Tuesday, January 22, 2013

Political Economic Errors

What is the current economic situation? Are we doing fine, growing slowly, in a Recession, or in a Depression? Survey says? Nobody knows.

Politics means you don't tell the truth when bad news comes. You put a spin on it. If it is outright bad news, you wait until late on Friday to release the news, so the information is lost in the flurry of weekend sports and leisure stories. So what is the deal with the economy?

It sucks. More than eight million people are out of the job market. That means they aren't counted at all. They aren't part of the unemployment numbers. Now it's a little bit easier to pretend that the unemployment number is good, when you aren't counting nearly two percent of the population. If we were counting them, we would be into double digit unemployment.

Propaganda. Propaganda is spinning of the news, it is also not reporting certain news stories. The eight million number was roundly ignored, even by Fox, which supposedly doesn't do anything but lie about the President according to the left wing loonies. So why aren't those news organizations covering this information? Because Fox is merely more middle of the road, hardly the rabid right wing group of racists they are portrayed to be. Don't get me wrong, they aren't cheerleaders like the other news organizations are, but they aren't just out there shouting bad things about the President either.

Propaganda means you change the names of things, but you never actually change the thing. Re-branding of unpopular programs and ideas is another example of propaganda. We don't torture the people the CIA questions. We used enhanced interrogation techniques. That is one example that the Republicans started, and the Democrats were happy to continue. Propaganda is taking the Health Care Exchanges, and renaming them Health Care Marketplaces. Has anything substantively changed in the program? No. But focus groups find that the term marketplace is less disturbing than the term exchange.

So what does all this have to do with the economy? That's easy. Propaganda and politics will not allow us to admit that the economy is in the toilet. So we rebrand and set up accepted definitions of things so they can never be reached. If we reach them, we redefine the term so it's even harder to reach. In other words, we spin the facts, we use propaganda to hide the truth.

So why do that? Because economies are set up to cycle money. Let's say you work in a factory that makes peanut butter. You buy a TV, the company that produced the TV has to hire workers, and people who ship it, and truckers to take it to the store, who has to hire people to sell it to you. Those people in turn buy among other things, Peanut Butter.

Now, if you thought the economy really sucked, would you buy a TV if yours was still working? No you wouldn't. You would get by with your existing TV, which when combined with others, would cause the company making the TV's to cut way back, or even shut down. See the cycle break down now?

So we hit a Recession. Companies all over the world laid people off. They held off hiring people back, and still are. Why if the economy is doing so well, are those companies still not hiring, and why are they still laying people off? Because Companies cut expenses, just like every one of you when you have less money. Propaganda can't help you make payroll if you don't have money coming in.

So how can we turn things around? Well according to the experts, we have to spend more money, we being the Government. We need the Government to hire more people, to do more things, and fund other public works projects. We need to pump cash into the economy, and we need to deficit spend our way out of the mess. That is like a gambler putting his house up to win back his car. It doesn't work, and never has.

Japan is in the news, because Japan is rolling the dice on the future. They are going to go whole hog into Keynes theory by spending like mad, and pumping tons of money into the economy. They say in the article that this theory worked in the late 1930's. Sort of. It gave the false economic ability to create a military, which Japan used to invade their neighbors, which led to massive destruction of Japan's industrial base. That in turn was repaired after the war by massive infusion of American money, which led to a very technological Japan of the latter half of the 20th Century.

The United States has calls from several economic experts to do much the same thing. All for an economy that is according to those same experts, not in a depression. The problem is they can't tell the truth, because that would cause them to lose political power. But if they don't tell the truth, they can't get support from the public to do what they Keynes theory says they have to in order to turn the economy around. Do you see the problem? Without propaganda, then everyone would know the economy sucks. With propaganda, the people don't know, and don't approve of the changes. Nice catch 22 wouldn't you agree?

So what about Japan, and why is it interesting? Because Japan is throwing caution to the wind, and going full speed ahead. If Keynes is right, then the Japanese economy will be roaring back to once again dominate the world as it did in the 1980's. If Keynes is wrong, then Japan will collapse, first among the industrial economies, and a world wide depression will follow shortly thereafter.

What do you predict? As for me I'm investing in canned food and seeds for a survival garden. Keynes is a moron who sold a bill of goods that nobody is allowed to question. When theories of that kind of economic power run so contrary to common sense and basic math you know something is wrong. When you create money out of thin air, via QE whatever number we're on, that isn't economics, that's a Vegas magic show, and that means it's a trick that should be left to entertainment, not reality. Because at the end of the day, someone is going to be left with the bill.

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