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It may be a holiday weekend, but there was a lot of activity in the days leading up to the weekend, and even over the weekend. Part of this is old news that got by, part is new. In no particular order, stories that struck me because they resonate with economic issues I've been beating the drum about.
The US Department of Labor has issued the agenda for their September 14/15 meeting to discuss "lifetime income options for retirement plans" Sounds pretty boring, doesn't it? In reality, it may well be the meeting where they settle on the story that will be used to confiscate your savings - IRA or 401k. I've been on this particular drum several times, for a couple of reasons. First, Barney Frank and others have publicly said they want to eliminate 401k plans because only "rich people" use them. Second, there's about $10 trillion in those accounts, and they need that money like a crack whore needs her fix. The agenda shows they will have representatives from groups that want your money and groups that want to keep administering those plans. It seems to me the most likely cover story is that they'll take your money and promise to provide you a modest return - like the Treasury Inflation Protected Securities (TIPS). To protect you from those awful market risks, you know, like the ones that hurt your 401k in 2008. This might make both sets of parties happy. You weren't invited were you? I sure wasn't, and there will be nobody representing me - at least, not that I know of.
Andrew Breitbart's BigGovernment.com has an interesting article by Morgen Richmond, showing an industry by industry summary of jobs lost through the depression so far. It shows what a dismal failure the stimulus programs have been.
It’s simply irrefutable that the Recovery Act has not had the beneficial impact projected by the White House. In fact, based on the data alone it’s arguable that the net impact has been detrimental to the economy, especially in combination with other legislation and policy changes enacted by the Administration and the Democrat-led Congress.This shouldn't be a surprise. Stimulus programs don't work. If they did, Japan would not be in the twenty-something-th year of a "lost decade". The much vaunted efforts of FDR in the "Great Depression" were pronounced a failure by members of his own administration. Contrary to popular buzz, World War II did not get us out of the Depression by spending; what happened was that the President (rightly) started paying more attention to winning the war than to screwing around with the economy and it righted itself. Most people don't realize that there were recessions and depressions before 1930 and the government never got involved. The economy fixed itself.
A program like "Cash for Clunkers" can't possibly restore a market; all it can do is pull demand forward. In any time period, some percentage of people are planning to buy a car in a few months. When they put a big incentive out, those people buy cars earlier, and to be charitable, maybe a few others. After that, the demand collapses to a lower level than it would have been because the other people just can't afford to buy a car or don't feel comfortable taking out a loan. That's exactly what happened to People's Automotive Collective Number 1, when their sales dropped by over 20% from the previous year.
Considering how many times this sort of Keynesian stimulus has failed, it's a wonder people still believe in it. It's got to be a religion.
Speaking of that, I've been reading a recurring idea that this depression may end up killing the Fed (example from a guest author at Zero Hedge here). Interesting thought, but this is the richest organization in the world - in many ways, the US Federal Government is a wholly-owned subsidiary of the Federal Reserve Bank, not the other way around. I can't imagine them giving up and going away without troubles in the country of biblical proportions. Would you take a couple of good roundhouse punches to your face to protect your kids? It might be more like literally giving up an arm. I would. It may be what it takes to rescue the country.
One of the great thinkers of our time (or any time), Dr. Thomas Sowell, had an interview with Uncommon Knowledge, posted in its entirety on BigGovernment.com. It's 36 minutes long and definitely worth watching and listening to. It's largely based on his new book, Dismantling America. (I'm sure you're tired of reading: I don't make anything from book links to Amazon - they're just for convenience).
I spent three days on my EMP articles, and more time writing them. Frankly, I find that issue easier to understand than political economics because it's all technical problems and not stupid politician tricks. But the chance of us needing to know all about an EMP is much lower than the chance of us needing to know about economic collapse. An EMP might happen, but our economy is in collapse right now.