Skip to comments.There Must Be Some Way Out Of Here
Posted on 07/18/2002 11:01:35 PM PDT by Uncle Bill
There Must Be Some Way Out Of Here
July 18th 2002 | WASHINGTON, DC From The Economist print edition
Americans are losing confidence in the economy. Can George Bush stem the slide?
THESE are not happy times for the White House. Share prices are tumbling, consumer confidence has fallen sharply and George Bush's own approval ratings seem to be heading down. For an administration haunted by the ghost of George Bush senior, whose defeat in 1992 was blamed on a sluggish economy, the parallels are becoming painful, not least because the current president's efforts to reassure Americans are also falling flat.
Mr Bush's trip to Wall Street to preach about corporate ethics was widely derided as too little, too late. This week's follow-up, a hastily-arranged pep talk on the economy in Alabama, proved another embarrassment. This economy is coming back, boomed Mr Bush. That's the fact. Meanwhile, in one of Wall Street's more dramatic days, stockmarkets slumped (though they recovered somewhat after he finished). It was all too close to Herbert Hoover, who famously proclaimed America's economy to be on a sound and prosperous basis in October 1929.
Judging Mr Bush's words by short-term movements in share prices is, of course, neither fair nor useful. The real questions are whether the White House has correctly diagnosed what ails the American economy, and whether its policies are right.
Mr Bush's basic contention is that the fundamentals of the American economy are in good shape. This was also the message of Alan Greenspan, chairman of the Federal Reserve, in congressional testimony the following day. At first blush, they have a point. Inflation is low and productivity growth remains surprisingly robust. Much of the excess investment that firms had built up during the boom has been worked off. Consumer spending remains surprisingly solid. Retail sales, for instance, rose 1.1% in June, far faster than analysts were expecting. The Fed has raised its forecast for economic growth in 2002 to 3.5-3.75%.
Yet despite these apparently good fundamentals, consumers are worried. The University of Michigan's consumer-confidence index fell sharply in July, to levels last seen in November. The main reason, of course, is the stockmarket slide (see article). Over the past two weeks alone the Dow Jones Industrial Average has fallen by 6%. The S&P 500 has dropped to levels not seen since October 1997. The technology-laden Nasdaq index is 72% below its peak in March 2000.
In large measure, this slide is the deflation of the 1990s bubble, a point Mr Bush himself hinted at: America must get rid of the hangover that we now have as a result of the binge...we just went through, he said in Alabama. But it has clearly been aggravated by the slew of corporate scandals and the loss of investor confidence.
Sliding equity prices could begin to hurt those fundamentals, promoted so assiduously by Messrs Bush and Greenspan. Household saving, in particular, may be found wanting as Americans re-evaluate what they can expect from their retirement portfolios. That suggests a protracted spell of sluggish, rather than buoyant, consumer spending. Capital investment could also suffer, if firms become more cautious about borrowing.
Unfortunately, there are scant signs that the administration will help counter this. In his Alabama speech, Mr Bush promised an agenda for long-term growth. This encompassed: fiscal policy (he wants to make his tax cut permanent, whilst forcing Congress to hold the line on spending); trade policy (he urged Congress to grant him fast-track authority to negotiate trade agreements); corporate reform (he touted his new Corporate Fraud Task Force, promised more money for the Securities and Exchange Commission, and urged Congress to send him an accounting-reform bill before August); boosting accountability in schools; and terrorism-risk insurance.
This grab-bag of assorted policies hardly constitutes a post-bubble economic agenda. Even if you thought it did, once you start going through the individual bits, the progress is patchy. For instance, the Senate certainly passed a tough corporate-reform bill on July 15th, and Mr Bush welcomed it. The next day Republicans in the House of Representatives promised to dilute many of the measures in the Senate bill (though they did agree to stiffer sentences for corporate criminals).
Nor do the prospects for trade policy look good. The Bush team has been pushing Congress for fast-track authority for 18 months. Legislation squeaked past the House of Representatives last December and the Senate in May. But reconciling the two bills has been difficult. If Congress does not get round to voting on fast-track by the August recess, the proximity of the mid-term elections in November suggests that the politically sensitive trade bill has little hope.
The biggest and most intractable problems, however, concern fiscal policy. Nobody seems to have absorbed how a post-bubble environment might influence the budget. On July 12th, the Bush administration announced that the federal government would run a deficit of $165 billion this year, compared with an earlier forecast of $106 billion made in February 2002. Although the economy has grown faster than expected since February, tax revenues have plummeted. Much of this revenue drop is due to the stockmarket, as individuals' capital gains have turned into losses. If the bear market lasts, so too will those revenue shortfalls.
In these conditions, Mr Bush's main fiscal policythat his 2001 tax cuts, ostensibly to be reversed in 2010, should be made permanentis hard to justify. If demand weakens substantially, there may be a case for more tax cuts (or spending) today. But it is hard to see the fiscal wisdom in making future tax cuts permanent at a time when revenues are so uncertain.
On spending, blame needs to be divided between the White House and Congress. Mr Bush talks tough on spending. He has threatened to veto a $27 billion supplemental budget bill that Congress has larded up to $31 billion. However, by agreeing to far larger, and permanent, expenditures (such as the massive farm bill) Mr Bush has lost the moral high ground. Congress, in turn, is closely divided, and short on any procedural systems for fiscal discipline. Finger-pointing and partisan bickering are far more likely in Washington than the confidence-inspiring policies that America's economy needs.
Copyright © The Economist Newspaper Limited 2002. All rights reserved.
Repeal the 16th amendment and abolish the income tax. Abolish the IRS and take away the citizenship of senior IRS officials and send them to Russia where they'll feel at home. Obliterate federal spending, and start to pay off the national debt in large chunks. Abolish "static scoring" with regards to taxation of any kind. Reinstate and restore the Constitution and Bill of Rights and abolish all laws, treaties, emergency orders and executive orders that have rendered it useless and return to the Constitutional boundaries of our constitutional Republic our founding fathers gave us. Importantly, repeal the Emergency and War Powers Acts. Repeal all laws created by unconstitutional and extraconstitutional devices, such as Executive Order or Presidential Directive. Repeal and abolish all unconstitutional federal involvement in states issues such as: crime, health, education, welfare and the environment, and only God knows how many other intrusions. Social programs such as Social Security, welfare and Medicare must be repealed. So too, do most federal subsidies. Rescind all treaties and International Agreements which are not in perfect agreement with the Constitution. Tell the United Nations to stuff it! The U.S. should disassociate itself from the U.N. and the U.N. should be forced to leave the United States. Destroy all documentation that links the U.S. with the U.N. See Arthur Andersen for details. Alger Hiss, screw you. Furthermore, demand that the federal government refrain from meddling in the business and squabbles of foreign nations, unless there is an imminent threat to the people of the United States. PROTECT OUR BORDERS!! Elect a real small government candidate for President, and the same for Congress. Take memory loss drug to try to forget that most Americans love socialism in about every way and that politicans are simply a reflection of themselves, and, none of the above is going to happen. Now, returning back to reality. Terrorism, shadow government, Stock market crash, federal government crash, Police State, Martial Law, gun-confiscation, FEMA, FBI, CIA, Dictatorship, T.I.P.S., Carnivore, Operation Magic Lantern, Echelon, The Patriot Act, Executive orders too numerous to count, slavery, death, One World Government. It could never happen here. For those of you not just interested in Medicare Part B.
HOW BIG IS THE GOVERNMENT'S DEBT? - $33.1 TRILLION!
"We have no government armed with power capable of contending with human passions unbridled by morality and religion. Avarice, ambition, revenge, or gallantry, would break the strongest cords of our Constitution as a whale goes through a net. Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other." President John Adams, second President of the United States addressing the U.S. military, October 11, 1798
You've obviously compiled, as have I, evidence demonstrating the malthusian driven megalomaniacal intentions of the world elite.
What surer way to kill off large chunks of population than to let it enslave itself with its own unbridled passions? A corralled herd is more easily culled than free men who can still fight back.
Is your screenname somehow connected with attempts to awaken what manhood remains in men who've permitted themselves to be morphed into sheeple?
Instead of being Tax Free which they are because they are Churches , they have accepted the "tax exempt" status from the government. They can lose their tax exemption status if they go against government/pagan policies.
Hitler said "Tell a lie long enough and people will believe it."
Chruches believing that "tax exemption" granted by government is innocent is one of those lies.
"The UN's doctrine of tolerence and diversity."
Stalin said America would be taken down by a "War of Concessions" different words same end.
Inncidently (as I'm sure you know) the UN is another of those lies that Hitler talked about.
As far as these churches corrupting our Churches , I think You have to go back to Constintine as the beginning of the corruption. With the introduction of pagan idols and pagan celebration days to increase the churches members.
I describe how I came to Christ , by saying I came through the "back door". I didn't discover Him in Gods' Word , I discovered Him after I discovered the "evil" He faced for us. When I found the "evil" He defeated for us , I knew He was real.
That's when I understood His Love for us.
I'm not trying to preach to the choir , I can't. I don't read the Bible.
I'm relying on my Faith in Christ to guide me.
I don't believe for a second that God put us here to suffer at the hands of His enemies. Even though that is a role Christians have accepted for thousands of years. Even today being slaughtered in Africa.
There was one time I heard where Christ hid from His enemies , and that was so Scripture could be fullfilled.
I believe like Christ , we need to come together as ONE CHURCH IN GODS' NAME AND FOR GODS' HONOR and drag His enemies into His Light where they will crumble. And there is no doubt in my mind that they will crumble in His Light.
These barbarians need to accomplish what they do , in secret. If people knew half of what they have done , they would drag them into the streets and make examples out of them.
That's what they fear , TRUTH. And the TRUTH leads to God. That is why they must separate us from our God with such things as diversity and incorporation as Ceasar did.
There's no doubt in my mind that we can stop them and change the ending of the Bible. But "We" have to stand together in His name as one Church and for His honor , placing Him back above man.
Only then will we be able to defeat man's corrupt laws that will enslave and eventually destroy us.
Basically , "we" have to STAND UP WITH CHRIST and do what must be done , instead of sitting on our hands and waiting for Him to do it for us. I believe in my heart He will walk with us and we will win.
The folks on Wall Street say this time will be different. That this rally will last. If history doesn't provide the proper context for that pipedream, maybe valuations will.
America's 500 biggest stocks are selling for anywhere between 25 and 40 times one year's earnings, depending on how one accounts for nonrecurring charges. Even at the cheap end of that range, the S&P 500 ($SPX: news, chart, profile) is still selling for more than twice the historical average for a bear-market low.
The highest price-earnings ratio seen at a major market bottom during the past 60 years is approximately 12.5, technician Paul F. Desmond at Lowry's Reports tells me. That was in June 1962. (Read more about tops and bottoms.)
Next time a guy tells you this time will be different, ask if he or she works for a brokerage, investment bank, pension fund or mutual fund manager. If the answer is no, ask when was the last time they made money in this market of sick stocks.
Has scandal taught big business a lesson?
a. Yes, they've learned the hard way--------(25%)
b. No, they'll get off easy and do it again-------------------------(60%)
c. I'm not sure------(15%)
We are "2" because we are two and "sheep" because we follow the L-rd and not the god of this World nor false shepherds/wolves sent to deceive the sheep. Herd mentality is a dangerous thing.
There have been many signs of a coming crash and I have posted those often, i.e., trains de-railing and going over cliffs, buses crashing, decks falling into the ocean, fires at Cache Mt. and so on. Here's just one: 89. It is harvest time in the land. The Hayman fire and a big Rodeo (corral) fire and these speak of far worse to come...the fire of persecution by the one worlders taking over.
Uncle Bill has been writing about this economic crash for several years and unforunately, his threads often have little traffic. Others threads go to the 100's or 1000's which are examples of the Delphi Technique and Hegelian Dialectic in practice to deceive Freepers every day -- threads which excite the emotions such as the child murder threads or those which bait Rep/Dem (as if they represented Good/Evil, when they do not). A friend just sent this link: So, Have You Been Delphi'd? -- There is more here: LEARN. People should not only think outside the box, but get outside the box. Sodom is on fire.
"This expansion will run forever,"
Rudi Dornbusch - MIT economics professor - July 30, 1998, Wall Street Journal.
"We don't want one, we don't need one, and, as we have the tools to keep the current expansion going, we won't have one."
Rudi Dornbusch - MIT economics professor - July 30, 1998, Wall Street Journal. Regarding The U.S. having a recession.
"Thus, only natural causes, and not the Fed, can bring the economy to a standstill. Fortunately, we have the monetary and fiscal resources to keep that from happening, as well as a policy team that won't hesitate to use them for continued expansion."
Rudi Dornbusch - MIT economics professor - July 30, 1998, Wall Street Journal.
Where's The Risk?
"And there are dangers that institutions take bets on particular risk models that turn out to be wrong. Long-Term Capital Management nearly collapsed in 1998 after the Russian default undermined its investment assumptions. Similar mistakes could emerge if others have taken on too much bank credit, assuming the extraordinary bubble of the 1990s would continue for longer."
Andy Fastow - Enron's off-balance-sheet partnerships known as LJM2 - "Do I know everything that's going on? Do I have to sign off on every deal that goes in there? Yes," he says. "I'm in the unique position of not having the ownership or the responsibility or obligation to sell the assets, but I know everything about them, and I've been involved in their approval and maybe in their structuring."
Mr. Speaker, America's trade deficit for September hit $35 billion for one month, $35 billion. America is heading for a $420 billion, 1-year trade deficit. Unbelievable. If this continues, America will have a crash that will make 1929 look like a fender-bender. What is even worse, China is now taking $100 billion of cash out of our economy, buying missiles, and pointing them at us.
Beam us up, all of us. We must be stupid. Ronald Reagan almost destroyed Communism, and the Clinton administration has reinvented it, is now subsidizing it, and is now stabilizing it. I yield back any common sense left and any patriotism left in this Congress. ... James Traficant
Ah...Hegelian-speak! The Towers of Babel/Babylon have fallen and crashed in the marketplace. They cannot be rebuilt by consensus.
LEARN - Homepage
About Consensus and Facilitation
The Delphi Technique. What Is It?
The Delphi Technique: How to Disrupt It
What's Wrong With Consensus
What American Citizens Need to Know About Consensus and Facilitation
The Community of Sixty
Dean Gotcher on Consensus Building
Ah...Hegelian-speak! ...They cannot be rebuilt by consensus.
You of course realize that the word synthesis is older than Hegel?
Do you shun plants because they engage in photosynthesis?
Even useful hardware comes from synthesis -- e.g., photo+copier.
Whole ideas spring from the synthesis of theory with experimentation. Enormous progress springs from joining academic inquiry with empirical experience. It's not all the result of thesis and antithesis you know. Better yet, check your dictionary. Your definition is a late addition and hasn't rendered the original meaning obsolete. (Just as my life has not lost all gaity because I'm not homosexual<G>)
I pray you get my, er, drift. See, even analogies and metaphors (like "beat a dead horse" comes to mind for some reason) rely on synthesis of a current situation with a vivid image. My life and writing would sure be dull without them.
And come to think of it. Just which one of us responding like the Hegelian student here? <G> Perhaps you've become the anti-Hegelian? You've been studying it so long you've adopted a Hegelian view-point of all processes? Better be careful there -- your ideas may be coalesced and absorbed into the basis of the next thesis. <G>
Look, without a predetermined outcome, the synthesis of which I wrote had to with sparking new inspiration, not excision and elimination so as not to interfere with a predetermined goal.
Now, after all that, instead of a negative response, perhaps following my suggestion to compare and contrast those two links for common and uncommon ideas just could be safe? <G>
"I place economy among the first and most important of republic virtues, and public debt as the greatest of the dangers to be feared."
Thomas Jefferson to William Plumer, 1816.
"The burden of debt is as destructive to freedom as subjugation by conquest."
I was joking. Some might think that is a rare event. Not joking, however about the following:
Rom 6:16 Know ye not, that to whom ye yield yourselves servants to obey, his servants ye are to whom ye obey; whether of sin unto death, or of obedience unto righteousness?
Remember the old time cartoon of an angel on one shoulder and a devil on the other? America has yielded itself continually for a long time to various forms of idolatry in its worship of Mammon -- hedonism, materialism, pride, selfishness, and every evil and sexual perversity under the sun. The few who remain who want good are appalled to see the country given over to socialist monsters who are not interested in the public good but in totalitarianism and slavery. Those one worlders will embrace their false prophet, Islam, and require that the whole world worship their beast system and will put a boot to the head of all resistors. As long as the Power Elite silence or eliminate the ones who expose their lies, writing to one's Congressmen is a waste of time. Congressmen should be renamed Transgressors...they have kicked out good and love their Barabbas to whom they bow.
The rich men of the earth who hide out in the Caymans enjoying their ill-gotten gains should party hard and enjoy every fresh breeze they can. Where they are ultimately going is going to be Hot and forever. One of the founders said of the republic..."if you can keep it" or something like that. America didn't keep it. There are serious consequences. Consensus may be comforting, but it is probably too late. Even Lot had to leave town.
"Scenes are now to take place as will open the eyes of credulity and of insanity itself, to the dangers of a paper medium abandoned to the discretion of avarice and of swindlers."
Thomas Jefferson to Thomas Cooper, 1814. ME 14:189.
"A spirit... of gambling in our public paper has seized on too many of our citizens, and we fear it will check our commerce, arts, manufactures, and agriculture, unless stopped."
Thomas Jefferson to William Carmichael, 1791. ME 8:230.
"We are now taught to believe that legerdemain tricks upon paper can produce as solid wealth as hard labor in the earth. It is vain for common sense to urge that nothing can produce but nothing; that it is an idle dream to believe in a philosopher's stone which is to turn everything into gold, and to redeem man from the original sentence of his Maker, 'in the sweat of his brow shall he eat his bread.'"
Thomas Jefferson to Charles Yancey, 1816. ME 14:381.
"Congress passed the Federal Reserve Act on the 22nd of December 1913, and from that day forward the United States of America ceased to be a republic."
Anne Williamson - The FED - March 2001 - WorldNet - Vol.10, No. 3.
In 1913 a man gathers up his family and moves from Kentucky to another state far away. He has his lovely wife, and six children to take care of. This is a great challenge, as he has virtually no money, and worse, only an 8th grade education.
Upon arrival, he begins the hunt for a variety of jobs. Within a short time he lands two labor jobs. He works both jobs for some time. He then finds a solid position for a logging company, where he performs a variety of tasks including falling, rigging, operating heavy equipment, etc.
By now, a few years later, he has added two more children to his quiver, for a grand total of eight children. He has bounced from apartment, to rentals, to a rental farm where he is finally happy and content.
He refuses to let his wife work. He and she are content and happy with her taking care of the home and the children, while he provides for the family.
One day he is approached by the landlord, who he has known for some time, to buy the small 25 acre farm. His first instinct is no. He refuses to go into debt. Debt to him was an enemy, a heavy load, slavery in motion. The landlord will sell the acreage for $35 an acre, the home for $650. That's $875 for the land and $650 for the home with everything included. Grand total: $1525. The man had half of that amount. He agreed with the landlord that he would give him the $1525 within a two year time period. No loans, no papers, just a handshake.
He sold a few things, saved his money, plus the money he had already saved, and through hard work gave the landlord the full price, even beating the deadline.
Years thereafter, he purchased 20-30 acre tracts adjoining his property one at a time, until he had 380+ acres, he built a new smaller home, added a huge barn, purchased a tractor, accumulated large heads of cattle, horses, and put in the best fencing available throughout the entire farm. The river and large creek that run through the property provided excellent irrigation for the crops in the fields. The dirt is so rich and dark, you would do a double-take when you saw it. TV? What was that.
For the most part, the farm was self-sufficient. Deer and even elk could easily be killed on the farm, or surrounding timber areas. Timber? That's old growth timber, that you could walk barefoot through, and see the awesome handiwork of God Almighty.
They worked this farm through the Great Depression, world war and troubles of all kinds. One child died. But seven lived to a ripe old age. This man, even when old, often stated, he could breathe out here.
So, his wife never held a job. She never finished high school. She married him at 15 years of age. She worked terribly hard on the farm, and, well, raising eight kids, speaks for itself. If cooking is an IQ, she was a genius. She never missed a day of church. She read books and studied all of her life, and wisdom flowed from her soul. Neighbors from miles around would ask her of many things knowing they would receive an answer. He had an 8th grade education. His work ethic was legend. He bought a small farm and gradually turned it into a 380 acre spread, with tractors and attachments, farm machinery, a new home, cattle, horses, well, fencing, etc. He didn't borrow a dime in his whole life. No loans, no banks, no credit, zip. He did this within an approximate 30 year timeframe.
Now, I challenge a young blue collar worker with an 8th grade education, no money, a young wife with little education, and 8 kids, to move to another state, with no job prospects, to find a job(s), purchase a small farm, turn that farm into a 300-400 acre spread, with tractors, machinery, a new home, cattle, horses, fencing, etc., without ever borrowing money from anybody, and do it within approximately 30 years. Good luck.
For those who think it can't happen here, Ninevah and Babylon were once great centers of civilization.
There are thousands of unexcavated "tells" in the Middle East which were once thriving cities.
The moving hand writes, and then moves on.
Tene, tene, tekel uupharsin...