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REQUIEM

Below are the two final essays to be posted on Allegiance and Duty Betrayed. The first one is written by a friend -- screen name 'Euro-American Scum' -- who, over the past four years, has been the most faithful essayist here. He has written about everything from his pilgrimage to Normandy in 2004 to take part in the 60th–year commemoration of the invasion, to his memories of his tour in Vietnam. His dedication to America’s founding principles ... and those who have sacrificed to preserve them over the past 200+ years ... is unequaled. Thank you, E-A-S. It has been a privilege to include your writing here, and it is a privilege to call you my friend.

The second essay is my own farewell. And with it I thank all of the many regular visitors, and those who may have only dropped in occasionally, for coming here. I hope you learned something. I hope a seed or two was planted. But, even if not, I thank you for stopping by ... 25 March, 2010

10/31/2009

GDP Numbers ... Sleight of Hand ... Rabbits and Hats ... Carnival Barkers ...


The GDP figures released yesterday, indicating a surprising 3.5% growth in the third quarter, are largely a combination of (1) adroit sleight of hand, and (2) non-free-market economic manipulation.

The American economy is primarily being fueled by enormous government deficit spending, which by nature cannot be sustained. It’s all part of an all-too-familiar pattern. When the left takes over an economy, growth usually moves in unnatural spurts as the government spends money it doesn't have. Then comes the hangover. It may take a while to set in, but once it does, it’s fierce.

In 1971, the first full year after Allende was elected in Chile, the Chilean GDP grew by nearly eight percent. Then the house of cards began teetering and the country slid into chaos, ultimately resulting in a military coup.

I'm not saying America is in for anything even remotely similar, but the important lesson to be learned from Chile’s myopia is that initial GDP figures following a dramatic leftward swing in leadership don't prove that socialism works. There is no avoiding the dark destination that will result from spending what we don’t have and funneling those funds into non-free-market ventures. That particular road is well-traveled, well-marked and littered with bodies. We will never return to anything even remotely resembling genuine prosperity as long as we abandon free market principles and focus instead on a well-oiled printing press intent on providing handouts to a long line of special interests.

Take a look at the current categorizations of unemployment:
______________________________________________________

U1: Percentage of labor force unemployed 15 weeks or longer.

U2: Percentage of labor force who lost jobs or completed temporary work.

U3: Official unemployment rate per ILO definition.

U4: U3 + ‘discouraged workers’, or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.

U5: U4 + other ‘marginally attached workers’, or ‘loosely attached workers’, or those who ‘would like’ and are able to work, but have not looked for work recently.

U6: U5 + Part time workers who want to work full time.
______________________________________________

The recently released figures show that unemployment continues its march -- yet another 520,000 Americans got pink slips last week. The government accountants are conveniently using the U3 numbers and ignoring all others.

Because of this unrealistic procedure, they are conveniently able to keep the unemployment rate at 9.8%, even though every week we have another half million new filers. If we include those who have dropped off the rolls, or who have taken part-time work (i.e., if we use the U6 numbers), unemployment sits at 17+%. Hardly a sign of economic recovery by anyone’s rational measure.

In this latest GDP quarterly report, Cash for Clunkers caused a temporary spike, but what we are witnessing is a lagging indicator. The same is true of the $8,000 tax credit for first time home buyers.

If we want to examine a real leading indicator, how about considering the fact that GM is looking for yet another (count ‘em ... that would make three) government bailout. Hmmmm ... could that be because Cash for Clunkers provided merely a temporary artificial boost, and, going forward, more and more taxpayer-funded auto-maker crutches (green ones sporting the bearded faces of old American leaders) are in the offing?

Retail outlets are already starting Black Friday door-buster sales … in October. For retail to be attempting to attract money that people plan to spend on the holidays before Black Friday is virtually unprecedented. How’s that for a leading indicator?

State and local governments are out of cash.

The housing market, while receiving a temporary boost from the first-time-buyer tax credit, has continued its decline.

Commercial paper is in the process of collapse.

Workers who thought their traditionally-safe jobs would continue to be so are finding themselves furloughed and laid off, and their former employers are not refilling those positions.

The container shipping industry has fallen off a cliff. Packaging sales are down significantly. Unless I am unaware of some kind of new ‘packaging technology’, one still needs boxes to pack and ship stuff.

Transportation (primarily shipping, railroad and trucking) are all down as well. Unless companies are hiring mules or hefty carrier pigeons on the sly, it looks as though very little in the way of nuts and bolts are moving anywhere these days.

All of the current ‘robust’ GDP data simply proves one thing (irrelevant, unless you’re into number tricks): that future demand has been successfully pulled into present figures. However, the success of this revolutionary kind of accounting has effectively evaporated any real hope for a genuinely improving economy in the near term.

~ joanie

16 comments:

shelusc said...

We agree.

But, worst of all...we are using our Constitution as kindling to relight our dying economic fire.

DaveBurkett said...

Well done, Joanie.

The three major elections in VA, NY and NJ are going to be VERY interesting. I've been hearing all the liberals saying they won't be a referendum on Obama. Ha! Like hell they won't!

Anonymous said...

The grass roots of the conservative movement just claimed a scalp before anyone even voted," said Republican strategist Mark McKinnon, a former senior adviser to President George W. Bush and Sen. John McCain (R-Ariz.). "The conservative movement is alive, well, kicking hindquarters and taking names. And if you don't measure up, look out."

In a War Within the GOP, the Right Wins a Battle

From the Washington Post, of all places.

Diane Biddle

Anonymous said...

Our area has not been hit as hard as many. However, there are several examples of a time bomb that has yet to explode in commercial and speculative real estate. Two years ago a five unit strip mall was built next to campus. The anchor was supposed to be a Starbucks. They backed out as part of fixing their overexpansion. Two years later all units remain empty. Another strip mall was built last year closer to home. It has a new bank branch, a Judo school and 6 empty units to this day. I have never seen more than one car in the bank lot. Just down the road they shaved the top off of an entire knob overlooking a river. It is subdivided for million dollar houses. Not one in three years has been built. Just last week we went to an auction for kicks. They were selling a home in the most expensive subdivision in our area. The estimated value was $1.7 million. In our area, that gets you a gated estate and over 6,000 sq feet. There were no bids over $500 k, which did not hit the minimum, so they canceled. Again, this is not Florida, so I was shocked.

robmaroni said...

The container shipping industry has fallen off a cliff. Packaging sales are down significantly. Unless I am unaware of some kind of new ‘packaging technology’, one still needs boxes to pack and ship stuff.

Transportation (primarily shipping, railroad and trucking) are all down as well. Unless companies are hiring mules or hefty carrier pigeons on the sly, it looks as though very little in the way of nuts and bolts are moving anywhere these days.


Those particular facts are much more telling than most people realize, and we ignore them at our peril.

BTW Joanie, did you hear that the RNC is now endorsing Hoffman in the NY congressional race? What a bunch of spineless weathervanes!

John Galt said...

BTW Joanie, did you hear that the RNC is now endorsing Hoffman in the NY congressional race? What a bunch of spineless weathervanes!

Hoffman should have rejected the RNC’s endorsement. He is not running as a Republican. Now the national “Rockefeller Republicans” will claim it was their help that got Hoffman elected even though he would have been elected without their help, and even with their opposition. This is the same type of disgusting, cynical, principle-less maneuvering that most Hoffman supporters have rejected. Screw the GOP!

ML in NJ said...

Driving around where I live (northern NJ) I see all sorts of commercial property on the market that hasn't been on the market for at least 25 years. Every one of these buildings used to have people working in them.

Cal Brindisi said...

I agree with every point you make Joanie, and that's why I'm glad I'm up to the ears in gold and just about broke in everything else. ;)

Geithner: The Deficit Is Gigantic, But We'll Deal With It Another Time

Anonymous said...

From the Washington Times re:the NY 23rd race:

Hoffman spokesman concerned about ACORN funny business in NY-23 race

joanie said...

Thanks for the observations about the economy in your area, 'anonymous'.

We are witnessing the same here in south-central PA. For example: on a once particularly thriving few miles of a state road that we travel quite often, it is very depressing to see how many buildings are now vacant. Buildings that have housed small businesses that have been doing well for all of the thirty-five years we have lived in this area.

I would estimate that, on a mile-long once congested stretch of that road, a full forty percent of the buildings are now empty, and grass and weeds are beginning to take over the parking lots.

Seeing that transformation really tugs at one's heart strings. People worked in those buildings forty or more hours a week, sometimes for many decades. They raised their families, dependant on the business that was done there. And now hollow shells remain of what were once indelible parts of people's lives.

So very sad, for those people, and for all of America.

~ joanie

joanie said...

ML in NJ:

Thank you for your comments, similar to those of 'anonymous'. Please see my post above.

~ joanie

joanie said...

Rob and 'anonymous':

It will be wonderful if Hoffman can pull off a win in the 23rd disctict of NY. (By the way, that district includes Potsdam, where Rick and I met, and where many wonderful conservative Americans call home.) :)

But we'd better not count our chickens just yet. The 'republican', after having withdrawn from the race, has now endorsed the democrat. Serves as evidence of just how many Specter-like 'republicans' are out there.

Keeping our fingers crossed that the turncoat's endorsement, and ACORN's inevitable intrusion, don't steal this one from Hoffman.

~ joanie

joanie said...

That Washington Times article illustrates why we will never have another conservative administration, and why we may not ever have another republican majority in the house or senate (not that the letter ‘R’ means all that much anymore, mind you).

The left has amassed so much power in all the right places (on Capital Hill, in ‘higher education’, in the media, etc.), and they have finally honed corruption into a virtual art form.

Now they are focusing on silencing the opposition – and, mark my word, they will eventually succeed – and using voter fraud and vote-counting irregularities to see to it that the stranglehold they have on federal power, and the ability to manipulate the media, will never again be challenged.

While silencing all opposition, they will also simultaneously see to it that taxpayer money is used to prop up (what they deem) ‘necessary media outlets’ like the New York Times, Public Broadcasting, NBC, etc.

In the end (in the literal sense of the term, for America as we know it), they will not only control all power emanating from Washington D.C., but they will also eventually control (for all intents and purposes) all news outlets.

The former Soviet Union would be green with envy.

~ joanie

John Cooper said...

You think states have it bad now? If Pelosicare passes, it will increase state Medicaid rolls by 37%.

Every state in the nation will be bankrupt.

Oh, and in the Pelosicare bill, states are not allowed to "opt-out".

Brian Spear said...

Amen!

Economic Recovery, The Great Hoax of 2009-2010

gigli said...

http://www.grimmy.com/images/MP_Archive/MP_2009/MP1027.gif