Do they even want a recovery?

The four reasons we're facing a jobless recovery, outlined the other day by Martin Hutchinson of Money Morning, are on target in my opinion. Here's the link. Developing his analysis further, I think what's really going on is this... ** When they “put America to work” with government jobs, they are paying them by extracting wealth from the more productive private sector and diverting it to a quarter of a million morons raking leaves in National Parks (basically an assumption of and the redirecting of State welfare payments, no more or less).

** Or the money is borrowed, which will “crowd out” private investment.

** The trouble is, once the spending peters out, the economy starts going south. (government jobs have no multiplier effect). Then they will say “we need another stimulus”! But by that time, they will have to pay 11% to sell treasuries.

** And as this interest rate works its way through the economy, the economic contraction accelerates as does inflation! They will get into a vicious spiral downward.

** Another aspect: should there be even a hint of a recovery, taxes will be slapped on, The present administration is salivating to raise taxes to finance more government programs and bureaucracy, which is paving the way to turning the US into an Argentina, complete with capital flight to Asia.

** The real way out is to give tax breaks and subsidies to entrepreneurs to start businesses and decrease the size of government. This generates demand for goods and services and employment, which is self-sustaining, actually increasing the size of the economy. But that would be “giving tax breaks to the rich”, something the Marxist-Socialist-Progressives CANNOT DO IDEOLOGICALLY! They would rather send every welfare-freeloader a couple of hundred bucks to piss away at the liquor store, and think that will revive the economy!

** Therefore, the country’s economy will NEVER recover until the Marxist-Socialist-Progressive Obamaites are removed. But judging from the ACORN voting irregularities and the coming census and gerrymandering that’s coming, they may NEVER be removed. This could very well be the end of the prosperous and free America we have known over our lifetimes.

Presidential hectoring hurts economy

When Richard Nixon was in the process of damaging the American economy back in 1971 via wage and price controls, closing the gold window, etc., he used aggressive rhetoric to support his actions. I remember specifically his demonizing of financial "speculators". He virtually spat the word: Speculators! The epitome of evil, right? This week Obama was doing much the same thing to hedge fund managers and others, bullying them, calling for them to sacrifice, implying that they are unpatriotic, giving them the full load of overbearing denunciation. As if he had any clue what he was talking about.

Well, it turned out that the "speculators" were right and Nixon was wrong. And today, for the most part, the financial managers are right and Obama is wrong. When it comes to the economy, regardless of political party, the rule is: The politicians are always wrong. Regarding the economy, government has a reverse Midas touch: everything it touches turns to c**p. In recent years Congress touched the housing market via subprime loans, and we are now living with the result. Now the government is aggressively touching the financial markets in general, and the auto industry in particular. The results are predictable.

Republican leaders today, including the establishment wing of leaders on their "listening tour", tell us that the GOP must offer an affirmative alternative to Obama's massive taxing, spending and borrowing policies. They can't combat something with nothing, they say.

Wrong, wrong, wrong. The correct approach is to educate the voters to the truth, rather than to compete with Democrats in pandering to their ignorance. The truth is that the free market, if allowed to operate, will ruthlessly correct the financial imbalances more quickly and more thoroughly than any government programs will. Government interference will just prolong the disease and the pain, and will mess up the economy for years. That's what FDR did in the 1930's, and that's what Obama is doing now.

Government has a legitimate role in enforcing contracts and in prosecuting fraud, insider trading, and other criminal activity, and in enabling a level playing field. But politicians have no ability to manage anything at all. When government attempts to override the market and to manage the economy on a large scale, the resulting economic system is called fascism. I recommend reading all about this in Jonah Goldberg's recent book, "Liberal Fascism".

Here are two informative rebuttals to Obama's hectoring of financial managers and his damaging actions in the financial markets. There's this one by Bill Frezza at Real Clear Markets. And this one by Cliff Asness at Business Insider.

If economics bores you or you think you can't understand it, please give these two articles a shot. The authors make the issues quite clear.