This page has been archived and commenting is disabled.

Guest Post: Innovation - America Has A Structural Problem

Tyler Durden's picture




 

Submitted by Gordon T. Long of Tipping Points

Innovation - America Has A Structural Problem

I gave President Barrack Obama six months to roll-out his doomed Keynesian policies, twelve months to discover they were flawed and eighteen months to realize that the solution to America’s problems must lie within a different economic framework. I had hoped by the end of twenty-four months to see new policies closer to an Austrian economic philosophy emerge. I was wrong.
 
Though, even the Wall Street Journal recently featured an article on the re-emergence of the Austrian School of Economic philosophy, it would appear that President Obama’s administration still neither gets it, nor I am afraid ever will. Key defections by his leading economic advisors, talk of the need for QE II and a Stimulus II, and a political collapse in public confidence suggests a growing awareness that Keynesian policies are not working, as many predicted they wouldn’t. Obama's exciting rhetoric of Hope and Change has left myself and the majority of recent polled Americans disillusioned and disappointed. What I see the administration failing to grasp is twofold:

I-America has a Structural problem, not a cyclical business cycle problem. Though the cyclical business cycle was greatly worsened by the financial crisis, I would argue that the structural problem facing the US is actually a contributor to what caused the financial crisis.

II- America has a Credit demand problem, not a Credit supply problem. It isn’t that the banks won’t lend, but rather that few can any longer afford or qualify (on any reasonably and historically sound basis) to borrow.

A STRUCTURAL PROBLEM

1) Trade Balance: Insufficient Export/Import Ratio
 
We are all painfully aware that the US has not produced sufficient exportable product to support its standard of living for many years. Manufacturing in the US has been in steady decline since the 1960’s and the excess spending during the Vietnam War. It has been 50 years since the US had a balanced budget (forget Clinton's social security slight of hand). Over the last 10-15 years the US has seriously compounded this problem by accelerating the de-industrializaton of America without a strategy to replace salable export product. Corporate industrial strategies of outsourcing, downsizing, and off-shoring were never countered other than by an excess consumption splurge which fostered massive real estate and retail expansion distortions.

Simply said: A US Service Economy that is based on 70% GDP consumer consumption does not pay the bills!

For a brief period of time following the dotcom implosion, the US operated as a mercantile “Financial Economy” that turned out to have been nothing more than a historic illusion.

1999

2009

As the graphs below clearly show, since late 1999 with the surge in the adoption of the internet, unemployment in the US has spiked. Clerical, manufacturing and almost any job that could be further automated through networking advancements were replaced.

2) Creative Destruction: Slowing Innovation Rate

In my recent paper INNOVATION: What Made America Great is now Killing Her! , I described how the dotcom bubble ushered in a change in America that is still reverberating through the nation and around the globe. The Internet unleashed productivity opportunities of unprecedented proportions in addition to new business models, new  ways of doing business and completely new and never before realized markets.  Ten years ago there was no such position as a Web Master; having a home PC was primarily for word processing and creating spreadsheets; Apple made MACs and ordering on-line was a quaint experiment for risk takers.

In 1997 prior to the ‘go-go’ Dotcom era unfolding, America’s unemployment was less than half of what it is today at 4.7%.  At that time the US added 3 Million net jobs which reflected the creation of 33.4 Million new positions while obsolescing or cutting 30.4 Million old positions. Job losses occurred in old vocations such as typists, secretaries, filing clerks, switchboard operators etc.  Hired were new occupations such as C++ programmers, web masters, database managers, network analysts, etc. 

As our research chart above however illustrates, the additions have fallen off precipitously while the job losses have stayed relatively flat. In 2009 job losses were 31M and only slightly larger than 1997, which would be expected with further internet application development. New job creation however was only 24.7M which is dramatically lower than the 33.4 in 1997.

Over 98% of all jobs created in America have traditionally been created by companies with less then 500 employees. Recent research by the Kaufman Foundation shows that in fact new start ups versus existing businesses dominated the creation of new positions.

America’s slowing ability to innovate which is reflected in published research papers, patents issued and numbers of college graduates with advanced math and science degrees has seriously fallen behind. I laid out the seriousness of this problem in my early 2010 paper:  America - Innovate or Die!

It is more than a little disconcerting that after 13 Trillion in stimulus measures we see business spending on capital investment STILL shrinking in the US.

It can’t be any clearer, the US has a structural problem. The administration can not possibly fail to realize this. My sense is they just don't know what to do about it.

A DEMAND PROBLEM

1) Credit Available - Demand Flat.

According to the Federal Reserve's latest quarterly survey of banks' lending practices recorded during July 2010, “for the first time since 2006, banks are making commercial and industrial loans more available to small firms, with about one-fifth of large domestic banks having eased lending standards. This offset a net tightening of standards by a small fraction of other banks."  Also, for the past six months, banks have continued easing lending to large and mid-sized firms. What's more, banks also reported that they stopped cutting existing lines of credit for commercial and industrial firms for the first time since the Fed added the question in its survey in January 2009. As for consumer loans, banks also reported easing standards for approving loans.

Credit is available, but demand remains flat.

Asked in the July survey how demand for commercial and industrial loans has changed over the past three months, 61% of banks responded "about the same," while 9% said "moderately weaker." While it was good news that 30% responded "moderately stronger," it's not exactly a surge in demand.  Even in a slowly recovering economy, the growing distaste for credit among our debt-weary public has hampered the way for new purchases and investments.

This isn't all that is surprising. The latest economic indicators paint a very exhausted consumer: In the years leading up to the financial crisis, he bought too much house and too many cars. The consumer is in burn-out mode, more focused on either saving or paying down credit card debt than buying more appliances and gadgets.

The amount consumers owed on their credit cards during the three months ending in June dropped to its lowest levels in more than eight years, indicating that cardholders continue to pay off balances in the uncertain economy, according to TransUnion's second quarter credit card statistics.

The average combined debt for bank-issued credit cards fell by more than 13% to $4,951 over the previous year. This represented the first three-month period where credit card debt fell below $5,000 since the three months ending in March 2002. Meanwhile, personal savings have risen to 6.4% of after-tax incomes, about three times higher than it was in 2007.

Perhaps what the Fed's quarterly report is really saying is this:

"There's a growing distaste for credit. The American consumer is the child who ate too much and spoiled his dinner. And even if you hand him his favorite meal on a silver platter, he's just not that hungry.”

2) Shifting Demographics

Another obvious but seldom highlighted factor affecting demand is shifting demographics. The Baby Boomer generation is no longer the consumption engine it has been to the US economy.

We have a generation that, as has been predicted for some time, is reducing its expenses but it may be even more dramatic than forecasted. With home housing prices no longer being the wealth generation vehicle they had expected it to be, stocks not delivering the returns they had been told to expect for the 'long term’ investor and medical expenses climbing above their worst budgeted targets, the baby boomers are being forced to cut back even further than the expected demographics were warning about.

The demand for credit to finance new acquisitions is not the same priority it was only a few years ago. Harry Dent's extensive demographic research lays this out in indisputable detail.

All Federal Reserve and Government actions are about increasing credit supply.  None effectively address demand.

THE RESULT

40.8 Million Americans on Food Stamps

Employment at Unprecedented Lows

Expect it to get worse until the administration finally realizes that we have both a structural and demand problem facing America, not a cyclical business cycle and credit availability problem. I personally don't believe for a minute that the Obama Administration haven't come to realize something is wrong. The White House simply doesn't know what to do about it. They are doing the only thing our Washington political machine knows what to do - throw money and credit at the problem, which is precisely what got us into this problem in the first place.

 

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 09/09/2010 - 12:27 | 572005 Tarheel
Tarheel's picture

I'm sorry you were so dissapointed by our Kenyan president.

Thu, 09/09/2010 - 12:43 | 572045 themosmitsos
themosmitsos's picture

ahahhahahHAHAHHAHAHHAHAHA infinity ;)

I call him the affirmative action president, but your's is much better

Thu, 09/09/2010 - 12:56 | 572072 BlackChicken
BlackChicken's picture

I call ANY POTUS that will stand with his hands behind his back during the National Anthem, remove the American Flag from his press interviews, and not give respect to our fallen heroes at Arlington...

A fucking looser... nothing more, and nothing less.

Thu, 09/09/2010 - 13:15 | 572116 Plissken47
Plissken47's picture

Please quick reading Tea Party e-mails and watching Faux News.

Thu, 09/09/2010 - 13:15 | 572117 Plissken47
Plissken47's picture

Please quit reading Tea Party e-mails and watching Faux News.

Thu, 09/09/2010 - 17:25 | 572906 BlackChicken
BlackChicken's picture

I don't receive e-mail from, nor am I a member of the Tea Party, and I rarely watch television let alone the 'news' channels. 

Thanks for your concern regardless.

Thu, 09/09/2010 - 14:08 | 572278 aerojet
aerojet's picture

That's just stupid.  As if a president wrapping himself in the flag every chance he got (Bush II) was something other than easy sentiment.

Thu, 09/09/2010 - 17:35 | 572924 BlackChicken
BlackChicken's picture

I think you missed the point, and are trying to spin what I said.

The POTUS is a representative of the United States and one of the symbols of what this country stands for is our flag.  When ANY POTUS is too ashamed to have that symbol near them during a televised speech that might be watched anywhere in the world, he is sending a clear message to those outside our country - "I do NOT stand by my fellow countrymen"

Name calling is not going to raise your awareness or IQ.

I was no fan of Bush either, but at least the man knew how to show honor to those who are willing to lay down their lives for our country.

Fri, 09/10/2010 - 06:57 | 573702 Edward G. Rendell
Edward G. Rendell's picture

"Name calling is not going to raise your awareness or IQ."

Oh, you confused me when you called the president a "fucking looser" with the handle "black chicken."   

Anyhow, ZH has just about reached the end of its usefulness to me except as another place to watch the culture degenerate. 

Between the sly racists and the overt anti-Semites in the com-boxes, Tyler's rampant "guest post" cutting and pasting, the nigh-disappearance of Marla, and the general decline in commenter cleverness, it's lost most the qualities early adopters admired.

Morons bitchez!  :-(

Fri, 09/10/2010 - 13:17 | 574393 BlackChicken
BlackChicken's picture

Thanks for pointing that out to me; my bad on calling the President a loser.  That was kind of pathetic I admit it, I should have said "borderline treason" instead of letting my emotions get the better of me.

My handle is my favorite wine made by Robert Biale, please forgive me for not explaining that earlier so you would not lump me in with the degeneration of our culture. 

I have a lot to learn that is for sure - NO sarcasm intended.

I realised I made a spelling error as well after my post was replied to - my bad again.

If you dare to insinuate my comment (or handle),was racist, the moron is you

"ANY POTUS" was where my comment began, and his race never for a second came into my mind.  I do not like what the man is doing, but he is still the POTUS regardless.

Thu, 09/09/2010 - 14:20 | 572327 caconhma
caconhma's picture

He is an incompetent fraud, a liar, and an enemy of America and its way of life.

However, to call someone a loser who came from an unknown gutter with an unknown citizenship to become an American Senator and then a President is just stupid.

Yes, he is a puppet of the America ruling elite but he was very smart to be selected. He is not a mean imbecile GW Bush who was a part of the ruling elite who became a President thanks to his family connections.

In any case, it is an American tragedy when a great country in just 10 years finds itself on a doorstep of a catastrophe and a civil war.

Thu, 09/09/2010 - 17:27 | 572910 caconhma
caconhma's picture

  You know the honeymoon is over when the comedians start.

The liberals are asking us to give Obama time. We agree . . .. 
and think 25 to life would be appropriate.
--Jay Leno

America needs Obama-care like Nancy Pelosi needs a Halloween 
mask
. -Jay Leno

Q: Have you heard about McDonald's' new Obama Value Meal?
A: Order anything you like and the guy behind you has to pay for
it.
-Conan O'Brien

Q:What does Barack Obama call lunch with a convicted felon?
A: A fund raiser. -Jay Leno

Q: What's the difference between Obama's cabinet and a penitentiary?
A: One is filled with tax evaders, blackmailers, and threats to society.
The other is for housing prisoners.
--David Letterman

Q: If Nancy Pelosi and Obama were on a boat in the middle of the ocean and it started to sink, who would be saved?
A: America ! -Jimmy Fallon

Q: What's the difference between Obama and his dog, Bo?
A: Bo has papers. --Jimmy Kimmel

Q: What was the most positive result of the "Cash for Clunkers" program?
A: It took 95% of the Obama bumper stickers off the road. -David Letterman

Thu, 09/09/2010 - 17:49 | 572942 RingToneDeaf
RingToneDeaf's picture

This tragedy took longer than 10 years, this started probably in the 60's or it's roots the 50's, with the moral decay at the university level.

How can you call O very smart to be elected, when everything he has done since then has been destructive and devisive to the country unless it is a part of a plan to destroy the US. Actions speak louder than words.

Bush II was not my favorite cut taxes and spend, spend politician but his actions in other ways speak louder than a Liberals bleatings, a decent man I would say, flawed, human, an American, yes.. Cannot say that about BarryO, a loser who has never done anything that was judged by it's success..Except decieve the dim whitted American people of what he really is.

Thu, 09/09/2010 - 21:08 | 573230 Loan Gunman
Loan Gunman's picture

I think you meant loser.

Thu, 09/09/2010 - 13:15 | 572121 jimijon
jimijon's picture

Did you mean "Kenyesian" president?

Thu, 09/09/2010 - 13:19 | 572137 hungrydweller
hungrydweller's picture

No - I believe he meant exactly what he wrote.

Thu, 09/09/2010 - 13:18 | 572130 hungrydweller
hungrydweller's picture

Agreed.  Why anyone would have voted for the biggest empty-shirt politician in our country's history is beyond me.  "Surprised"!!??  Really?  C'mon, the guy had absolutely no experience doing anything productive or useful in his entire adult life.  I was no fan of Bush II and even less of a fan of McCain (My God, could you imagine that whining Palin as our VP - at least Biden is entertaining), but Obama was obvious fraud from the outset.

Thu, 09/09/2010 - 13:31 | 572168 Ripped Chunk
Ripped Chunk's picture

"the biggest empty-shirt politician in our country's history"

Wait until you see your "choices" for 2012. It will only get worse. And it's pretty fucking bad right now.

Thu, 09/09/2010 - 13:58 | 572240 ColonelCooper
ColonelCooper's picture

At least if Palin runs her shirt will be full.

Thu, 09/09/2010 - 14:26 | 572354 DoChenRollingBearing
DoChenRollingBearing's picture

Hahaha!  

+ 100 Colonel!

I got that Obamonopoly in an email.  Whoever created that should get an award.

Thu, 09/09/2010 - 13:35 | 572179 NotApplicable
NotApplicable's picture

What does that matter who you vote for when they are all puppets from the same show?

For instance, during the last election cycle both Obama and McCain had a foreign policy advisor named Brzezinski. No, they both didn't have Zbignew, but they did each have one of his sons, Mark and Ian.

"Don't blame me, I voted for Kodos" - Homer Simpson

Thu, 09/09/2010 - 13:51 | 572225 hungrydweller
hungrydweller's picture

Moe for President!

Thu, 09/09/2010 - 20:40 | 573198 Kayman
Kayman's picture

Just an aside-Zbigniew predicted the collapse of the Soviet Union and everyone thought he was nuts.

I wonder if you could get a candid summary from him about the prospects for this country.

Thu, 09/09/2010 - 14:33 | 572381 alibabaandthefo...
alibabaandthefortythieves's picture

I was born in Kenya. I'm offended you refer to him as Kenyan.

Thu, 09/09/2010 - 15:59 | 572688 hungrydweller
hungrydweller's picture

Obama is Thief #41.

Thu, 09/09/2010 - 16:01 | 572700 A Proud Canadian
A Proud Canadian's picture

Kenyan Keynsian

Thu, 09/09/2010 - 19:01 | 573070 Cathartes Aura
Cathartes Aura's picture

@ Tarheel:

I'm sorry you were so dissapointed by our Kenyan president.

 

so you voted for the one born in Panama, eh?

point being whoever was "elected" (*cough* installed) the drama would be the same. . . try not to be distracted by fictitious "sides"

Thu, 09/09/2010 - 12:28 | 572006 Weimar Ben Bernanke
Weimar Ben Bernanke's picture

We are America Tyler!!!! History and the laws of economics do not apply to us!!!! I will ignore your fancy economic charts and facts that seem to be true but Obama will save us,if not then Palin,Beck,Perry,Clinton will!!!! OHHH there is new episode of jersey Shore tonight!!!

Thu, 09/09/2010 - 13:08 | 572095 Millennial
Millennial's picture

"OHHH there is new episode of jersey Shore tonight!!!" 

I'll be watching Jwoww beat the shit outta Sammi and Angela gets in on it as well. 

yay! I love drunk hooahs fighting. Maybe nip slip tonight?

 

In any case I'll probably be drinking cherry vodka and diet coke.

Thu, 09/09/2010 - 13:53 | 572229 Almost Solvent
Almost Solvent's picture

Try grape vodka and pink lemonade.

Brilliant!

Thu, 09/09/2010 - 14:29 | 572365 DoChenRollingBearing
DoChenRollingBearing's picture

My favorite glide path to bed:

4 parts berry flavored vodka, 1 part absinthe.  Mmm...

Thu, 09/09/2010 - 16:37 | 572795 Millennial
Millennial's picture

Actually me and my buddy who lurks here have come up with various concoctions. If you get blue vodka like colored blue and tastes like blueberries mix it with mtw dew and lemonade. We call it Baja Blast like the drink from T-bell, it's got a kick and lemony flavor and its sweet but it gets you real drunk because you end up making more and you forget how much you drank. We did 2 5ths of this stuff and we were sloshed then drove to tbar somehow got home. 

 

Later on we both made out with strippers. They were going to college for their BBA's.

 

Further to prevent our parents from thinking we are alcoholics we use the term "lunch" for booze/drunk as in "Hey wanna get lunch dude? Sure! Mom we're gonna get lunch, bye!" I think it works besides coming home 12 hrs later and falling asleep on the carpet.

Thu, 09/09/2010 - 16:40 | 572804 Millennial
Millennial's picture

Might try that tonight.

Thu, 09/09/2010 - 22:00 | 573283 DeltaDawn
DeltaDawn's picture

You should be really proud of yourself, not.  

No time for acting like a Russian. You will need all your skills and wits to weather this one.

 

 

Thu, 09/09/2010 - 14:12 | 572293 gumstick2003@ya...
gumstick2003@yahoo.com's picture

This is so true. and what happens when the powerful get their roles confused and start thinking the seat belongs to them. it's not that they don't know what to do about it, but that they can't face the task of looking in the mirror. fearing that what they will see is a mirage. because they are the bearers of all that is good and right. so truth or the ability to see the truth remains unquestionable, from any perspective but their own.

Thu, 09/09/2010 - 12:31 | 572011 bronzie
bronzie's picture

the 'structural problem' is that our economy is a fraud

we can't have a healthy economic system when it is founded on top of a dishonest monetary system

fiat currency is dishonest money - always has been, always will be

it's cool charting the symptoms of a dying fiat currency, but when are we going to address the root issue?

Thu, 09/09/2010 - 13:10 | 572099 israhole
israhole's picture

Somebody here a few weeks ago referred to it as "Uncle Scam".  :)

Thu, 09/09/2010 - 12:31 | 572013 Bearster
Bearster's picture

Socialists (to use the polite) term like Obama will never agree to Austrian economics, reductions in the size, scope, and role of government, or increasing liberty for the people.

Why?  Because morality always trumps mere pragmatic concerns.  Let me illustrate.

If I could convince you that you could make an easy million dollars by murdering someone I pointed out on the street, and even if you knew you could get away with it...would you?

To a socialist, morality consists of sacrificing the individual to the State.  Even if you prove beyond any doubt that this is not practical, results in economic inefficiency, etc. etc. etc., the socialist is unswayed.

Because it is *wrong* (in his eyes).

This explains not only Obama's intransigence, but why after all these decades and numerous countries around the world, where socialism has always failed wherever and whenever it has been tried, it is still believed and accepted and longed-for.

"Somehow, if my group were in power, we could make it work, and things would all be different, somehow..."

Thu, 09/09/2010 - 13:26 | 572131 B9K9
B9K9's picture
Ok, somewhat off-topic, but I'd like to hear other comments.

@MarketTruth - If you come close to telling on the Fed, a dirt nap is in your future.

Since you raised this important issue, and even though this thread is going stale, I'm going to post a preliminary reply just to flesh out some basic themes that have been discussed on different posts.

Premise tree:

#1 - The continuing political viability of the USA is completely dependent on the success of the Fed to maintain asset values.

#2 - The Fed has exposed itself to tremendous risk by telegraphing its asset valuation positions/mechanisms to any/all who care to see.

#3 - The easiest and most direct means of (a) taking down the USA; and (b) assuming either global power and/or simply seizing domestic political/military control is to destroy asset values being supported by the Fed.

#4 - Ergo, the easiest and most direct means of destroying asset values is either a full exposure of blatantly illegal, and/or counter-leveraging, Fed asset support activities.

Ok, so now that the basic mechanism(s) for destroying asset values, and by relationship, the USA, in order to assume either global power and/or domestic control, is laid out, who are the respective players? For ease & simplicity, we can group them into two separate groups - foreign & domestic:

I. Foreign

  • Chinese
  • Russians
  • Arabs
  • Israelis
  • Europeans

II. Domestic

  • Republicans
  • Democrats
  • Military
  • Industrialists
  • Bankers

Now, as MarketTruth mentions above, such a step is fraught with risk for domestic players who don't have adequate (personal) protection. That's why the most likely candidate might either be the MIC or ... bankers.

Think about bankers for a moment; they have all the tools and they have all the information. If they could kill the king and assume the top position themselves, they could successfully dodge paybacks (assuming they eliminated their rivals upon taking control of the respective vengeance mechanisms).

As to foreign sources, what is holding them back from revealing their hands? Nuclear attack? Who knows; really who cares. It only muddies the analysis - the key is to first determine the likely culprits and then ID their time-line.

My bet is on an internal judas goat. Imagine the potential payoff of shorting & crashing an entire global financial system, and then taking complete political of the USA (and its military) simply by exposing the Fed's illegal activities with a wide scale P/R campaign (after all, the power-elite own, and in fact, ARE, the MSM).

CogDis and I have had disagreements on the unity of the power-elite. My belief is that as in any criminal enterprise and poker game, when one is holding a strong hand, the potential reward(s) & temptation of going "all in" are simply too great to resist. As the old saw goes, "there's no honor among thieves".

From my perspective, this is entirely fascinating. In every activity in life, there is always the 'game within the game'. We have gotten to the point where the players could hardly give a shit whether Tyler and others are onto them. They are now intently focused on each other as they quietly circle the room.

In every generation and in every corner of the globe, there is always a Mao, Stalin & Hitler waiting in the wings, biding their time, yet salivating at the chance to grab it all. Almost 500 years ago, men like Cortes & Pizarro risked it all to seize for themselves alone practically the entire world's known wealth. Who out there today is just itching to pull the trigger?

Thu, 09/09/2010 - 14:01 | 572249 centerline
centerline's picture

Hindsight being 20/20, the last 20 years (at least) does look way too orchestrated.  Anyone who is a position to oversee large segments of the economy who claims they simply did not see the last bubble before it popped is either party to creating it, or covering thier ass.  Hell, I saw it coming from the street level.  Between the "flip the house" bullshit, liar loans, everyone becoming a real estate agent, super-duper special mortgage bomb instruments, etc. - who didn't at least at some point think..."hmmm, this is really not right."  The average guy got caught up in the run.  The professionals, those who are supposed to safeguard the economy, could not have collectively got "caught up" in the same run.  Sorry.  Don't buy it.

 

Therefore, I can only conclude that this has all been on purpose.  Either as an attempt to keep a dying system alive (which actually began to rollover in the 80's) or even worse... outright intent to kill said system for financial gain, power grab, resource grab, etc.  I ask myself both who stands to gain and who stands to lose.  

Thu, 09/09/2010 - 15:12 | 572519 Bartanist
Bartanist's picture

Let's think this through a little more:

- The power has to be multi-generational (potentially many generations)

- The power has to be multi-national or transnational

- The power has to be superior to and be able to direct western governments, western religeons, western finance and western media

- Think about how seemingly "out of place" some of our technological development has been (Einstein and Nazi Germany for instance)

- If there is a multigenerational multinational power, it has been able to hide itself for a long time. Look for the gaps in our historical education and that is seemingly an area hidden history.

- The power has to have been located outside of the sphere of conflict so that is can avoid exposure through direct conflict.

The power has to be so great and frightening that it can bring country leaders into tow immediately (think about Bush Jr. and how he was a whipped puppy ... think of Obama, same thing). No one in the western world challenges the power.

There has been much prophecy throughout history... what does it point to? WTF was with the Georgia guidestones? Why did Americans finance Hitler and the Catholic Church assist the Nazi's escape Germany. What do Nuremburg and Basel have in common? What do George Washington and Albert Pike have in common? Why does the BIS need lots of gold? What the heck is with the study of mysticism and alchemy throughout history by otherwise brilliant people? What is will the ruling class and their obsession with bloodlines?

From all that I have read (and this borders on the absolutely certifiably crazy by virtually all modern standards, but what the hey?!?) we very well might have one or more very ancient beings living on earth and running things through its/his proxies... maybe Marduk.

Pretty f'n nutzoid, eh? However if this is the case there are a couple of things people need to know.

1. The coming of Aquarius may change things (hand-off of who is in charge of the planet)

2. In ancient history these powers believed in reducing the burden of people on earth by thinning the herd.

Thu, 09/09/2010 - 16:08 | 572720 centerline
centerline's picture

http://www.youtube.com/watch?v=TTcLhKdOqu8

A Swedish metal band runs everything?

 

 

(just kidding)

Thu, 09/09/2010 - 17:06 | 572863 Almost Solvent
Almost Solvent's picture

Interesting, but why bother?

If the alien/god was so powerful, why not just enslave us like in Stargate?

They must treasure the charade for some reason, but outright slavery is the most efficient.

Thu, 09/09/2010 - 17:30 | 572914 Bendromeda Strain
Bendromeda Strain's picture

It's like Dracula - you have to invite your own destruction. Oh, and that thing that Verbal Kint said...

Thu, 09/09/2010 - 22:12 | 573294 StychoKiller
StychoKiller's picture

Look up "Age of Kali" -- just as valid as any other theory out there.  Put some steel over your tin (actually aluminum)-foil beanie to filter out magnetic fields as well.

Thu, 09/09/2010 - 22:18 | 573305 merehuman
merehuman's picture

my vote is on the Bildeburgh/Rothchild cabal using China as proxy, China taking the stage for pegging their yuan to gold , and soon.

It would explain Chinese rulers having the public purchase silver and gold.

It would make them Top dog quickly and without doubt. 

Thu, 09/09/2010 - 13:48 | 572215 Sam Clemons
Sam Clemons's picture

And somehow always means somebody.

Thu, 09/09/2010 - 21:34 | 573248 StychoKiller
StychoKiller's picture

Socialism is politics for 6-year olds.  Get a grip and grow up folks, the universe is NOT FAIR -- deal with it!

The problem with socialism is socialism, because there are no socialists.  Socialism is a system based upon an assumption about human nature that simply isn't true.  I can design a perfect canine community in which dogs never chase squirrels or groom their nether regions in an indelicate manner.  But the moment I take that idea from the drawing board to the real world, I will discover that I cannot get dogs to behave against their nature--at least not without inflicting a terrible amount of punishment. Likewise, it's easy to design a society that rewards each according to his need instead of his ability.  The hard part is getting the crooked timber of humanity to yield to your vision.

And it's also why the problem with capitalism is capitalists.  Some people will always abuse the system and take things too far.  Some will do it out of the hubris of intellect.  Some will do it out of the venality of greed.
I bring all of this up because many in Washington seem convinced that the solution to the problem with capitalists is always less capitalism.  To be sure, a free-market society is in some sense a government program.  The government must prosecute criminality, enforce contracts, and demand that the rules be observed.  Few lovers of free markets are so laissez-faire as to want to strip the government of its role as REFEREE.
But few should want the REFEREE to suit up and play the game.

Thu, 09/09/2010 - 12:33 | 572016 Grand Supercycle
Thu, 09/09/2010 - 12:34 | 572017 JLee2027
JLee2027's picture

I'm convinced the entire system needs to burn down before major changes will be made.

Thu, 09/09/2010 - 13:03 | 572084 BlackChicken
BlackChicken's picture

I completely agree with you.

However, if it does burn down, it will not happen because it was allowed to naturally occur, it will burn down to make THE perfect cover story to the largest theft of wealth since man walked upright.

It will be designed as a cover-story, or a distraction...

Thu, 09/09/2010 - 13:10 | 572101 bronzie
bronzie's picture

the history of governments and their decline shows that it is time to implement another world war

the war distracts the sheeple from the dying monetary system and economy while the power players setup the next system in the background

world war III - coming soon to a theatre near you!

Thu, 09/09/2010 - 13:35 | 572177 Ripped Chunk
Ripped Chunk's picture

Agreed. It is inevitable at this point.

" the war distracts the sheeple"  and kills them and their children, all so the wealthy beyond normal imagination can get even wealthier.

Thu, 09/09/2010 - 14:39 | 572409 Azannoth
Azannoth's picture

The events of 9/11 and the following wars only confirm your statements that the power players have no regard for the 'common man' and will lauch false flag attacks and start wars to keep their power

Thu, 09/09/2010 - 19:22 | 573106 Cathartes Aura
Cathartes Aura's picture

given that amrka currently has a "surplus" of humans relative to jobs (which use human work/hours to create value/wealth), and given that wars consume humans, it would seem wars will continue, and probably escalate in the coming months/years.

Thu, 09/09/2010 - 19:24 | 573108 Cathartes Aura
Cathartes Aura's picture

given that amrka currently has a "surplus" of humans relative to jobs (which use human work/hours to create value/wealth), and given that wars consume humans, it would seem wars will continue, and probably escalate in the coming months/years.

Thu, 09/09/2010 - 14:33 | 572380 caconhma
caconhma's picture

This is exactly what the comrade Lenin said. He and his fellows Jewish Bolsheviks slaughtered close to 40 millions Russians and transformed Russia into a barbaric country it was in the 17th century.

So, be very careful. Do not kill the patient. Just be active and go back to the values that made this country great and prosperous.

Thu, 09/09/2010 - 12:40 | 572026 Ms. Erable
Ms. Erable's picture

The author presumes that the current administration wants to 'fix the economy'. Check your premises; this is the 'fundamental transformation of America' that El Presidente' touted before his immaculation coronation inauguration.

Wlecome to the world's largest, most heavily-armed banana republic. Now shut up and get back in line before they frag your sorry ass.

Thu, 09/09/2010 - 12:47 | 572028 Azannoth
Azannoth's picture

"..Austrian economic philosophy emerge. I was wrong." You could not see the man behind the suit as many of us did thats why youre surprised and were not

 

"In 1997 prior to the ‘go-go’ Dotcom era unfolding, America’s unemployment was less than half of what it is today at 4.7%..."

And what are you suggesting go back to the 80's ?

Are you gonna smash computers like the English workers smashed steam machines in the 19 century ?

 

Yes we no longer need as many people around as we did 20 years ago and this wont change without some massive War that we dont want, and we also dont need 1,000,000,000 webmasters and software engineers so I guess learn to live with it or die

Thu, 09/09/2010 - 13:15 | 572109 NotApplicable
NotApplicable's picture

Yes we no longer need as many people around as we did 20 years ago...

That is absolutely not true! It is merely Malthusian propaganda based upon fear-mongering.

Rothbard totally destroys this idea in his book Man, State and Economy, where he shows that human labor is always the scarcest factor of production, as there is always currently sub-marginal capital in the form of land that can be put into production to solve unmet human needs. Sure we don't need 1,000,000,000 webmasters, but that is not our only need.

We lost our manufacturing base not due to excess capacity, but by the banksters consuming capital via debt expansion (which is made clear by the Arc of business spending graph above), which results in malinvestment in the capital goods industries, like all of those expensive automobile factories that aren't needed.

It is this malinvestment that gives the picture of "excess labor," because it was growth not based upon sustainable demand, but instead based on temporary access to easy money. It does nothing but to pull forward demand, upsetting any natural growth, all while destroying the economic fundamentals society prospers under.

In other words, just like we don't need 1,000,000,000 webmasters, we didn't need all of those autoworkers/home builders/etc. either.

Question is, what did we need? If you take a look around, I'll bet you can find quite a few people with unmet needs.

Thu, 09/09/2010 - 13:21 | 572142 NotApplicable
NotApplicable's picture

Of course, I neglected to mention the magic fix for excess labor, which is a one-word solution: Savings.

The only reason there is ever any excess labor is because there is not enough saved capital to employ them.

Think of all of the excess labor in 3rd world refugee camps. While they lack skills, what they really lack is savings. Meanwhile look at 1st world, where saved capital has been replaced by debt.

So, instead of an entrepreneur getting returns on capital near the market rate of interest, they end up paying market rates for the privilege to try and earn a living.

Given enough time, how can the banksters not own everything in a fiat currency scheme?

Thu, 09/09/2010 - 21:40 | 573256 StychoKiller
StychoKiller's picture

Ideas/words that have to be thrown into the dustbin:

1. "Planned obsolescence."

2. "Disposable."

3. "Teaser rates."

Feel free to add to the list...

Thu, 09/09/2010 - 12:39 | 572029 bankonzhongguo
bankonzhongguo's picture

Its simple.  America has to MAKE something besides debt.  The future of the Republic rests in making and maintaining the machines of INDUSTRY and a knowledge based middle class.  Without knowing how to make tools, the Republic is doomed to repeat the mistakes of failed empires.  You can't outsource national security, nor re-define it to turn inward and transform the country into a control grid with Citizens now cattle, forever searching to Bin Ladin, Guy Montag and Emmanuel Goldstein. Nor can you print money to keep it going.

Regrettably, Obama is no different that Cheney and their world view does not represent America then, now or its darker future.

Obama doesn't ride the bus.

 

Thu, 09/09/2010 - 13:20 | 572139 Everyman
Everyman's picture

 

Its simple.  America has to MAKE something besides debt.  The future of the Republic rests in making and maintaining the machines of INDUSTRY and a knowledge based middle class.

 

Very True and the point of our economy.  All we have been doing for the last decade or so is to "make and manufacture debt" and then some geniuse figured out how to "sell the debt" to someone else!!!

Thu, 09/09/2010 - 13:59 | 572245 Freebird
Freebird's picture

Is snake oil still in production?

Thu, 09/09/2010 - 15:33 | 572621 tmosley
tmosley's picture

They changed their business model in 1913, so no.

Plenty of dollars though.

Thu, 09/09/2010 - 14:36 | 572395 painequalschange
painequalschange's picture

America used to make things the rest of the world needed.

Now they can make their own things.

What could cause that to change?

 

Thu, 09/09/2010 - 12:40 | 572034 Dismal Scientist
Dismal Scientist's picture

There are simply no good choices, just a decision whether to take pain now or more pain later. I think this guy has nailed it by saying that the US government simply does not know what to do, since the lessons of the past are of little help.

In as much as the periphery of the US is similar to the periphery of Europe, then its time for it to roast in a deflationary oven as well. Just get used to a lower standard of living for years to come, and take appropriate measures if you can. Failing that, emigrate. What have you got to lose ?

Thu, 09/09/2010 - 12:42 | 572041 Goldenballs
Goldenballs's picture

Obama is a stooge,what does the man represent apart from rhetoric.Words are easy,action and results a lot harder.The guy is hopeless and on the gravy train,surrounded by hacks who have no idea what the truth really is and what is needed,and why should they have the majority are already very rich men who are only interested in power and influence.America deserves better especially in its hour of need.

Thu, 09/09/2010 - 12:45 | 572049 DoChenRollingBearing
DoChenRollingBearing's picture

Now it is clear that anyone voting for Obama was completely clueless, willfully ignorant, or one of the benefiting classes (Wall St., banksters, government programs, etc.).  Can't blame Bush now.  Even Castro just said that Communism has failed.

It looks like there is worldwide overcapacity in most industries as well as a lack of will to spend by us.

Things do not look good for awhile.  I hope that our people now start electing people who better understand that Keynesianism is so completely disproved that we regain our freedoms and fiscal sanity.

Thu, 09/09/2010 - 13:17 | 572126 Millennial
Millennial's picture

Naw doesn't work like that too many stupid people breeding. Look at every liberal you come across. Many republicans are also stupid. 

 

I do love strippers though.

Thu, 09/09/2010 - 13:23 | 572144 DoChenRollingBearing
DoChenRollingBearing's picture

I agree there are LOTS of stupid people everywhere, and a lot of them are breeding.

I'll pass on the strippers, but every time I see a nice bonbon while walking around, well I try to discreetly appreciate the beauty.

"The duty of beauty is to be admired"  (author unknown to me)

Thu, 09/09/2010 - 14:03 | 572258 Village Idiot
Village Idiot's picture

"The duty of beauty is to be admired"

 

Beautiful - I will pass this little pearl along to my wife.

Thu, 09/09/2010 - 14:36 | 572396 DoChenRollingBearing
DoChenRollingBearing's picture

Village!  Every time I remember it, I tell my wife as well.  She doesn't show anything, but it has to help her smile inside.

Thu, 09/09/2010 - 14:49 | 572460 Village Idiot
Village Idiot's picture

I don't know how this relates, but my wife is in for some "elective" surgery as we speak.  I recited those words as she stepped out of the car and she smiled. 

Thu, 09/09/2010 - 15:14 | 572553 DoChenRollingBearing
DoChenRollingBearing's picture

+++ to doing something nice!

Thu, 09/09/2010 - 12:45 | 572050 bankonzhongguo
bankonzhongguo's picture

Its simple.  America has to MAKE something besides debt.  The future of the Republic rests in making and maintaining the machines of INDUSTRY and a knowledge based middle class.  Without knowing how to make tools, the Republic is doomed to repeat the mistakes of failed empires.  You can't outsource national security, nor re-define it to turn inward and transform the country into a control grid with Citizens now cattle, forever searching to Bin Ladin, Guy Montag and Emmanuel Goldstein. Nor can you print money to keep it going.

Regrettably, Obama is no different that Cheney and their world view does not represent America then, now or its darker future.

Obama doesn't ride the bus.

 

Thu, 09/09/2010 - 12:47 | 572052 docj
docj's picture

Gee, so you can't sustain an economy of 300-million (at least) people simply from the rents generated by moving paper around and by suing each other?

Who knew?

Is Idol on tonight?

Thu, 09/09/2010 - 12:52 | 572058 Hall 9000
Hall 9000's picture

 

Gordon T. Long wrote:

2) Shifting Demographics

"Another obvious but seldom highlighted factor affecting demand is shifting demographics. The Baby Boomer generation is no longer the consumption engine it has been to the US economy. ...We have a generation that, as has been predicted for some time, is reducing its expenses but it may be even more dramatic than forecasted. With home housing prices no longer being the wealth generation vehicle they had expected it to be, stocks not delivering the returns they had been told to expect for the 'long term’ investor and medical expenses climbing above their worst budgeted targets, the baby boomers are being forced to cut back even further than the expected demographics were warning about."

 

A good and important observation.

 

 

Thu, 09/09/2010 - 13:03 | 572085 Robslob
Robslob's picture

It gets better...we are now in the process of exporting corruption, hence, JPM and Goldman Saks moving their prop desks out of the country.

Wonder if they will feel compelled to hold this sack of shit market up when they are no longer funded by the U.S. to do so?

Thu, 09/09/2010 - 13:12 | 572105 Millennial
Millennial's picture

I am increasingly convinced knowledge and agreement of Austrian Economics is required for any politician to hold office. Make it an amendment.

Thu, 09/09/2010 - 13:20 | 572138 frugalman
frugalman's picture

+1

As a 60YO boomer, I am still working, but have pared the expenses to the bone.  I brownbag my lunch, my cell phone costs $3.33 a month for emergency use only, have eschewed cable tv for broadcast only, and drive a 7YO vehicle with 110,000 miles on it.  We don't eat out too often, and our only luxury is frequent rounds of golf, but we try to keep that on the cheap also.  So yes, boomers are aware of what is going on, and trying to stretch every dollar.

Thu, 09/09/2010 - 14:34 | 572385 centerline
centerline's picture

Looking into the future on current course not sure how the average Gen-Xer, Y-er or beyond is going to help thier kids go to college, retire, or even get another car or make are serious capital expediture at some point without crashing household budgets.  This freakshow of an economy might surprise us all and linger/limp into 2011 or 2012.  But longer term on this course, it is toast.  There is a massive hole in the near future that cannot be filled by any amount of money the fed can print (without crashing the system in the process).  The damage has already been done.  It is already evident in the charts showing parabolic collapse.  The sad part is that most people do not see it.  They won't know it until it is right upon them.  Boomers are getting the first taste of this new normal now.  On the more paranoid side of things... what better time to blow the system up than right at the cusp of boomer retirement.

Thu, 09/09/2010 - 14:49 | 572457 aerojet
aerojet's picture

Fuck you, you self-serving asshole!  I'm 37 and I've had to do what you just said FOR MY ENTIRE ADULT LIFE.  I don't even play golf!  So get bent and I'll see you in hell.

Thu, 09/09/2010 - 15:35 | 572628 tmosley
tmosley's picture

Why are you blaming him?  It's the government that stole 50+% of your income.

Thu, 09/09/2010 - 16:18 | 572745 centerline
centerline's picture

I am 41.  Staring into the abyss is a bitch for sure.  I feel like I never had a chance as well.  And I am no slouch... professional with graduate degree with a good job.  Lots and lots of people worse off than I am for sure.  For this reason, not for any PhD study in f***ing economics, it is painfully clear for anyone who wants to wake up look into the abyss with me, that we are at the leading edge of huge paradigm shift, socially, economically, and otherwise.

 

Hang in there aerojet.  Something has to give.  The current path is not sustainable much longer.

Thu, 09/09/2010 - 21:45 | 573264 StychoKiller
StychoKiller's picture

Guess we better put on our running shoes and get ready for "Logan's Run."

Thu, 09/09/2010 - 13:07 | 572081 Caviar Emptor
Caviar Emptor's picture

Big O just sees the world through political eyes. Don't be fooled. He just supplied a huge $200 Billion supply-side tax cut in order to curry favor with the big money boyz. In return, they let him make some political hay by telling the middle class that he's "giving them" favorable income tax treatment while tax cuts for "the rich" expire. He may just have bought himself a trip back to the White House. When the likes of Cramer start praising his policies, start asking yourself why.

Well it looks like Americans might be in the mood for getting fooled again if they believe they are being helped. It's Hopium all over again. He's actually cheating the US middle class and giving gifts to big biz. Here's why.

Most of the R&D tax cuts will flow straight to upgrading and expanding investments in China and other developing economies where large US corporates derive their profits and compete for new markets. Huge overcapacity still exists in the US and domestic demand is expected to grow anemically because of structural, social and economic problems. It makes more sense to design and manufacture and sell abroad, and export to the US as demand materializes. 

Here's a PERFECT example hot off the presses today (as in AFTER the R&D tax cut announcement):

Ford cancels plan to move SUV plant from Germany to US 

http://www.bloomberg.com/news/2010-09-09/ford-said-to-cancel-plan-to-mov...

There'll be some very limited small potatoes benefit in the US and they'll hype it to the moon: 10 jobs created in Sheboygan! 15 in Toledo! 20 in Union City! Booooooyah! 

So we just gave away another $200 Billion.  But worst of all, we haven't addressed ANY of the structural issues that are crippling the US economy now, preventing jobs creation and growth.

Guess we'll have to wait for things to get really ugly before anybody wakes up.

 

Thu, 09/09/2010 - 13:13 | 572110 AccreditedEYE
AccreditedEYE's picture

Most of the R&D tax cuts will flow straight to upgrading and expanding investments in China and other developing economies where large US corporates derive their profits and compete for new markets

The elite see this. They know that in order to keep the growth machine moving, they must pump up the emerging markets. And perhaps that's why we keep stalling to do anything... the longer it takes for us to crash and get back to zero the longer we stay less competitive than the rest of the world. All the while, developing nations will amass more power. I think the funny thing here is that the globalists have been so quick to move this ball down the field, they haven't stopped to think about the fact that the "teams" they are empowering might not want to play by their "one world, one vision" terms. Such arrogance!

Thu, 09/09/2010 - 13:29 | 572159 Caviar Emptor
Caviar Emptor's picture

Yup

Thu, 09/09/2010 - 13:16 | 572113 docj
docj's picture

Most of the R&D tax cuts will flow straight to upgrading and expanding investments in China and other developing economies where large US corporates derive their profits and compete for new markets.

Spot-freaking-on.  Stunning for me - and I'm in the biz up to my neck - to see how many of my colleagues, whose personal professional futures ride largely if not entirely on how this plays out, are perfectly clueless about this.

People around get excited about the 20-30 jobs for PhDs in lab coats - completely failing to recognize that's windowdressing for the continued outsourcing of our high-tech jobs (following the near-complete outsourcing of our "low"-tech jobs).

Thu, 09/09/2010 - 13:30 | 572165 Caviar Emptor
Caviar Emptor's picture

I see it too. Today's Ford announcement is a stunner and a harbinger of what's to come. Team O gonna have lots a splainin to do.

Thu, 09/09/2010 - 13:56 | 572237 docj
docj's picture

You're right that it's a stunner and a harbinger - but President Two Iron ain't gonna 'splain nothin.  He's just going to continue to scream about The Rich not paying Their Fair Share, or some such populist twaddle.

And roughly half of Idol America will lap it up - while their jobs and livelihoods are being outsourced from beneath them.

Thu, 09/09/2010 - 21:39 | 573254 Loan Gunman
Loan Gunman's picture

BO doesn't have a two iron in his bag.  Gotta be a real golfer to hit a two iron.

Fri, 09/10/2010 - 03:13 | 573630 The Navigator
The Navigator's picture

while tax cuts for "the rich" expire (those making over $250k)

The problem will be, if hyperinflation kicks in, a kid working at McDonalds will be making over $250k/yr. And that was their plan when the income tax was instituted; 'they said' only the rich would pay it and now they say only the rich making over $250k. THEY never index the tax and with a couple of years of good inflation, everyone is in the new 'rich' bracket. Think about ways to make some extra ca$h that you save for yourself, that is YOUR money, not someone elses - if gold or silver works, do it - otherwise renting out that extra room in your house, part-time lock smith on the weekends. Doesn't matter what your age, we're all going to get screwed out of SocSec and any retirement we try to nest away. Starve the beast and feed your chickens.

Thu, 09/09/2010 - 13:01 | 572083 williambanzai7
williambanzai7's picture

I think everyone realizes what has happened. I for one do not believe all is lost. There are things that could be done. But announcing pork projects over Labor Day weekend is not one of them.

It is time to clear out Washington.

Thu, 09/09/2010 - 13:15 | 572122 ReallySparky
ReallySparky's picture

"It is time to clear out Washington".

Darling, the proper phrase is, "It is time to take the TRASH OUT".

Thu, 09/09/2010 - 15:43 | 572641 tmosley
tmosley's picture

Feces goes in the toilet, not the trash can.

"This town needs an enema!"

http://www.youtube.com/watch?v=kt2nc2NkcGE

Thu, 09/09/2010 - 13:06 | 572091 bugs_
bugs_'s picture

Its a bit of a dog's dinner isn't it?

Thu, 09/09/2010 - 13:08 | 572094 piceridu
piceridu's picture

Freedom and liberty alone breed prosperity. When the government mandates anything, it wreaks havoc on it’s constituents like an evil tsunami, destroying all that it comes in contact with. If good intentions were all that it took to change systems and attitudes then it would be easy.  The government’s answers to all problems and issues usually result into achieving the complete opposite of what it set out to do. Vietnam, Iraq, the War on Drugs, Welfare, Social Security, War on Terror are prime examples, and the list goes on. If you look around your everyday environment, everything that is useful and purposeful comes from private enterprise or the individual mind, not from the government collective. The system is inherently evil because of the way government leaders achieve their power and how the wield it. Statism is the norm and the people are too stupid or too involved in their daily survival that they can be submitted easily; spoon fed social planning and propaganda. Politicians know how to hold onto their evil grip. Promise the segment of voters, who actually go and vote and give them what you can rob from the most productive participants of society. These productive participants struggle to know how the game is played and how skewed the playing field is out of their favor. They’re the ones that fill the tax coffers only to be ignored when the time comes to dish out what the government extorted. The biggest players on the field, the corporations not only know the rules of the game, they make them. They are responsible for hand picking the most controllable candidates. They promise support (money) in exchange for the candidate’s soul. And the endless cycle of corruption continues until the ponzi scheme is completely played out.

Thu, 09/09/2010 - 13:18 | 572128 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1000 piceridu

Freedom and liberty are the only way out, even so it will be long and hard.

Government mandates, favoritism, programs, more regulations, more czars, higher taxes, more spending, etc., etc. are exactly what is NOT helpful.

Thank you for reminding us that we need to get back to our roots.

Thu, 09/09/2010 - 15:18 | 572570 Ben Fleeced
Ben Fleeced's picture

1930's film "The Great McGinty". Same plot.

 

Thu, 09/09/2010 - 13:10 | 572096 ozziindaus
ozziindaus's picture

Innovation and creativity does not come on demand, it needs to be nurtured and encouraged. Unfortunately what has happened in recent times is the ability of major corporations to stifle innovation by patenting just about everything regardless of any intention to release for production. This places start ups at a disadvantage who don't have the resources for research or patent filings. It's further aggravated by the US government's sponsorship of greedy multinational corps through DoE, DoD handouts. I deal with this shit every day.

Thu, 09/09/2010 - 13:10 | 572100 Mercury
Mercury's picture

Yeah right, like there was ever a chance that Obama was going to go all Austrian on us.

  Like I said before, it's probably too late anyway.  Better to let Liberal Jesus stay at the helm as the U.S.S. America runs hard up on the rocks.  That's the only way any significant number of people in this country are going to be able to connect the dots - and the sooner the better.  The quality of whatever system comes next will be dependant on how fresh and explicit the memory is of failed Keynesianism, central planning and government overreach is in people's minds.

Thu, 09/09/2010 - 13:15 | 572118 bronzie
bronzie's picture

"The quality of whatever system comes next will be dependant on how fresh and explicit the memory is of failed Keynesianism, central planning and government overreach is in people's minds"

well said

it is more likely that the sheeple will be begging the govt to 'help' them once again

"I am from the govt and I am here to help" - best joke ever, cracks me up every time

Thu, 09/09/2010 - 13:40 | 572124 AccreditedEYE
AccreditedEYE's picture

The quality of whatever system comes next will be dependant on how fresh and explicit the memory is of failed Keynesianism, central planning and government overreach is in people's minds.

While I hope you are right, I fear that they are moving central planning and government overreach to the next level. Crush the powers that be now, empower the developing powers and control world commerce. Sovereign power and identity and rights be damned.

Thu, 09/09/2010 - 13:12 | 572102 Caviar Emptor
Caviar Emptor's picture

 

Here's the first response to the Obama R&D Tax Cut:

Ford cancels plan to move SUV plant from Germany to US 

http://www.bloomberg.com/news/2010-09-09/ford-said-to-cancel-plan-to-mov...

Beautiful.

Thu, 09/09/2010 - 13:22 | 572103 DarkMath
DarkMath's picture

"and almost any job that could be further automated through networking advancements were replaced " and sent to India and China via the H1-B pipeline.

The H1-B program will lower American living standards and is just another nail in the Dollar coffin.

Thu, 09/09/2010 - 13:13 | 572108 MountainMan
MountainMan's picture

America needs a "new" visionary to lead it out of the woods. Someone devoid of corporatism, the Republican and Democratic parties...someone willing to put his life on the line because that is exactly what he would be doing...so very sad to see a once great nation left almost ruderless far out at sea.

Thu, 09/09/2010 - 13:14 | 572114 react1200
react1200's picture

watch Barney Fifer debate Rachel.  http://rachelforcongress.com/

Thu, 09/09/2010 - 13:15 | 572119 MountainMan
MountainMan's picture

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.
--Thomas Jefferson

Thu, 09/09/2010 - 13:44 | 572202 AccreditedEYE
AccreditedEYE's picture

Great quote. I was in Monticello this past weekend. Really helped to crystallize the situation we are in for me. Amazing man of his time. (Even though he did die broke!)  

Thu, 09/09/2010 - 16:58 | 572125 macholatte
macholatte's picture

I gave President Barrack Obama six months to roll-out his doomed Keynesian policies, twelve months to discover they were flawed and eighteen months to realize that the solution to America’s problems must lie within a different economic framework. I had hoped by the end of twenty-four months to see new policies closer to an Austrian economic philosophy emerge. I was wrong.

Nice to see that you are honest enough to admit an error in thinking. However, you are just another person living in a world of denial. That's normal.

  Anger

    Bargaining

       Denial

           Acceptance

 

The next phase is to ACCEPT the idea that the Obama means to destroy the country and remake it in an LSD induced delusional model laid out by the Rhodes-Orwell-Clinton-Rothchild-Soros, et al global elitist machine.

Once you have made that leap, the mozaic will come into focus and you will realize that the Obama already did "realize that the solution to America’s problems must lie within a different economic framework". It's just not the framework you and I believe is the "solution to America's problems" nor is the definition of the "problems" the same. On the contrary, our belief is that the Obama solution IS the problem. The Obama believes it is the saviour.

How else are you going to transfer all the wealth of America to Kenya and launder all those hundreds of billions of US dollars through African banks?

Put your charts and graphs down. They are accurate and you are correct. It's your premise that's wrong.

Think about it and come back with another fine dissertation looking through a different pair of glasses.

The suffering of the population is just an unintended consequence.

-- George Soros 

 

Thu, 09/09/2010 - 22:32 | 573323 merehuman
merehuman's picture

soon we will emulate N Korea. Aint got nothen, but love our Dear Leader ..or else

Thu, 09/09/2010 - 13:18 | 572133 jimijon
jimijon's picture

The solution is rather simple. 

Arrest and prosecute the traitors who seized power with the JFK murder, the wars, 9/11 and more. Of course, someone at the corps should go to jail if they commit crime in the name of the said corporation.

Only then will the ship start turning.

Thu, 09/09/2010 - 15:28 | 572603 Ben Fleeced
Ben Fleeced's picture

What if JFK was accidentaly killed by friendly fire?

Thu, 09/09/2010 - 21:53 | 573271 StychoKiller
StychoKiller's picture

Everyone knows that the real target was Connelly and Jackie.  Good snipers are so hard to find.

Thu, 09/09/2010 - 17:34 | 572925 zaknick
zaknick's picture

+quadrillions

Thu, 09/09/2010 - 13:32 | 572154 Nihilarian
Nihilarian's picture

"I had hoped by the end of twenty-four months to see new policies closer to an Austrian economic philosophy emerge. I was wrong."

Bullshit. Show me one instance in history when a ruler said "ok, everything I've done up to this point was completely wrong, let me do the exact opposite." You've got to be fucking kidding me.

Thu, 09/09/2010 - 16:40 | 572806 zaknick
zaknick's picture

Not ruler, the interests around him and I'm afraid it goes down to the root.

Fri, 09/10/2010 - 10:32 | 573988 Nihilarian
Nihilarian's picture

Not really. 1) He's no longer in power. 2) Even after admitting that the current system is no working, they're still not abandoning it.

Thu, 09/09/2010 - 13:29 | 572157 CitizenPete
CitizenPete's picture

Since when in history does any sitting front man (a.k.a. President) dictate global banking or FED policy?

Thu, 09/09/2010 - 13:47 | 572212 Rusty Shorts
Rusty Shorts's picture

President Andrew Jackson

Thu, 09/09/2010 - 15:52 | 572673 Nihilarian
Nihilarian's picture

+Gold.  Andrew Jackson FTW!

Thu, 09/09/2010 - 16:43 | 572809 zaknick
zaknick's picture

Yep.  Isn't it freaking horrible to come into this world and find you're in some money changers' rigged shit?

 

 

Thu, 09/09/2010 - 13:30 | 572161 Heroic Couplet
Heroic Couplet's picture

Alan Greenspan and Bush's dimwit US Labor Secretary Elaine Chao both chirped "health sciences" as the only jobs left in the US. If 99.9% of the US population wanted to study health sciences, they would have done so voluntarily. The wage arbitrage and planned offshoring of jobs do not show in your charts.

It should be easy to have CEOs testify in front of Congress about the number of jobs they have sent offshore. It's easy to take social security numbers and figure out the real unemployment rate in the US, especially given the Bush tax cuts have not worked to create jobs.

 

Thu, 09/09/2010 - 13:34 | 572169 michael.suede
michael.suede's picture

This guy is making some classic errors in his analysis.

The government is incapable of doing anything other than butt-fucking the economy into the ground.  It can not counter "off-shoring" or de-industrialization other than by getting the hell out of the way.

If government got out of the way, US corporations could hire unskilled labor here just as cheaply as they hire abroad.  If the government got out of the way, US exporters wouldn't be subject to double taxation.  There are all sorts of rules and regulations that are screwing us.

Further, most of the systemic problems this guy brings up are a consequence of Lord Christ Bernanke and The Almighty Greenspan hosing interest rates for the past several decades.  As any good Austrian knows, artificial interest rates are the cause of business cycles.

As for the technological advancement displacing workers - this is ridiculous.  The massive increases in efficiency brought on by technological development have saved us from completely devolving into a third world peasant state.  

As workers are displaced due to increases in efficiency, they will go on to fill other rolls needed in production.  Since people always want more stuff, there will ALWAYS be some place for displaced workers to find a job in a normal stable economy not run by a bunch of tyrants and central bankers.

If robots and computers were able to make everything - we would all be rich and everything would be free.  We would all have free cars, free computers, free big screen tvs, and everything else because robots could make unending amounts of it for nothing.  Believing that technology destroys jobs is a typical Keynesian fallacy.

 

Thu, 09/09/2010 - 14:07 | 572276 Goldenballs
Goldenballs's picture

Could hire unskilled labour as cheaply as abroad - you just don,t get it do you,Cheap is part of the reason we are in this mess,every person who gets paid less,spends less,so a country gradually retracts.Why should you compete with the third world,the only way you can is to become the third world.Unless you restrict imports you might as well capitulate your entire nation.Massive increases in efficiency have cost millions of jobs and futures,the wealth is not being spread around enough hence the mess everything is in.Ensure profit is taxed properly and if the businessmen don,t like it refuse import quota,s so it can,t be imported.Weak Government is the road to doom.

Thu, 09/09/2010 - 15:04 | 572522 michael.suede
michael.suede's picture

Cheap is not the reason we are in this mess.

Massive government hoarding of resources, regulations, taxation, and monetary manipulation is the reason we are in this mess.

In case you haven't figured it out yet, we paid for this war and our welfare state on a credit card, and the bills are about to come due.

Throw in the absolutely epic waste of resources we spend on the military industrial complex with huge monetary manipulation and it is an absolute miracle of Christ we haven't fully imploded as a country yet.

The fate of the Soviet Union is the future fate of America - for the exact same reasons.

 

Thu, 09/09/2010 - 17:37 | 572929 Dr. Acula
Dr. Acula's picture

"Cheap is part of the reason we are in this mess"

Yes, the paradox of thrift. It would be a paradise if only everyone wasted their money on hookers and blow.

"Why should you compete with the third world,the only way you can is to become the third world."

Why should you go blabbing about economics, if you're an idiot who doesn't understand Econ 101 and the Ricardian Law of Comparative Advantage?

"Unless you restrict imports you might as well capitulate your entire nation"

Unless you restrict food from the supermarket from entering your home, you might as well capitaluate your entire house.

"Ensure profit is taxed properly and if the businessmen don,t like it refuse import quota,s so it can,t be imported"

i.e. Ensure you commit robberies against businessmen. If they don't like it, threaten to execute citizens and foreigners who dare to engage in voluntary exchanges.

 

Thu, 09/09/2010 - 14:40 | 572416 Caviar Emptor
Caviar Emptor's picture

If robots and computers were able to make everything - we would all be rich and everything would be free.  We would all have free cars, free computers, free big screen tvs, and everything else because robots could make unending amounts of it for nothing.  Believing that technology destroys jobs is a typical Keynesian fallacy-

 

...Only if you can invent a perpetual motion machine, my friend. :) Even robots and computers have to derive energy from somewhere. And humans would still need to derive sustenance from the environment, from biology and that requires more adaptibility than computers are capable of. Biology is unpredictable. 

Sorry to wake you from your pipe dream. We can't all go fishing yet. I disagree that people always want more "stuff". Depends what kind. And they'd still have fights. You're envisioning a world without competition. That's the most fundamental kind of paper communism imaginable. 

Thu, 09/09/2010 - 15:02 | 572506 michael.suede
michael.suede's picture

I knew some guy would just have to come in here and act like I actually believed this was possible.

I never said it was possible, I was using it as a hypothetical to illustrate that machines do not eliminate jobs, they simply make work more efficient so the economy can be more productive.

As one type of job gets replaced by a robot, the worker will be shifted to a different job doing something else.  There will always be something else because people always want more stuff.

Anyone claiming that people will not want more "stuff" is the one engaged in pipe dreams.

 

 

Thu, 09/09/2010 - 21:56 | 573278 StychoKiller
StychoKiller's picture

[quote]

RICH Economy step 1:
Offer a prize of $50,000/year to any worker that designs a
machine/software/process that will replace him/her.
Offer an additional prize of $30,000/year to ALL OTHER WORKERS
that get replaced.

Answering conservative objections:
1. A machine works 24/7, thereby tripling output immediately.
2. Machines do not take sick leave.
3. Machines are never late for work.
4. Machines do not form unions and constantly ask for higher wages
   and more fringe benefits.
5. Machines do not take vacations.
6. Machines do not harbor grudges and foul up production in sneaky, undetectable ways.
7. Cybernation was advancing every decade anyway, despite the opposition of Unions, government, and other Alpha males; it was better to have huge populations celebrating the reward of $30K to $50K/year for group cleverness than huge populations suffering the humiliation of welfare.
8. With production rising due to Cybernation, consumers were needed
   and a society on welfare was a society of very meager consumers.

The majority of the unemployed, living comfortably on $30k/year, spent
most of their time drinking, smoking, engaging in primate sexual
acrobatics and watching TV.  When Moralists complained that this was a subhuman existence, Hubbard answered, "And what kind of existence did they have doing idiot jobs that machines do better?"

[/quote] -- R.A. Wilson

Thu, 09/09/2010 - 13:33 | 572173 Goldenballs
Goldenballs's picture

For 30 years now Big business has done exactly what it wants.National interest has become non-existant in the rush to create profit.More profit has been created than ever before,so what has happened to the profit,has it been re-invested in society infrastructure - no,has it been used to secure the nations future - no,has it been invested in new industries and new jobs - no,has it been taxed appropriately - no,has it been paid out in wages spread evenly throughout the workforce - no,been used to train people for the future -  no,has it been lodged in tax havens - yes,has it benefited the few - yes,have the few taken advantage of the society that the profits came from - yes,has it been wasted on futile wars - yes,on international organisations who become empires and do little - yes, has it been paid to Directors,CEO,s,Lawyers,Bankers and Politicians in amounts over and above what is considered reasonable - yes,and finally will the politicians or shareholders ever have the balls to adddress these issues before dangerous events occur - no.

 The world looks more like the 1930,s every day.Unemployment,Instability,Lack of real wealth,Riches built on ever increasing debt,no attempt to address reality,Smoke and Mirrors on everything.No strong decisive leadership,no action on issues that cripple economies because the elites don,t want it.Ultimately forget the financial cost,how many lives will these obscene policies eventually cost.Obama is a fraud in everyone of these respects,if he had any humanity,dignity or self -respect he would resign as the problems above are beyond him and his administration who have their power through the very system that has failed and know only how to perpetuate the system that gave them power.In short they are incapable of the Radical Reform needed.Believe me the war has already started,everyday the cracks in society grow wider.

Thu, 09/09/2010 - 16:50 | 572818 Dismal Scientist
Dismal Scientist's picture

deleted

Thu, 09/09/2010 - 21:59 | 573281 StychoKiller
StychoKiller's picture

"Having Power is like holding an angry wolf by the ears." -- Augustus Caesar

Thu, 09/09/2010 - 13:47 | 572216 Dr_Dazed
Dr_Dazed's picture
"I had hoped by the end of twenty-four months to see new policies closer to an Austrian economic philosophy emerge. I was wrong."
Inauguration Day DateTuesday, January 20, 2009

 

I'd be more inclined to take the time to look at your numbers if you could add.

Thu, 09/09/2010 - 13:58 | 572244 tempo
tempo's picture

Equity market can go higher because most of the stimulus plans and tax credits increase Corporation cash flow and earnings.   The stiumus/credits go to Corporations who use most the money to buy goods overseas which benefits china/India/etc.   The tax credits for solar and wind power are assemblied in the USA (probably by illegals) but nearly all the components are made overseas.   The plans/credit are drafted by and for the Corporations benefit not the America people.   Equity prices can go higher as long as 50% of the US spending and 25% of CA spending is funded with new borrowings.   No one cares about the citizens; its all about the elite power families that control Washington and Wall Street.

Thu, 09/09/2010 - 14:00 | 572246 Threeggg
Threeggg's picture

Dow going negative here

Bloodbath for oil to come and precious metals rally soon !

Thu, 09/09/2010 - 14:29 | 572362 fiddler_on_the_roof
fiddler_on_the_roof's picture

I hope Gold(which I own) TANKS as Johnny Bravo says. I will get some sizeable cash in a couple of months which I hope to deploy in Gold.

Thu, 09/09/2010 - 22:43 | 573336 merehuman
merehuman's picture

China is adding drivers and putting many cars on the road every day. Other nations are still productive and need energy. No , oil is going up.

Also oil is a REAL thing, having real worth unlike many monetary papers.

Besides its getting costlier to obtain. I am not in the market and hardly qualify to give an opinion. Common sense is all i know.

Thu, 09/09/2010 - 14:05 | 572269 Catullus
Catullus's picture

This is getting fun. I really like how they're holding up the equity markets so that people feel more wealthy. It's an old Greenspan trick. So long as people don't want to rip you limb from limb, you're fine.

It's not enough to tell the muddle class right now that they can take their house, the 401(k)s, their small businesses, and tell them to cut the "value" by 30%-50%. The absolute number has to fall, not the exchange value.

Have some faith, folks. It will take awhile, but individuals will figure it out when they realize they're just spinning their wheels.

Thu, 09/09/2010 - 14:09 | 572285 Uncle Remus
Uncle Remus's picture

As long as DC behaves like a Banana Republic (on steriods), I don't see how any business owner would be willing to take on the regulatory and tax risks or willingly expose themselves to relentless government intrusion and market meddling by starting a new or expanding an existing business.

Thu, 09/09/2010 - 16:06 | 572693 sethstorm
sethstorm's picture

The problem is that by refusing to, those businessfolk have painted a target on themselves.  Why should a business be allowed to ask and get perfection when regular individuals are asked to accept less?

The more political the refusal is, the more the government will target them; never mind the significant part of the unemployed that have no problem in taking part in such action(especially if it meant a stable job).  It won't matter if you're one of the honest few or the many who are not. 

 

Thu, 09/09/2010 - 14:17 | 572315 Sudden Debt
Sudden Debt's picture

Who here will cast a vote on the new elections? How many people vote in America?

 

Thu, 09/09/2010 - 22:02 | 573287 StychoKiller
StychoKiller's picture

November 2010 might be the last election we get to vote in, based on the way the Economy is going.  DO NOT vote for the Decepticrats or Republicons!

Thu, 09/09/2010 - 14:33 | 572382 asteroids
asteroids's picture

Cost of credit is a few points. The cost to you is 20-30 points. People are tired of outrageous profits.

Thu, 09/09/2010 - 14:55 | 572479 web bot
web bot's picture

Why is it lately that every time I look at a chart, there are arrows moving in violent directions? I thought at first I needed new glasses...

Thu, 09/09/2010 - 15:30 | 572612 DR
DR's picture

Wow, the Arc of Business Spending graph is the most dismal of all-we are diving negative just like the 1930s...

Do NOT follow this link or you will be banned from the site!