The calm of the summer is over, and now those dark clouds become more ominous. This week in particular could be decisive in molding the nation's future. Will America embrace its greatness or will the nation opt for a fairy tale land where money is free and motivation is one of a new set of deadly sins, along with hard work, ambition, self-reliance and other keys that made this nation the envy of the world?
Unfortunately, a nation of competition means there will be losers, too. Of course, the great thing is when you lose you can learn, the belly in your gut can burn brighter, and the ideas in your mind can come together with more clarity. An easy example of this is sports. This week kicks off the National Football League's new season. It's a chance for every team that didn't win the Super Bowl last year to take home the trophy this time. In this year's White House election, Americans are being asked to stop having Super Bowls and to stop applauding winners. In fact, we are being asked to go so far as to punish winners.
It would be like playing professional football with flags instead of tackling, no scoring, and different rules that dissuade greatness and encourage mediocrity. That's been the case with the American economy that only looks good next to European nations that embraced a doctrine of punishing success and encouraging mediocrity. When we are told the greatness of America is to only have a so-called middle class rather than upward mobility that comes from making something out of nothing and always has the kind of economic coattails that create opportunities for a lot of people. As we enter this week that concludes with the latest reading on employment, we should see what's happening around the world where there are pro-growth policies and where there is class warfare.
Old Socialist Europe
Euro zone unemployment reached a record mark in July at 11.3% while inflation edged to 2.6%.
While these nations are circling the drain, the rest of the world continues to enjoy strong economic growth. I know we are all bracing for China to fly off the rails, and at some point it will happen. There will be victory laps by prognosticators that made the call first, 20 years ago. But I look at what's happening within BRIC nations and others. I look at their educational levels, their pro-growth policies, and their energy policies and tax regulations; and the trends will only accelerate growth in the future.
Burma (Myanmar) 4.0%
The employment situation in Europe guarantees some kind of money-printing intervention, but policies guarantee that the situation in the long run becomes worse.
This week we'll hear a pitch that talks about a strong middle class as a result of confiscating wealth from more successful people (couples earning $250,000 and individuals $200,000 annually) and punishing corporations for generating profits domestically and abroad. The way to enrich any "class" is through free market polices along with a new emphasis on education that doesn't cover for poor teachers and outrageous college tuitions. We need to exploit our natural resources and get 50 million people off food stamps. We need to encourage greatness and stop using "fairness" as a platform to punish job creators and hard workers.
This week will be pivotal. Our national debt will hit $16,000,000,000,000 this week, and we'll get a jobs report that will have to be spun and rationalized into a positive story.
There are a lot of things I plan to write about this week, including King Gillette and the false success of the auto bailout and Clinton economy, but the market is probably focused mostly on reacting with joy at dissapointing news.
This is the calm before the storm. It's errie and worrisome. In addition to the prevailing wisdom that the European Central Bank begins to print more euros, there is a hunch China will do something to stimulate their economy, and our Fed is right behind them.