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Doom? Stop your fear mongering. We made it through Clinton's bubble economy and the subsequent crash fine. We will get through Dubya's recession and come out stronger.
It's a false prosperity when it's based on selling smoke from the fires of finance.
I don't see "strength" when America no longer has an electronics industry, a textile industry, a shoe industry, a garment industry, and soon to be lost automobile industry.
Where are our manufacturing plants, that once dotted the nation?
(My former employer, IBM Endicott, once had a local payroll of over 15,000. No longer. Endicott, NY, is a rust belt village now, slowly dying.)
Frankly, if international trade were interrupted, for whatever reason, we would be in deep trouble. In other words, we're (insert your favorite expletive deleted here).
We wouldn't be able to fulfill our basic needs with local manufactured goods... at least not for several years. Shucks, we couldn't even fight a protracted conventional war because there aren't any private industries to convert to war production.
Real prosperity is the creation and exchange of usable surplus goods and services, and the time to enjoy them. But you already know that.
The economy will recover in the same way that economies in oppressive totalitarian states always recover... (those that do).
More and more "underground" economic actviety will take place - people transacting foir cash without records, people doing direct barter (trade), again without records, etc... until the "legitimate" economy gets smaller and smaller to the point where it doesn't matter much any more.
Unless, of course, the government tries to crack down HARD on the "underground" economy, and grows enough police, restrictions, and goon squads to successfully destroy it.
U.S. WORKERS ON JOBLESS BENEFITS HIT RECORD
March 26, 2009
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The number of workers collecting state unemployment benefits rose to a record 5.56 million earlier this month, while new claims rose to 652,000 in the week ended March 21, the Labor Department said on Thursday. Analysts polled by Reuters had expected continued claims to total about 5.48 million during the week ended March 14, the most recent data available. The number of new claims for the week of March 21 had been forecast at 650,000.
. Reuters.com - World News, Financial News, Breaking US & International News
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EDITOR'S NOTE: Actually, on April 2, 2009, Reuters says that private employers cut jobs by a record 742,000 in March, as opposed to the roughly 650,000 predicted. Even Walt Disney World is laying off employees, with estimates of about 1,900 being given the sack (and we should stress that Disney is Florida's largest employer, with total payroll of about 62,000 people). However, it has been reported that layoffs at Disney have occurred across the board including entertainment, merchandise, finance, transportation, training, and theme-park operations. Prior to this, voluntary buyouts were offered to 600 park executives, including 313 in Orlando, but Disney claims that only 50 have taken the deal. Apparently they have been going after non unionized employees first, and even though it may be hard to believe, there really is a Mickey Mouse Labor Union.
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Aside from the unemployment news, the US hit another new record in March, which is to say that over 32 Million Americans are now signed up for food stamps, representing about 10 percent of the overall national population, or about 30 percent of the estimated 100 Million Americans of working age. Ironically, US government statistics claim that the unemployment rate is only about 8 percent (we all know the real and correct number is 17 percent), but how then could that be possible or correct when over thirty percent of the working age population is so bad off that they need (and are eligible for) food stamps, and 15 Million people are out of work, if that were true? It would appear the correct official government unemployment statistics should be higher - don't cha think?
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Regardless, here is the thing. Ben Bernanke says the recession will be over this year (in 2009), and that there will be a positive turn around in 2010. OK, so let us give him kudos for his optimism. HOWEVER, unemployment continues to rise, and there still seems to be the nagging question of how and what is going to produce positive trade balances in the future, bring the jobs back to the US for the unemployed AND how the heck all these Trillions upon Trillions worth of debt will be paid off. Getting back to our Disney theme, Peter Pan advises to simply think happy thoughts if you want to fly, but we tend to think the real world requires some more concrete and practical initiatives. On the other hand, Tinker Bell accounting is more fun, to be sure (not sensible, not practical, but arguably more fun).
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Here is something of interest in print we have seen recently that we would like to share with you: Rags make paper, Paper makes money, Money makes banks, Banks make loans, Loans make beggars, Beggars make rags.
(above comments from Ascot Advisory)
However, every recession in US history has been reversed by either a war or "bubble" growth. The only exception was the economic boom of the 1980s which was a direct result of Reagan's economic policy, large scale modernization, and important technological changes in industry and the economy.
You left out the massive deficit spending under his (Reagans') administration - quite probably the most important factor.
The expectation of an economic recovery is unlikely. There will be no sudden increase in the number of high paying private sector jobs, nor boom in American factories.
Sure there is. *Bama's gonna buy 'em all and run 'em himself with Congress as his management staff. You can buy your stuff at teh company store... the Welfare office.
Despite the "Sky is falling" and tea bagger rhetoric going on, I suspect we will find in a few months that the recovery began in the second quarter of 2009. 71% of the American people have confidence in our new president, congress is taking actions, business is beginning to prosper. There are probably a couple more speed bumps along the way, but at least the Crawford village idiot is back where he can do no harm.
Despite the "Sky is falling" and tea bagger rhetoric going on, I suspect we will find in a few months that the recovery began in the second quarter of 2009. 71% of the American people have confidence in our new president, congress is taking actions, business is beginning to prosper. There are probably a couple more speed bumps along the way, but at least the Crawford village idiot is back where he can do no harm.
Despite the "Sky is falling" and tea bagger rhetoric going on, I suspect we will find in a few months that the recovery began in the second quarter of 2009.
I sincerely hope for the best, but I conclude that the impossible to pay national debt (over ten trillions) and Congress' inability to pay interest on that debt, will seal the deal.
You can't spend your way out of debt.
More realistically, I suspect that the winter of 2009-2010 will be the worst possible time for the "straw that breaks the camel's back..."
By then, the huge bulk of unemployment benefits will be running out, pressures will rise to extend benefits, food stamp outlay will double to 20%, and suddenly, the cow won't stand for any more milking.
Once the "dollar bill" tanks, and oil imports skyrocket in price, the dominoes will fall.
Wise Ant Saith: store up a surplus for the 'harsh winter' - and hide it from the Gestapo Grasshoppers.
Wise Ant Saith: store up a surplus for the 'harsh winter' - and hide it from the Gestapo Grasshoppers.
Chicken Little saith: The sky is falling the sky is falling.
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