These days, it's hard to draw any conclusion other than
that the train is gaining speed on wobbly tracks perched over a rickety
Most notably, unemployment has again risen - to 9.8%
from 9.6% - very much not the direction things should be headed given the
amount of money the government has pumped into the economy. The latest data
shows that this nation of 310 million souls managed to add just 39,000 jobs
in November. That, unfortunately, falls short of even keeping up with a
population growth of about 1% - doing just that requires generating a net of
about 250,000 jobs a month. As for eating away at the millions of unemployed
and the many millions more who are underemployed... oh, well.
Of course, the mainstream financial media wastes no
time in pointing to this latest dismalia as
proof positive that the Fed's recent decision to energetically restoke the money machine with upwards of $100 billion a
month was the right decision. This despite the clear evidence that adding
debt to debt is having no real effect, except begetting more debt.
This is a lesson that, so far, appears to be making no
headway in the cognitions of Washington's policy makers, even with the latest
election results delivering a sharp rap across the knuckles to the power
Evidence of that truth came to me during a recent drive
to do sundry errands. After flipping through the stations, I ended up
listening to a program on National Public Radio with a moderator
quizzing a couple of congresspersons - one still in power and the other
dismissed by voters in the midterm elections.
In conversing with the latter, the reporter asked if
the Democrat congressman's loss wasn't a clear sign of voter frustration. To
which the ex-official blathered on about the number of filibusters threatened
by the Republicans over the last couple of years as a reason why the Obama
Congress was unable to get its business done.
But, interjected the reporter, the Democrat-controlled
Congress passed all manner of legislation - healthcare, financial reform,
environmental bills, etc., etc - so isn't it more a case of voters being
upset about the quality and scale of the legislation passed, and not the
dearth of it?
Whereupon the ex-Con began to illustrate his point by
spouting off about some wastewater bill that was turned back by the
Republicans, even though it would have unleashed another $15 billion in
federal spending "so important to putting Americans back to work."
But wait, again interjected the reporter, wouldn't many
people listening to this program say to themselves, this guy just doesn't get
it? That we don't want the federal government to keep spending billions of
taxpayer money on these make-work projects?
Without missing a beat, the ex-Con flipped like a
freshly landed mackerel and argued against his position of just seconds
before, saying, "This isn't about the money! It's about clean water for
At which point the reporter cleared his throat and
ended the interview.
Next up was an angry Democrat of some influence. The
congresswoman's anger was directed first at the findings of the Deficit
Reduction Commission that the spending cuts must be widespread if they are to
be sufficient, and then at the administration for even thinking about
extending the Bush tax cuts for people earning over $250K.
Oh, how I wish I was able to do proper justice to her
diatribe here - I can't, but I will do my best.
In her world view, the poor huddled masses of America -
being defined as anyone with an income of under $250,000 a year - had nothing
to do with the financial crisis, and so why should they be held even a little
bit responsible for helping to foot the bill? No, no - it was the greedy fat
cats that brought this fresh hell upon us, and so it is they, and they
alone, who should be made to pay... and pay.
Of course, nowhere in the discussion was there mention
of the role that the many-tentacled government
played in all of this... of the loose money, the looser spending, the wars,
the unbridled enthusiasm for a steady diet of pork, and... and...
If there were some mega-computer capable of fairly allocating
the financial pain based on the contribution each of us has made to this
mess, and then assess taxes accordingly, I suspect the end result would leave
past and present members of the Fed living in cardboard boxes, and 97% of
past and present members of Congress shuffling in gutters looking for
cigarette stubs... at least when they weren't fighting over discarded clothes
with executives of the big financial institutions, NGOs, and the Treasury
Having wiped all of those individuals out to the bone,
the burden could then shift to the military-industrial complex that has so
effectively pursued its symbiotic and very, very costly "Don't Ask
(where the money went), Don't Tell (the truth)" policy for decades now.
It could then lay the hooks into anyone who ever took a
government-backed loan - big or small - without first taking the time to do a
serious calculation as to their ability to repay it, or the unscrupulous
lenders who knew that the loans they were originating were going to end up in
default with the tab ultimately being dropped on the government.
In fact, were such a mega-computer able to do the
calculation, I strongly suggest it would only be after many further layers
that the pain, fairly allocated, would reach the rank and file business
community, the sole real engine of growth in this economy.
I refer, of course, to the
very same individuals so steadily derided by the vote-seeking politicos,
despite the fact that it is these long-suffering entrepreneurs who wake up
every new day to risk everything in their efforts to create new jobs, despite
the heavy glop of bureaucracy on their backs every step of the way.
Yet it is the few that succeed, against all odds and a
constant battering of taxes and regulations, that
this particular congressperson sees as the villains. In other words, she has
pretty much reversed the proper order of accountability - as one would expect
in a system where all that matters is vote gaining.
When the talk turned to the administration's apparent
willingness to accept an across-the-board extension of the Bush tax
reductions as part of a compromise to also extend unemployment benefits (at
42%, the situation of the long-term unemployed is becoming a serious
problem), the congresswoman was almost apoplectic. In addition to the views
just exposed, about the wealthy needing to pay for their many sins, she was
astounded that anyone could hold up the unemployment extension, given the
poor shape of the economy.
How can anyone argue against
the direct benefits to our struggling economy of putting money in the pockets
of people who most need it, she asked with dismay in her voice. Adding in
support of her view that it should be obvious to all that the recipients of
the money will turn right around and spend it on the necessities and that
will give the economy just the boost it needs.
Hmm, I thought as I drove down the road. All we need to
improve the economy is to give people money.
Why, it's simplicity itself! And now that I get it, I
think people should just quit their whining about fiscal probity and all of
that, and just let 'er rip. Don't stop with small
change, encourage the Treasury to start cranking out checks in princely sums
Thousands, millions, even! In no time at all, America's
salad days will be back.
Of course I'm being cynical. But the point I'm trying
to make is important, because while I am exaggerating, the economic concept
so ardently championed by the congresswoman is accepted at face value by most
of the government and all of the administration's favorite economists.
More than that, because it is accepted, it is policy.
In this construct money is, at best, an abstraction: it
has reached the point that the government, and most people, actually believe
the stuff falls from the proverbial tree. Money is no longer a medium for
saving or transacting with the fruits of one's labor, but instead is a
commodity - albeit unique in that it has unlimited supply.
It does not, however, enjoy unlimited demand. For now,
the demand is certainly there. But as the supply increases, individuals and
institutions are correctly wary of the effects of dilution... debasement...
inflation, pick your term.
The alternative forms of money - the sound kind - are
getting a lot of attention because more and more people actually "get
it." They are beginning to recognize the fictions that the politicians
and bureaucrats believe in and are taking measures to protect themselves and
Before moving on, I would mention that I know someone
who works as a manager in the Department of Motor Vehicles. A few days ago
she told me that, other than a relatively brief flurry during the Cash for
Clunkers program, the pace of car registrations has been slow ever since the
crisis began and has shown absolutely no improvement since that program
In fact, the only increase in the DMV's workload has
come from the processing of suspended driver's licenses.
As the latest unemployment figures show and my friend's
first-hand observations confirm, this economy is not recovering. And, per the
rise in license suspensions, the government is becoming increasingly
aggressive in fine-generating enforcement actions.
In relationship to the second of those data points, if
you're going to imbibe this holiday season, don't drive.
Finally, please don't misunderstand my comments above
as being insensitive to the plight of the unemployed. I personally know far
too many people in that situation whose prospects of ever regaining their
prior lifestyles is now almost non-existent to be cavalier about the topic.
The only realistic way I can help - because I can't and
won't put my own family's future at risk by trying to help everyone - is
doing my part to build and maintain a business that, by offering a tangible
value to clients, is able to keep a lot of people productively employed.
Therefore, it angers me to no end to listen as the
morons maintained in power by the equally moronic masses make rude noises
about the entrepreneurial class and otherwise meddle in matters about which
they have no actual understanding and, as a consequence, continue doing great
damage to the economy.
Something has got to change... and will, before
this is over.
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