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So! Are they really holding up a finger?
By KennethSchustereit in KennethSchustereit The Old Bolillo!
October 11, 2009

This is a line by line examination and query to Mr. Dickson concerning his article. My dialog will be in all caps since I cannot paste this into my various blogs without the font all appearing the same. After the article, my comments and concerns will be in normal font.

Economists gauge recovery with finger in wind By David M. Dickson “You don't need an economist to know which way the wind blows; a weatherman might do just as well. Economic forecasting, never a precise science, can be devilishly difficult, particularly when the economy arrives at a turning point.

I HAVE FELT FOR SOME TIME THAT THIS PRESENT TWO YEAR PERIOD IS INDEED THAT TURNING POINT AND THAT WE HAVE BEEN POINTING TO THIS PERIOD FOR FORTY OR SO YEARS.

"Economists never professed to be precise forecasters," said Peter Morici, a business professor at the University of Maryland who warned about the housing bubble long before it burst. "People ask us, so we forecast. But it's not a physical science."

IT SEEMS TO ME IT IS MORE OF A MATHMATICAL SCIENCE AFFECTED BY THE POLITICAL WHEELING AND DEALING ON CAPITOL HILL.

Reaction from Wall Street can compound the problem. The stock market recently has been buffeted by hopes that the economy is climbing out of a hole - or by fears that it is falling back into one, depending on the news of the day.

WHILE I UNDERSTAND THIS IS HAPPENING I AM RATHER MYSTIFIED AS TO WHY. SURELY I AM NOT THE ONLY ONE THAT SEES A GRADUAL DOWNTURN OF BOTH OUR COUNTRY’S IMPACT ON THE WORLD POLITICAL AND ECONOMIC STAGE AND THE INEVITABLE ECONOMIC CRISIS THAT WILL BE CAUSED WHEN THE $38 TRILLION IN UNFUNDED LIABILITIES HIT THE SOCIAL SECURITY AND MEDICARE SYSTEMS COMES TO FRUITION? THAT LATTER CRISIS AND IT’S ACCOMPANYING POLITICAL FALLOUT WILL MAKE THE PRESENT CRISIS LOOK SMALL INDEED, IN MY HUMBLE OPINION. WHAT I FAIL TO SEE, I GUESS, IS WHY SO FEW OTHERS SEE THIS IMPENDING CATASTROPHY AND SEEM TO BE FAILING TO PREPARE FOR IT? I AM EVEN MORE STUNNED THAT FINANCIAL INSTITUTIONS ARE URGING PEOPLE TO SAVE MONEY AT SIMPLE INTEREST RATES THAT ARE PRESENTLY NOT KEEPING UP WITH THE TRUE INFLATION RATE.

On Oct. 1, the day after the Dow Jones Industrial Average recorded its best quarterly performance since 1998 and its biggest third-quarter jump since 1939, the Bureau of Labor Statistics reported at 8:30 a.m. that first-time claims for jobless benefits increased during the previous week by 17,000, more than economists expected. That disappointed investors, who promptly hit the sell button when the stock market opened an hour later.

PARDON ME BUT WASN’T THAT D.J.I.A. JUMP SPURRED MOSTLY BY AN ARTIFICIAL ECONOMIC FINANCIAL SCHEME CALLED “CASH FOR CLUNKER” AND WASN’T THAT MONEY JUST PRINTED UP AND BORROWED FROM BOTH OUR GRANDCHILDREN AND CHINA? AND IS IT NOT A FACT THAT WHILE $3 BILLION IN FUNDS WAS CREATED FOR THAT SCHEME THERE ARE $3.4 BILLION IN CLAIMS FROM DEALERSHIPS AGAINST IT? WHICH BEGS THE FURTHER QUESTION OF HOW MANY DEALERSHIPS WILL NOT GET PAID THAT EXTRA $400 MILLION? SO, IF THE “JUMP” WAS MOSTLY SPURRED BY AN ARTIFICIAL SCHEME WITH “CREATED” CURRENCY THAT OUR GRANDCHILDREN WILL BE LIABLE FOR AND THERE IS STILL A HUGE PART OF THAT STILL UNFUNDED, WHERE DOES THAT, IN REALISTIC TERMS, LEAVE BOTH OUR SHORT AND LONG TERM ECONOMIC FORECAST?

By 10 a.m., the Institute for Supply Management (ISM) reported that the nation's struggling manufacturing sector expanded for the second month in a row in September. Economists had expected the pace of expansion to accelerate, but in fact it eased a bit, further disappointing investors.

IS IT NOT A FACT THAT OUR “MANUFACTURING SECTOR HAS BEEN SHIFTING TO OVERSEAS OPERATIONS FOR SOME TWENTY YEARS NOW? IS IT ALSO NOT A FACT THAT LARGE SECTIONS OF OUR SERVICE SECTOR HAS BEEN SHIFTING OVER SEAS WITH PHONE BANKS FOR CUSTOMER SERVICE COMING OUT OF INDIA, ARGENTINA AND PERU? JOINING THIS OUTFLOW OF JOBS AND INCOME TO THE AVERAGE WORKING PEOPLE DID NOT THIS COUNTRY BECOME FOR THE FIRST TIME IN IT’S HISTORY A NET FOOD IMPORTING COUNTRY IN 2006?

The rout was on. Not even August's biggest monthly jump in consumer spending in nearly eight years, which the Commerce Department announced that morning, could take the sting off the unexpected blows on jobless claims and manufacturing. The Dow ended the day down 203 points; all 30 companies in the index retreated.

AGAIN, WASN’T THAT SPENDING “JUMP” MOSTLY RELATED TO “CASH FOR CLUNKERS” IN WHICH PERFECTLY GOOD VEHICLES WERE DESTROYED, MANY OF THOSE PAID OFF IN FAVOR OF BOTH MORE PERSONAL AND NATIONAL DEBT? I GUESS AN APPROPRIATE QUESTION WOULD THEN BE; WHAT WAS THE PERSONAL AND NATIONAL DEBT INDEX AFTER AUGUST?

Exceeding the expectations of economists can move markets the other way as well. On Oct. 5, the ISM reported that the nation's service sector expanded in September for the first time in more than a year. The group's index of non-manufacturing activity jumped from 48.4 in August to 50.9, significantly beating the expectations of 70 economists polled by Bloomberg News.”

DON’T SERVICE SECTOR JOBS PAY SIGNIFICANTLY LESS THAN MANUFACTURING JOBS AND AREN’T THEY ULTIMATELY AND LARGELY DEPENDENT ON THE GROSS NATIONAL PRODUCT INDEX IN THE LONG RUN?

Officially our unemployment rate is at 9.8%. Counting those who have given up the rate, most analysts agree, is closer to 17.5%. This is having a ripple effect on the Social Security system and for the first time since 1982 there will be no Cost Of Living Adjustment. Allow me, please, a small rabbit trail which I promise to tie in to the present discussion.

Since there are many seniors out there deciding once a month if they will eat good or take their medication, I feel that something needs to be done to assure our senior citizens that they are still valued despite this economic disaster. A disaster, I am convinced will get worse since for the first time the Social Security system is paying out more than it’s receiving in revenue.

When I say “something needs to be done” I would address that concern to the PEOPLE of this country, not the government. People, average people, since the advent of the Social Security system, have relied on government, I.E. their investment in that system to care for them in their old age. So instead of caring for their elders, younger people have put them in nursing homes that rely on money from a Social Security system that is now broke.

And we have seen headlines around the country that nursing homes have had funding cuts. This should concern us all since those homes traditionally operate with very thin staffing.

Now please consider this question as we get back into the economic forecast; what country in the history of the world has ever monetized it’s debt by printing money and NOT suffered from hyper-inflation? In March of ‘09 while we were closely watching the AIG bonus scandal, Federal Reserve Chairman, Ben Bernanke ordered the printing of $1.2 trillion in currency. That money, according to the Congressional Budget Office will be on the streets of this country by 2011 or thereabouts.

While I know the actual answer to the question I would like to hear both liberal and conservative pundits answer it. I have heard both camps say, in differing adjectives and verbs due to their political alignment, that American entrepreneurship and enterprise will bring us out of this whatever either side is calling it today but no one on either side wishes to answer the question.

I have heard that Bernanke will “tighten up on the money supply” to stop hyper-inflation. I don’t understand this concept. I also don’t understand how this can be done in light of the idea of another stimulus bill.

My question then becomes; if we’re already running a $1.4 trillion deficit for fiscal ‘09 and we’ve borrowed from our grandchildren for ‘08 and ‘09 stimulus bills, how can we, in good conscience, consider borrowing from them again-mortgaging their futures even further, to make things more comfortable? I realize this is more a case of generational ethics but I feel the question needs to be asked and answered.

Answered by politicians, many of whom, have insulated themselves from their constituents and their own prosperity, financial futures and even their healthcare from the rest of the country. Thus begging the question: how do those who support this continuing growth in government and it’s growing tentacles into our daily lives?

Those very politicians and the almost “state-run media” that props them up are proposing the very things that caused this economic crisis to begin with! The state of California has invested $400 million in very risky adventures like shopping malls across the country. I presume that would include Texas. It’s ironic that the governor of that state is appearing in commercials begging people to move to California while that state is losing thousands of people and hundreds of business per month. And many of those are coming to Texas!

I feel this is a prime example of what has caused this economic crisis. I saw a few weeks ago that the Texas state government is looking with drooling lips at the hundreds of millions in the Texas Teacher Retirement fund! Let me see, didn’t we hear that when General Motors became Government Motors those teacher retirement funds that were invested there were decimated? So, who in their right minds would even consider violating the trust the teachers of this state by dipping into that fund to gamble on risky investments?

So, where are we going? With unemployment rising, our food production slowing moving out of the country, exploration for domestic oil down, automobile dealerships dealing with huge losses, the value of the dollar dropping, some OPEC members calling for oil to be valued in currency other than the dollar and the government printing up huge new amounts of currency, how can the hoards of lemmings march back from the edge?

After listening to both liberal and conservative economists, I don't think I trust either. I'd sure like to hear what Allen Keyes has to say about this. Him, I trust.

Will there be a recovery? What does the “finger in the wind” tell the average person who can read and use his common sense? To whom should we listen?

Comments


  • Observer Observer Report a ViolationReport a Violation
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    The one group to which we should most assuredly NOT listen is the liberal Democrats who are convinced that there is a governmental solution to every perceived societal problem. The question we should be asking ourselves is how many more years of 2-3% growth in GNP, while India, China and Brazil are growing at rates of 5-8+%, will it take before we join Argentina and most of Europe in the also-ran group? There seems to be a fairly consistent inverse relationship between growth in the size of government and growth in the economy. It remains as true today as it was 20+ years ago -- Government is not the solution to the problem, government IS the problem.

    October 12, 2009 at 11 a.m.