Monday, November 2, 2009

The Economic Recovery Fantasy


By Alan Caruba

I freely confess that I regard it as a triumph if I can balance my checkbook. My Father was a Certified Public Accountant and surely despaired of his second son (the first became a CPA!) who had no head for numbers.

Like most Americans, though, I find it laughable, if not outright mockery, when the White House and the lapdog media tell me that the nation is now recovering from the recession. The media, as just one example, is bleeding thousands of jobs that are not likely to ever return.

What I do know is that, as of November 1st, 115 banks have failed this year. They represented combined assets of $19.5 billion at the end of September. Most have been gobbled up by larger banks. In 1989, at the height of the savings and loan crisis, the FDIC closed 534 banks or about ten a week.

Rep. Ron Paul, a Republican congressman from Texas, flatly says, “A false recovery is under way. I am reminded of the outlook in 1930 when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones Industrial average did not recover to 1929 levels until 1954.”

It took ten years and a World War for America to dig out of the Great Depression.

The President’s economic team, Christina Romer, Peter Orszag, Larry Summers, Timothy Geithner, and Jared Bernstein scare the heck out of me.

I would much rather have Ben Stein running Treasury and Larry Kudlow overseeing the national economy.

The waste of billions of taxpayer dollars in the bilious “stimulus” bill was the ultimate wet dream of legislators, the opportunity to tap the treasury for every “pork” project they had been promising the voters.

Far worse, however, is the healthcare “reform”, if passed. As reported recently in the Weekly Standard, Medicare fraud now costs Americans an estimated $60 billion a year. Compare that with the annual $8 billion in profits of all the private insurance companies combined!

The Pelosi-Reid bill is Medicare on steroids, but the yet unanswered question is this: If Congress can require you to buy insurance even if you don’t want to, what else can you be compelled to do?

Christiana Romer recently testified before Congress that the stimulus bill has accomplished little at this point. The abortive “Cash for Clunkers” program has been calculated to have actually cost the government six times the rebate whose effect lasted all of a month.

Meanwhile, when its treasury notes are not bought by foreign investors, the nation buys its own debt, a scheme that is impossible to maintain. I do not loan money to myself. I either save it or spend it.

Congress should be reducing taxes—the U.S. tax rate on corporations is among the highest in the world—and taking steps to relieve the tax burden on small businesses which are the heart of employment and the economy in general.

Congress is also getting ready to raise the cost of energy for every American family and enterprise with the hideous “cap-and-trade” bill.

Energy in America has long been one of the most affordable elements of the economy, but the Obama administration is throwing billions at the least productive elements called “clean energy”, solar and wind, while declaring war on coal that provides just over half of all the electricity we use every day.

The figures cited for unemployment are a bad joke. Officially set at 9.5 percent, it is actually likely to be closer to 14 percent, about the same amount as during the Great Depression of the 1930s.

Everyone is aware that the economy is not recovering. It is reflected in reduced inventories. It is reflected in continued layoffs. It is reflected in retail advertisements offering two-for-one deals. It is reflected in less consumer spending. On Halloween, my local mall already had a big Christmas tree on display.

I find it insulting that the government is eager to give money to people defaulting on their mortgages because they couldn’t afford them when the government was pressuring mortgage lenders to make them.

I find it insulting to be told about jobs “created or saved” by the White House when this is a pure fantasy. Only private enterprise creates real jobs. Government jobs add nothing to the economy except another layer of bureaucracy. What America needs is productivity.

I find it insulting to be told that the recession is over when it is just taking a breather before the mounting debt from White House initiatives overwhelms us all, rising unemployment continues, and senseless legislation is still in the pipeline.

None of this is good news, but it is, at least, the real news.

5 comments:

Buzzg said...

I agree Alan, we are being given 'bread and circuses'. It is not difficult to determine that the citizens of this great nation are being led down the flowerless garden path.
What to do about it? I've no idea.
There are far too many people in this still great nation who are standing around with their hands out waiting for the next dole from "Big Brother".
When we get down to brass tacks, the citizens are to blame. They have to look in the mirror and decide if they would rather be citizens or subjects.
Yes, you are spreading the real news.
I love my country, fear my government, and despise those who have nothing more to contribute than the constant whine; "Why doesn't the Government DO something?"
Meanwhile I buy ammo and long term storage food and build fences and gates on my 5 acres in Oregon.
I have a large supply of wild turkeys and deer which I consider emergency rations.
You are welcome anytime.

Semper Vertias

Alan Caruba said...

Buzzg, I may have to take you up on the invitation some day, but as of tomorrow, if NJ and VA go to the GOP, a whole bunch of Dems from red states are going to recalculate their loyalty to the idiot in the White House.

Saildog said...

For once Alan, I find myself in furious agreement with you. "The recovery" is/was a mirage concocted by Wall Street (Goldman Sachs actually) and their lapdogs/GS alumni in the White House.

The US is bust. Its people, its corporations and its government all so hopelessly indebted, the only discussion seems to be whether inflation or deflation will fix it. Meanwhile the bankers are getting a bumper crop of bonuses. I wonder if the people will turn on them?

By the way, I am an Australian equivalent of a CPA (Chartered Accountant). Balancing the cheque book has been a life long challenge for me too.

Guy said...

Alan, your post today reflects my thoughts exactly, which have been swirling around in my head since the day they announced this "recovery". I think the most important point you make is at the end ... "Only private enterprise creates real jobs. Government jobs add nothing to the economy except another layer of bureaucracy...."

I really wish that all these new government jobs ONLY added nothing to the economy, but the reality of the situation is that it's much worse than that. In reality, these new "jobs" are a huge drain on the economy. It continues to amaze me how few people seem to understand that a government job is no job at all, except for the person who is lucky enough to be getting the check. The government doesn't create, manufacture, build, design, innovate, or produce ANYTHING. All they do is TAKE from one person, and give it to someone else, wasting (or stealing) a large portion of the money on bureaucracy in the process. Put that same money into an innovative, productive PRIVATE company, and REAL jobs will be created, which will FEED the economy, not suffocate it.

Getting excited about new "government jobs" is simply ludicrous. Every new government job created represents REAL JOBS LOST. Each and every government job they add requires SEVERAL OTHER PEOPLE to work that much harder just to pay for it. All of these "jobs" they have created are in fact just stones around our collective necks.

When I hear them talking about how much money their Health Care plan is going to "save" us I have to laugh. Just exactly how is creating thousands of non-productive, taxpayer funded jobs going to SAVE us any money? If it wasn't so terrifying and insulting, it would be comical.

We have already reached the point where over 50% of the people in this country work for the government at some level, either State, City, County, or Federal. It doesn't take a rocket scientist to realize that at some point, the house of cards must fall. You'd think that those in government would realize this and stop the madness before that happens, but it's beginning to look like that's what they have in mind. I just don't understand why. Perhaps they have a sinister plan, perhaps they're too stupid to realize what they are doing, or perhaps they are just so hell-bent on attaining power that they just don't care. Whatever the reason is, they are destroying our economy with false jobs, false promises, and false hope.

One thing's for sure ... it is indeed insulting, and I am getting a little sick of being insulted by the people who are sworn to represent me. It's election day ... let the house cleaning begin!!!

Guy said...

Alan, your post today reflects my thoughts exactly, which have been swirling around in my head since the day they announced this "recovery". I think the most important point you make is at the end ... "Only private enterprise creates real jobs. Government jobs add nothing to the economy except another layer of bureaucracy...."

I really wish that all these new government jobs ONLY added nothing to the economy, but the reality of the situation is that it's much worse than that. In reality, these new "jobs" are a huge drain on the economy. It continues to amaze me how few people seem to understand that a government job is no job at all, except for the person who is lucky enough to be getting the check. The government doesn't create, manufacture, build, design, innovate, or produce ANYTHING. All they do is TAKE from one person, and give it to someone else, wasting (or stealing) a large portion of the money on bureaucracy in the process. Put that same money into an innovative, productive PRIVATE company, and REAL jobs will be created, which will FEED the economy, not suffocate it.

Getting excited about new "government jobs" is simply ludicrous. Every new government job created represents REAL JOBS LOST. Each and every government job they add requires SEVERAL OTHER PEOPLE to work that much harder just to pay for it. All of these "jobs" they have created are in fact just stones around our collective necks.

When I hear them talking about how much money their Health Care plan is going to "save" us I have to laugh. Just exactly how is creating thousands of non-productive, taxpayer funded jobs going to SAVE us any money? If it wasn't so terrifying and insulting, it would be comical.

We have already reached the point where over 50% of the people in this country work for the government at some level, either State, City, County, or Federal. It doesn't take a rocket scientist to realize that at some point, the house of cards must fall. You'd think that those in government would realize this and stop the madness before that happens, but it's beginning to look like that's what they have in mind. I just don't understand why. Perhaps they have a sinister plan, perhaps they're too stupid to realize what they are doing, or perhaps they are just so hell-bent on attaining power that they just don't care. Whatever the reason is, they are destroying our economy with false jobs, false promises, and false hope.

One thing's for sure ... it is indeed insulting, and I am getting a little sick of being insulted by the people who are sworn to represent me. It's election day ... let the house cleaning begin!!!