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MARCH 15, 2005 –
Pick a day of the week a throw a dart. That seems to be what
decides whether Fed Chairman Alan Greenspan will tell us we are
headed for disaster or doing fabulously on any given day.
It has reached the
point where it is not just fence straddling, but truly troublesome
psychosis. And it has been going on for a while now.
Look at this from
last year.
First, from
May
6, 2004 comments to a banking conference:
“Our fiscal prospects are, in my
judgment, a significant obstacle to long-term stability because the
budget deficit is not readily subject to correction by market forces
that stabilize other imbalances."
Then
a few months later to the House Budget Committee: "The
most recent data suggest that, on the whole, the expansion has
regained some traction."
One day he is
pointing out that there is an "inverted yield curve," a little
thing that precedes every recession and never appears except when
there is a recession about to occur, and the next he is saying the
economy is wonderful - even in the face of all obvious evidence to
the contrary, such as seen in this
Washington Post quote typical of the situation: "Greenspan
was upbeat about the economy in remarks to the House Budget
Committee, and did not suggest there would be any major changes in
the Fed's monetary policy, which was a welcome relief to rate-wary
investors. But the short-term cheer over his comments was not enough
to allay the market's deeper concerns."
The problem, though, is not Greenspan
himself but something we see play out on a much, much larger scale,
and which has the entire nation confused about the current state of
the economy, which is actually very simple to explain.
You see, it is the job of the entire
investment firm profession to get you to buy stocks and bonds.
And economists serve these people, and tend to be Republicans.
Now, what is the actual economic
reality? It is very simple and we have laid it out for months
and months now; indeed years.
Look at articles like
Economy - New Gallup Poll And Labor Number Challenge Bush's
Assessment Of Economy and
The Actual State Of The Economy that we've run over the
past year.
The reality is that Greenspan and others
understand the second part of the above Washington Post quote, that
there are permanent "deeper concerns" due to the policies
implemented by President Bush and the Bush/Limbaugh Republicans.
The deficit is real, the declining dollar is real, that the lack of
pensions are real, that record number of personal bankruptcies are
occurring each year..
So why does the reporting and commenting
go back and forth so much?
Because they have to say something and
to try and say something positive. They sit and wait on this
and that report and then are supposed to make some comment based on
these snapshots. If they were simply to continue to focus on
the big picture, as we at The Moderate Independent do, they would
have nothing new or interesting - or very positive - to say.
How many times can you write, "You can't
keep running up the nation's credit cards like this?" How many
times can you point out that the tax cuts were not targeted in any
way toward job creation - they simply handed money to wealthy people
without any incentives linked to increased hiring or any other
mechanism of job creation.
Sometimes the monthly reports are better
than others, but they mean nothing. As our Ben F. Terton
explained a while ago, the "growth" that has been seen is like the
whirling rush of water into a toilet bowl before all the water is
flushed and gone forever.
Lots of money was handed directly to
companies, and so their profits increased. That would be nice
except for one catch: it was money we didn't have to give.
The cheerful reporting of the sudden increase of cash among
companies is the eqivalent of going out and buying a new truck and 42-inch TV
on your credit card and then coming home and saying, "See how well
we are doing, honey, we have all sorts of nice new stuff."
The reality in that case would be that,
no, things around the household haven't improved, just someone in
the household made a stupid decision to run up all sorts of debt
that has to be paid down at some point.
We hear talk now about
foreign investors getting leery of floating our endless bonds.
And we hear about the inverted yield curve - the surest sign of a
coming recession, when short-term interest rates are, unlike normal,
higher than long-term interest rates.
You have to take this all a step
further, though, because this is just the government aspect of
things. Though the press likes to report useless, skewed month
to month "unemployment" numbers, the reality is that these numbers
only include people still receiving unemployment compensation
benefits. Those who have exhausted all of their benefits and
are still unable to find work are called, "long-term unemployed."
The number of people in this group tells the real story of
unemployment, of people permanently put in the worst of financial
situations.
And as reality has it, the last two
years has seen
record numbers of long-term unemployed.
On top of that, the trend that started
during the Clinton years of record personal bankruptcies continues.
And the
trade
deficit continues to set new records.
So on the one hand you have a government
completely broke, setting deficit borrowing records every
year. And on the other, you have the American people
completely overspent, credit cards run to the max and many stuck
long-term without any employment.
And then you have a Baby Boomer group
that will be retiring many without pensions, only with
dot-com-crash-battered 401K's to depend on.
Lady's and gentlemen, the math doesn't
add up.
The only thing the Bush/Limbaughians
have to try and keep things from seeming the disaster they are is
their complete domination of the media - of course, as we've
explained, this is why they've set up 24 hour-a-day propaganda on
all media, to convince the people that things that are horrible for
them are actually just fine.
You can look at this report or that
number, but the "conundrum" Alan Greenspan keeps coming back to is
simple: How can he continue to try to say anything positive
when the obvious, big-picture context of the economy is horrible and
only being exacerbated by current policies?
And so you see poor Alan looking like a
deranged monkey on acid, saying we have a recovery, things look
good, and then, just a few days later, we have a real problem, the
deficits and inverted yield curve cannot be ignored.
The question Americans should be asking
is, "Why would you try and ignore the deficits in the first place?"
And no, this is not a Republican only
issue. The Democrats have helped propagate the lie of a
"recovery." (see:
Economy - Does Anyone Remember Something Called The Deficit?)
The simple reality is that the economy
is a plane flying on empty with no gas reserves left with which to
refuel.
It's not nice to report, it is not a
story that changes from day to so you can run new stories to keep
your paper or TV station full, but it is the reality.
Only a drastic change in policies can
give hope of salvaging things. Unfortunately, with talk of
moving toward a "sales tax," something that would be among the
stupidest and most disastrous things that could be done to the
nation, it seems only things will get worse.
The question then comes to why:
Why would the Bush administration be doing such a thing?
Read this article we ran a while back -
The Bush Administration's Actions Directly Parallel A Hostile
Corporate Takeover - and you will see that it all fits with
how they have operated their whole lives. Anyone care to talk
about what became of the companies George W. Bush ran in the past?
Anyone hear of companies like Enron and Worldcom?
It is time to acknowledge and realize,
that there are people who do horrible things to millions of people
purely out of selfish greed. And it is time to realize that
all of us are being played by both Republicans and Democrats and the
entire media.
If this last statement bothers you and
you feel you are on the right side of things, tell me how much
personal debt you have? Tell me how many stocks you have
invested in without researching the management and fiscal plan?
Tell me how many of you allowed financial planners to tell you
absurd things like, "You should be 60% in the stock market, 40% in
more conservative things," tricking you into giving thousands to
CEO's without doing proper research into what they will do with that
money? Maybe they just took all your cash and gave it to
themselves as bonuses - would you even be aware?
Our nation has not reached this point
because of the Bush administration. The seeds of this go well
back into the Clinton days, and it has nothing to do with the
policies of our government.
The reason we are in the economic
situation we are in starts with you and the way you have been
played.
And only The Moderate Independent will
help straighten you out and get yourself - and our nation - back on
course, rather than playing the silly, "It's the Republicans; no
it's the liberals," game they have been using to keep all of us from
clearly seeing what is really occurring.
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