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If We Blow It Up Again It Will Blow Up Again April 18, 2013

Posted by Dr. Robert Owens in Politics.
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Back in 2007 when I was speaking of the crash to come I noted that we really didn’t have to worry because our fearless and infallible leaders intuitively know the remedy.  When the bubble bursts they will blow up another bubble.

The absolute triumph of Keynesian economics in America and the West has never been more on display than during our rocky journey through the Great Recession.  An economic contraction which our leaders say is over and those of us who work and live in flyover country know is still grinding us down to the new normal.  TARP was going to save the economy.  It didn’t.  President Obama’s porkulus stimulus was going to save the economy.  It didn’t.  QE 1 and QE 2 were going to save the economy.  They didn’t.

Then along comes QE 3 with an open ended commitment to pump 85 billion per month into the economy, and presto-changeo alakazam and miraculously the stock market is breaking new highs and the real estate market is beginning to revive.  Unemployment keeps inching down and even the Neocons over on Fox are telling us the cratered economy is showing signs of life.  It turns out if you magically create trillions of dollars and drop them from helicopters across the country there seems to be more money blowing in the wind.  As one very profitable prophet once said, “It doesn’t take a weatherman to know which way the wind blows.”

Hang on to your hats because a booming economy has to become part of the Obama legacy so that the transition to a centrally-controlled economy can ever be hailed as the prescription for success.  Just as the booming economy of the 90s is constantly brought up as “The prosperity we experienced during the Clinton years” so to if any politician ever attempts to restore economic freedom, or when there is another crash it can be blamed on too much regulation, a pathological fear of deficits, and return to the old days of greed and avarice.

Those of us old enough to remember the Clinton years should know that it was the peace dividend and the Tech Boom Bubble which fueled the prosperity of the 90s.  We should also remember that it was a phony peace dividend since our military was engaged in interventions around the world during Clinton’s depredations in the oval office.  We should also remember that the Tech Boom flew through the air with billions in stock values for companies that made no profit and eventually delivered not prosperity but the crash of 2000.

Our Constitution was not written to be not a living document that evolves over time.  The words were never meant to take on new meanings with every passing generation.  The accumulation of case law and judicial proclamations was not meant to supplant the written political contract that the Sovereign States individually decided to ratify.  However, contrary to the oft stated desires of the Founders of our nation and the Framers of the Constitution the United States has evolved into a behemoth bureaucracy.  In all bureaucracies instead of the best and the brightest rising to the top those who learn to pull the levers the best end up controlling the machine.  Often the official leaders are merely telegenic front men for the powers behind the throne.   The grifters who have gained power through elections filled with ineligible voters, outright fraud, gerrymandering, and a two party system where-in Progressives control both parties use the living document ruse to turn the Constitution into a dead letter.

Crony capitalism has replaced free enterprise.  Just watch the big gaming table at the New York Stock Exchange.  Its volatile swings are dictated not by innovation, profits or production they are instead moved by real or projected government actions.  Will the Fed keep creating money out of thin air?  Will the EPA impose Cap-N-Trade?  Will the imperial presidency use a foreign adventure to grasp more power?  The banks act as willing accomplices of the Fed borrowing money at 0% interest and buying Treasuries at 3% helping to maintain the fiction that we aren’t monetizing our debt and printing our way to prosperity.  The foreigners who used to crowd the treasury auctions know what is going on.  Today the biggest purchasers of American debt are American banks using the Fed’s funny money.

How many times must this Ponzi scheme economy show itself for what it is?  How many times must this self-serving Progressive cabal be exposed for the hypocritical central-planning neo-fascists that they are?  How many articles like this must be written before enough people wake up and do something?  We glory in the American Revolution.  It overthrew tyranny and established personal independence, individual freedom, and economic opportunity on a scale that had never before been seen in the world.  This is something worth celebrating.  However, the counter revolution has been in progress since Hamilton founded the first bank and John Adams threw his opponents in jail.  The cost of freedom is eternal vigilance, and today’s generation may be too busy watching the game to notice their country is being transformed into something they won’t recognize by the time they get up for their seventh inning stretch.

Any semblance of a freely functioning economy has vanished since Progressive leaders like FDR, LBJ, and BHO birthed government control and intervention as an 800 pound gorilla on steroids.  The mirage of false prosperity is once again raising its crowned head out of the sea of financial calamity it created with the last bubble.  A new bubble is forming and happy days will soon be here again with a chicken in every pot and a flat screen in every home.  How many of our fellow citizens will be swept up in the coming Obama Boom?  How many will be devastated when it all comes crashing down again?

The too-big-to-fail friends of the government will be made whole.  The perpetually re-elected and their handlers will have their golden parachute pensions and plush jobs on K-Street and at Fannie, Freddie, and crony filled board rooms across the country.  The only ones hurt will be those who do the real work, those who play by the rules.  When the new bubble blows up the remedy is ready made: we’ll just blow up another bubble.  How could this ever go wrong?

Dr. Owens teaches History, Political Science, and Religion.  He is the Historian of the Future @ http://drrobertowens.com © 2013 Robert R. Owens drrobertowens@hotmail.com  Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens / Edited by Dr. Rosalie Owens

 

Economics 102 February 22, 2013

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People avoid silence because they’re afraid of what they might hear.   Although we value our freedom of speech, polite conversation in America is subject to one crushing rule, “Don’t talk about religion or politics!”  Most of us were raised with this stifling warning in our ears.  The purpose was to avoid arguments at the dinner table but the result is a population unconcerned in the two subjects affecting life the most.  I can only talk about the weather for so long which displays the wisdom of memorizing sports stats and watching American Idol.  With the two biggest topics off the table we’re faced with either trivial pursuit or silence.  Bored with the weather and having neglected my memorization and viewing options I propose a topic to stimulate vigorous conversation without causing any bickering: economics.

Barry, Harry, and Nancy knew they had to take us through-the-looking-glass in four short years.  With no effective break on their power for the first two years, Congress moved so fast their yesterday became our tomorrow.  That tomorrow is now today.  The ruling party rammed their agenda through without one opposition vote.  Every revolution needs an emergency to justify radical surgery and the economy is the emergency available. Consequently, these descendants of FDR and LBJ shoved a raw deal down the throat of a great society.

Almost everyone is in agreement that the first stimulus failed.  According to MSNBC, “In January, Obama’s economic team predicted unemployment would rise no higher than 8 percent with the help of $787 billion in new government spending.”  However, according to the LA Times the unemployment rate in May reached a 25-year high of 9.4 percent.  The President may see glimmers of hope but Say-it Ain’t-So Joe said he couldn’t rule out a second stimulus telling us the administration which ran on the slogan, “The worst economy since the Great Depression” misread how bad the economy was.  How bad is it?  What’s worse than the Great Depression?  What’s their answer to this baddest of bad economies?  What’s their Plan B?  Try Plan A again, and again, and again?  I think what our leaders need as they drive the largest economy the world has ever known over the cliff is Economics 102, Macroeconomics or how an economy works.

Most people, including the best-government-money-can-buy, look at the economy as if it were controlled by magic having no idea where the rabbit goes or where the doves come from, and since I doubt I’ll convince any of our all-knowing leaders to enroll in freshman macroeconomics I want to offer a crash course in Economic Reality.

  1. Government regulations distort markets and inflate bubbles.
  2. Every generation experiences at least one bubble and at least one bust.
  3. Every bubble bursts.
  4. Every burst bubble is followed by a panic.
  5. Panics inspire economic regulations.
  6. Economic regulations reflect political ideologies not economic realities.
  7. Economic regulations always regulate the excesses of the last bubble.
  8.  Economic regulations are always blind to the excesses of the next bubble.
  9. Since consumption is the purpose for production any economic regulation that ignores this fact always leads to the misapplication of resources and the misdirection of effort.

10. Depressions are recessions with government help.

11. It is impossible to spend yourself into prosperity.

12. It is impossible to tax yourself into prosperity.

13. Higher taxes lead to smaller revenue and black-markets.

The New Economy leads straight to the Second World, from freedom to conformity from capitalism to Obamanomics.  Instead of a fair race with the rapidly transforming economies of Asia, America runs hobbled like a child in a three – legged race strapped to the stiff-legged ideas of collectivism.

Why would our leaders want us economically hobbled?  What would they gain if we fall into the swamp of poverty engulfing most of the world?  Wouldn’t they be right there with us?  Go to any Second or Third World country and you’ll see the rich and powerful behind walls in gated-communities where they live in the First World while everyone else sits in the dust eating leaves.  In America, we avoided this fate with the growth of a massive middleclass.  Under assault with stagnant wages, rising prices, and disappearing jobs the middleclass is being outsourced.  How is this being accomplished?

Remember the mantra of the Clintons?  “It’s the economy stupid!” That’s still the Liberal’s strategy, riding like a flea on a rat cradle-to-grave social engineering in the guise of economic policy.  The Progressives drive the economy into the ditch all the while saying it is someone else’s fault and shrieking that we need more of what is causing the problem: bloated government and runaway spending.  A lack of basic economic understanding is destroying the greatest economy ever forged.  A zero sum game causes divisions and arguments about who gets what when we used to all strive for the same thing: success.

America is splintering as the melting pot becomes a smelting pot.  What is its cause?  The divisiveness of class-warfare encouraged by the only people who win through America’s split between red and blue, rich and poor, us and them.  Who are they?  If it isn’t us I guess it’s them.

Dr. Owens teaches History, Political Science, and Religion.  He is the Historian of the Future @ http://drrobertowens.com © 2013 Robert R. Owens drrobertowens@hotmail.com  Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens / Edited by Dr. Rosalie Owens

 

 

The No Growth Zero Sum Pie May 25, 2012

Posted by Dr. Robert Owens in Politics.
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Has America reached the stage where we all stand in a circle and take turns holding a constantly shrinking dollar?

If our Dear Leader and the Daley led Outfit wins re-election next year perhaps a few more people will see the hand writing on the wall.  Though the Constitution is undeniably the greatest work to come from the hand of man, though it provided the safe haven of freedom for generations it is today a dead letter.  If after the coming November election the Democrats tax storm sweeps us down the economic drain and inflation kicks in those dazed by the success of the Chicago system in re-electing the first anti-American president then the silent majority will be ready to hear the watchmen on the walls.

We have sold our birthright for a bowl of entitlements.  We have stood silently by while corrupt politicians have looted our posterity of opportunity and hope.  We have allowed our Federal Government to assume powers never delegated to them by the Constitution.  We have spent the revenues of the future for a present that no longer resembles the last best hope of mankind.  We have followed the pipers from the Land of the free and the home of the brave onto the road to serfdom and we are about to learn that he who pays the piper calls the tune.

While our nation wallows in the Great Recession which our Progressive leaders and their water boys in the Corporations Once Known as the Mainstream Media keep trying to tell us is over China keeps eating our lunch.  Starting with NAFTA both Democrats and Republicans have agreed to free trade deals that aren’t free and have suppressed our trade.  For these economic geniuses who think they can centrally plan the largest economy in the history of the world let me spell this out slowly and clearly:

  • If you buy more than you sell you have a negative balance of trade
  • If you spend more than you make you eventually go bankrupt

AND…..

  • Everyone else except you seems to know these two simple truths.

Maybe our economic geniuses should try Economics 101.  They want us to accept that America has become a no growth zero sum pie.  It doesn’t fit their game plan to take their foot off the throat of the economy.  If they did it would roar to life as the liberty and opportunity which is our heritage, and once again prove that free people making free choices is the best way to grow the pie and enrich the people.

A new book calls President Obama an amateur, and at first glance he may appear to be one.  However he does not stand alone.  He is the front man for a triumphant Progressive Movement which has successfully implemented a strategy that has taken more than a century to mature.  Starting in the 1890s they set their sights on education capturing the universities and then training generations of teachers, journalists, and lawyers.  These people have infiltrated every aspect of our lives dumbing down successive generations while Progressive politicians have worked at getting a majority of the voters addicted to government handouts.  Then in the1960s the Cloward and Piven Strategy was embraced as a way to spend the country into oblivion so that it could be remade in a Progressive image.  Step by step, inch by inch, line upon line these webs have been woven, and as the average American twists and turns trying to find some avenue of escape from the shabby future these want to be commissars have planned, all they see is the party line on the major networks telling them everything is coming up roses.

It is time to WAKE UP!  It is time to prepare as if the world we have known will end and expect major dislocations in every aspect of life.  Even an overwhelming defeat for President Obama, Nancy Pelosi, Harry Reid, and the rest of their fellow travelers will only mean this train wreck is slowing down.  The so-called draconian Ryan Budget never gets to a balanced budget for 40 or 50 years.  More than 30 years out the national debt is still growing.  Projections show that by 2025 the interest on the debt alone will begin to consume any hope of getting out of the trick bag they have spent us in to.  Our elected leaders have no plan to reverse the decline. They merely want to manage it in a more orderly fashion.

Each of us must decide what is most important.  Each of us must either prepare for the coming contraction or hit the wall like a crash dummy.

Personally I have decided that family is more important than career, food is more important than convenience, and honor is more important than status.   I have left the tenured halls and headed for the hills.  I have abandoned friends of many years to be surrounded by family.  I have embraced the soil to grow my own food. In other words, I believe I have been to the top of the mountain, I have seen what is coming, and I have taken my own advice.

When I was the Dean of a School of Christian Ministries I used to tell my students to prepare as if there was no Holy Spirit and preach as if there were no notes.  Today I advise my readers, prepare as if the America we have known and loved is about to be transformed before our eyes into a social democracy of European proportions, and live as if there is still hope.

For as long as we believe there is still hope we will not be hopeless.

So we come to the ultimate message: hope in Christ and you will never be disappointed.  All things must pass and only those things done in Christ will last.  All empires fall.  It is our place in History to watch the slow motion fall of a mighty empire: Western Civilization. But if we hold on to what is true, if we stand for what we believe, though a thousand fall on our right and ten thousand fall on our left it will not come upon us.

Dr. Owens teaches History, Political Science, and Religion for Southside Virginia Community College.  He is the Historian of the Future and the author of the History of the Future @ http://drrobertowens.com © 2012 Robert R. Owens drrobertowens@hotmail.com  Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens

 

America Lost in a Bubble May 10, 2012

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All bubbles burst.  This is a law of nature.  No matter from what material the bubble arises.  No matter what forces propel its expansion.  All bubbles burst.

Actually the science of bursting bubbles has recently popped into the forefront of scientific discovery.  Conventional wisdom has taught since the beginning of time that when a bubble bursts it simply vanishes.  However, recent observations using high speed cameras has revealed that when a bubble bursts it leaves a circle of miniature daughter bubbles that pop so fast the eye cannot catch it.  There is even the thought that each daughter bubble leaves a ring and each daughter bubble leaves a ring ad infinitum.   All happening so fast it cannot be seen.  And yet, each succeeding bubble bursts.

The physics of bubbles tells us that the pressure on the inside works against the tension on the surface and a ratio between the two determines when the bubble will burst.  No matter how it bursts, no matter why or when it bursts one thing is certain: all bubbles burst.

In economics a bubble is the term commonly used for a cycle characterized by rapid expansion followed by rapid often dramatic contraction.  What causes economic bubbles is often a matter of dispute among economists.  Some believe they are a natural part of the economic cycle: everything goes up, and everything eventually comes back down.

Others believe they are caused by inflation.  In this scenario everything has a natural price which is the intersection of cost and demand.  The Bubble is the artificial rise of price over the natural price.  Eventually the economy must correct itself and the inflated product will return to its natural price.

No matter which theory you subscribe to, one thing is certain: all bubbles burst.

Remember the Clinton years?  Today the official History as dispensed constantly by the Corporations Once Known as the Mainstream Media is that the wise and benevolent rule of the man from Hope was a time of plenty.  There was solid growth and balanced budgets.  As the Progressive narrative goes, President Clinton alone was responsible for the growth of the nineties which Bush the Younger proceeded to destroy leaving a mess for President Obama who has fought valiantly to restart the economy and save the day.  At least that’s the story as dispensed by the headlines and the talking heads.

The reality is approximately 180 degrees opposite of the spin.

President Clinton won a three way election with less than 50% of the vote (twice) and called it a mandate both times.  The policies he opposed for his entire career had recently won the Cold War, and President Clinton reaped the rewards.  He gutted the military and called it a Peace Dividend which he proceeded to spend on social engineering projects pumping up the economy with government spending.  Then the Dot-com Boom turned into the Dot-com Bubble and the economy was roaring.  Another plus for Clinton was the defeat of Hillarycare which would have torpedoed the economy just as Obamacare is now.  He also profited by the election of a Republican House in 1994 which kept the promises in the Contract With America and led the way in cutting spending and building a budget that at least appeared to be balanced.

Everything was coming up roses. The economy was growing and so was the Dot-com Bubble, which everyone just knew would go on forever even though anyone older than the milk in the fridge should have known that all bubbles burst.

In 2000 George II won a contested election, and before he had time to change the drapes in the Oval Office the Dot-com Bubble burst.  This led to a short sharp recession; this was the one that Bush didn’t blame on Clinton.  He instead passed the now infamous Bush tax cuts and mailed out what he called rebates in the form of free money to spur the economy.  All the while behind the scenes the housing bubble was beginning to inflate to epic proportions.   Federal spending grew, the government grew, and the bubble grew.

During the go-go years people with no job, no money, and sometimes no ID were able to buy McMansions for no money down and walk out with cash in their hands.  How could this ever go wrong?  I remember hearing of people bidding on houses, offering 10% over the asking price and losing out to someone who offered more.  Prices went up and up and up and somehow even sane people apparently thought it would never end.

Things looked good.  Things looked very good.  Following the recession which began seven weeks after President Bush took office, America had six years of uninterrupted economic growth.  There were fifty two straight months of job creation producing more than eight million new jobs, the unemployment averaged 5.3 %, after-tax income per capita increased by11%, from 2000 to 2007, and GDP grew by more than 17 % adding almost $2.1 trillion.  Exotic ways to paper over the fact that people with no money were buying houses fueling the boom kept everyone smiling and the bubble expanding.

The only problem was that eventually all bubbles burst.  And when it did John McCain suspended his presidential race to fly back to Washington and add his hearty, “Me Too” to the bailout and seal his fate.

President Obama took office as the economy crashed into the deepest recession since World War Two.  He immediately began blaming President Bush and hasn’t stopped yet.  He passed the largest stimulus bill in American History, began a record expansion of the Federal government, and the largest spending binge since the beginning of time.  All in the name of cleaning up the mess from the bursting of the housing bubble.

And what are all these trillions of dollars in reckless spending doing?  Are they inflating another bubble?  Change the words and you change the perception: spending becomes investment and responsibility becomes austerity.  Those who are manning the pumps aren’t blowing up a financial bubble they are showing compassion for their fellow man and investing for the future.  Anyone who warns of a coming crash or tries to slow the rate of spending is pushing grandma off the cliff for the benefit of millionaires and billionaires.

No matter how this mad dash to nowhere is spun one thing is certain: all bubbles burst

On the brighter side President Obama has perfected the cure for illegal immigration.  The economy has taken such a massive hit that the illegal immigrants are leaving looking for greener pastures.  And he has also brought the solution to a 10%+ unemployment rate.  So many people have become discouraged that they have dropped out of the labor market, and according to our current administration this is good news.  Perhaps we should take a cue from Mr. Obama’s favorite pastime and just consider his first term a mulligan.

Maybe the slogan for President Obama’s second term shouldn’t be “Forward.” Perhaps it should be “I deserve a re-do.”

Just remember: all bubbles burst.

Dr. Owens teaches History, Political Science, and Religion for Southside Virginia Community College.  He is the Historian of the Future and the author of the History of the Future @ http://drrobertowens.com © 2012 Robert R. Owens drrobertowens@hotmail.com  Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens

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