recession

Is This The Climax Yet?

I particularly enjoyed this non sequitur today in my inbox, from one of my favorite news providers, BusinessInsider.com:

“The G20 has agreed to pursue programs of austerity while also preserving and enhancing the recovery.”

When I clicked on the link, I got the real headline:

“G20 Officially Reveals Its Total Pointlessness.”

Yes, the politicians are stymied. The only good thing going for them is that they are finding lots of occasions to practice their talent for talking out of both sides of their mouth. But the straight-talking intellectual academics aren’t faring much better.

A few blogs ago, I described this slow-motion movie we’re all watching as this recession unfolds. The movie’s climax will approach when the Federal Reserve finds itself in front of a dilemma: They must withdraw central bank assistance to maintain credibility in the U.S. bond and dollar, but when is the right time to begin?

Their problem is that no one seems to know. Bernanke and his colleagues are reportedly hunkered down as I write, trying to figure out how to handle what is looking increasingly like another slowdown, or to be precise the second V in the W. But this is not what they expected to happen. This is not AT ALL what they expected to happen.

Why a Republican Resurgence is Good for Everybody

At the White House website, the biography of Bill Clinton illustrates the successes of his administration, most notably:

During the administration of William Jefferson Clinton, the U.S. enjoyed more peace and economic well being than at any time in its history.

It’s true. The Clinton years were some of the most prosperous years that the United States has ever seen. Was that the result of massive government spending and initiatives? Of course not. Clinton’s first major initiative - health care reform - failed, resulting in a Republican takeover of Congress and Clinton shifting to rhetoric such as ”the era of big government is over.”

The actual successes of the Clinton years were very right wing ones - welfare reform, free trade agreements and a robust innovative economy fueled by the ingenuity of software entrepreneurs. Spending was down, and Bill Clinton left office with a huge surplus. This was certainly the result of a lack of spending from the federal government, a foreseeable result of having two diametrically opposed political parties in power at once. The fact that the low-spending Clinton years (years in which the government actually shut down for nearly two months) resulted in economic prosperity, while high deficit eras like the pre-war terms of Franklin D. Roosevelt and the Bush-Obama years resulted in depression and recession, makes one of the strongest cases for libertarianism.

Economic Depressions Don’t Exist Under Totalitarian Systems

So contends Lev Nazrozov. He writes:

Out-of-control predatory capitalists have perpetrated a worldwide economic depression. Capitalism’s degenerate character is now extraordinarily visible during this time of multiple crises.

On each side of the page there is a picture of a miserable emaciated proletarian who carries on his back a huge pack of money, with a bourgeois seated atop of the pack and smoking a cigar.

By simply allowing the government to dominate every sector of the polity, by embracing totalitarianism, we might be able to avoid the woes of economic recession? Historical study makes such a conclusion seem ridiculous. While totalitarian economies did not suffer from “depressions”, per se, one could argue that consumers and citizens lived under a system which continuously mimicked the effects of depression.

How to Get Out of Debt

See Video

Classic parody of an infomercial offering common sense we could all benefit from.

Is It Time to Close the Government Money Hole?

See Video

This video would be much funnier if it wasn’t fairly accurate. But this satirical argument addresses a very real issue in DC. There’s no discussion on whether money should be taxed, borrowed and spent, just how it will be wasted by our irresponsible, ineffecient government.

Today in Liberty: Snow shuts down federal government, intel committees faulted for lax NSA oversight

“Excess of liberty, whether it lies in state or individuals, seems only to pass into excess of slavery.” — Plato

— Snow day in Washington: The federal government is closed today due to a winter storm that’s expected to bring up to 10” of snow to the Washington, D.C. area. We know. You’re heartbroken, and you’re wondering how you can survive the day without a functioning federal government.

— House pushes back votes targeting EPA regs, individual mandate delay: The snow day has caused the House of Representatives to delay votes on measures to block pending EPA regulations targeting coal plants and Obamacare’s individual mandate. The House will be back in session tomorrow and vote on these two measures on Wednesday.

— NSA blame turns to Congress: Politico notes that the lack of any real congressional oversight of the NSA’s domestic surveillance programs has now become a topic of conversation in the ongoing controversy. Even Sen. John McCain (R-AZ) realizes that congressional intelligence committees have failed to do their jobs. “Clearly, they’ve been co-opted,” McCain told Politico. “There’s no doubt about that.” The chairs of the two congressional intel committees, Rep. Mike Rogers (R-MI) and Sen. Dianne Feinstein (D-CA), have functioned as apologists for the NSA programs rather than providing attentive oversight or showing the least bit of concern for civil liberties.

Poll: Americans pessimistic about the economy

More than five years after the recession officially ended, there are some signs of life in the economy. There have been a couple months solid job growth and the stock market is surging. But the vast majority of Americans are still pessimistic about the economy as they head into 2014, according to a new CNN poll:

A new CNN/ORC poll released Friday showed people were pessimistic that the economy was improving. Nearly 70% said the economy is generally in poor shape, and only 32% rated it good.

Two-thirds of respondents said most of the economic news they’ve heard recently was bad news. More rural than urban dwellers said the economy was in poor shape.

And just over half expected the economy to remain in poor shape a year from now.
[…]
Those people aren’t buying big-ticket items like furniture or appliances, and some were cutting back on essentials. Thirty-six percent said they were cutting back spending on food or medicine, up from 31% in late 2008, the year the housing market collapsed.

It hard to blame people for feeling this way about the economy and for doubting that there will be any improvement in the next year. They’ve been told time after time by President Obama that the economy was improving. How many times were we told that the 2009 stimulus saved the economy or hear the phrase “summer of recovery”?

Obamacare isn’t slowing down healthcare costs

President Barack Obama and administration officials have been playing up Obamacare as part of the reason that healthcare costs have grown at its slowest rate in 50 years, which, they say, will be part of the legacy of the law.

“I’m not going to walk away from 40 million people who have the chance to get health insurance for the first time,” said President Obama on November 14 in a statement on Obamacare.  ”And I’m not going to walk away from something that has helped the cost of health care grow at its slowest rate in 50 years.”

HHS Secretary Kathleen Sebelius made a similar claim during her appearance before a House Energy and Commerce subcommittee on Wednesday, telling members that “costs have gone down based on the trajectory we would have seen absent [Obamacare].”

But doubt has been cast on that claim by many healthcare policy analysts. Bob Laszewski, President of Health Policy and Strategy Associates, has cast doubt on these claims, shooting down the rhetoric over Obamacare and the slowdown of health costs as “silly.”

“First, Obamacare is not a health care reform law; it is a health insurance reform law. No one on either side of the debate has ever argued anything different,” wrote Laszweski, who is frequently cited in mainstream media reports about the law, last week on his personal blog. “Does the law have some limited cost containment features in it? Yes. But these are either pilot projects or are years from being fully implemented.”

Obama’s economy: Labor participation drops again, recovery far below average

The October jobs report surprised analysts, many of whom thought that the government shutdown would have a negative impact on the economy. Not only were 204,000 jobs added last month, the two previous months were revised upward by 60,000.

The bad news is that the unemployment rate ticked up slightly to 7.3%, as did the U-6 unemployment rate, now at 13.8%. The worse news is that number of workers not in the labor force exploded by 932,000 in October, according to Zero Hedge, bringing the labor participation rate to 62.8%. Not only is this the lowest rate since the aftermath of the 2007-2008 recession, it’s the lowest since 1978.

(Chart via Zero Hedge - click to enlarge)

The Employment Policy Institute (EPI), a leftist think tank, offered a rather grim take on the jobs report and the long-term outlook.

House Democrat welcomes “stealth socialism” in America

Alan Grayson

Rep. Alan Grayson (D-FL) says that “stealth socialism” has been “created” in the United States through the Federal Reserve’s bond buying program, which essentially monetizes the government’s debt. What’s more he’s happy about it.

“The one good thing that’s happened in the past five years, in the sense of making people hopeful that the economy might survive a collapse, is that the Federal Reserve’s unconventional monetary policy put us back on a low-level track toward growth,”Grayson, a far-leftist firebrand, told Salon.com in a recent interview. “They showed that monetary policy in extremis can work to some degree.”

In a surprise move, the Federal Reserve announced last week that it would continue the bond buying program, known as “quantitative easing,” in hopes that it would stimulate an economy that is still struggling to recover from the 2008 recession. This is the third round of quantitative easing (QE3) since 2009, bringing the Federal Reserve’s balance sheet, according to the Los Angeles Times, “to nearly $3.7 trillion from about $900 billion in mid-2008.”

“We’ve had a government takeover of the bond market. Stealth socialism’s been created. Government simply ends up owning more and more and more,” he said. “If government had taken over the steel industry, maybe it would have been more noticeable. They’ve taken over the financing of housing industry as well, with a desired result.”

 
 


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