The Fundamentals Look Really Bad, But Maybe They’re the Wrong Fundamentals
Is there nothing but economic gloom and doom ahead? Stacy McCain has given the Economic 8-Ball a good shake and it’s coming up “Signs Say Yes” .
Such gloomy evidence hardly testifies to the “transformative” power that Joe Biden attributed to the stimulus. But there can be no doubt the administration has succeeded in “changing the conversation.” With so many troubling omens, some analysts are now predicting a “W-shaped” recovery — a so-called “double-dip” recession with another significant downturn before the economy bottoms out and begins a genuine recovery.
Those who put little faith in Biden’s economic acumen are watching for the second dip of that “W,” perhaps as painful as last fall’s collapse that led Democrats to enact the $787 billion stimulus. However severe the financial damage of another downturn, one certain effect can be easily predicted — the final bankruptcy of Obama’s economic credibility.
I’m not entirely sure the other half of that “W” is coming. I think we’re still on the downward leg of the more traditional “V”-shaped recession. We haven’t hit bottom yet, mostly because small businesses and investors have been scared out of the economy. Not only are the people who could restart our economy worried by the lunatic amounts of debt the majority has piled up in nine months but they’re also starting down the twin barrels of Obamacare and “cap and trade”. Either one of those could bankrupt a number of small businesses and together, they send the very clear message that entrepreneurship is no longer welcome here.
Not until the next election, at least.
However, when capital does start returning to our economy, I think it will find that middle America (the part not usually covered in all the big financial news) is in pretty good shape. The average American didn’t get gulled by subprime mortgages and wasn’t scammed by the confidence schemes of crooks like Bernie Madoff. They smelled the economic change in the air and mostly battened down their hatches before the storm struck. Most local and regional banks are in pretty good shape, and resisted the siren song of easy government money warbled by Barney Frank and Chris Dodd. There is some fertile ground in American for a recovery, but it won’t happen until Washington gets the heck out of the way.
Other Posts of Interest:
- Democrats Think You Are Stupid
- You Want Economic Recovery? Look at Our Corporate Tax Rate.
- Four Years of No Entrepreneurship?
Category: The Economy and Your Money
Jimmie, thank you so much for a short, but more balanced look at our present economic situation. Far too many journalists and bloggers–who are not, by the way, economists or financial experts–still follow the "if-it-bleeds-it-leads" philosophy and are terrifying people with their various forecasts. Forecasts, by their very nature, are subject to both assumptions and subsequent uncertainties, assumptions and uncertainties which one can only guess at, not predict with total assurance.
People cannot psychologically and/or physically remain in a state of constant fear. Eventually, they simply become overwhelmed and numb. This is what angers me the most about the "gloom-and-doom" crowd. Instead of inspiring people to continually fight for the future best interest of this country, its citizens, and ourselves, they have the opposite effect–people read dire prediction after dire prediction, eventually reach the conclusion there's nothing they can do, and just give up. I am watching this happen with my own friends and neighbors and find myself constantly needing to encourage them to continue writing letters, continue calling, continue protesting, continue the pressure on our "representatives" to let them know that what "we the people" want is not anything close to what the looney liberals want for us.
Has this administration and Congress put our nation in a heck of a financial mess? Without a doubt. Can we get ourselves out of it? Yes, with a lot of hard work, a lot of sacrifice (and I'm talking about sacrifice by the people that have been on our nation's gravy train for far too long), and a continued and concerted effort to get these economic and ethnological idiots out of office.
Again, thank you for trying to be a rational voice in irrational times. People are already scared. Instead of unintentionally depressing us into fatalistic inaction, I wish more people would simply report the problems, tell us about possible solutions, then encourage us to pursue these solutions or find some of our own. The media needs to spend less time telling us the sky is falling and spend more time inspiring us to hold it up.
>>Instead of unintentionally depressing us into fatalistic inaction, I wish more people would simply report the problems, tell us about possible solutions,>>
Well…I'm one of the doom and gloomers. I've been following several economic/financial blogs, and they all say we're in trouble – long term – and use Japan as a model.
One thing I haven't seen mentioned, but one which concerns me is the tax and regulation inclination of the government. Do you really expect people to be optimistic in hiring people when they see the Feds grabbing as much control of everything as they can? States are in trouble and are talking weird ways of raising taxes, the Feds want to raise taxes, the environmentalists are out there looking for ways to penalize people so they can fine them – you have Cass Sunstein who thinks animals should be able to sue owners – you have a Congress who has no intention or inclination to control the trial lawyers…. I could go on. None of these things have _anything_ to do with the laws that have been broken in the finance markets – and which the Feds are doing _nothing_ about – but they all are the same issues that make socialist countries and banana republics unfriendly to profitable business. If you can change the rules at will, and if corruption government officials can parcel out money to people they favor while grabbing it from those they don't – well, the "equal justice under the law" is a farce, and we'll all be trying to hang on to what we have while keeping our heads down and hoping nobody notices us.
The only good news is that it leads me to believe that we'll soon be an all cash economy – too much information from paper trails will lead back to the government. Cash doesn't leave a trail.
Suek, considering the sentence of my comment you chose to quote in your own, you appear to be espousing fatalistic inaction, a behavior which is utterly counterintuitive and completely counterproductive in response to the problems at hand in our nation. If our Founding Fathers had chosen fatalistic inaction ("Oh, there's just no way we can beat the British Empire–guess we'll just have to pay those taxes. Sigh. . ."), we would all be singing "God Save the Queen" and begging the NHS to take out our tonsils and save premature babies.
You want to use Japan as a model for our current economic crisis? In what sense? The fact that we're both free markets, even though Japan is more tightly regulated thru long-standing societal controls? Their problems caused by inflated values on real estate collateral versus the U.S. subprime mortgages given to borrowers that should have never received loans? That we happen to be located on the same planet? Though the comparisons with Japan aren't completely apples and oranges, the fact remains that even though the Japanese economy has been hobbled in the past decade, it and the country itself has still been viable and is now making a comeback after some hard sacrifices–something I said our nation would be required to make in my original comment.
As for our nation returning to an all-cash economy–um, no, I doubt it. People are lazy and they have become all too accustomed to the ease of pulling out the plastic. But for argument's sake, let's say you're correct. Before the advent of credit cards and other "paper trails," as you put it, the government had many other ways of monitoring us and our money. If you truly believe that our economic future is signed, sealed, and delivered and nothing we can do–including kick these idiots out of office and try to reverse the damage as much as possible–will help, I must assume you have already begun taking yourself off-the-grid. Are you stocking up on gold? Have you closed all your credit card and bank accounts? If you're employed, is your boss paying you off the books? Have you stopped paying income taxes? Have you stopped renewing your driver's license and car tags? And obviously, you're going to close down all email accounts, take yourself completely offline by cancelling your ISP, and turn off all your phones.
Look, all I did was compliment Jimmie on a fair and balanced post. I, and thankfully many others, are choosing to fight this administration and their disastrous decisions tooth-and-nail because we think this country is worth it and we refuse to let them destroy it without a fight. If you want to sit and marinate in gloom-and-doom all day long, that's your choice. It is still a free country, despite all efforts to the contrary. But you're not doing anyone any favors–especially yourself. Being a victim is no way to live.