Tag Archives: Econopolitics

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A New Reich in Reach: Deutschland über Alles!

Merkel To Europe: “Prepare To Cede Sovereignty”

…as always happens, once the crisis talk is back, so is discussion of a fiscal union. Sure enough, earlier today Germany’s Angela Merkel once again reminded everyone just what the stakes are in order to achieve a truly stable, and sustainable European union: nothing short of ceding sovereignty to Germany. And with that we are back to square one, because that has always been the trade off – want a unified, fiscally and monetarily, Europe? You can get it: just bow down to Merkel.

Just goes to show…you can catch more countries with cash than with bullets.

The Euros can at least be glad that the Germans didn’t figure this out 75 years ago or so when a somewhat different set of people were in charge of the Reich!

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Approaching the REAL Fiscal Cliff:

Many (most?) peoples’ heads spin and their brains go TILT! at trying to understand the fiscal mess in Washington.

So…try it a different way:

Understanding the REAL Fiscal Cliff:
PART 1 U.S. Government
U.S. Tax Revenue $2,171,000,000,000
Federal Budget $3,880,000,000,000
Deficit (New Debt) $1,650,000,000,000
National Debt $14,271,000,000,000
Recent Budget Cuts $38,500,000,000
PART 2 Family Budget 
Drop 8 zeros from the above and assume
it to be a family’s household budget
Annual Income $21,700.00
Annual spending $38,200.00
New credit card debt $16,500.00
Outstanding c.c. balance $142,710.00
Recent Budget Cuts $38.50
See?  Not so hard to understand after all!

Would/could you run YOUR family like this?
How long could you get away with it?
So what’s wrong with Washington?
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QE3: Fed Turns on the Printing Press Again

Another shot of economic methamphetamine from the Fed:

Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates

The Federal Reserve fulfilled expectations of more stimulus for the faltering economy, taking aim now at driving down mortgage rates.

The Fed said it will buy $40 billion of mortgages per month in an attempt to foster a nascent recovery in the real estate market. The purchases will be open-ended, meaning that they will continue until the Fed is satisfied that economic conditions, primarily in unemployment, improve.

Enacting the third leg of quantitative easing will take the Fed’s money creation past the $3 trillion level since it began the process in 2008.

One can go back in American history and find repeated episodes of inflationary policies to attempt to revive and overcome economic difficulties. Based on the historical record (even ignoring cases of foreign inflationary experiences like Zimbabwe, Wiemar Germany, and others) from the 1770’s on, inflationary policies have ultimately failed every time they have been tried.

It’s worth recalling Einstein’s definition of insanity as expecting a different outcome from repeating the same procedure over and over again.

By that definition, our current liberal financial managers are a perfect casebook illustration of the Michael Savage observation that “Liberalism is a mental disorder.”

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All that glitters….

Return of the Gold Standard as world order unravels

As the twin pillars of international monetary system threaten to come tumbling down in unison, gold has reclaimed its ancient status as the anchor of stability. The spot price surged to an all-time high of $1,594 an ounce in London, lifting silver to $39 in its train.

So, what’s this have to do with us?
Have you heard of the latest proposed run of the monetary printing presses in D.C.?

Fed chair Ben Bernanke confessed to Congress that growth has failed to gain traction. “Deflationary risks might re-emerge, implying a need for additional policy support,” he said.

The bar to QE3 – yet more bond purchases – is even lower than markets had thought. The new intake of hard-money men on the voting committee has not shifted Fed thinking, despite global anger at dollar debasement under QE2.

The Chief  humbly offers this bit as the real bottom-line takeaway message:

“…the flight to gold is accelerating at a faster and faster speed,” said Peter Hambro, chairman of Britain’s biggest pure gold listing Petropavlovsk.

“One of the big US banks texted me today to say that if QE3 actually happens, we could see gold at $5,000 and silver at $1,000. I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money.”

One might be mindful of a Larry Niven comment: “Not responsible for advice not taken.”

’nuff said.

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Continuing Economic Malaise

A couple of items here that speak for themselves.

Jobless Claims Unexpectedly Rise; Inflation Pressure Grows

New claims for unemployment benefits unexpectedly rose last week, bouncing back above the key 400,000 level, while core producer prices clumbed faster than expected in March, government reports showed on Thursday.

Initial claims for state unemployment benefits rose 27,000 to a seasonally adjusted 412,000, the Labor Department said.

Economists polled by Reuters had forecast claims slipping to 380,000.

The prior weeks figure was revised up to 385,000 from the previously reported 382,000.

The four-week moving average of unemployment claims—a better measure of underlying trends—climbed 5,500 to 395,750.

And on the inflation front:

U.S. core producer prices rose slightly faster than expected in March and the increase from a year ago was the largest since August 2009, pointing to a broadening in pipeline inflation pressures.

Of course these calculations EXCLUDE food and energy costs…but hey, everyone knows that these don’t affect most people anyway, do they?!

More Americans leaving workforce

The share of the population that is working fell to its lowest level last year since women started entering the workforce in large numbers three decades ago, a USA TODAY analysis finds.

Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record.

Doesn’t exactly suggest a vibrant economy, does it?

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If this ain’t broke…what is?

Somebody needs to slap Michael Moore upside the head with a serious cluebat for crying that we had LOTS of money to spend!

Maybe we WILL have lots more dollars if we keep the presses rolling, just like the Germans had lots more Reichsbank Marks in the twenties:


50,000,000 Mark note, Sept. 1923, which was already only small change:
1st November 1923 1 pound of bread cost 3 billion, 1 pound of meat 36 billion, 1 glass of beer: 4 billion.”

Mandatory Spending to Exceed all Federal Revenues — 50 Years Ahead of Schedule

…if national defense, interstate highways, national parks, homeland security, and all other discretionary programs somehow became absolutely free, we’d still have a budget deficit. The White House Office of Management and Budget projects that in the current fiscal year (2011), mandatory spending alone will exceed all federal receipts. So even if we didn’t spend a single cent on discretionary programs, we still wouldn’t be able to balance our budget this year — let alone pay off any of the $14 trillion in debt that we have already accumulated.

And the administration and the Congressional Democrats Donkey Congs cry about attempting to cut a measley $61B out of a trillion+ package, for a whopping 4% (or less) cut? Give me a break!

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B.O. Pro-Arab Energy Policy

Interior appeals oil drilling ruling

B. Hussein Obama’s Interior Department is pursuing policies that are greatly benefiting mid-east oil suppliers, and that will conincidently and inevitably result in continuting increasees in the prices that will be paid by Americans for any and all poil-based commodities, starting with gasoline, and including all plastics, synthetic fibers, and most chemical and pharmaceutical feed stocks. But hey, it’s for your own good…and too bad if you’re too stupid to appreciate the favor. (F— you if you can’t take a joke!)

The Obama administration late Friday appealed a judge’s orders directing the Interior Department to act on several Gulf of Mexico deepwater drilling permits.

The appeal is the latest salvo in the ongoing fight over the speed with which Interior is – or isn’t – letting oil drillers get back to work after last year’s BP oil spill.

Interior Secretary Ken Salazar had hinted the appeal was coming at a Senate hearing Wednesday. “The judge in this particular case in my view is wrong,” Salazar said. “And we will argue the case because I don’t believe that the court has the jurisdiction to basically tell the Department of Interior what my administrative responsibilities are.”

He added, “the policy we have in mind is unmistakingly [sic] clear: We are moving forward with the development of oil and gas” production.”

BS! Total BS!

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Administration Targets Jobs

It becomes more clear just how the administration is focusing on jobs: jobs are in the cross-hairs and are targeted for destruction, to say nothing about reducing energy availability at the same time, thus killing two birds with one stone.

New rules would cut thousands of coal jobs

The Obama administration’s own experts estimate their proposal for protecting streams from coal mining would eliminate thousands of jobs and slash production across much of the country, according to a government document obtained by the Associated Press.

The Office of Surface Mining Reclamation and Enforcement document says the agency’s preferred rules would impose standards for water quality and restrictions on mining methods that would affect the quality or quantity of streams near coal mines. The rules are supposed to replace George W. Bush-era regulations that set up buffer zones around streams and were aimed chiefly at mountaintop removal mining in Appalachia….

OSM’s proposal — part of a draft environmental impact statement — would affect coal mines from Louisiana to Alaska.

The office, a branch of the Interior Department, estimated that the protections would trim coal production to the point that an estimated 7,000 of the nation’s 80,600 coal-mining jobs would be lost. Production would decrease or stay flat in 22 states…

To add a bit of additional perspective, half of the US supply of electricity is coal based. Sort of hard to recharge the new Chevy Volt autos if there’s less electricity available! Regulators working at cross-purposes? According to the lib-progs isn’t government supposed to be MORE efficient at management? Never mind….if we’re rational, we already know the answer to THAT…and “it ain’t that pretty at all”…but I digress.

The National Mining Association blasted the proposal, saying OSM is vastly underestimating the economic impact.

“OSM’s preferred alternative will destroy tens of thousands of coal-related jobs across the country from Appalachia to Alaska and Illinois to Texas with no demonstrated benefit to the environment,” the trade group said. “OSM’s own analysis provides a very conservative estimate of jobs that will be eliminated, incomes that will be lost and state revenues that will be foregone at both surface and underground coal mining operations.”

OK, you know the envirowackos say that’s just the big corporations trying to defend their turf…the impact won’t REALLY be that bad, would it? But wait, the states aren’t too thrilled with D.O.I./OSM either:

They blasted the proposal as “nonsensical and difficult to follow” in a Nov. 26 letter to OSM Director Joe Pizarchik. The letter was signed by officials from Alabama, Indiana, Kentucky, Texas, Utah, Virginia, West Virginia and Wyoming.

“Neither the environmental impact statement nor the administrative record that OSM has developed over 30-plus years of regulation … justify the sweeping changes that they’re proposing to make,” West Virginia Department of Environmental Protection official Thomas Clarke told AP on Wednesday.

As your electric rates continue to increase, due to the inexorable operation of supply (decreasing) and demand (increasing), give thanks to the administration for it’s energy and employment reduction plans.

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Int’l Effect of Fed’s Quantitative Easement: Unease!

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Specter of trade war looms as G-20 nations gather

When I made this posting a few days ago, I was really sort of hoping that the comparison between what’s happening now regarding international trade and exchange and what happened when FDR figuratively blew-up the 1933 London World Economic Conference would prove not to continue to hold water, since the outcome then, and the expected outcome (given no change of course) now are both Very Bad Things for economic health.

Unfortunately, it seems that there is more expectation of the present, problematical course of the B.O. administration continuing.

The world’s economies stand on the brink of a trade war as leaders of rich and emerging nations gather in Seoul.

A dispute over whether China and the United States are manipulating their currencies is threatening to resurrect destructive protectionist policies like those that worsened the Great Depression. The biggest fear is that trade barriers will send the global economy back into recession.

Hopes had been high that the Group of 20, which includes wealthy nations like Germany and the U.S. and rising giants like China, could be a forum to forge a lasting global economic recovery. Yet so far, G-20 countries haven’t agreed on an agenda, let alone solutions to the problems that divide them.

Doesn’t sound like everyone is ready to play nicely together.

G-20 leaders were expected to issue a communique detailing results of the summit on Friday.

Good luck on THAT! Oh, for sure there’ll be a “statement”, but it doesn;t look like there will be much to state except “Yep, we’ve been there, and done that – time to go home. See you all next time around!”
Meanwhile, as the Fed fires up the printing presses, and the results on Main Street will be predictable: don’t get a crick in your neck watching the rocketing contrail of higher prices.

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B.O. to World: Too Bad If You Can’t Take a Monetary Joke!

Obama says U.S. low growth or no growth danger to world

U.S. President Barack Obama defended the Federal Reserve’s policy of printing dollars on Monday after China and Russia stepped up criticism ahead of this week’s Group of 20 meeting.

The G20 summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent a currency row escalating into a rush to protectionism that could imperil the global recovery. [ID:nSGE6A703T]

But there is little sign of consensus.

The summit has been overshadowed by disagreements over the U.S. Federal Reserve’s quantitative easing (QE) policy under which it will print money to buy $600 billion of government bonds, a move that could depress the dollar and cause a potentially destabilising flow of money into emerging economies.

So, where will be be when China decides to bail out on buying our debt, since it’s value will be diving due to the Fed’s inflationary debt monetization? We don’t really want to go there…but we might not be given a choice in the matter.

As a historical sidebar note, something somewhat similar happened to us before…where a reform-minded US president with economic difficulties told the world to shove it, that we were doing our own thing in spite of it’s impact on them.

The occasion was during the early days of the FDR administration in 1933. Roosevelt set the stage in his first inaugural address by stating that “our international trade relations, though vastly important, are in point of time and necessity secondary to the establishment of a sound national economy.” He went on in June 1933, to instruct the Secretary of State who was attending the London World Economic Conference that “…far too much importance is attached to exchange stability…”

AS the Conference continued, he sent what has become known as the “bombshell message” July 3, 1933 in which he told the Conference delegates that the U.S. would NOT be a party to efforts at exchange-rate stabilization while declaring that “old fetishes of so-called international bankers are being replaced by efforts to plan national currencies”.

THe ultimate take-away message to the world was that the U.S. was going to be focusing on its own situation, and was not willing to extend itself to take part in concerted international efforts to avert danger. The lesson was not missed by Hitler, who saw a green light to his own nationalistic plans for “problem solving”.

(ref: Freedom from Fear; David M. Kennedy; Oxford Univ. Press, 1999)

So we REALLY want to give a similar impression to such luminaries of international peace and enlightenment as the Chicoms, and Putin’s Russia? REALLY?

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B.O.’s Environmental Economic Wrecking Plan

EPA Estimates Its Greenhouse Gas Restrictions Would Reduce Global Temperature by No More Than 0.006 of a Degree in 90 Years

Tough new rules proposed by the Environmental Protection Agency restricting greenhouse gas emissions would reduce the global mean temperature by only 0.006 to 0.0015 of a degree Celsius by the year 2100, according to the EPA’s analysis.

THAT’s saving the planet?

The authors cite the EPA’s own staff to show that greenhouse gas regulations, which would require major sources of CO2 (carbon dioxide) to obtain permits and limit their output, could seriously harm the economy if implemented.

“It is clear throughout the country, PSD (Prevention of Significant Deterioration) permit issuance would be unable to keep up with the flood of incoming applications, resulting in delays, at the outset, that would be at least a decade or longer, and that would only grow worse over time as each year, the number of new permit applications would exceed permitting authority resources for that year.” the EPA wrote in the Federal Register on June 3.

Lest you think SD would not be seriously and negatively affected since it’s not a heavy industrial state, among other proposed regulatory issues are some that specifically target rural areas (dust standards, animal CO2, etc.)

Other proposed EPA regulations include:
— pending regulations on emissions from industrial and commercial boilers which the Republican staff says are stringent enough to make some factories shutter rather than become compliant, and risking 798,000 jobs;
— higher emissions standards for cement plants, which involves 15,000 jobs;
— and increased National Ambient Air Quality Standards for the amount of ground-level ozone to 60 parts per billion, which the EPA estimates could cost $19 billion to $90 billion to implement.

Top House Republicans have formed the Rural America Solutions Group aimed at working on issue that effect agricultural areas of the country, and held a forum Wednesday on what they termed “the EPA’s Assault on Rural America.”

They heard from witnesses representing the beef and cattle industry, farmers, coal workers, and others affected by the many new and proposed regulations laid out in the report.

At the forum, Rep. Frank Lucas (R-Okla.) said, “In many instances, the EPA is overreaching its authority. Instead of operating within the law, EPA believes it can dictate to Congress that legislation needs to be passed for more government authority. And if Congress doesn’t act, it threatens to regulate anyway. Every day, the EPA seems to demonstrate how vastly disconnected it is to the folks who feed us.”

Republicans invited EPA Administrator Lisa Jackson to attend the forum, but she did not appear, nor did she send a representative.

All this for a alleged small fraction of one degree over a century? There is another issue at play here…and it’s NOT climate change. Can you say P-O-W-E-R, D-O-M-I-N-A-N-C-E, and C-O-N-T-R-O-L?

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Believe it, or don’t…

Obama tells UN leaders world has dodged depression

The Chief hopes this is right but…skepticism remains.

President Barack Obama is calling on world leaders to support new efforts to bring about peace in the Mideast,…

Ah, yes…peace in the mid-east. Of course with Ham-ass and the Hezballers still dedicated to the total destruction of Israel, this remains problematic, at best. As far as B.O.’s fulminations on the topic…the phrase “poor situational awareness” comes to mind…unless of course, he is a crypto anti-semite who looks forward to a “final solution” to the problem of Israel.

…while declaring the global economy has been “pulled back from the brink of a depression.”

Hmmm. If you put $1 with that it would get you a can of pop, but the Chief would submit that the jury is still out on this one. There hasn’t been any flood of coverage on Greece, Spain, Ireland, Italy, etc. correcting their out of kilter financial and economic blues. Anecdotally, a friend who 2 months ago went to Brazil to take on an engineering exploration job with Petrobras, the Brazilian national oil company (with was just given $2B by the Obamacrats for exploration) was released and sent packing as part of a 25% workforce reduction.

Yep! Things are looking up all over. (At least Germany and Russia are looking up… but they ruthlessly cut deficits and stimulus spending. Russia’s 13% flat tax is doing wonders for getting things going economically in the post-Soviet era.)

Obama, visiting the United Nations where world leaders are gathered, says “America has joined with nations around the world to spur growth and renewed demand that could restart job creation.”

One supposes that maybe he’s talking about stuff like the money paid to Brazil to create jobs in their oil industry, along with a similar $2B payment to Mexico to expand THEIR drilling in the Gulf (while our drilling is halted? WTF!?)

That statement DOES make sense if the policy he has in mind is to CUT the US economy, in order to support a global redistribution of jobs in the interest of international social justice, or some such ideology. (Nah…surely not Obama?)

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T.A.N.S.T.A.A.F.L.

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(If necessary see this link on TANSTAAFL.)

Received via an e-mail newsletter, and shamelessly forwarded for your edification. (IMHO Walter Williams is EXCELLENT!)

Something for Nothing
By Walter E. Williams

Perhaps the most difficult economic lesson is that we live in a world of scarcity and everything has a cost. Scarcity exists whenever human wants exceed the means to satisfy those wants. For example, Rolls-Royce produces less than 4,000 cars a year but it’s a safe bet that more than 4,000 of the Earth’s 6.5 billion people want a Rolls-Royce. That means Rolls-Royces are scarce. But it’s not just Rolls-Royces that are scarce. It’s clothing, food, land and most anything a human would want. There’s not enough to meet every single want.

Scarcity means there’s no free lunch. Having more of one thing requires having less of another. You might say, “Williams, that’s where you’re wrong. Someone gave me this newspaper and I’m reading your column for free!” Not true. If you weren’t spending time reading my column, you might have spent the time reading something else, chatting with your wife or children, or going out for a jog. You’re reading my column for a zero price but you’re not doing so at zero cost. You have to sacrifice something. There are zero-price services such as “free libraries,” “free public schools,” “free transportation” and free whatever. It doesn’t mean that costs are not being borne by somebody. [emphasis added]

The vision of getting something for nothing, or getting something that someone else has to pay for, explains why so many Americans are duped by politicians. A congressional hoax that’s flourished for seven decades is the Social Security hoax that half of the Social Security tax (6.2 percent) is paid by employers, the other half (6.2 percent) paid by employees. The law says that if you are self-employed, you get to pay both halves. The fact of the matter is whether you’re self-employed or not, you pay both halves of the Social Security tax that totals 12.4 percent. Let’s look at it.

Suppose you hire me and our agreed-upon weekly salary is $500. From that $500, you’re going to deduct $31 as my share of the Social Security tax and you’re going to add $31 as the so-called employer’s share, sending a total of $62 to the IRS. Here’s the question: What is the weekly cost for you to hire me? I hope you answered $531.

The next question is: In order to make hiring me profitable, what must be the minimum dollar value of my contribution to your total output? If you said $531, go to the head of the class because if the value of my contribution to total output is only our agreed-upon salary of $500, you’re making losses hiring me and you’re going to be out of business soon. Therefore, if I am producing $531 worth of value per week, it is I who’s paying the so-called employer as well as the employee share. The reason why Congress created the fiction of the employer share was to deceive us into thinking that we’re paying fewer taxes than we in fact are.

By the way, all those other nonwage benefits that a worker receives are in fact paid for by the worker such as health insurance, retirement benefits and childcare services. Without these nonwage benefits, money wages would be higher. During WWII, Congress imposed wage and price controls making it illegal for companies to compete for employees by offering higher wages. That’s when we saw many companies start to offer nonwage benefits, such as health insurance, as a means of competing for employees.

Nonwage benefits turn out to be good for the employee because, for the most part, he pays no taxes on them. In other words, if the employer paid the worker the cash value of, say, health insurance as wages, the worker would have to pay income taxes on it and then go out and buy health insurance.

The bottom line lesson is that if you think you’re getting something for nothing, or somebody else is paying for something you receive, you’d better give it another look. [emphasis added]

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Green Jobs a Loss

California watchdog sees climate policy job losses

California is likely to see modest job losses in the near term from its aggressive climate change policy due to higher energy costs and other factors, the state’s independent Legislative Analyst’s Office said. Skip related content

The budget watchdog was responding to a request by Republican state Senator Dave Cogdill to study the effects of California’s 2006 climate change law, which mandates changes to cut greenhouse gas emissions to 1990 levels by 2020.

The report goes on to note that the reason that the losses are only modest, is that California uses less energy overall, due to it’s generally salubrious climate.

Otherwise, the only surprise here is that any one is surprised. If the green stuff was really stimulative to the economy, it wouldn’t need government programs at any level to encourage it…entrepreneurs would be lining up to jump into the business on their own.

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B.O. & Fed Land Scheme

White House land grab
Proposal to seize land would favor animals over Americans

You’d think the Obama administration is busy enough controlling the banks, insurance companies and automakers, but thanks to whistleblowers at the Department of the Interior, we now learn they’re planning to increase their control over energy-rich land in the West.

A secret administration memo has surfaced revealing plans for the federal government to seize more than 10 million acres from Montana to New Mexico, halting job- creating activities like ranching, forestry, mining and energy development. Worse, this land grab would dry up tax revenue that’s essential for funding schools, firehouses and community centers.

President Obama could enact the plans in this memo with just the stroke of a pen, without any input from the communities affected by it.

At a time when our national unemployment rate is 9.7 percent, it is unbelievable anyone would be looking to stop job-creating energy enterprises, yet that’s exactly what’s happening.

We’ve been there, done that, under Carter and Clinton. B.O. seems inclined to follow their evil example.

Hopefully there’s enough gumption out there to stop him from doing this.

Locking up lands with energy resources? What’s THAT about?

Hmmmm. After spending us into international bankruptcy we’ll need to do SOMETHING to re-boot the dollar…auctions of mineral and energy rights could be a way to do it. Now, who has a lot of cash and a high demand for more energy to drive a forced industrial expansion?

China.  Not a nice thought, but there it is.

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Recovery or Not: Truth or Consequences

One always has the choice of accepting hard truth, or not. One does not have the option of evading the consequences of that decision.

Economic Depression: A Better Definition

“How can you keep talking about a depression,” asks a Dear Reader, “when the economy is clearly recovering just as it should be.”

Ah ha! We’ll explain in a minute.

First, the latest from Wall Street: The Dow fell 18 points yesterday. We’re still not sure whether the final, fading phase of the bear market has begun or not. This bounce took the Dow back to 10,725 on January 19th. It hasn’t seen that level since. Was that it? Was that as high as it’s going to get? Is it down from here on out…until the Dow finally bottoms out somewhere south of 5,000?

We don’t know. We’ll just have to wait to find out…along with everyone else.

Now…back to that ‘recovery’….

It’s true that there are some signs of “stabilization.” The unemployment rate is not getting badder as fast as it was a few months ago. And house prices seem to have stopped falling – for the moment. It’s also true that the economy managed to register positive ‘growth’ in the last quarter…mostly thanks to government spending and inventory restocking.

The trouble is, all of these things are consistent with a depression – especially a depression that the feds are fighting every inch of the way. In the 1930s, there were several years of growth…and there were great years for the stock market too. Then, things fell apart again. The nation ended the ’30s not one penny richer than it had been when it began them.

And Japan has seen some good years and some bad years, too, since its depression began in 1990. Oddly, Japan’s population is falling…so in per capita terms, Japan’s downturn hasn’t really been so bad. Per person, the Japanese got richer over the last 10 years.

It’s also true that here at The Daily Reckoning, we use the term ‘depression’ a bit differently than most economists. Most economists believe GDP growth represents increasing prosperity. They think a depression is merely a recession, with negative GDP growth, that lasts longer and goes more deeply than normal.
Our definitions are better:

A recession is a pause during a period of growth. A depression marks the end of the period of growth…giving the economy a chance to make adjustments so that a new period of growth may begin.

THAT makes real sense, especially compared to “Hope and Change”.  Of course one can also continue to partake of the “H & C” Koolaid.  It’s your call, but don’t come ’round looking for a bail-out!

The rest of the piece has more development and illustration of this principle…it’s well worth taking a look.

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Jobs R-not Us

There’s bad news, and at least locally, some not so bad news.

The ‘Real’ Jobless Rate: 17.5% Of Workers Are Unemployed

As experts debate the potential speed of the US recovery, one figure looms large but is often overlooked: nearly 1 in 5 Americans is either out of work or under-employed.

According to the government’s broadest measure of unemployment, some 17.5 percent are either without a job entirely or underemployed. The so-called U-6 number is at the highest rate since becoming an official labor statistic in 1994.

The number dwarfs the statistic most people pay attention to—the U-3 rate—which most recently showed unemployment at 10.2 percent for October, the highest it has been since June 1983.

One wonders how the alleged bail-out is working economic wonders, just the Change that The One promised that we can believe in.

Instead, it’s turned into “Change – Believe it or Not”…would you believe not, except change for the worse.

As far as the better news goes, recently the Chief saw a map on TV with different colors indicating the levels of states’ unemployment: South Dakota, North Dakota, and Nebraska all were the same color, which represented the lowest unemployment rates in the country.  We’re (still) a long way from Detroit (so far).

Obamunism

Too Late…It’s Spent!

Obama warns on US public debt pile

After doubling the budget deficit since he came into office, and pushing hard for a massive increase in public spending for a number of programs including the Obamacare health “hellth” bill, it takes nothing if not a massive display of chutzpah to make comments like this.

US President Barack Obama warned that the US economy could head into a “double-dip recession” unless urgent steps were taken to rein in mounting public debt.

“It is important though to recognise if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the US economy in a double-dip recession,” said Mr Obama.

Sounds like the ChiComs have been reading him the riot act about his spending…after all, they have a LOT of investment in U.S. debt to protect from a total fiscal melt-down. IMHO it may be too late. I hope not, but…

Constitution Watch, Glowbull Warming

A Mixed Blessing

Federal program to help company that processes Black Hills wood chips

The U.S. Department of Agriculture has selected Western Biomass Energy LLC to participate in the Biomass Crop Assistance Program. Western Biomass Energy converts wood chips from the Black Hills into renewable fuels.

Sen. John Thune, R-S.D., authored BCAP, which was included in the 2008 Farm Bill.

The company will use the funding to offset the feedstock cost associated with its pilot biorefinery in Upton, Wyo., that refines cellulosic ethanol from South Dakota wood chips.

One supposes that this is supposed to be good news. It is for some.

Senator Thune can claim that he brought home the bacon for SD. Sure ’nuff! A Democrat couldn’t have done it better!

The Chief worked in a lab at the SD School of Mines for 5 weeks one summer a few years ago as a science teacher. This was very informative, and very enjoyable…the project of the lab was to devise methods of looking for techniques to increase the ethanol yield from wood chip cellulosic feedstocks.

I had a chance met the entrepreneurs of this project. I was impressed by them. They are highly competent engineers and businessmen, and are doing all they can to succeed with their enterprise. The School of Mines was also doing its job well…using their grants from the company for assisting the businesspeople to be able to make use of SD products (OK, by-products) to produce a value-added commodity that can help you get your car down the road at a cheaper price.

So what’s the rub?

Firstly, one could wonder if this enterprise could continue without the continued infusion of tax money (or should it be called printing-press money these days)? Hate to say so, but probably not…otherwise there would be no need for the subsidy. (Ooops! That also could apply to the corn-based ethanol too…but we won’t go THERE!)

Some might argue that the Glowbull Warming crisis forces us to use public funds to develop alternative renewable energy. Frankly, as noted in numerous previous postings on the category of “Glowbull Warming”, the Chief isn’t a member of the Orthodox Carboniferous Church of St. AlGore so that’s not a real impressive argument hereabouts. (If you really think man-made CO2 is causing a problem…stop exhaling it with every breath!)

So, what else?…oh, yeah…Senator, could you remind me again what article and section of the Constitution addresses cellulosic biomass ethanol? Must have missed that one in my PoliSci classes.

I guess if one thinks the constitution is “a flexible living document”, allowing stuff like this, then it’s all OK?…sort of like supporting McCain-Feingold Campaign Finance Reform Political Speech Limitation Act while you were still in the House. Don’t get me wrong…I REALLY DO like you Senator, and you’re generally way ahead of most of the Senate, but you really ought to bone up on the Constitution a bit, otherwise some might think that you have leanings towards Republocratic Demicanism.

It is realized that this may not give many readers a warm fuzzy glow, (with stuff to alienate both sides of the so-called spectrum) but what’s the point of trying to develop political principles if one’s not willing to at least make the effort to be consistent with them. Easy for ME to say…knowing I’ll never be elected…but hey, it feels right anyway.

Obamunism

B.O. Appoints Fox to Guard Financial Henhouse

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Wall Street exec to lead SEC fraud branch

The Obama administration on Friday tapped a Wall Street executive to lead the Securities and Exchange Commission’s charge against investor fraud in the wake of the Bernie Madoff scandal as it pushed anew for a regulatory overhaul to protect Americans from financial sector shenanigans.

The SEC announced Adam Storch, vice president of Goldman Sachs’ Business Intelligence Group, is assuming the new position of managing executive of the its enforcement division, created earlier this year.

Goldman-Sachs AGAIN? Yeah. Right.

Although the Chief has some serious issues with Arizona Senator John McCain, on this one he hit the nail on the head:

“SEC names Goldman Sachs exec to enforcement post – you can’t make it up,” quipped Sen. John McCain, Arizona Republican, on Twitter, the popular social-networking Web site.

THIS is more “Change You Can Believe In” – at least if you’re with Goldman-Sachs.

This is the same Goldman Sachs involved with continuing to make massive bonus payments.

Conflict of interest?  What’s that?  (Nothing to see here folks. Move along.)

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B.O. – Guess What? A New Federal Agency!

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Like, what else would they propose – MORE government, of course.

Obama proposes new consumer agency

The Obama administration Tuesday proposed legislation for a financial oversight agency designed to protect consumers and investors from unscrupulous deals – a plan praised by Democrats, but met with skepticism on Wall Street.

The proposal also faces a political tussle on Capitol Hill, where pro-business Republicans have opposed past administration attempts at bank reform.

The White House sent Congress a 152-page draft bill to create the Consumer Financial Protection Agency, which it says would offer greater consumer protections for such financial products as mortgages, credit cards and loans by establishing simpler and more transparent rules and regulations.

Lets call a spade a spade here. First off…another new agency? Isn’t there ANYTHING they can cook up that doesn’t expand the government?

Far and away the greatest part of the financial difficulties that people get into is by having an attitude that “the rules don’t apply to me”, and that “someone has the obligation to give me the money I want to have the things I WANT to have, whether I can REALLY afford them or not.” Taking on consumer debt to acquire an ever bigger, and admittedly more impressive pile of “toys for big boys (and girls)” is NOT any more viable in the long run than is the Federal government’s massive and apparently unlimited expansion of ITS debt load.

What else would one expect B.O. to do than put in an agency that will effectively facilitate further expansion of consumer credit, while inevitably providing more “protective” regulatory loopholes. Apparently, if it’s sauce for the Federal goose, then it’s also sauce for the consumer gander.

NOT what we really need in either case!

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Economy Recovering or Not so Fast?

Probably not…First the optimism:

Recovery Rally Rolls On

Bernanke, Data Boost Stocks

The markets received a rhetorical lift from Bernanke, who after giving a speech said, “the recession is very likely over at this point.”

“He’s a man who is very cautious in his commentary. He tends to really avoid extreme statements,” said Kenny. “If he’s saying we’re out of the recession, then we’re well out of the recession. This is the most positive he’s been.”

How solid is this? Apparently not too solid.

…Bernanke also warned that “it’s still going to feel like a very weak economy for some time.”

Meanwhile, on a less optimistic note, are these reports from across the big pond of some things that are contra-indicators of an incipient economic boostsomehow overlooked in the US government-affiliated mainstream media:

US credit shrinks at Great Depression rate prompting fears of double-dip recession

Professor Tim Congdon from International Monetary Research said US bank loans have fallen at an annual pace of almost 14pc in the three months to August (from $7,147bn to $6,886bn).

“There has been nothing like this in the USA since the 1930s,” he said. “The rapid destruction of money balances is madness.” The M3 “broad” money supply, watched as an early warning signal for the economy a year or so later, has been falling at a 5pc annual rate.

Similar concerns have been raised by David Rosenberg, chief strategist at Gluskin Sheff, who said that over the four weeks up to August 24, bank credit shrank at an “epic” 9pc annual pace, the M2 money supply shrank at 12.2pc and M1 shrank at 6.5pc.

“For the first time in the post-WW2 [Second World War] era, we have deflation in credit, wages and rents and, from our lens, this is a toxic brew,” he said.

And the point is?

US banks are cutting lending by around 1pc a month. A similar process is occurring in the eurozone, where private sector credit has been contracting and M3 has been flat for almost a year.

Mr Congdon said IMF chief Dominique Strauss-Kahn is wrong to argue that the history of financial crises shows that “speedy recovery” depends on “cleansing banks’ balance sheets of toxic assets”. “The message of all financial crises is that policy-makers’ priority must be to stop the quantity of money falling and, ideally, to get it rising again,” he said.

He predicted that the Federal Reserve and other central banks will be forced to engage in outright monetisation of government debt by next year, whatever they say now.

Debt monetisation is basically using newly created money to pay of previously existing debts. In other words, HIGH inflation.

Another more obscure sign that the U.S. and global economy both are all not operating up top speed, and will not be for a while yet:

Revealed: The ghost fleet of the recession

The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination – and is why your Christmas stocking may be on the light side this year.

You have to see this article to get a real feel for what they’re talking about, so take alook.

The photos of the laid-up ships looks like the D-Day invasion fleet, which impression is reinforced by satellite position location charts.

This is interesting, and the logic is inescapable…if the goods aren’t being shipped NOW, they won’t be in the stores for Christmas, and if they aren’t in the stores for Christmas, then obviously they won’t be sold. Doesn’t look too good for consumer demand. This CANNOT change…the orders haven’t been placed, and the ships are out of service as a result.

Worth noting once again that none of this is being currently covered in the US state-influenced Main Stream Media.