Dave's Top 10 Reasons This Recession Will Last Forever 65 comments
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10. No innovation. As Nobel Prize Laureate Edmund Phelps told Bloomberg News Aug. 2, “I’m not convinced that there’s going to be another wave of innovation in the offing.”
9. Speaking of innovation, the US is not getting the clever immigrants it used to. Remember that almost half of Silicon Valley during the tech bubble peak was Asian.
8. China will hold its own but its economy is too small to act as a locomotive for the rest of the world (maybe for Korea).
7. The US only can finance its nearly $2 trillion annual borrowing requirement if banks and households buy Treasury securities rather than riskier corporate securities or mortgages. If the rest of the economy starts competing with the Treasury for capital, interest rates will rise immediately and suppress economic activity.
6. The rest of the world is full up on US Treasury securities. Asia won’t dump its existing holdings (it would be the biggest loser) but will try to diversify out of dollars. That’s why the Euro is trading at the ridiculous level of $1.40. There won’t be enough Europeans left working in thirty years to pay taxes to cover the interest on newly issued long-term government bonds. But the Euro has diversification value against the dollar and its parity is exaggeraged. So revert to Point 5: the US is on its own financing the deficit.
5. The US consumer can’t get out of a hole. The bloggers have been all over the personal income data for June, which shows that household finances continue to deteriorate. I don’t need to reiterate what others have documented; see for example:
The U.S. Consumer’s Pain Will Continue Until 2010 by John Lounsbury
Personal Income and Savings: The Double Whammy by Tyler Durden
Where’s the Consumer? by Karl Denninger
4. American demographics look suspiciously like Japan’s in 1990, at the beginning of the “Lost Decade.” Japan’s elderly dependent ratio jumped from 18% to 26% over the 10 years; between 2010 and 2020, America’s will rise from 19% to 25%. In other words, a huge component of the labor force is nearing retirement. They have no savings to speak of and what they thought was their nest egg (home equity) just vaporized. Their savings requirements are bottomless. The combination of demographic and wealth shocks should produce a loop-de-loop in the “marginal propensity to save” such as we have never seen before, except, of course, in Japan.
3. More taxes are en route, to pay for health care, the interest on the federal debt, or whatever. No country ever taxed its way out of a rececession.
2. The rule of law has been severely weakened in financial transactions, through heavy-handed White House intervention into the bankruptcies of the auto sector, through mortgage renegotiation, and so forth.
And Dave’s Number One reason the recession will last forever is:
1. Barack Obama!
Bill Clinton, the last Democratic president, thought in effect, “Let’s get economic growth so I can tax it and pay for all my toys and games.” That was the “New Democrat” approach. Obama knows that if the economy crumbles and he’s the only one left with a checkbook, then everyone has to come to him. Where is the independent base of entrepreneurial business which the Republicans might use to to raise money against Obama? The banks, the hedge funds, the manufacturers, the municipalities, in fact everyone who is left standing in the economy is beholden to Obama. This is Chicago city politics writ large. Leave aside all of the individual things that Obama is doing that harm economic growth: Obama is the first American president (with the possible exception of FDR) to actually benefit from economic weakness.
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This article has 65 comments:
i knew it was a piece of nonsense after point number 1....
but claiming obama will produce the first permanent recession?
who let's this stuff get published?
at least i hope so, for the author's sake
Obama is trying to deal with 28 years of cheap credit and devaluation of the dollar, of enslavement of the consumers by the banks and the shipping of well-paying jobs out of the country.
Obama is trying to preserve the economy...that's his problem. He should just let it fall. He should have said no to all the bailouts -- but if we would have had a run on banks and U.S. citizens would have lost all their savings (as has happened before), the laissez-faire economists would be seeing that there IS NO easy solution to a unwinding of 28 years of debt accumulation.
'Free-marketeers' also have it wrong. Recessions and depressions are different beasts. Recessions can be managed. But depressions manage us...and are God's punishment on societies that have become greedy and Godless. The 'Sins' of the pleasures of capital expansion must be paid for. The top of the Mountain of Sin is littered with the corpses of the Maestro and his 'Master's of the Universe'. Do you think the 'Master's of the Universe' were Godless and greedy?
Depressions are the way that societies are forced to get on their knees and recognize their mortality; and rediscover their humanity. We are the same society that had its children taking guns to school, that has tripled its prison and juvenile delinquencey populations, that specializes in sex-change operations, and pays billions each year for bigger lips, bigger breasts, bigger penises, and bigger houses and cars.
We need a change. We need to become humans again.
The points are well-taken, but they may only mean that there will be a "new normal" of slow growth - more like Europe than the US in recent times. So what? Why is that a problem?
A lot of Europeans are happy with their lives. Why do we have to have 5% growth to be happy? With the kind of wealth that we already have, it should not be too hard to learn to live and be happy with 1-2% growth.
I'm sure we all miss that nice little George W fella, but didn't he have something to do with stopping innovation (e.g. stem cells), immigration constraints (have you tried travelling with a non US citizen?), bailing out failed businesses, massive budget deficits (the real no. 1) and just about everything else on your list? In fact, he is even the cause of your no. 1 - so take that and suck on it.
Secondly, the incidents in California, Philadelphia and Birmingham are just the tip of the iceberg and we should expect a tsunami of defaults and bankruptcies at various levels of government. Thus far, each disaster speaks to the insatiable demands of special interests, the unwillingness to institute needed fiscal reform, mounting deficits and the stranglehold of unions. Largely reliant upon real estate taxes and personal income receipts......both of which are in a freefall......state and local government will be forced to take the needed action or declare insolvency. If they elect to do the former, more jobs will be lost; if they do the latter, expect help from Washington.
And speaking of Washington, Obama's Jacobin policies.....designed to reallocate resources from those that produce and save to those that consume........will be the death knell for this great economy. Already weak, we cannot take the additional weight of healthcare and environmental reform, with each imposing its unique tax and giving clear preference to those who Obama owes a political debt. No longer young and vibrant, we will struggle each day beneath the enormous weight of taxes and regulatory burden.
We could go thru the list, but I don't really think that was/is your intention. However, 10, 6, 4 & 3 bear comment.
6) The rest of the world IS full up on US Treasury securities, they will struggle to provide recent levels of support, so how is all of the addition debt going to be funded? Please don't say the FED, that is a whole other story!
4) American demographics do look suspiciously like Japan’s in 1990, but so does the rest of the world.
3) You are right, like it or not, more taxes are en route. Falling revenues, increasing costs, including massive Debt Repayments and Falling demand, quite a recipe, but not moms apple pie!
And finally, number 10, last becomes first.
Why is the next wave of innovation so desperately needed!
Because, of the three major drivers of Economic Growth, over the last 200 years, it is now the only survivor?
With both Oil & Demographics already Peaked and on the road to permanent decline, INNOVATION is now our NUMBER ONE NEED!
I've done innovation, the key is getting money that doesn't ask hard questions.
On Aug 06 07:20 AM perceptions_now wrote:
> David, not a bad Letterman impersonation, but I wouldn't give up
> that day job, just yet!
>
> We could go thru the list, but I don't really think that was/is your
> intention. However, 10, 6, 4 & 3 bear comment.
>
> 6) The rest of the world IS full up on US Treasury securities, they
> will struggle to provide recent levels of support, so how is all
> of the addition debt going to be funded? Please don't say the FED,
> that is a whole other story!
>
> 4) American demographics do look suspiciously like Japan’s in 1990,
> but so does the rest of the world.
>
> 3) You are right, like it or not, more taxes are en route. Falling
> revenues, increasing costs, including massive Debt Repayments and
> Falling demand, quite a recipe, but not moms apple pie!
>
> And finally, number 10, last becomes first.
>
> Why is the next wave of innovation so desperately needed!
>
> Because, of the three major drivers of Economic Growth, over the
> last 200 years, it is now the only survivor?
>
> With both Oil & Demographics already Peaked and on the road to
> permanent decline, INNOVATION is now our NUMBER ONE NEED!
Thus, the author is on point in concept but the conclusion needs a lot of working on.
worthless here....I wonder if he somebody's brother in law at
Seeking Alpha.....
Have the imbalances that got us here been corrected? I worry about trying to use debt to get out of old debt as a strategy. Cash for Clunkers might be a little wacky....but at least its a 'bailout' that hits people instead of any one corporation. People are critical of a Billion dolars for the program that might have some small effect, yet we gave GM 50+ Billion when the entire world new bankruptcy was likely! Wow. I am sligthly long this market but have a hard time accepting that all the change is priced in and we are headed to new major highs! There are many fragments in the news that also do not support a strong rally...I know it, the rally, does not have to make sense in order for you to make money...but 20 yrs experiences says makes me worry.
On Aug 06 07:27 AM Andrew Butter wrote:
> How much of the innovation in the past was driven by easy money?
>
>
> I've done innovation, the key is getting money that doesn't ask hard
> questions.
If you think that this article is nonsense, then you are manifesting your only reality. Trust me, I wish some of the things that he highlighted weren't true...but they are...
If you haven't read Matterhorn Asset Management's recent newsletter, The Dark Years are Here (see link below), I highly suggest that you do...
consequencesunintended...
If you prepare for the worst and hope for the best, you will be much better off. Denying the truth is dangerous...
It was short hand for the famous story about the clerk at the patents office, who this quote was attributed to. Whether the story was true or not, it became central to the idea that you can not predict where the next wave of innovation will come from. People have, throughout history, predicted the end of innovation in this way, and consistently been proven wrong.
On Aug 06 07:52 AM Roger Knights wrote:
> Chap08 put words in the author's mouth with his claim that the author
> "believe[s] that 'there is nothing left to be invented.'" The author
> said no such thing.
On Aug 06 07:37 AM Moon Kil Woong wrote:
> Although dumping on Democrats or Republicans only for this mess is
> incorrect, I must agree with the author that funding our deficit
> will be a very long term problem. Coupled with the fact we seem permanantly
> addicted to low or 0 Fed Funds rates and QE to boot, we very much
> are likely to get stuck in the rut Japan was during their lost decades.
>
>
> Thus, the author is on point in concept but the conclusion needs
> a lot of working on.
Chap08 stated "I'm sure we all miss that nice little George W fella, but didn't he have something to do with stopping innovation (e.g. stem cells), immigration constraints (have you tried travelling with a non US citizen?), bailing out failed businesses, massive budget deficits (the real no. 1)... "
As a conservative, I only "miss" George because he's been replaced by a socialist. George was never anything more than the lesser evil in the elections he won. That said, avoiding wasting tax payer dollars on fetal stem cell research was hardly a blow to innovation, given that it's shown no real promise and adult stem cell research is already curing disease and healing damage. That issue was just another money grab by so-called scientists who enjoy sucking the public teet, backed up by leftists who wanted to make sure that it was convenient for the public to regard the unborn as a disposable commodity.
Immigration constraits were hardly a Bush hallmark - he did little to stem the tide. Almost nobody on the Right is interested keeping out the useful immigrants - it's the hordes of bottom-end welfare consumers, people who break the law to get here and destroy labor demand at the bottom end, that we want out. The problem is that the better immigrants usually follow the legal procedure - so it's easy for INS to pick on them. Not much work involved. Plus we seem to have a sick desire to take in every stray who feels oppressed by his crooked/brutal government, rather than look out for our own interests.
As for bailouts - yeah, probably a bad idea. No arguement here.
Massive deficits? I sure hope you're not excusing the left's $1T+ deficits with that statement. Fighting wars is costly, and has usually justified some short-term deficit spending. The more damaging component of that spending was new government hand outs - which the current admin is only going to expand, not rein in. The cost of the military is a small thing compared to entitlements that the left (people like Obie) has saddled us with and are working to expand further.
The government's efforts to strip the wealth out of the economy is the biggest obstacle to recovery. Some people deny the reality of the Laffer Curve, but it's real and it's kicking our butts. Further confiscation of wealth by the state - the most wasteful enterprise in America (or any other country) - will further erode our productive capacity. Instead of making the pie bigger, we're fighting over who gets the biggest slice, and those who produce goods and services are not winning that struggle.
No innovation. "Buzzer" Wrong.
No immigrants. "Buzzer" Maybe. This is a risk
China as locomotive. "Buzzer" States the obvious. Does not matter.
Financing deficit. "Buzzer" No. It's a $5 Trillion economy. eficits are still not large.
Full up on Treasuies. "Buzzer" Wrong. US Treasuries is the widest, deepest and most transparent market around. what are you going to do buy Chinese Treasuries?
U.S. Consumer. "Buzzer". Wrong. Enough already with this. Consumerare acting very rationally. At this stage of the cycle you expect to see this. Unless people have changed completely they will do what their forefathers did after the last umpteen recessions.
U.S. Demographics. "Buzzer" Wrong. Check your facts. The US is much younger than Japan and ageing less quickly than all other Develeoped economies and most emergings. Fertility and immigration are the drivers. See point 2 above.
Taxes. "Buzzer" Wrong. Not a correct statement. Check your facts. Higher taxes will be bullish if the cash is used to pay down debt and leads to less treasuries. Fiscal responsibility and discipline are good for markets.
Rule of Law. "Buzzer" Wrong. Still the best place to do business - other tan maybe Australia and that economy is the size of Southern California - maybe smaller so not a lot of opportunity there.
Obama. "Buzzer" Wrong. US pulls out of recession regardless of who is President.
P.S Initial claims this week are down big. Recovery is here champ. Obama will be a two term President and maybe Clinton will come after. Perhaps you should improve the average IQ here and emigrate.
That's all.
generalfusion.com
It's not the same as fusor reactors, and there's proof behind the neutrons. The downside is that it could put the solar industry out of business, as well as wind farms. Why? $0.04/kWh .
In the software sector, innovation is moving at a blinding speed, because the computers are finally fast enough to keep up with developers and engineers.
Regarding population growth, you underestimate the Latin Libido effect in the border states and the Catholic church's ability to modify people's prophylactic behaviors. Latinos are consumers 'con ganas'.
There is hope.
Health care? I don't agree. Healthcare is bankrupting us. We don't need billionaire doctors and insurance CEOs while everyone else suffers. The cost of health insurace is destroying American business and keeping workers from salary compensation -- 10% per year now is going out of the workers' pockets directly into the pockets of doctors and insurance crooks.
As far as destroying the economy, Obama is dealing with a destroyed economy. Remember the story of the Earth: Nature produces fruits and plants in summer and autumn; and then there is a period of rest and infertility, germination. We will come back from this. But it won't be for a generation or so.
And speaking of Washington, Obama's Jacobin policies.....designed to reallocate resources from those that produce and save to those that consume........will be the death knell for this great economy. Already weak, we cannot take the additional weight of healthcare and environmental reform, with each imposing its unique tax and giving clear preference to those who Obama owes a political debt. No longer young and vibrant, we will struggle each day beneath the enormous weight of taxes and regulatory burden.
1) The US will continue to produce about 17-22% of the world's manufactured goods.
2) The US remains a dynamic place to create a business.
3) Just because the Rest-of-World is getting rich, does not mean we are getting poor.
4) We heard this story about Soviet Russia in the 1960's, Germany in the 1970's, Japan in the 1980's, Asian Tigers in the 1990's, and now China .
Now - we have our work cut out for us, and Crony Capitalism isn't helping the situation, but we'll get over it.
-----------------------
Don't Get Massacred !
gudovac1941.blogspot.com/
On Aug 06 07:27 AM Andrew Butter wrote:
> How much of the innovation in the past was driven by easy money?
>
>
> I've done innovation, the key is getting money that doesn't ask hard
> questions.
And, Markitwhatca, correlation studies strongly point to energy driving both market cycles and productivity improvements across multiple countries and cultures. Since it seems America is now in a political, cultural and social quagmire on energy policy, it seems difficult to understand how we will stabilize our economy long-term until we stabilize our energy resource vision and future. Certainly powerful interests are colliding on this front, often without presenting accurate or complete data and facts. To me, its all about ergs and watts going to drive them...
New high tech wealth creation will be Asian, not America.
On Aug 06 08:29 AM Reactionary wrote:
> The assertion that we need foreigners to do all our inventing is absurd. Western culture produces inventors - as a rule the best Eastern culture can do is produce refiners of existing ideas. Sure - most of the Leftist indoctrination facility we call an education system is deficient - but you don't need the bulk of the population to be working on the next new thing. We still have smart engineers and scientists, and for now we still have free enterprise to reward those folks financially.
Did you notice the condescending insults directed at the author, the editors and others in general?
For goodness sake, is it really necessary that they should denigrate, insult and attempt to marginalize everyone they disagree with?
I was contented to see that an overwhelming majority of folks voted “thumbs down” on said comments / replies.
To your list of misdeeds I would add the hubris of wars of aggression while paying for them by borrowing money from one's economic rival, the theft of other countries' natural resources, hundreds of thousands dead through the euphemism of "collateral damage" and the destruction of the natural world for convenience and the holy grail of GROWTH. Throw in torture there somewhere too and the scurrilous subversion of the US constitution. Not playing by the rules - skull and bones instead.
Robert Malthus postulated in 1798 that humans would all starve because they'd outrun their food supply. Isn't that same premise (made new and improved by today's socialists) that we'll exhaust Earth's resources and/oror pollute ousrselves to death?
Like Malthus, who's now been wrong for 211 years, the new messengers of doom and gloom will be wrong, yet again, and as always.
Mostly, what "lasts forever" is human ignorance and folly.
NEWS FLASH - RECESSION IS OVER!
Depression has now begun.
U.S.of A. Broke.
All debt will be paid.
Either by the debtor or by the lender.
Either with pennies worth dollars or with dollars worth pennies.
That is all.
On Aug 06 08:29 AM Reactionary wrote:
> in the elections he won. That said, avoiding wasting tax payer dollars
> on fetal stem cell research was hardly a blow to innovation, given
> that it's shown no real promise and adult stem cell research is already
> curing disease and healing damage. That issue was just another money
> grab by so-called scientists who enjoy sucking the public teet, backed
> up by leftists who wanted to make sure that it was convenient for
> the public to regard the unborn as a disposable commodity.
>
Re the subject at hand: there is always reason for hope. We can hope that someday the majority of people will be self-educated via the internet, and finally realize that we'll never fix problems by voting, and throw all the scoundrels out of office. Before that magic day, we can be sure that innovation will continue, whether in the US or somewhere else where free markets still survive. Unfortunately, Obama's policies are a dreary mix of socialism and crony capitalism that favor specific political interests and industries at the expense of all others, i.e., much like Bush's.
There must be a tropical island somewhere that free men and women can live on..... sigh.
On Aug 06 10:19 AM Novice Trader wrote:
> Has anybody noticed that the most snide and rancorous replies to
> his article have come from the Obama parishioners?
>
> Did you notice the condescending insults directed at the author,
> the editors and others in general?
>
> For goodness sake, is it really necessary that they should denigrate,
> insult and attempt to marginalize everyone they disagree with? <br/>
>
> I was contented to see that an overwhelming majority of folks voted
> “thumbs down” on said comments / replies.
On Aug 06 07:25 AM User 410955 wrote:
> Once upon a time in this country, there were decent paying jobs that
> provided a healthy paycheck. These incomes were sufficient to cover
> the bills and provided some discretionary income also. Some chose
> to save and invest this discretionary income, many chose to spend
> it foolishly. Now, those jobs are gone. The replacement jobs (service
> sector, etc) provide barely enough income to pay the basic needs
> in life. There is nothing left after paying groceries and rent (for
> those fortunate enough to have employment). The bottom line: if one
> seized the opportunity to save during the good years, one has money
> (if the markets did not ruin things) and hopefully can keep it and
> possibly retire someday. If one did not save when times were good,
> the opportunity to save in a meaningful way is gone. Unfortunately,
> most Americans chose to spend more than they earned and saved little
> to nothing. Savings and personal wealth statistics bear this our
> quite clearly. Only a fraction of Americans have somewhere near the
> wealth required to secure some form of retirement. I believe the
> future financial implications for this nation are quite clear. The
> recession / depression will probably last forever.
Obama of course did not cause the recession, but his actions determine the path forward. His strategy seems to be more entitlements and less taxes (at least for some), and higher taxes for the ’rich’. We are faced with lowest revenue (taxes) since the Great Depression. Govt. can and should lend a helping hand during bad times, but opening the spigots- helicopters and the rest – monetary & fiscal policies- bailouts, dole outs, stimulus, zero APR – is a path to ruin.
Keynesian stimulus does not work – we know that for sure - proven during the Depression here, and Japan in the 90s, and once again being proven here right now. It is populist measure – politicians love to spend (and want to appear doing something) – that is the only reason it is done. Ongoing job losses, foreclosures are a clear testament, we have all that after 2 years of easing, and despite unprecedented Trillion been thrown at the crisis
Unless America gets back to the basics – produce stuff – rather than simply borrow and consume – we will not recover. The Ponzi scheme that we ran for last 20-25 years is over- time to do the hard time like Madoff. Else this Great Recession likely will turn into the Great Depression – Obama is taking us there.
Unemployed middle age white men?
Middle aged white men with guns?
Middle aged white men who believe in the PPT?
With that % no doubt over 90% of the Seeking Alpha commentors...I'll just say to you, stop complaining, you've lived a better life than 99.99% of the people ever to walk this Earth. Get over yourselves.
1. A recession can't last forever. Eventually, the economy grinds to a complete halt. End of recession.
2. "I’m not convinced that there’s going to be another wave of innovation in the offing.” Every generation thinks this. Who was seriously thinking that nanotechnology could yield any benefits just a few decades ago? How did the ascendancy of the Internet come as a relative surprise, when the Internet itself existed for decades before it began to replace the private networks of America Online and Compuserve? It's because seeing the future is hard, and because human beings' ability to build on the works of others is incredible.
3. "the US is not getting the clever immigrants it used to." The clear indication is that Americans can not innovate. Idiocy.
4. "China will hold its own but its economy is too small to act as a locomotive for the rest of the world." No indication whatsoever that this is required.
5. "The US only can finance its nearly $2 trillion annual borrowing requirement if banks and households buy Treasury securities rather than riskier corporate securities or mortgages. If the rest of the economy starts competing with the Treasury for capital, interest rates will rise immediately and suppress economic activity."
a. There's a $2 trillion deficit THIS year. Future deficits don't approach this level.
b. The rest of the economy has ALWAYS competed with the Treasury for capital.
6. "The rest of the world is full up on US Treasury securities." Only if the trade deficit
7. "The US consumer can’t get out of a hole." CAN'T? Impossible, eh? Time is no factor here?
8. "[Retirees] savings requirements are bottomless." Yet another person who thinks that retirees as a group will suddenly become net savers, despite having greatly reduced income.
9. "Bill Clinton, the last Democratic president, thought in effect, 'Let’s get economic growth so I can tax it and pay for all my toys and games.'" Let's not forget that Clinton was the only President in the last 45 years that presided over multiple years of budget surpluses. And let's not forget that government spending increased MUCH more under Reagan and Bush II than under Clinton.
10. The entire last paragraph that ends "Obama is the first American president (with the possible exception of FDR) to actually benefit from economic weakness" is one of the most moronic statements I've read to date on seekingalpha.com. Have you not seen the polling data, indicating that as the recession continues, Obama's approval ratings decline? What is that, a statistical mirage? Obama, who you clearly find to be a consummate politician, is only re-elected if the economy improves significantly between now and 2012.
The author did not blame Obama, he said Obama is the number 1 reason the recession will last forever like Japan because of the tax and spend policies started by Bush.
Folks, get off the politics bandwagon, it simply drives around the cul-de-sac while the politicians are taking your money and screwing your spouse. Honestly now, anyone observing politics for more than ten years has to see it's merely a shell game for both sides.
On Aug 07 10:07 AM ebworthen wrote:
> Nothing like writing the truth to get people upset!
>
> The author did not blame Obama, he said Obama is the number 1 reason
> the recession will last forever like Japan because of the tax and
> spend policies started by Bush.
>
> Folks, get off the politics bandwagon, it simply drives around the
> cul-de-sac while the politicians are taking your money and screwing
> your spouse. Honestly now, anyone observing politics for more than
> ten years has to see it's merely a shell game for both sides.
If you want to try to pigeonhole us into some unique category, then we bloggers should qualify for Affirmative Action.
On Aug 07 12:08 AM CJJ wrote:
> Can I get a show of hands of the middle age white men commentors?
>
> Unemployed middle age white men?
> Middle aged white men with guns?
> Middle aged white men who believe in the PPT?
>
> With that % no doubt over 90% of the Seeking Alpha commentors...I'll
> just say to you, stop complaining, you've lived a better life than
> 99.99% of the people ever to walk this Earth. Get over yourselves.
You also forgot a big one- the unnecessary war in Iraq which will end up costing the taxpayer 3 Trillion fully loaded.
Health Care is a public good - like infrastructure. There is a optimum level of taxation (to pay for good things like Healthcare and Education but not unnecessary wars and mortgage interest deductions). Look at Canada, taxes are higher but citizens are well taken care off.
The last 2 points about Clinton and Obama completely ruined your article.
For a long term perspective on bear markets check out this chart.
dshort.com/articles/20...
That issue is: US spending vs US production. I don't think I need to tell anyone here about what's happening to US Spending. US productivity has been stagnant for years thanks to inefficient allocation of resources to Unions (both public and private) and other special interest groups. The boosts in productivity of the past 20 years merely reflect the consumption that's been pushed forward by relentless borrowing. Well now the chickens have come home to roost.
This is not new. It has been going on for decades, and was only able to go on for so long because the US dollar is backed by the rest of the world. Now that cracks have begun to appear in the dollar monetary regime, our days are numbered. Of course Obama didn't cause this. However, imo, he could be doing a better job of getting us out of it.
I concur with your observation that Obama is naive and not cognizant of his own limitations and weakness. In politics this shortcoming could prove deadly.
Over his first eight months in office, his priorities seemed to be tilted toward fulfilling his personal ideological crusade ialmost to the point of being doctrinal --- Stimulus, Guantanamo Bay closing, the Infamous Torture Memo leak, Health Care, among others. The most frightening sign of all is that he talks incessantly and in doing so (as his eardrums were filled) failed to listen well - another deadly strike. "It is the economy, stupid!".
He is beginning to look more and more like another King Jimmy the Confessor, whose one-term presidency was considered by most historians as a failure.
In contrast, I think Mitt (Romney) would be more adept in facing the financial crooks and the political crocodiles.
TK
On Aug 06 04:50 PM Jimbo wrote:
> I was never a big fan of George W. Bush. However, I have sadly concluded
> that our system only allows one to pick the lesser of two evils.
> Both Political parties must bear responsibility for the rancid and
> corrupt politico-economic system we have. My take on Obama is that
> he is very naive about his abilities and limitations.The Greek concept
> of Hubris is appropriate here. He has exhibited weaknesses that Russia,
> Iran, North Korea and Venezuela, to mention only a few, will exploit.
> Hang on folks. We are in for a wild ride. I just hope we can survive.
> US productivity
> has been stagnant for years thanks to inefficient allocation of resources
> to Unions (both public and private) and other special interest groups.
> The boosts in productivity of the past 20 years merely reflect the
> consumption that's been pushed forward by relentless borrowing.
1. You can't have it both ways. Either productivity's been stagnant or there have been boosts in the past 20 years.
2. Productivity is a measure of production per input unit (in this case labor). Productivity increases have no direct link to demand, but are rather a shift in the supply curve.
> This ...has been going on for decades, and was only
> able to go on for so long because the US dollar is backed by the
> rest of the world. Now that cracks have begun to appear in the dollar
> monetary regime, our days are numbered.
In what way? Sounds like you think the dollar will decline, making imports more expensive for us and our exports cheaper around the world. This would tend to increase demand for American-made goods, both domestically and internationally. The trade deficit would decline, perhaps even becoming a surplus.
What's the problem?
> Over his first eight months in office, his priorities seemed to be
> tilted toward fulfilling his personal ideological crusade ialmost
> to the point of being doctrinal --- Stimulus, Guantanamo Bay closing,
> the Infamous Torture Memo leak, Health Care, among others.
Funny, some would characterize this as following through on issues integral to his campaign.
> I think Mitt (Romney) would be more adept in facing
> the financial crooks and the political crocodiles.
There is no doubt that McCain made an enormous mistake in his running mate selection.
If Mitt got the nod in 2010, sure bet is that Ms. Palin would be out. The only issue might be his religion. But then if he will, the Lutheran Church, myself as a Lutheran, would welcome him with open arms.
TK
On Aug 09 01:32 PM Vox Rationalis wrote:
> On Aug 08 05:44 PM Teutonic Knight wrote:
Hogwash. You think he wasn't "outshined" by Palin? I can only guess at the decision-making process, but whatever it was, Palin's selection was pretty clearly the worst in anybody's memory. If Romney's there to take the point when the financial markets were grinding to a crawl, the Democrats would have been in much more trouble on that issue. Instead, McCain announced he was "suspending" his campaign so he could rush to Washington -- after sitting down with Katie Couric for a live interview during the national news. Meanwhile, Palin was in an unrecoverable flat spin for the entire campaign.
Romney will be a formidable candidate, if only the Republicans can get out of their own way.
They've been saying the same thing for years, remember Charles H. Duell, U.S. Commissioner of Patents, in 1899? "Everything that can be invented has been invented."
Phelps is a banker, not a scientist or an engineer. I'm not too worried about his opinions on innovation...