Posted on 09/10/2010 9:44:10 AM PDT by An Old Man
I gave President Barrack Obama six months to roll-out his doomed Keynesian policies, twelve months to discover they were flawed and eighteen months to realize that the solution to America’s problems must lie within a different economic framework. I had hoped by the end of twenty-four months to see new policies closer to an Austrian economic philosophy emerge. I was wrong.
A STRUCTURAL PROBLEM
1) Trade Balance: Insufficient Export/Import Ratio
2) Creative Destruction: Slowing Innovation Rate
It can’t be any clearer, the US has a structural problem. The administration can not possibly fail to realize this. My sense is they just don't know what to do about it.
A DEMAND PROBLEM
1) Credit Available - Demand Flat.
2) Shifting Demographics
THE RESULT
Expect it to get worse until the administration finally realizes that we have both a structural and demand problem facing America, not a cyclical business cycle and credit availability problem. I personally don't believe for a minute that the Obama Administration haven't come to realize something is wrong. The White House simply doesn't know what to do about it. They are doing the only thing our Washington political machine knows what to do - throw money and credit at the problem, which is precisely what got us into this problem in the first place.
Once America was the last best hope of mankind. Now it’s conservative America . . .
Mr. Long, I will give you thirty seconds to get this through your head.....HE WANTS IT TO FAIL!!!!
Assuming Mr. Long is totally unaware of what the big turd in Washington thinks, do you have any plans that might help the GOP flush the toilet?
Unfortunately very true! It will be a long and drawn out decade or so... I do feel sorry for my son and his chances though - the future is looking bleak.
Forgot #3. a corrupt and inept political structure
What?
And, now with a new “Professor” in the WH, it’ll be the same old stuff, but with a new name.
In response to the question headlined “What Should the Federal Reserve Do Next?” prominent economists mention “uncertainty” about fiscal and monetary policy at least 8 times.
“Uncertainty” is not the problem. The problem is the certainty of 0bamanomics.
0bamanomics is composed of higher taxes (massive tax increase next January, cap and trade), higher government spending (“stimulus”, massive budget increases), theft (Chrysler bondholder’s value), extortion (BP’s $20 billion payoff), rewarding failure (bailouts, extension of unemployment benefits), bribery (the purchase of votes for 0bamacare), nationalization private enterprises (0bamaCare, Autos, Student Loans, etc.), regulatory destruction (insurance markets, oil drilling bans), physical destruction (cash for clunkers), economic distortion (homebuyer tax credits), massive permanent fiscal deficits, and daily demonization and threats against businesses, entrepreneurs, employers, and profit.
In comparison to the destructive hurricane of 0bamanomics, the Federal Reserve’s policy options are a pea-shooter.
0bamanomics will certainly continue to destroy wealth, investment opportunities and job creation until it is intellectually, morally and legislatively defeated, and replaced with the primacy of the freedom of people and markets.
Sincerely,
Obama failed because Rush wished it. /sarcasm
The more that things go ‘wrong’ the more Obama sees opportunity for government intervention.
When the ‘Progressives’ talk of losing 700,000 jobs per month, they never make the connnection that the business community were responding to the possiblity of an Obama Administration. Business continue to batten down the hatches during this economic storm.
The trick is not to allow the complete collapse while the ‘Progressives’ are in control. This could be a teachable moment for anyone who is interested in a vibrant economy. Threats for a command economy drive economic forces to a ‘slow roll’.
Unfortunately very true! It will be a long and drawn out decade or so... I do feel sorry for my son and his chances though - the future is looking bleak.
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When we shed ourselves of leftist crap and bureaucratic impediments, we will take off like a rocket again.
Think of Japan and Germany after WWII - until they adopted leftist, statist dogma.
Unfortunately, you are not looking at reality! The taxes necessary that my son will pay are exorbitant! We are living high on the hog at the expense of tomorrows children.
Yes, it is okay for us...but the future is not nearly as bright as you portray..
Abraham Lincoln called America the last best hope of mankind. Now it is up to conservative Americans to bear that burden. The country is divided and the division is precisely about those things that make us exceptional, the things that made and still make us “the last best hope of mankind.” If we lose this battle more than just America is lost.
The “structural problem” is called the government.
Once we clear away the debris from this current fiasco, there will be real oportunity's to set the country back on course. Please consider for a moment these two points by the author in his opening remarks:
II - America has a Credit demand problem, not a Credit supply problem. It isn’t that the banks won’t lend, but rather that few can any longer afford or qualify (on any reasonably and historically sound basis) to borrow.
Currently almost all of the efforts are directed towards the credit demand side of the equation. The demand we had recently was not real, but rather the result of government meddling in the ebb and flow of normal business.
The author also states in his article that we need to produce more goods that can be exported. I concur with him in that. Again, the task has been made very difficult by the governments meddling in commerce. At this very moment, Intel the computer chip manufacturer is in the final stages of completing production facilities in China. My spy's tell me that when it is complete all production will be moved there. That's just one of our major industrial players that have chosen to move rather than put up with the restrictions our government puts on trade.
The course correction we must make to regain our position as a world leader in manufacturing is not going to be fast, and it will not be painless. The alternative is more of what we have today. A lot more!
Yes, it is okay for us...but the future is not nearly as bright as you portray..
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Our cities are not in rubble, we have not lost hundreds of thousands of our young men, and we possess abundant natural resources.
We shall recover, but first there will be a lot of government sugar teats that are torn away from sucking mouths, and government obstructionists who are put out of their offices.
Yes, I’m aware of the quote and its history. What puzzled me was what followed the quote. It seemed to imply “we used to be great, now we’re conservative.”
Oh great. Another rant from an Austrian.
> “Oh great. Another rant from an Austrian.”
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Oh great! Another vacuous retort from a failed Keynesian cotton candy salesman.
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> “My sense is they just don’t know what to do about it.”
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My sense is that they know exactly what to do about it, and will do the opposite, because destruction is their goal, in order to facilitate the end of national soverignty.
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I fear for the lives of many, if it turns out that what you wrote is true.
Energy-1: We should build nuclear plants like crazy and drive down the cost of energy. Not increase it like Obama wants to do with cap and trade. That would decrease costs to businesses and consumers alike, and make alternatives to gasoline fueled vehicles more practical. We do need alternatives to gas. Oil price shock is a large part of the economic crisis and we've known we were vulnerable since the 70's.
Energy-2: Take a hard look at the ethanol program. Can't speak for others, but our cars get 10% less mpg on gas with ethanol than without. And if the gas only has 10% ethanol and gets 10% less mpg, then we're not burning any less gas. We are just filling up more frequently. And we're driving up the price of corn that also takes money away from consumers.
Labor-1: Close the border and start deporting. Don't allow an influx of labor when unemployment is high. Same for the employment visa's. Let America employ Americans.
Labor-2: Stop our colleges from teaching foreigners all our high tech secrets. We create our own competition. Get everyone from the middle east out of any nuclear or other sensitive technology programs.
Labor-3: If we are going to invest in new technology, developing cheap general purpose automation might be the way to go. Automation can bring the price of manufacturing down, so that transportation costs result in manufacturing processes moving back to the U.S., along all the associated engineering and marketing and other jobs they said would never leave when they started outsourcing.
That's good for a start...
What are we going to use for capital to build the new Nukes? In the old days (I really am old) we used draft animals as a source of energy to move the plows and harvesters. The problem was that a good portion of the crop was used to feed the animals and was not available for sale. Today we use carbon based fuel to power the machines which replaced the animals. Again a portion of the crop is being converted to energy and is not available for sale. Way back when, we could always eat the horses when the imbalance became to great to sustain production. I suspect it will be more difficult to devour those big green machines.
I like your solution to imported labor. Do you feel any compassion for the poor people who will be deprived of the governments generosity with other peoples money?
In regard to industrial secrets, I suspect we can no longer keep them secret. The cat has escaped the bag and will not return.
I used to design and build automated machinery. Nobody every believed me when I told them they could be replaced by a machine. Sometimes I wonder where they obtained other employment when the new machines went into production.
Obama is out of his leauge, he is not mature enougn to be Presdent, a total failure....
I hope I explained my cryptic comment. I think we will not be great if we stray from our traditions and the left, including the Democratic party, is doing so.
Yes, the explanation was clear. Thanks.
Before Obama took Office I read a government report that said they had applications for 36 nuclear reactors. Some of those I believe had been pending for years. So presumably those applicants already had private capital lined up, government just has to get out of the way.
But I would be fine with the government using it's credit to back some loans for them. They don't have to back 100% in order to keep the interest rates on the loans down. They could require the plants have have at least 15% equity capital so the owners have skin in the game and let 80% be financed by loans. And the government could back those loans 70%. Banks would put up the financing, knowing the government is standing behind 70% of their exposure. But 30% exposure to the bank loan would be enough to encourage the bank to do some homework and oversight. And there should be some limits on equity payouts, excessive salaries and bonuses until the government backed loans are paid off.
That would compete with the private market, but it's not like banks are willing to make a ton of loans right now anyway, so it would be a good time for it.
With regard to imbalance, you can always mothball the things, if you really have too much capacity, but it's not like we aren't going to keep growing in population and energy needs. Unless some new alternative energy comes out that produces abundant energy and is less expensive, I think the demand will be there.
I like your solution to imported labor. Do you feel any compassion for the poor people who will be deprived of the governments generosity with other peoples money?
Sure. But they are here illegally and they aren't really entitled to that generosity (i assume were talking medical care, schooling, etc). I propose, AFTER the border is secure so they can't come back, paying them $3000 or $4000 to go home. That'd be cheaper than law enforcement and courts and deportations. And to the extent that it put American's to work, we would immediately start recouping that in both income taxes and reduced unemployment benefits. And the sudden influx of cash from returning Mexicans would help that country cope with the return.
"In regard to industrial secrets, I suspect we can no longer keep them secret."
Probably so, but we still lead the world in some tech, and if we get our house in order can become the worlds innovator again. We should still close that door.
"Nobody every believed me when I told them they could be replaced by a machine.
Automation is a double edged sword. Yes it could return a lot of jobs that went overseas. But it could also accelerate putting entire job classes out of work. Eventually the economy will adjust and new jobs will be created. But in the meantime, those people will need help. Yeah, I said it, government help. But at least foreign countries won't be buying our industries and technology at fire sale and shipping them overseas.
> “Take a hard look at the ethanol program. Can’t speak for others, but our cars get 10% less mpg on gas with ethanol than without. And if the gas only has 10% ethanol and gets 10% less mpg, then we’re not burning any less gas. We are just filling up more frequently. And we’re driving up the price of corn that also takes money away from consumers.”
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Amen!
Ethanol offers so little energy potential in comparison to the energy required to produce it that it should be outlawed as a motor fuel.
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