09/02/11 Paris, France – We’re in the Charles de Gaulle airport, in Paris, en route to the USA.
Not much to report anyway…at least not to you, dear reader. The Dow went down 119 points yesterday. Gold lost 2 bucks.
Nothing revelatory…no burning bushes…no booming voices from the heavens.
But, the rest of the world is waking up to what you’ve known for years.
Here’s the headline in The Financial Times today:
Hopes for global recovery take a hit
Yes, the world’s financial elite still believe in the recession/recovery concept. What a pity it never seems to work out. The report continues:
The global manufacturing recovery appear[s] to have come to a grinding halt in August, activity surveys suggested on Thursday, undermining hopes of a vigorous economic recovery in the second half of the year.
And what’s this? Martin Wolf, chief economist at the FT, has finally realized…
This is no normal recession.
Of course, Dear Readers, have known that for years. Now, after trillions spent trying to treat it as though it were a typical post-war recession, leading economists are finally noticing the obvious. All that spending has stimulated nothing but larger debts:
In the US, unemployment is still double pre-crisis levels…
But neither Mr. Wolf nor Mr. Bernanke are ready to give up. Nor are any of the other misters who are in position to manipulate the system…influence it…or steal from it.
Mr. Wolf promises to give us his ‘fix it’ solutions in next week’s newspaper column. He hints that the US government should…surprise!…spend more money.
Either he has learned nothing. Or we haven’t. He still believes that the challenge is basically a matter of repairing the economy…fixing it…so that it works like he thinks it should. What does that mean? How many people should have jobs? How fast should GDP grow? What should be the interest rates charged by lenders?
Ask him!
Dear readers see the absurdity of this immediately. In the minds of the meddlers, an economy should work as they command. It has no natural state…no normal functioning…no purposes to which they aren’t privy.
In short, the economy should do as it is told!
How will this command economy thing work out? Stay tuned…
Bill Bonner
for The Daily Reckning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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Job Growth at Halt in U.S.; Worst Showing in 11 Months
We need to invest in education, now!
We need to invest in a good 5c cigar.
Look at how many highly educated college grads are out of work.
Hybrid politics is the answer.
Wolf is a tool and the FT is propaganda.
But then, I don’t sully my day reading them.
Nope, long past wasting my time doing that.
That’s your job. You filter their garbage for me. For free even. Such a deal.
Maybe everything would get better if the top 400 families in the USA received 40% of the income instead of just a mere 20%????
Would the economy improve if they took 80% of the income?
Received? From whom did they receive it? From you? Just curious…
They TOOK 80% of the income? Or they EARNED 80% of the income?
Far as I know the only one who can take income is the Government.
How about NOBODY gets to take anyone’s income – especially Government.
How about everyone gets to keep what he earns? Why isn’t that fair?
How about the government can’t pick winners and favorites and bail out institutions with people’s hard-earned money?
How about your rights as an individual as enumerated in the Constitution are held absolutely inviolate so that you don’t need to care who has wealth or power becuase they can’t ever use it to violate your rights?
Tax people to give it to who? The Government, that’s who.
Who in their right mind thinks the Government should have more of our money – more of anyone’s money?
What more evidence does anyone need??? They lose money running casinos for God’s sake! The lost money running a f-ing brothel in Nevada!
Enough already with the call for more Government, more taxes, more spending, more power, more infirngement of our personal liberties.
Aticus – we have checks and balances (supposedly) on power. The three branches of government. Yet, money is also power. Where is the check on that? Money, i.e. power, seems to want to consolidate. The only thing worse than the govt taxing the rich is being in bed with them too.
What happens to an economy when the top 400 or so families take 100% of the income?
Ooppsie. Sorry Atticus, I meant earns 100% of the income.
Communism fails because it provides little incentive to produce. Capitalism fails because it invariably concentrates too high a percentage of the nations wealth in too few hands. Regulation is the only remedy for failure. The possibility of earning a fair amount of the nations assetts is a bulwark against economic failure of capitalism. No indivicual can truly “earn” salaries and bonuses of forty million dollars a year. Even a bum who might be placed into the position as CEO and is paid $5,000 a year is just as capable of driving a company into bankruptcy as is a CEO who is paid $40,000,000 a year.
We´re going to pay off our debts; we can´t stand that sensation of being grabbed by our financial testicles any longer.
Mr. Friedman is the picture of a human success story. Mr. Friedman’s success sprung up from within him. One of his degrees was earned with the distinction, suma cum laude (with highest honors). Read A Theory of Everything by Mr. Friedman @ http://nyti.ms/nLRWH3
Pay off our debts?
LOL.
How about we default on our debts?
The only way to solve our economic and political problems is TERM LIMITS at the federal, state and local levels. Make the business of politics temporary and we will minimize special intrest and union influence and possibly attract real talent.
Its amazing how academics can lose their reason and spout nonsense. It appears their own mental theoretical concepts about realities progressively sheer away from actual reality, especially more problematic ones, into never never land. This phenomenum is not restricted to economists. A friend of mine once said, “I was educated beyond my intelligence!” This seems to be the case all too often.
A response to Freedman
Education is not the solution now. The folks who used to hire the highly educated are cutting back and hiding from this administration. Even with a PHD and multiple Masters degrees there are very few jobs out there. I am really keeping my productivity up where I work now because for the first time there are very few jobs out there. We are killing the small companies and the job creators with regulations and red tape. There are a lot of very educated folks out of work now. Going into more debt to get an advanced degree is not a good idea until we get the small companies hiring again. Most small companies have cut back to the bone. Hell the government agencies are ticketing kids with lemonade stands so what are they doing to real small business folks? The ones I know are pulling their heads into a turtle shell like position hoping to keep cash. Bill is right as it suffers from low tax levels the government is going to reach out and attach anything of value. I thank God every day for my job. I love education but this is not the time to go deeply into debt. It is not the solution it used to be. We are in a great correction with new rules.
We need hybrid politics, and this is why: If 1938-1945 is the focus, then I would start by saying those were still VERY lean years. Yes, unemployment finally began dropping dramatically (after 10 years of FDR’s unsuccessful stimulus spending attempts under the New Deal) but that was because the war produced its own artificial demand for goods, and also because literally millions of people were pressed into military service of one form or another and taken out of the (un)employment pool.
Massive government spending today can do the former, temporarily (see Stimulus, New Deal), but not the latter. Moreover, from ’38 to ’45, Americans were unified in common cause and purpose that necessitated transitioning to a command economy for a couple of years in order to win the war. What we have today is a bitterly divided country, a bitterly divided government, and a president who frequently stokes the flames of class warfare for his own short term political gain. What we need is much more unified, pro-growth, pro-business leadership in order to get the country as a whole more unified and convinced we are moving towards economic growth. Once you successfully can do that, better times almost become a self-fulfilling prophesy.
And finally we are ALREADY approaching the levels of federal debt as a ratio to GDP that existed during the WWII years when we were in an all-out existential fight. Continuing to spend money we don’t have, and don’t appear to have a way of repaying, will only continue to create its own destabilizing pressures. Bottom line is that endless deficit spending is not the way out — economic growth is, and until Washington changes its tune, we will continue to drift in our current economic malaise.
reality is a BiCh!
when i got done, i really laughed, bill!
…writing from the Charles de Gaulle (not the carrier that has recently distinguished itself by helping bomb libya ahead into the Stone Age and upon which Sarko the Psycho recently landed a`la fly-boy Bush [but w/out the crotch enhancement] so he could declare victory and say: “way to go, brownies!”)…
…no, not the carrier, but the airport, also named after the guy upon whose fingers Tricky Dicky Nixon, Kissinger’s (Rockefeller’s) puppet, slammed the
GolD WiNDoW shut. hey’ just b/c we lost vietNam to the SAME general that kicked France’s derriere, why “take our gold”?
besides, there probably wasn’t any left, anyhoo, even back then! fuzzy math…
here’s to ya, bill!
If the top 400 families in the US, earning 20% of the income, pay off politicians to write laws favoring them, so then they can earn 40% of the income, that’s fair for two indisputable, undeniable reasons: 1, everyone in the US has the same equal opportunity to pay off those same politicians to write different laws favoring them instead, and 2, I used the verb “earn”.
“Far as I know the only one who can take income is the Government”
Right and everyone else just steals it.