Prepare for Fiscal Doom

In either event, 2013 is not shaping up to be a banner year for the economy. And it’s not just or even mostly because of the fiscal cliff.

Our financial system is not stronger now than it was in 2008 when it finally collapsed under the weight of crashing real estate prices that fell all the harder because they were ballasted by plenty of government guaranteed debt.

In fact, prepare right now for the Next Great Bailout. Because this time around, the federal government, via Dodd-Frank, has pre-announced that- come what may- they will bailout the financial system anytime they feel like it, no act of Congress necessary.

I’m getting a feeling that both the Obama administration and the loyal opposition are concerned about an economy that they know is ready to screech to a halt in 2013.

That’s why they are pushing the fiscal cliff story so hard with their known associates at the Congressional Budget Office.

Certainly they know what the Fed knows; the Fed that has said it will keep interest rates at sub-zero until evolution produces men who can produce hundred dollar bills via extra sensory perception. The Fed, you see, is gravely concerned about the next year’s GDP outlook. And they should be

And because even government economists recognize that evolutionary change- like men who can conjure money out their hope and change gland- takes quite a bit of time, the knuckleheads at the Fed- who have no other plan than producing more hundred dollar bills- are sore afraid.

They are trying to buttress Obamanomics with paper dollars even as the columns that are needed to truly support the economy, jobs- that’s where OUR money comes from- comes crashing in… again.

“[N]o matter what you might hear in the mainstream media or from the White House,” say our friends at Political Calculations, “this isn't a situation that developed overnight because of the aftermath of Hurricane Sandy or the so-called ‘fiscal cliff’. Recessionary forces have been at work in the U.S. economy for many months now.”

“Even though a painful correction is necessary,” writes Peter Schiff, “nobody in power wants it to happen while they're in the driver's seat. So, Bernanke will stick with his well-rehearsed lines: the money will flow until there is ‘substantial improvement’ in unemployment.”

Don’t hold your breath on the ‘substantial improvement’ in unemployment. .

In true political fashion, Obama and the squishy, moderate, Blame-the-Tea-Party portion of the GOP are ready to shift the responsibility for these failed policies produced on both sides of the aisle, by using the fiscal cliff as a ready-made excuse for 30 years of fiscal makeshifts and evasions; evasions and makeshifts that they created.

As our contributor Mike Shedlock pointed out yesterday, Japan’s economy is now contracting at a 3.5 percent annualized rate. Japan it might be remembered came up with the whole “free money- for everyone- 4-EVER!” concept. They have been trying to jumpstart their economy for a decade that way.

In that time China- still a communist country- has vaulted over Japan as the Asian economic power that matters most. And there is only one explanation for a communist, semi-medieval country like China to overtake a supposedly free and prosperous Japan: There are more Ivy League-educated, modern, Keynesian economists in charge of Japan, than in China.

Still China will catch up to Japan and the US soon. China has the same problems that Japan and the US have. They are just earlier in the cycle than us.

In China “free money- for everyone- 4-EVER!” rules the roost even more firmly than it does in the United States, because they have a ton of money.

These Keynesians are in control of everything all over the world. They are unconcerned with producing wealth and only concerned with producing money. Wealth and money, you see, are not the same things. We are not producing wealth as fast as we are producing money.

When you produce money without wealth the thin veneer holding the economy together eventually bursts like a balloon does when over inflated.

That’s what’s in store for 2013; or maybe- if we are lucky- we can put it off until 2014 or 2015.

Those jobs are never coming back for several reasons, no matter who is in charge here. For decades, US unions managed to force increasing wages for what was basically low to semi-skilled labor, such as tightening a few bolts or lowering a windshield onto a vehicle. Well, they finally killed the host, as all parasites do, and companies looked overseas for more cheaper labor. High pay for unskilled labor will never return. The laws of economics are like the laws of gravity - sooner or later everything falls to where it ought to be. Prices and wages have a basis in reality, no matter how much unions or politicians think they can make them magically lower or higher.

What we need to do is unleash market forces here. Just as some jobs disappear, new ones appear that are better, if only people would let the market work. We don’t have buggy whip makers any more, but nobody misses them. If we don’t adjust to new conditions, then we are doomed to stagnation.

(Snicker) I never knew a vote was an "investment." Did you?

Rev Jesse Jackson: Black Voters Deserve A Return On Election ‘Investment’
WBBM-AM ^ | November 10, 2012 / FR Posted by 2ndDivisionVet

The Rev. Jesse Jackson on Saturday said that President Obama’s reelection was “a great victory,” but that it would be incomplete with a reconstruction of urban America and an investment in the communities where the blacks who voted overwhelmingly for the president live.

“We’re happy and full of pride,” in the president’s reelection, Jackson told the crowd at the Saturday morning forum at Rainbow/PUSH headquarters, 930 E. 50th St., “but our houses remain raggedy … our schools remain closed.”

Despite attempts at voter suppression in states such as Ohio, Pennsylvania and Florida, Jackson said, blacks turned out en masse to vote, enduring waits that stretched into hours in many places. “We waited, we voted, we believed,” Jackson said. “Now we want to get well.

“We voted early, we voted long. Our votes won,” he said. Rev. Jackson, who spoke longer, louder, and more forcefully than he has in some time at the Saturday morning Rainbow/PUSH meeting, asked the crowd, “What do we want? We want, we want, we want, we deserve, we deserve … a return on our investment.

“What’s good for us is good for everybody. What’s good for blacks is good for everybody,” he said. “We bled too much, we died too young, we cried too much, we prayed too long, now we want a return on our investment.”

Referring to those voter suppression efforts, he said, “these acts of meanness had unintended consequences.” Rather than keeping blacks and Latinos away from the polls, voter ID measures and the curtailing of access to the voting booths made people more determined to vote. “Suppression became stimulation and people fought back,” he said.

“We fought back,” and the battle was won, but the war still remains, he said. “If we vote and don’t bargain we get nothing. A Jacuzzi filled with stagnant water will not get you well,” Jackson said. “You have to stir the water.” Jackson said blacks, who voted for Barack Obama for state senator, for U.S. Senator, and now twice as President of the United States, should demand, bargain, and march if necessary, for an end to “patterns of race discrimination, (for) our share of jobs. We want faster public transportation to connect us to where the jobs are.”

He said black American also needs “access to capital,” noting, “It’s cruel to say. ‘jump in the pool,’ when there is no water. “

He also called for “fair trade,” a “domestic trade zone. We need a domestic OPEC,” he said. “In Chicago, for example, there are 100,000 vacant homes or abandoned lots; 40,000 in Baltimore. If we were to rebuild 25 percent, if we take down the boards and put in window panes, fix the broken sidewalks, cut the grass, fix the roofing, we’d create more jobs than there are people, just rebuilding where we live.”

Jackson said, “there must be a plan for reconstruction” of urban America. Saying that automobile companies and banks got bailouts, “we’re the people who provided the votes — we want to be bailed out. We need jobs, education, healthcare now. If we can be targeted for voter registration and voter turnout, target us for reconstruction, now.

“We are the new mainstream,” Jackson said. “We are the America of shared hopes and shared dreams. We have the power, we have the votes. “We waited, we voted, we believed, now we want to get well.” He then asked the crowd, “Do you want to get well? Are you willing to fight to get well?

“It’s time to sing a new song, of joy and hope,” Jackson said. “It’s time to march again. March for healthcare, march for jobs. When we march great things come our way. “

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