Free Markets, Free People

Some sanity, sad as it is

It’s not often one finds a dose of sanity in the New York Times. When one does, it should be celebrated, rather than ignored. In this case, the sanity comes from David Stockman, former budget director for President Reagan. His bottom line is no different than what I’ve been predicting since 2009. It’s just as gloomy:

[T]he Main Street economy is failing while Washington is piling a soaring debt burden on our descendants, unable to rein in either the warfare state or the welfare state or raise the taxes needed to pay the nation’s bills. By default, the Fed has resorted to a radical, uncharted spree of money printing. But the flood of liquidity, instead of spurring banks to lend and corporations to spend, has stayed trapped in the canyons of Wall Street, where it is inflating yet another unsustainable bubble.

When it bursts, there will be no new round of bailouts like the ones the banks got in 2008. Instead, America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today’s feeble remnants of economic growth.

He calls it a state-wreck, which is exactly what it is. An arrogant government that thinks it can fix everything, help everyone, and create money out of nothing has corrupted the markets & political culture, and mortgaged our future.

Even now, the Fed, after two previous rounds of "monetary stimulus"—code words for creating en ever larger supply of "money"—is dumping $44 billion cash into the market every month. And where it going? Creating millions of new jobs? No. It’s just going to Wall Street, where the equity markets have hit an all-time high.

The wheels have been wobbling for the last five years. Sometime in the not-too-distant future, they’ll simply…come off, and then we shall see what we see.

Read the whole article. Save it. Print it out. Keep it. That way, you’ll be be able to show your children how the richest, most powerful nation in the history of the earth committed suicide.

Dale Franks
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15 Responses to Some sanity, sad as it is

  • As depressing as the article is, the comments are even more depressing. Here is a serious reader of the New York Times:

    (Only an old crank would put forward, again, the tired shibboleth of small government and free market – that particular dystopia has a history. If you want it – go to Somalia).

    The left is now so blinded and captured by their quasi-religious political and economic philosophies that if you don’t believe in it all the way, you’re a heretic and should go live with the savages.

    No debate is possible with people who see the world that way. They lack the cognitive capacity to distinguish “small government” from “no government” or from “thuggish tribal government”. They use the products of the free market every day, even to type messages such as the one above, but have no conception of how it works or how to recognize it’s results.

    • …the tired shibboleth of small government and free market…

      And I wonder how the FLUCK we, as a nation, developed to the point where we could sustain this kind of madness as long as we have?  Oh, yeh…MUCH smaller government and a MUCH freer market.
      And that comment proves Stockman’s conclusion…it can’t be fixed.  We’re doomed.
      I’m also put in mind of news contemporaneous with the Stockman piece about a Gallup poll.  The primary problem people see with the GOP is that they will not compromise.  What CAN you compromise with when the choices are A) TAX & SPEND & CATASTROPHE, ooooorrr B) VERY GENTLY, MODESTLY REIN IN SPENDING?

    • I don’t believe anything can be done to prevent this sort of thing. We’re at the stage now where it is best to watch, and make notes for when the time comes for score settling.
      Because history shows us that time ALWAYS comes.

    • Well, in the early American republic, it was hard to see that there was a government at all. But the difference is culture. The problem in Somalia isn’t lack of government, it is disfunctional culture.

      The left denies the superiority of our culture, and even those on the “open borders” right are blind to the importance of culture. But culture is the key.

    • That comment is just one of hundreds that the left barfs back from academia/MushroomMedia daily.
      It’s right up there with “trickle down economics”, “War never settled anything”, an on and on.
      It is a good example of concrete “thinking” that Ayn Rand took to task in “Comprachicos” and Yochelson & Samenow studied in “Criminal Personality, both works, incidently, from 1970.
      The reason things won’t get fixed is that the public indoctrination systems ALSO stultify the mental processes NEEDED to fit the problems. Indoctrination is bad enough, but concretized thinking produces essentially lower-animal mental processes (See: Nancy Pelosi, Harry Reid, Buttcrack Obama, Erb, etc.

  • Dale,
    When I read that one myself, I wondered what your take was on it.
    All I can say is, oh darn.   At least when it goes to hell I’ll have mentally prepped for it and won’t be sitting in the local equivalent of the Superdome waiting for that slacker in the White House to make it worse by ‘fixing’ it.

  • The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

    President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound [!!! and WTF???] is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

    I say again…this cannot be mere fecklessness.  This HAS to be design.

    • He, and his media minions are pushing “Remain calm.  All is well!!!!”.   If they’re very lucky they (along with the rest of us) won’t end up like Kevin Bacon did with the same message in Animal House.

      • When the dung hits the cooling device, he plans to be out of office and safely ensconced in a tony – and protected – living situation. And the media will blame the GOP/Tea Party/Christians/Big Oil/BUSH or whatever the designated bad guy is. So what does he care?
        He’ll be fine. He’s got his exit strategy.

        • Well, depends on whether or not things go completely to hell and we swap the use of light poles from their present function to a more instantly gratifying one, doesn’t it?

          • … I was HOPING somebody would get around to mentioning that lamp posts can “illuminate” in a metaphorical way…

            When The Day comes, I hope there are a LOT of Leftards (including the preening idiots mentioned previously) who have that brief moment of clarity “Oops, we pushed it too far”. In a perfect world, that would include everyone -EVERY, SINGLE, ONE, dammit- of those “elected representatives” who voted to pass Porkulus and Obamacare and the other thousand-plus-page-bills they crammed through without bothering to read them (and with no pretense at debate).

            Misfeasance, malfeasance, dereliction of duty – whatever you call it – by all that’s just, THAT should be a hanging offense. I will never forgive those *******s. (But I never heard, back then, any condemnation of those slugs for making it perfectly clear how little regard they have for the citizens who elected them, or for the dignity of the office they were elected TO. And when I remind people of it today, they look confused then say, “Oh, yeah”… but there’s no outrage at all. Aaaargghh!) Start there, Madame Defarge!

  • Looking at the last real estate bubble, it began around ’96 or ’97 and peaked around ’06. The resulting economic crisis hit in late ’08, just in time to help Obama win election. Bill created it (not all by himself, but he was the main guy) and was safely out of office when it popped.

    The next one won’t ramp up as quick, because now everyone is market shy. Fredie Mac started in ’38 and didn’t do much until after WW2 ended. Even the New Dealers couldn’t create a housing bubble in the late ’30s and early ’40s. Obama’s effort won’t drive a large bubble in the short term, and when (and if: we have other serious issues that may be the prime drivers in our next crash) it finally does he won’t get the blame.

    The problem is that this stuff doesn’t have easy to see cause and effect, so it takes an educated and high information public to see what’s going on. And the media and academics are protecting their leftist ideology and hiding the cause and effect.

    • There are people who want this to happen again.  Flippers for one.  And people who  previously thought they were going to be able to early retire off their inflated home prices.   Add in the fact that everyone knows how to exploit the system and this time the boom will be faster, imho.