President Obama, Fed Chair Bernanke, and Treasury Secretary Tim Geithner have set up a Kool Aid stand. They want you to buy the Kool Aid and drink some. Millions of Americans have.
Here are the symptoms of someone who has swilled the Kool Aid. They proclaim that the "Great Recession is over." They have bought into the short term or micro view of an artificially stimulated TARP economy. They adamantly counter attack anyone who holds an opinion that you cannot continue to inflate and stimulate an economy, or avoid a collapse, by spending money you don't have. In fact it is going to make the coming depression far worse. What happens when the interest rates rise on all that US debt when we eventually come out of the great recession? Servicing that interest in an inflationary environment will be an incredible drag on our economy. Oil is going to get ugly, fast. We are just getting a short term reprieve.
It is an illusion. What is not an illusion is that gold is hitting all time highs again at 1135.00 an oz.
Another illusion was created when manufactured GDP numbers included a mad dash for free money in "Cash for Clunkers" and the same mad dash for the "free" 8000 dollar tax credit for first home buyers that expired (and was extended!) at the end of the quarter.
Continuing job losses are illusory in that they are woefully understated. Add something nobody is talking about. A humongous labor pool where new job offers come with the lowest salaries I have witnessed in 30 years. Yours truly was offered a job for 8.25 an hour at a non profit. Slim health coverage in 180 days. Managing 20 employees making 7 and change. I turned it down because I can. I made that kind of money 30 years ago.
You cannot dismantle an entire health care industry, without scaring the shit out of employers and corporate taxpayers. They simply cannot or won't add jobs until they see just what kind of ugly tax bill comes due, and just who is going to pay for ObamaCare. It is an employer buffet.
One of the few straight shooters we have left is Peter Schiff. I trust him. He called the banking collapse and he is calling this the way he sees it. He is a libertarian. His views are in the link below. Don't drink the Kool Aid. Schiff hates Kool Aid. Me, too.
I pasted this blurb from Schiff's article which bears repeating. It is this type of illusory massaging of our numbers that is so misleading.
An article in this week's New York Times by veteran writer Louis Uchitelle confirmed a fact that I have been alleging for years. Uchitelle pointed out that foreign outsourcing of component manufacturing has led to consistent overstatement of U.S. GDP and productivity. The connection goes a long way to explain why we keep losing jobs even as GDP is apparently expanding.
Uchitelle's article is excellent. http://www.nytimes.com/2009/11/09/business/economy/09econ.html?_r=1