As we close out 2016 and draw nearer to the end of Obama’s 8 years in the White House, our commander-in-chief decided to celebrate by once again telling us all just how awesome he thinks he is via a lovely little tweet storm.And while the gross numbers may look impressive, a quick look at the “employment-to-population” ratio reveals that, even after Obama’s “recovery”, we still have the lowest percentage of our population actually employed than at any point since the mid-80s. This looks slightly less like “remarkable progress.”…..Of course, he failed to mention the staggering premium increases that came with his “Affordable Care Act,” increases which even Bill Clinton admitted are crushing small businesses and the middle class. Somehow we suspect the people of Phoenix, AZ, who will see a 145% increase in their healthcare premiums in 2017, would define Obamacare as “remarkable progress.”
Furthermore, the current economic malaise is not something new that was caused by the financial crisis in 2008. The reality is that economic growth has deteriorated consistently since 1980. Economic growth cannot be supported by debt growth. Increases in debt reduce savings and productive investment. Debt, like cancer, consumes income which detracts from consumption and investment. The larger the debt, the more consumption it requires….As interest rates began their long march lower in the 1980’s so did economic growth. As growth rates began to slow, the need to maintain higher standards of living required a reduction in the personal savings rate and increases in debt. In turn, there was less available for productive investment. As each year passed quietly by the cancer of debt spread, undetected and ignored, until it became terminal.
The central innovation, if it may be called that, was his own: rational expectations theory. There is no other way to state it, but rational expectations is a mathematical solution to a problem of infinities. It simply does not exist in the real world, for how can it? To describe it in layman’s terms is to reveal the dodge: economists model consumer and individual behavior as if every single one of us is either himself a social scientist in the same mold, or at the very least has one on retainer so as to consult with for every single economic and financial decision.
Central Banks Losing Control—–The PBOC Desperate Campaign To Prop Up The Yuan Is Way Behind The Curve
No matter which way you reduce these factors, they always come back to the same thing. The mainstream is filled with stories of stoic Chinese central bankers calmly disassociating speculators from the global recovery. The truth is far more sinister and troubling, that of a central bank increasingly unable to manage even a neutral stance despite trillions in assumed liquidity additions. That description applies universally and globally, of course, across the whole of this downward side of the eurodollar dating back now almost a decade. The Chinese are no exception, only the latest to be fully engulfed. If it hasn’t already, global dreams of reflation will eventually have to reckon with these forces, just as past episodes did.
Well la-de-friggin da. The idiocy of those opening paragraphs is obvious to the world. What was Snowden supposed to say? “Hey guys I am not coming into work because I stole documents and I am meeting up with Greenwald?”……His op-ed is so ridiculous, one can dismiss the book as the work of a misguided fool who fails to understand what the US constitution is all about.
China’s balancing act isn’t getting any easier. Policy makers are grappling with how to attack excessive borrowing and rein in soaring property prices while maintaining rapid growth. They’re also battling yuan depreciation and capital outflow pressures as U.S. interest rates rise, while on the horizon looms the risk of confrontation with America’s President-elect Donald Trump on trade and Taiwan. It’s a high-wire act with the potential to produce shocks, like the one erupting in the bond market as tighter liquidity threatens financing for small companies.
“It wouldn’t be a bad opening for a Tom Clancy novel about the Cold War” – that’s how the Los Angeles Times described the sequence of events leading up to the expulsion of 35 Russian diplomats (“spies”) and the latest face-off between Washington and Moscow. Indeed the whole episode of has about it a fictional aura, which is, after all, only appropriate, since the entire basis of this latest cold war drama is pure invention….It’s all part of the security theater performed by Obama’s dead-enders, as they do their best to cast a long shadow over the incoming Trump administration. And like any performance, it comes with a little booklet explaining the provenance of the piece, in this case a “report” reiterating in a most unconvincing manner the assertions we’ve been hearing since Election Day: that Trump’s victory was the culmination of an elaborate Russian conspiracy, a remake of “The Manchurian Candidate,” only this time with computers.
I acted as an economic consultant to Jack Kennedy, Lyndon Baines Johnson, Richard Nixon, Gerald Ford (hardly long enough to count) and turned down Ronald Reagan…….Two years ago I warned a major Republican Senator I had been very close to for more than a decade of the economic problems ahead. I never heard from him. No acknowledgment, no nothing.
To start, the animal spirits and optimism that greeted Donald Trump’s election victory will flame out not long after inauguration day. Without a major economic crisis, it will be near impossible to get substantial – $2 trillion deficit – spending approved by Congress. Moreover, even if massive fiscal stimulus is approved it won’t make much of a lick to the economy for four quarters or more – if ever.
The myth is widespread that President Reagan won the cold war by breaking the Soviet Union financially with an arms race. As one who was involved in Reagan’s effort to end the cold war, I find myself yet again correcting the record. Reagan never spoke of winning the cold war. He spoke of ending it. Other officials in his government have said the same thing, and Pat Buchanan can verify it…….Reagan did not believe the CIA’s claim that the Soviet Union could prevail in an arms race. He formed a secret committee and gave the committee the power to investigate the CIA’s claim that the US would lose an arms race with the Soviet Union. The committee concluded that the CIA was protecting its prerogatives. I know this because I was a member of the committee.