Seeing Through the Fog of Funny Money Policymaking

OK, let's go through this one more time. Despite what we keep hearing from the politicians and moneymen, things are not getting better. Yes, we have seen the economic equivalent of a dead cat bounce -- how could we not, given the trillions that have been thrown at the system -- but it is simply not sustainable.

The reality is that we've just careened through decades of overborrowing and malinvestment, which created an array of dangerous imbalances and undermined our nation's economic foundations. Now that the party is over, the wreckage is going to weigh on our prospects for years, if not decades.

Unfortunately, those who live in a bubble (i.e., Washington) or who've come to depend on them (e.g., Wall Street) have not seen through the fog of funny money policymaking. But as Bloomberg reports in "Americans Grow More Pessimistic on Economy, Nation’s Direction," the average Joe (and Jane) seem to have their eyes wide open when it comes to today's depressing reality.

 
Americans have grown gloomier about both the economy and the nation’s direction over the past three months even as the U.S. shows signs of moving from recession to recovery.

Almost half the people now feel less financially secure than when President Barack Obama took office in January, a Bloomberg National Poll shows.

Those concerns have put consumers in a miserly mood as they head to the mall for holiday shopping, with half the country planning to spend less on gifts than last year and few buyers willing to run up credit-card debt for Christmas.

“The recession may be over, but the administration seems to be losing the battle when it comes to winning the hearts and minds of Americans,” says Chris Rupkey, chief financial economist for Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “This is important because the spending of consumers is the main factor that will turn the economic recovery into a self- sustaining one.”

Obama yesterday addressed anxiety over the economy with a speech proposing new spending on the nation’s transportation system, tax credits to spur hiring by small businesses and incentives to make homes more energy efficient.

Unemployment in November stood at 10 percent, a drop from 10.2 percent in October yet still the second month in a row the figure stood in double digits.

No. 1 Concern

The economy is the country’s top concern, with persistently high unemployment the greatest threat the public sees. Eight of 10 Americans rate joblessness a high risk to the economy in the next two years, outranking the federal budget deficit, which is cited by 7 of 10. An increase in taxes is named as a high risk by almost 6 of 10.

Fewer than 1 in 3 Americans think the economy will improve in the next six months. They are pessimistic that the government will succeed in reducing unemployment or lowering the budget deficit.

A year into Obama’s presidency, only 32 percent of poll respondents believe the country is headed in the right direction, down from 40 percent who said so in September.

The mood among members of Obama’s own Democratic Party has shifted most dramatically: While Democrats remain the most positive, the proportion saying the country is on the right track dropped to 58 percent from 71 percent in September. Among independents, 26 percent say the country is on the right track, down from 29 percent in September.

The poll of 1,000 U.S. adults was conducted Dec. 3-7 by Selzer & Co., a Des Moines, Iowa-based firm. The margin of error is plus or minus 3.1 percentage points. The poll includes 714 likely voters in the 2010 general election, the margin of error for questions based on likely voters is plus or minus 3.7 percentage points.

Click here to read the rest of the report and see related material, including a video and information about the methodology and exact wording of the poll questions.

Comments

[nevket240]

more funny money.

http://www.bloomberg.com/avp/avp.htm?N=av&T=Soros%20Urges%20%24100%20Billion%20Climate%20Fund%20Using%20IMF%20Finances&clipSRC=mms://media2.bloomberg.com/cache/vzyz8Vz8lChc.asf

this as&ehole is talking his book. the funds would be transferred to his companies that provide the tech. what a scam..

regards

[kevinearick]

Where are the real jobs? The experts keep talking.

The climate bill is a good example. It reveals the bait and switch method behind green jobs, the state of disclosure, and the structural failure in the economy.

The climate control initiative is just the latest in a long line of failed objective-based management proposals, designed to profit proponents, with no practical method for solution, and, therefore, no real jobs, just more make-work at exponential opportunity cost, and that well is dry.

1. Objective-based management works in the short term if the true problem and costs can be pushed off onto future generations, along with the penalties and interest associated with opportunity costs.

Objective-based management withstands the test of time if:

2. Labor has the necessary incentive to work out a practical solution; and

3. Sufficient entrepreneurial talent is available from natural new family formation, where evolutionary action creates it.

1. The demographic curve has turned, eliminating the option of pushing off unfunded liabilities to future generations;

2. Real labor is currently receiving the lowest return on the economy in modern history, and has no incentive to assist management;

3. The US Supreme Court shorted natural new family formation decades ago, leaving its economy with an insufficient pool of entrepreneurial talent.

Before any of the symptomatic problems in the economy may be effectively addressed, the core problem of legitimacy must be addressed. Command-and-control economies, whether socialism or corporatism, cannot function in the current environment.

As far as the tie to jobs, the President’s jobs proposal is going to accelerate the error, but must be pursued to provide the necessary disclosure. The bank stimulus largely moved nothing but numbers in computers; the job stimulus is going to be a little different.

It would be more productive to send people a check to retrain themselves than to pay them to make bad decisions habitually, until they can identify an appropriate entry point into a real economy, which must be built to replace the current make-work economy.

Do not expect productive assistance from the existing education establishment. It requires a complete overhaul; it is the most politically connected, and maladjusted, organization in the system. In the process of disclosure, the inherent failures of government-driven education are quickly becoming transparent.

At this point, we can confirm that corporations, banks, governments, and unions cannot solve the problem (large and medium institutions). Next, we take a look at small business and community banks, in the crucible of commercial real estate failure, as we work our way toward the fundamental circuit mechanism, Family Law, in a process of deduction, which precedes remedy, because of the participatory level required to build a the next economy.

In a normal recession, small business would have automatically been induced to backfill the economic contraction, but they were prevented from doing so by nexus regulation, designed at the base of the demographic expansion curve, and accelerated through electronic automation, which brings us to the current predicament. The economy is turning upside down.

The climate bill, like all the others, employs the natural progression of the problem as a pry bar, to repeatedly extract wealth for the establishment, without ever addressing the problem. Problems have to be solved now.

The circuit may be completed by:

1. feeding the byproducts into an existing natural system;

2. altering the byproducts for induction into a natural system;

or

3. designing a new reaction pathway.

Expect no change in course so long as the education system remains intact. Expect rapid change once it cracks.

The planet is effectively performing an audit. Watch out for the tree of knowledge, expert systems, because it’s fruit, asymmetric information advantage, is poison, for all involved.

There is what the experts say and what they do. They do not do much.

[zippythepinhead]

Excellent analysis Kevin, we are indeed in treacherous times. Ron Pauls bill to audit the fed will die but hence there will be no need as they will collapse of there own doing and render themselves moot. Gold is retracing at this point, it will eventually explode as it more a bet against government insanity than it is anything else. At that exact point where life meets reality the learning curve will be hard and fast. Planetary audit indeed. Next up Greece...

"Sooner or later everyone sits down to a banquet of consequences"-Robert Louis Stevenson

[Tires]

I agree. Where are the jobs. I do see some movement but most jobs are for people with degree's what about Joe The Plumber?