVERYTHING YOU CAN, because BIG GOVERNMENT is NOT the ANSWER.

Apr 19 12:51 PM

[Twitcher:]

Imagine how much lower our postal rates would be if, for example, Fed Ex or UPS or a like entity were running the postal system. How many privately operated businesses would raise their prices when business was poor and survive?

Apr 19 12:56 PM

[Editrice:]

I am not an economist, but I do understand the art of argument. Mr. Schiff, when you say, "Yes, an educated workforce is important, but throwing more government money at education will do nothing to achieve this goal. Spending money on education and calling it an investment squanders resources that otherwise would have financed real investments," I read an assertion, not an argument. I would like to read in addition the reasoning behind your assertion and, perhaps, a few of the "real investments" you have in mind.

Apr 19 01:42 PM

[Dave Wrixon:]

Perhaps he should borrow this moron from George W Bush:

www.nytimes.com/2009/0...

"If all of this seems too outlandish, there is a more prosaic way of obtaining negative interest rates: through inflation. Suppose that, looking ahead, the Fed commits itself to producing significant inflation. In this case, while nominal interest rates could remain at zero, real interest rates — interest rates measured in purchasing power — could become negative. If people were confident that they could repay their zero-interest loans in devalued dollars, they would have significant incentive to borrow and spend.

Having the central bank embrace inflation would shock economists and Fed watchers who view price stability as the foremost goal of monetary policy. But there are worse things than inflation. And guess what? We have them today. A little more inflation might be preferable to rising unemployment or a series of fiscal measures that pile on debt bequeathed to future generations.

Ben S. Bernanke, the Fed chairman, is the perfect person to make this commitment to higher inflation. Mr. Bernanke has long been an advocate of inflation targeting. In the past, advocates of inflation targeting have stressed the need to keep inflation from getting out of hand. But in the current environment, the goal could be to produce enough inflation to ensure that the real interest rate is sufficiently negative.

The idea of negative interest rates may strike some people as absurd, the concoction of some impractical theorist. Perhaps it is. But remember this: Early mathematicians thought that the idea of negative numbers was absurd. Today, these numbers are commonplace. Even children can be taught that some problems (such as 2x + 6 = 0) have no solution unless you are ready to invoke negative numbers."


On Apr 19 10:17 AM FDNY RET wrote:

> Obama gives a wonderful delivery, of words written by gifted writers.
>
> What's missing from the equation is a gifted economic-"Thinker".
>
> Thanks Peter for, pointing out that fact.

Apr 19 02:11 PM

[constab:]

Education is an investment when the result of the education can be used in practice. Most of the education is useless. What is learned is forgotten within weeks. Most of the time people have to get rid of a lot of abstract theory when they start to practice. At that moment they aquire Experience. Experience is the most valuable asset in life.


On Apr 19 01:42 PM Editrice wrote:

> I am not an economist, but I do understand the art of argument. Mr.
> Schiff, when you say, "Yes, an educated workforce is important, but
> throwing more government money at education will do nothing to achieve
> this goal. Spending money on education and calling it an investment
> squanders resources that otherwise would have financed real investments,"
> I read an assertion, not an argument. I would like to read in addition
> the reasoning behind your assertion and, perhaps, a few of the "real
> investments" you have in mind.

Apr 19 02:22 PM

[fran:]

would it be unfair or unkind to conclude that the prez fails to read or comprehend the rhetorical pandering in the speaches any more or less than the majority of voters?

so long as the sound and charisma satisfy the audience, why the concern with the content. most don't attend a circus or movie to anticipate the need for deep thought. nor most other dialogue beyond sound bite length.

Apr 19 02:30 PM

[rm:]

[ would like to read in addition the reasoning behind your assertion and, perhaps, a few of the "real investments" you have in mind. ]

There are plenty of studies that show there is no correlation between education expenditures and test scores, graduation rates, etc.

I believe DC spends $15k per kid and yet is near the bottom nationally.

The best government "investment" is no investment at all. Name one problem that the government has "solved" and I'll name 10 that they've completely clustered up.

Apr 19 06:55 PM

[nova:]

It is time to accept the reality: Obama is a fraud.

Apr 20 12:54 AM

[O-B-WON:]

The economy / markets are like a natural force...

..you can momentarily change it's course or hold it up, but it will do what it wants no matter how much "tweaking" the Obamanites do or anyone else for that matter...

The sooner we learn to go with the flow and let nature makes it's natural selections (i.e. let companies fail) the sooner we can get back on course and start making some correct decisions.

Our destiny was determined a long time ago by the choices we made that put us in this mess...

Kinda like getting knocked up and having a kid in high school before you have a chance to get your education..

We’ve made our bed… now we’re going to have to lay in it.

Apr 20 01:01 AM

[Hmm?!:]

"Economists on the left and the right agree".....

I have posted the text of a full page Wall Street journal ad, signed by over 300 economists. The main stream media continues to ignore them all! Like it never happened? Ridiculous!

"There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy."
PRESIDENT-ELECT BARACK OBAMA, JANUARY 9 , 2009

With all due respect Mr.President, that is not true.

Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of
government, we the undersigned do not believe that more government spending is a way to improve economic performance.
More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in
the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over
experience to believe that more government spending will help the U.S. today. To improve the economy, policymakers should
focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the
burden of government are the best ways of using fiscal policy to boost growth.

Apr 20 02:10 AM

[capitalisth...:]

The Keynesian policies of the Bush and Obama administration's will fail as Keynesian economics does always and everywhere. Check out the following link for a more detailed explanation.

capitalisthero.com/Key...

Apr 20 03:25 AM

[Jonponwon:]

You and Obama have the same goal in mind - re-starting a cycle of growth that will make Americans rich. You disagree only on how to get there. Both of you believe in an illusion. The planet cannot take any more getting and spending. It's all over bar the shouting.

Apr 20 05:36 AM

[Obamitall:]

Yeh, the liberals really are not. They hate criticisms pointed their way.As the reporter in CNN revealed, the bigotry and hate is left field stuff.


On Apr 19 11:22 AM Ergo wrote:

> Excellent article. Too bad there isn't much discussion like this
> on the national stage. I notice that people are still voting "thumbs
> down" for anyone who criticizes Obama. It's just that kind of refusal
> to consider opposing views that will cause the crisis to get worse.

Apr 20 06:32 AM

[Matevski:]

A couple of years ago I first read an article from Peter on a Swedish website about his views on economics and the coming crisis (I live in Sweden). That article got me curious on Austrian economics and since then I have read several books from Murray N. Rothbard. It's funny how easy economics all of the sudden became.

Before that point, I was one of all the people who also thought that government was the solution to recessions/depressions, but now I know that this is not the case. Instead, government is the exact opposite: the actual cause of it.

Once again, thank you Peter!

Apr 20 06:32 AM

[Allan Frain:]

"Obama is a lawyer. Economics, business, he does not understand. He is doing what Larry Summers and Bernanke tell him to do (spend and print USD like crazy)."

Absolutely !! Witness that Obama put Pelosi in charge of drafting the Stimulus Plan. He is more of a delagator than a leader and his appointments are a function of his campaign donations.

It may have been easier to see that Hank Paulson could exert his will over Bush, but nothing has changed but the names and faces.

The GS alumnai in Treasury are running things. W and O are puppets. So much for "change."


On Apr 19 08:31 AM Steve in Greensboro wrote:

> Obama is a lawyer. Economics, business, he does not understand. He
> is doing what Larry Summers and Bernanke tell him to do (spend and
> print USD like crazy). If that was all the government did, we might
> get another house-of-cards recovery, like we did after the 2000-2002
> dot-com bubble burst.
>
> But there is another factor in the current environment.
>
> The U.S. hard left control the Legislature and Obama is a man of
> the left, so we will get carbon dioxide taxes, nationalized healthcare
> and higher marginal tax rates. This will offset (and more than offset)
> any recovery engineered by the conventional thinkers Summers and
> Bernanke.
>
> Sorry, but we voted for it.

Apr 20 09:57 AM

[Allan Frain:]

"Economists on the left and the right agree".....

The economic debate may be more accurately described as between Keynesians and Austrians.

Economics is the study of markets. Socialism is what you do when you don't want to accept market results. That is the left/right debate.

Apr 20 10:04 AM

[wavelength:]

President "I won" Obama tends to grossly overstate most things. He is allergic to the truth. If a neo-con is "a liberal who got mugged by reality", then a socialist is, as Allan Frain has correctly pointed out, a liberal who is plunging further and further into denial.

Apr 20 12:29 PM

[Hot Richard:]

Most smart people throw up a little guacamole into their mouths when Obama made his "on the left and right" comment.

His left and right just means Keynesians that support ABC spending and Keynesians that support XYZ spending.

Austrians ain't at the Obama table.

Wake me when ANYTHING shows Congress has the walnuts to bust spending.

Apr 20 12:40 PM

[Hot Richard:]

Some of you haven't been paying attention. Capitalism lost. Socialism won. At this point in history, the majority of American people want socialism and they don't want capitalism. The battle is over in America.

The majority of people also want to eat ice cream all day every day and live to 100 and have Angelina Jolie's body (in one way or another).

Time to retire to your lair, figure out how capitalism lost, and develop a better game plan and next country to target.

Hints:
- not a fan of democracy
- not a fan of state controlled currency
- not a fan of the state

Hot Richard would never crash the US economy and most days I'd just fish and smoke leaf.

Apr 20 12:49 PM

[BrentB:]

One wonders about this column - is this guy just blowing smoke? Many of his arguments are close to plausible, but then just miss the mark. For example, "no evidence that governments have the foresight or incentives to make investments that facilitate real economic growth" can only be true if no government plan ever worked. Surely he is wrong. Adding "bridges to nowhere" is a reference to the past Republican practises and cannot be a base for future expectations. Nor can the failure of five year plans in the soviet union be used as the basis to statements about government programs in the US. When a write uses all these extremes to justify an argument, you must suspect the argument.

Many of the arguments in this article do not reflect present reality. The ability of private enterprise to prosper in normal times cannot be used as a yardstick for these times, when the cost of capital for many small companies is so high they are forced to fold. Capitalism is not working right now. Normal rules do not apply.

D-

Apr 20 04:56 PM

[Skeptical Ben:]

And what did that make George W. "bullish" Bush? A lousy delivery by a mediocre mind? The growth and debt bulls that ran the government, the fed and the markets for a decade have done tremendous damage, there is no single person up to the task of fixing painlessly.


On Apr 19 10:17 AM FDNY RET wrote:

> Obama gives a wonderful delivery, of words written by gifted writers.
>
> What's missing from the equation is a gifted economic-"Thinker".
>
> Thanks Peter for, pointing out that fact.

Apr 21 12:28 AM

[marctacoma:]

I believe to some degree youre right. Most Americans 'think' they want socialism. But Rich don't we have a clear picture of how well that works from history? The problem is we are seeing the fruition of 50 years of liberalism in the public education system. I would challenge you to find a typical high school student who knows any thing about our recent past history.


On Apr 20 12:49 PM Hot Richard wrote:

> Some of you haven't been paying attention. Capitalism lost. Socialism
> won. At this point in history, the majority of American people want
> socialism and they don't want capitalism. The battle is over in America.
>
>
> The majority of people also want to eat ice cream all day every day
> and live to 100 and have Angelina Jolie's body (in one way or another).
>
>
> Time to retire to your lair, figure out how capitalism lost, and
> develop a better game plan and next country to target.
>
> Hints:
> - not a fan of democracy
> - not a fan of state controlled currency
> - not a fan of the state
>
> Hot Richard would never crash the US economy and most days I'd just
> fish and smoke leaf.
>

Apr 23 03:43 PM

[carey_jim:]

Two words, socialism and capitalism can't hold that much weight.

Most people want socialism? Capitalism lost? Has Obi-Wan Kenobi finally spoken again?

Public education is a victim of socialism?

California public schools went from being among the best in the nation to the worst in one generation, the generation that followed the hated socialist California governor Ronald Reagan.

The truth is that the American economy has been a mixture of free enterprise in the middle and at the bottom, but dominated by monopolies at the top, for at least one hundred years.

These monopolies and oligopolies account for at least half of all economic activity in the the United States and around the world.

Capitalism? Try starting up your own television station.


On Apr 23 03:43 PM marctacoma wrote:

> I believe to some degree youre right. Most Americans 'think' they
> want socialism. But Rich don't we have a clear picture of how well
> that works from history? The problem is we are seeing the fruition
> of 50 years of liberalism in the public education system. I would
> challenge you to find a typical high school student who knows any
> thing about our recent past history.

Apr 25 12:15 PM

[sdcougar:]

'Obama claims that much of the additional debt is not going to finance consumption, but rather "critical investment"'

And his critical investment includes fighting non-existent man-made global warming...which will throw trillions of dollars down another rat hole.
Here's what Obama said about your energy bill:
www.youtube.com/watch?...

And why higher energy bills? THIS;
video.google.fr/videop...

May 01 01:07 PM

[johngonole:]

Carey-Jim,

You make some excellent points. Schiffs arguments are basically concerning the impact of Federal Reserve and Government Spending policies and how they effect the overall economy. Your points about us being a mixed economy are well taken because they are true. I would suggest that productivity increases over the last years have been the slowest gains ever yet we've just gone through something akin to the industrial revolution when we talk about the technological revolution and the internet. With all these tremendous advances productivity in the US hardly budges.

I believe this is because more and more people work for governments (Federal, State, County, City) then ever before and work in a very very relaxed environment (hardly working or producing anything). Increases in employment at the oligopolies and monopolies also has not helped for the same reason. Fascism has created whole industries and companies that are immune from competition.

In essence while we've made huge productivity via technology they are being waisted or lost because of socilism and fascism in our country. Comfortable yes but look at the products that are actually having their prices lowered. Most of them are being imported from places where producitivity is increasing.

The real doom and gloom is that if we continue on the present course our dollar will collaspe and we will waken to the reality that the world will no longer serve our wants and needs and that most of us are working at pretend jobs that do nothing but push paper. Production is moving off shore. Obama wants to tax American profits when earned overseas. The effect won't be a reimportation of jobs to America. Rather foreign companies will simply capture profits than our companies. Our companies will be forced to abandon overseas operations. Reimporting them won't work because our work force simply can't compete.

On the positive if we could just convince enough Americans to demand a governemnt that in every law it passes seeked to protect the free market we would see government spending drop, monopolies and oligopolies shrink while small buisinesses could begin to produce and innovate again. Our current path will be akin to a snake feeding upon inself until there is nothing left to cannibalize.

In a side note the road is up hill. For example when Huckabee suggested on John Stewart's show that we could have smaller government if people would simply take responsibility and do the right thing he disagreed by stating that he thought we were doing pretty good because people can change lanes on the highway and obey traffic signals. The left will deny all logic and true progress so they can live in the world where they have all forms of control.
Why deny simple truth, such as if less people commit crimes less productivity will be waisted on jails, guards, courthouses, lawyers, etc...? John Stewarts response and the typical leftest is that if no one commits crimes then guards would be out of work.

So the truth is that are enemy is ignorance and those who feed upon it for their own gain. I'm not sure we can defeat it. Perhaps Texas will leave the Union. I'd move there just for a chance to hit the reset button.

Regardless somehow we must find our way back to a responsible, self reliant, self governing citizenry. Put back in place a libertarian dominated republic similar to our countries foundation. This will be the only way we get back to a productive society where one person can work and provide for his family while another parent can raise their children to be intelligent, thoughtful, and self confident.

May 10 02:23 AM