The old saying goes something like this, “fool me once, shame on you, fool me twice, shame on me.” Well America, take a wild guess which part of that statement pertains to us. There were a bevy of faked news reports out from June of 2012 all the way through November 6, of the same year telling us all how rosy the economy truly looked. Those of us who bothered to look a little deeper into the numbers being fed to us by the usual culprits told you it was a sham. Yes the U-3 number dipped below 8%. However, we pointed out that the labor force participation rate needed to drop below a level not experienced since before the market crash of 1929 in order to achieve that number. Yes the GDP number started to show some semblance of what can only be termed as sluggish growth. However, those figures were due entirely to increases in government hiring and spending as well as hugely incentivized increases in manufacturing inventories. Undaunted by mere facts, America returned the man child President to the Oval Office on the premise that our economy was just starting to recover, and a change at this point would be foolish.
A funny thing happened on the way to economic recovery today. As it turns out, illusions can not be maintained forever. So, the gag is this, once the election is over, we get a glimpse of the harsh realities yet to come. Since manufacturers who produced those inventories didn’t actually have orders for their wares, and were not capable of selling their product after the fact, those massive inventories will sit, the workers will be let go, and now as an added bonus, we elected a man to our top office who will do what ever he can to regulate any actual recovery out of existence. Yay! The stark reality is that our economy has slipped back into recession, and it did this before the economic damage done by the Obama Presidency reached its full potential. That thought should scare the pants off of anyone still awake, and if that does not do it, then the upcoming national hunger will. One of the major problems with relying on a recovery based entirely on growing the public sector is that governments don’t actually produce anything, they merely confiscate from those who do produce. The results of following this path all the way to the inevitable conclusion are truly something to fear.
The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus.
The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.
The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That’s a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.
The surprise contraction could raise fears about the economy’s ability to handle tax increases that took effect in January and looming spending cuts.
Still, the weakness may be because of one-time factors. Government spending cuts and slower inventory growth subtracted a total of 2.6 percentage points from growth.
And those volatile categories offset faster growth in consumer spending, business investment and housing — the economy’s core drivers of growth.
Another positive aspect of the report: For all of 2012, the economy expanded 2.2 percent, better than 2011′s growth of 1.8 percent.
The economy may stay weak at the start of the year because Americans are coming to grips with an increase in Social Security taxes that has left them with less take-home pay.
Subpar growth has held back hiring. The economy has created about 150,000 jobs a month, on average, for the past two years. That’s barely enough to reduce the unemployment rate, which has been 7.8 percent for the past two months.
I read a post at the Blogmocracy today that should be required reading for every high school and collegiate economics class taught in America. Hat tip to Coldwarrior. Take a good look at the picture at the top of the link. That man is holding a Ten Million Dollar Bill, made payable by the central bank of Zimbabwe. What makes it pertinent to today’s essay is that Barack Obama’s rhetoric is exactly the same as Robert Mugabe’s. You would be able to take a stump speech from either man, and substitute it for the other, and no one would be able to tell the difference, save one. You will find it necessary to substitute the word rich for white in the Mugabe speech, and vice versa for the Obama speech in order to pull off the ruse.
The only result possible from continued government largess of this scale is wild inflationary pressure. The only possible result from demonizing the successful people who create wealth and following through on the promises made to punish those who do succeed is the complete loss of wealth for the entire society. Zimbabwe stands as that perfect laboratory as to what our future looks like should we continue along this path for a sufficient amount of time.
The reason it will take longer for us to reach these depths than it took Zimbabwe is because preceding generations had built sufficient wealth for us to cannibalize without noticing immediately the destructive nature of our ways. Capitalism, while it is not perfect, is the best system of economics in existence. Our first 212 years have allowed us to act foolishly for the next 24, without burning completely through daddy’s money. But, just like Barbara Hutton, who’s two grandfathers were Franklyn Hutton and F.W. Woolworth, it is possible to blow it all. She died penniless you see, after spending her entire adult life not working, not creating, and spending both fortunes as if consequences were petty little concerns for other people to worry about. She didn’t notice either that she was going broke, and left no children behind. We, as Americans are not so lucky. We are leaving a generation or two, or possibly a dozen or more, who will have to pay for the mess that we are leaving them.
I guess the good news is that we have a tool to prevent Barack from accomplishing his ultimate goal, which is to see America turned into Zimbabwe. That tool is our Constitution, and last week Barack got slapped down by the Judicial Branch in a major league way. It seems as though a President can not just make up his own rules and then declare himself supreme after all. In this case, the Bamster had declared the Senate to be in recess, even though they weren’t, and then made recess appointments to the NLRB, three of them. He got sued, and lost at the appellate level, and the result of the suit is that not one single ruling from the board made during the last year is binding in any way. We are more than half way through this thing now, and the damage that has been done can still be undone. It’s just going to take a hell of a lot of work to get there.
Special note here: For those of you reading this who are not yet members of the Blogmocracy, please consider joining in the conversation. The comments and discussions on the posts that run there are what makes the site worth the read, and the posts ain’t bad either. What’s more, differing points of view are welcome.
Cross Posted from Musings of a Mad Conservative.