printIn “You Can’t Fix Stupid,” I counted the ways of Barack Obama’s stupidity, as far as the natural laws of economics go. Today he did me one better, claiming that “uncertainty over the debt ceiling has hindered hiring in the private sector.” The horrible jobs reports, in other words, were a function of market fears that the US would halt the borrowing and bankruptcy trends. That’s certainly novel. Let’s not forget that Republicans feed this folly by advancing, as a counterargument, the same tack: we have no certainty in capital and other markets, therefor no one will hire.
Nonsense on stilts: There is ample certainly; certainly about economic gloom-and-doom to come. Given the indicators in the US—OPD (Outstanding Public Debt) almost equaling GDP (Gross Domestic Product), the first is growing faster than the second—businesses have to become as lean as possible.
The uncertainty mantra is a mindless one. There is plenty of certainty: certainty about a dark future. A business that is to survive needs to streamline and become super efficient. It has to hunker down and stay in survival mode. So should you.
The combination of Obama and the Democrats actively working to destroy the economy and the Republicans fumble diddling around not knowing what to do, we can only expect eventual disaster. Obama and his gang make think of a bunch sorcerers plotting the overthrow of the kingdom in some secret lab in the castle dungeon. The Republicans, on the other hand, remind me of a bunch of not to bright bear cubs attempting self-abuse while wearing boxing gloves.
Well said Ilana.
Lack of credit will not usually hamper hiring…a responsible business will not borrow what it does not expect to be able pay back. Increasing your work force will only pay back if your sales can match the increased production capacity.
The government has set up a slippery slope: looming tax hikes cause businesses to increase prices, and to cut the work force in expectation of proportionally lower sales volumes.
These creatures – Demicans and Republicrats – are all invested in the same Ponzi. Pelosi, for instance, was “worth” c. $40 million in ’08. Now, after raking off from the bailouts, she’s at…$60 million. Sunday, at the “secret” meeting, Wall St. will deliver the same message delivered before TARP: “kick the can down the road, or we will collapse this sucker now”. Boner will cave, up goes the debt limit, and the political cover for both parties will be “4 trillion in cuts over the next 12 years!”…none of which, of course, will actually occur. The consolation is that the steeper the walls of the debt pyramid get, the more devastating will be the final Crash. (Some of) those in “survival mode” will survive the subsequent…ah…disturbances, those not so prepared will be factored out.
None of these “cuts” seem to be very real. One must also realize that these “cuts” will only be long-term solutions – the money spent on nonsense like slum housing or wars or Medicare or ethanol subsidies DOES go to people and slosh around the “economy” – it just is general malinvestment which (like a leech) eventually drains the health of the patient (in this case the nation).
The nation is a bit like a drug addict with the Welfare-Warfare state being the drug – it will take a long-time recovery program to set it straight. Given the nature of our politicians, I remain skeptical.
I went to my bank yesterday, A CD was ready to renew. I asked the investment manager if we could invest the CD into a new account that provided more than the present interest which is less than inflation; while using some of it to remodel the kitchen. She was short and to the point. “We have no investments that earn any real interest today. You will get more pleasure out of the remodeled kitchen than investing for the future.” Pelosi may profit from their manipulation but us little people won’t.
He also listed natural disasters, high gas prices, state and local budget cuts and the fiscal crisis in Greece.
It’s the sunspots, stupid.
@ Robert Glisson on 07.09.11 4:45 am – Pull your money out and buy high-value commodities…Platinum would be excellent, as it has very broad scientific/industrial applications. Silver has significant medical applications. Avoid things with artificial value, like jewelry, diamonds, etc. Also avoid things they can see (and hence steal) like real estate.
Commodities will be under your control (not the bank’s), and their value will always go up as long as the fed keeps printing money: inflation works for you, driving up the value of your goods.
Oh, rare-earth metals may also be a good investment…China produces over 90% of the world supply and has recently put annual-volume export restrictions on them…their value has literally gone up 800% in the last year alone. And they have broad uses…MRI’s, fluorescent lamps, generators, motors, etc.
Bipartisan nonsense like the Wars on Drugs, Iraq, Libya, and Afghanistan are helping to bankrupt us. Add in more bipartisan mischief like ethanol subsidies, student loans, and manned space exploration for extra waste. However, the big 600 lb Gorilla of future debt, in spite of any blather out of Obama, Bachmann, Pelosi, or Boehner – is Medicare/Medicaid. But this medical Debt Monster is one of the most popular programs in the USA.
So my blind 92 year old Aunt who says she’s “ready to die” is in the hospital with bone cancer taking her arm and now in her pelvis. That hospitalization costs enormous bucks.
My friend’s 23 year old, enjoying a “libertarian lite” lifestyle, fell off his frat house balcony (under the influence of booze and cocaine) and is now in a coma with severe brain damage – again – lots of money.
I don’t think either Mises or Keynes has a magic elixir to deal with the demented, the terminal, and others wasting away slowly that cost hundreds of thousands plus to keep alive for those extra months or years. No debt ceiling hooey or Congressional hoopla can provide a satisfactory answer to the Medical Debt Monster for our aging population.
Let us not call the estimable Robert Higgs’ hypothesis (uncertainty) “nonsense.” You may wish to read him on the current malaise.
They are trying to use Eric Cantor as the bad guy now in an attempt to make him so hated he will fold on the budget ceiling. Don’t know if it will work or not, but I’m not optimistic.