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Saturday, August 31, 2013

 "Willful Blindness"

I don't like charts: I seldom put a chart in a newsletter because the charts don't tell you how numbers are arrived at. How the numbers are arrived at is much more important than what the charts reflect. Charts are a snap shot reflecting a moment in time and not much more. Also, the underlying numbers are easily manipulated to fit the purpose of the presenter, such as polls in political campaigns.  IF the presenter is consistent in how they garner their numbers then charts, over time, can indicate the direction something is moving. Given consistently over time, a trend can be seen. It is at this point that people begin to take notice like-in, "OH, honey the house burned down. OH, we have too much debt. etc."   

The core of our economy is supply and demand. If a business makes something that people don't demand the business suffers. The net result is the business cuts back on its production and needs less people to work for them. This formula works In the other direction and when it does more people get hired. This is eight grade ECON 101.

There is an ebb and flow. Too much of something is being produced or under produced. Business is not a hard science. These swings are normal and are needed. It is these swings that allows the markets to constantly correct itself. The down side is the pain associated with downturns and the joy on the upswing.  People get hired or people get fired. 

About one hundred years ago government decided these self-correcting swings in the economy were not a good thing. With good intentions (government intentions are always good) the government began to intervene by creating a Federal Bank and defining its mission: Section 2A of the Federal Reserve Act calls on the Fed to maintain growth of money and credit consistent — and I quote — “with the economy’s long-run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”

 Does anyone really understand what that gibberish means? Certainly the idea sounds good.

One major disaster, that only a few people are left that lived through it, was the crash of 1929. Followed by FDR and his administration's ten year effort to manage the economy through various financial bank manipulation and social programs. (Think Social Security, WPA, etc.) It seems to me this is what the President, government, and the FED has been doing these last five years in new forceful ways. 

The good part, in how it once to worked, was the up swings in the economy allowed for growth and the development of America's middle class. The down turns were painful. Strangely enough the more painful the downturn the quicker the upswings happened.

Let's look at what government interventions has accomplished in the last five years with their QE1 - QE2 - QE3.

Snapshot 2007 vs. 2013


YEAR
Total Employed
Full-Time
Part-Time
2007
146,958,000
123,554,000
23,404,000
2013
144,841,000
118,470,000
26,371,000
Difference
-2,117,000
-5,084,000
+2,967,000

 What part of these numbers can't the people in the news media understand? The President and the media say jobs are growing and the economy is getting better every day.

Here is another wake up call that requires some really long term consideration….:

The average birth rate of children born to a woman during her lifetime has fallen by nearly half since 1950. From 4.9 to 2.5. Even so, if birth rates remain steady, the world's population will increase to 11 billion by 2050.  That is the equivalent to adding three China's to the planet.

Birth rates vary from a low of 0.78 in Singapore to a high off 7.16 in Niger. More than half of the world's countries have a birth rate greater than 2.1.

The majority of countries with high birth rates are underdeveloped. As a result, the proportion of people living in slums is expected to grow from 1 in 8 to 1 in 3 by 2050. A good part of that slum grow will be here.

More than one billion people are chronically hungry. To meet the increased demand for food expected by mid-century, the world's farmers will have to double production but is there enough potential farm land in the world left to do this?

 A good part of the chronically hungry might well be here. In many cities in our country white families aren't producing enough children to replace themselves while black, Hispanic, and Muslim communities are doubling in size.

 There are so many problems at our national and local levels of government it seems we are in a cauldron of bubbling bad month old stew. Some new problem rises to the top with each new burst of bubbles. Feeding the liberal media's screaming headlines with one salacious story of who said or did what while always bending truth and protecting inept politicians. The darlings of the political class. Their lying through omission and their sound bites guide and direct the thoughts and alters values of the majority voters. When the voters begin to become too aware of the political corruption the drums start beating and then the talk of war begins. 

This liberal group, who are still referred to as the 'free press', has become the drumbeat of the elite ruling class whose role is to decide what is good for the fragmented American citizens. They are the leaders, the shakers, and the directors of this degenerating once known as the American dream. The shell is still in place but the heart and dreams for most are loosely remembered.

 The children and grandchildren of the Weathermen are still with us. Still dedicated to the destruction of the 'one nation'. Many dress in conservative beliefs and values. Shouting warnings out of small pulpits to brain numbed neighbors whose middle class living standard is fading into the sunset while accepting the idea they are bad and racist. Accepting the imposed obligations to support, from birth to death, millions of people who will not take any responsibility for their lives or the lives of their children. This group is made up of white, red, black, and yellow Christians, Jews, Muslims, and nonbelievers alike.  This underclass is bound together by cancerous social government programs which eats away their dignity, hope, and destroys their communities.
 Like Dante's Inferno each generation demands more and more is given until they believe that their place in life and their mission is to become more reliant and dependent.  Never connecting that across town someone is working, for the support of their family, and the fruits of their labor is taken by government and handed over to them. Government is their friend and the complaining 'someone's' are bad racist people who don’t want to support them any longer.

 The elite governing group is insulated from the noise and struggle through laws, positions, and protected neighborhoods. Not connected to the 'working someone' or the welfare folks. Their lives are just the way it should be. If government wants more tax money from them they simply raise the cost of their goods and services they get from the working 'someone.' They raise their children and prepare them to become part of this elite group with its beliefs and values. All the while the social welfare group does the same with their children. Both sets of children are prepared for their place in life and the role they are to play within their communities.

 Our well-intended government with its well-intended welfare programs has created a dependent class within the American citizens. This river is wide and grows wider with each new generation. Not only destroying their lives but the cities they live in, the wake of their drive for a socialist form of American democracy. 

 Pay the piper:

 There are four cities in California in the Bankrupt Court. Detroit just went into the bankrupt Court. This doesn't seem like many but here is a list of other cities, many major cities that are on shaky footing along with cities and states.


 Now this is just the upfront quick list…. Also, these are cities where we would expect would elect leaders with leadership skills and knowledge but many mistakes by many different official were made, overtime, so the finger can't be pointed to one person or any group of the elected.
 There is a temptation to want to think these are limited problems in limited cities and states. They are not. The talk is there are sixty cities that have in big financial problems.   In another one or two years more will be added to that list because  in so many cities and states the pension fund problems are in danger and there doesn't seem to be any way to correct the short falls in funding.
 Under funding is one part of the problem and the other part of the problem is that no elected politician is willing to accept reality and take on the task of addressing the ever growing social issues.
People who can are leaving these cities. The flight from blighted areas appears to be accelerating — in the past decade alone, Detroit's population has fallen by 26%. A city of two million now stands at 700,000 with about half being Muslims.

Remaining residents in districts such as Brightmoor, northwest of the center, are besieged by vandalism and crime. Streets have been turned into ad hoc dumps for car tires and abandoned boats. One spray-painted sign reads simply: "Dumpers will be shot."

 Even the dumped stuff get stolen. Factories and homes have largely been stripped of anything of value, so thieves now target cars' catalytic converters. Illiteracy runs at 47%; half the adults in some areas are unemployed. In many neighborhood's, the only sign of activity is a slow trudge to the liquor store.
 In 1950, Detroit was 82% white. The "white flight" after the 1967 race riots flipped the ratio — it's now 82% black. When the 2008 financial crisis reduced the cost of living in the suburbs, many of the black population moved out of the center also.

 Harry Truman said the 'buck stops' at my desk…. This time it different because the 'buck stops' on our dinner tables.  We the people voted these men into office. We didn't watch what they were doing. We let them decide what was good and right for us. We were busy managing our lives and believed the elected would do the right thing and watch our backs. The level of naivete is our society is astounding… God help us….

Citizenship is a broad term and easily misunderstood and easy to hide from. Until we stop blaming the people we elect for doing the things elected people do in order to protect their position and power we will continue this race towards financial disaster. We can run from our responsibility but we can't hide. We are the ones who will pay and repay all of the debt. Not the elected and not the people on the social programs. 
 I want to end this newsletter with a simple chart published by the government every month which few have seen and fewer have read. Let us now take a minute and look at this employment report. This reports tells us how many people are working or/and people not working. Usually U-1 seems important enough for the national media to report and that is about 'new jobs.' BUT let us check out the other "U's" in the report…. This report compares some of 2012 to 2013 and looks at month over month.

 U-6 is the one I always look at first. For me this is the important number. Even here in the U-6 numbers the dropouts, graduates from high school and college do not get counted. Read each one.
 

China and Japan sold a combined $40 billion of US debt last month, (various bonds) but that's a drop in the bucket. China and Japan hold $1.27 trillion and $1.08 trillion of US debt respectively and the more they sell will lead to even more bond losses for us. Given this info you now know who your grandchildren are indebted to. So we must be very nice to the governments of China and Japan.

 When things aren't going well for government on the home front there is nothing like a 'little' war somewhere to distract the public. Remember the last government group that used "weapons of mass destruction' as a reason to go into Iraq? Those drums are beating again.  . Perpetual wars keep the populist distracted from government failures.  Syria has become Obama's way out.   
The following is a short talk from Louisiana's State Senator - Guillroy. We can only hope he is successful. Certainly he is hitting the nail on the head. With that said, a black Senator in Louisiana running as a Republican for the federal senate seat is in for a world of hurt.


(Heavenly Father, we come before you today to ask your forgiveness and to seek your direction and guidance. We know Your Word says, 'Woe to those who call evil good,' but that is exactly what we have done. We have lost our spiritual equilibrium and reversed our values. We have exploited the poor and called it the lottery. We have rewarded laziness and called it welfare. We have killed our unborn and called it choice. We have shot abortionists and called it justifiable. We have neglected to discipline our children and called it building self-esteem. We have abused power and called it politics. We have coveted our neighbor's possessions and called it ambition. We have polluted the air with profanity and pornography and called it freedom of expression. We have ridiculed the time-honored values of our forefathers and called it enlightenment. Search us, Oh God, and know our hearts today; cleanse us from sin and set us free. Amen!'  - Billy Graham)

441 days - 18 hours - 24 minutes till the 2014 voting starts… So little time….


Ron

 docnick37@gmail.com


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