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Are You Smarter Than a Communist? ^ | January 31, 2014 | John Ransom

Posted on 01/31/2014 4:25:11 AM PST by Kaslin

Well it’s official.

We’ve known that I am smarter than a communist, but now comes confirmation that I’m smarter than government economists—which still is a rather hollow accolade.

GDP figures for 2013 came out and despite a doubtful surge that came in the last half of the year GDP still managed to squeak under 2%, just as I predicted at the beginning of the year.

“For 2013 as a whole,” says ABCNews, “the economy grew a tepid 1.9 percent, weaker than the 2.8 percent increase in 2012, the Commerce Department said Thursday. Growth was held back last year by higher taxes and federal spending cuts.”

And Obamacare.

And Dodd-Frank.

And the War on Energy, the EPA, the IRS, the Fed and the general problems that Democrats have with adding, subtracting, multiplying and dividing conspired to keep growth slow. You'd have to be a communist not to admit of theses facts.

But, if you like your abacus, you can keep your abacus.

“For some reason, today pundits are appalled by the loss of Fed credibility…. Perhaps instead of that,” writes ZeroHedge, our favorite finance crime fighter, “the sophisticated financial community should focus on the core of the problem: the Fed's chronic inability to look even more than a couple of years into the future without being dead wrong about what transpires, even in the absence of a great financial crisis (which the Fed never could predict in the first place of course).”

In graph below ZH details the various revisions to GDP for 2013 that the Fed has made as it got closer and closer to its target date.

What’s most appalling about it is that even in June and September of this year, the Fed was still forecasting high even as the economy needed 4.1% and 3.2% annual growth rates in quarter three and four respectively just to come in under 2% for the year.

But don’t worry say economists. This year should be much, much better.

“This year, economists think the economy will get a lift from continued gains in hiring,” writes ABCNews. “Further steady job growth would give more households money to spend and help lift consumer spending, which accounts for about 70 percent of economic activity.”

Yeah, steady job growth?

The jobs numbers are at best mixed, as are a whole host of other data on the economy going into 2014.

How one sees the economy depends on whether one is a glass half-full kind a guy or a glass half empty kind a guy.

Personally I’m more like a Washington is half full of it kind of guy, and always the wrong half.

Job gains of always been the key to economic growth, and there’s not a lot of good news on that front. While it’s true that unemployment claims of been trending down the last several years, 2013 has been sideways. And a late surge of volatility in the index could point to a reversal of the trend since about September 2013. US Initial Claims for Unemployment Insurance Chart

US Initial Claims for Unemployment Insurance data by YCharts

As seen in the chart above claims volatility has picked up substantially since September. Much of that volatility is due to unemployment claims not being processed in a timely manner in certain large states. But if you apply just a little technical analysis since September to the chart, there's no doubt that there's been at least a temporary reversal. Claims are not trending downward, they’re trending upward.

And even the mainstream media has recently acknowledged that much of the improvement in the unemployment rate is coming via a shrinking workforce, not a growing number of jobs.

That’s akin to breaking a 12-inch ruler in half, and then claiming that one half of the ruler is still equal to one foot.

David Williams of WilliamsEdge and, a sponsor for Ransom Notes Radio and a specialist at forecasting market direction, has told me that 2014 will mark an important market top.

By the time of the midterm elections in 2014 the market should be reversing course, or at least sideways, in my estimation. Williams believes that this could mark the beginning of a multi-year bear market.

That’s a good news and bad news scenario.

The bad news obviously is that nobody likes the stock market to go down when all of us in one manner another are vested in stock markets returns for our retirement plan.

The good news however could be that 2014 might be the year where Main Street and Wall Street start to work in tandem to affect change.

Because as usual Washington, DC has it wrong: Wall Street and Main Street will always have more in common than anyone has with Washington, DC. We don’t need Washington protecting Main Street from Wall Street.

We just need Washington to stop being the uninvited third wheel to the economic machine driven by Wall Street and Main Street.

Remember: I’m not a government economist. Or a communist.

I’m just smarter than either.

But then so are you.

TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: economy; jobs; obama; unemployment
I made a slight correction in the first sentence by inserting am between I and smarter.
1 posted on 01/31/2014 4:25:11 AM PST by Kaslin
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To: Kaslin
“For 2013 as a whole,” says ABCNews, “the economy grew a tepid 1.9 percent, weaker than the 2.8 percent increase in 2012, the Commerce Department said Thursday. Growth was held back last year by higher taxes and federal spending cuts.”

Um--how can federal spending cuts have anything other than a positive effect on the economy? Thinking that government confiscating ever larger sums of money from the economy to spend on politician's pet projects is something like thinking that an anemic patient's blood will improve by the application of more leeches. It just doesn't work.

2 posted on 01/31/2014 4:42:43 AM PST by exDemMom (Current visual of the hole the US continues to dig itself into:
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To: exDemMom

Yeah generally when individuals choose to spend money, it’s a good spending decision. I mean, who’s going to waste his own money? Such money was earned doing something productive and the goods being traded for are valued.

But when gov’t spends, the money was first taken from individuals - individuals who could not then make a good spending decision. When you’re spending someone else’s money, it spends pretty wastefully eh?

So gov’t spending is by definition inefficient. Instead of good buying decisions made by individuals, gov’t spending is poor buying decisions made with someone else’s money... ie wastefully.


3 posted on 01/31/2014 5:03:48 AM PST by Principled
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To: Kaslin

By definition, yes.

4 posted on 01/31/2014 5:18:12 AM PST by Natufian (t)
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To: Kaslin

I don’t believe as a group we are smarter, we haven’t been able to overcome the war of words and ideas on gender, race, the media, education, economics, or even the republican party.

We’ve been fed the worst candidates for higher office, and we’ve allowed the thugocracy to intimidated us into speaking in low tones because we fear being labeled racist, misogynist, haters. The IRS for an example has been very effective in quelling the conservative message.

We also can’t seem to unite. The proof is on this board. Why can’t we pick one issue at a time such as so called amnesty and unite to put down the movement for normalization first then move on. We need one victory here to build on. But as soon as there is movement in one direction our own voices come out of the woodwork to distract.

This is the reason commies are smarter, they play long ball. they unite on 1 issue and pound it until the rest of us relent.

Now I’m saying they are smarter not more intelligent, their policies prove them less intelligent, they are smarter because they can organize, it’s a constant source of wonder to me why we don’t organize a massive march on Washington ( as Jim has called for) against amnesty. Believe it or not this really does scare the Pols.

5 posted on 01/31/2014 5:38:13 AM PST by VTenigma
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To: exDemMom
Um--how can federal spending cuts have anything other than a positive effect on the economy?

If they were real cuts it should help. What usually happens is instead of increasing a budget item by xx% it is increased by a lesser amount. The part of the increase that was dropped is called a budget cut, even though the actual budget was increased. I love government math. /s

6 posted on 01/31/2014 5:43:47 AM PST by ken in texas
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To: exDemMom

The GDP is a terrible measure of national wealth. It includes government as one of the added items. So reductions in government spending lower GDP.

Its inventor is economist, Simon Kuznets. He developed it for the U.S. Department of Commerce NBER. He disapproved, however, of its use as a general indication of welfare, writing that “the welfare of a nation can scarcely be inferred from a measure of national income.”

He’s exactly correct. More on him here:

7 posted on 01/31/2014 8:30:03 PM PST by 1010RD (First, Do No Harm)
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