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Stockman's Prescient Prediction
This weekend, I was thumbing through my highlighted copy of David Stockman's The Great Deformation (about which I wrote a lengthy and over-the-top laudatory review last September here) when this passage caught my eye:
In case you've been helping Elon Musk establish the new Martian Colony over the past nine months, you might have missed what's been going on with black tea:
(Incidentally, I wouldn't get too excited about the bounce we've seen over the past couple of weeks; unlike Cramer, I don't think this "smells like a bottom" - - but that's probably a field of study about which he's better acquainted than me. But I digress..........).
On the one hand, oil has indeed fallen to $50 (and well below it) as Stockman anticipated; on the other, if there's a worldwide recession going on (and perhaps there is, the very beginnings of one), it sure isn't yet apparent from the mass media.
Perhaps, as in 2008, commodities are a very large canary in a very crowded coalmine. I am highly confident Mr. Stockman's prediction about North Dakota is going to come all too true. And, as a parting shot, I must suggest (nay, insist) to those who haven't bought and read the book - please do so. It is excellent, from beginning to end. There are many other predictions in the book which will probably unfold much as the one regarding crude oil has.
- advertisements -
"How did it happen that the nations central bank printed nearly twice as much money in 13 weeks (after 2008 Financial Crisis) as it had during the entire Century before?"
- Stockman
It's TEXAS Tea (and black gold). Didn't this guy ever watch the Beverly Hillbillies?
Yeah, doesn't even know his Beverly Hillbillies theme song. What a cultural retard. As opposed to sophisticates like me and my buddy Raoul.
Does anyone remember the theme song to The Bel-Arabs?
"Then one day he was shooten at some joos and up thru the ground came a bubblen crude"
Once on a farm, there's a man named Jed.
Poor mountain boy, but he kept his family fed.
Then one day, he was huntin for some food,
And up from the ground, came some bubblin crude.
Oil, that is. Black Gold. Texas Tea.
Well the next thing you know, old Jed's a millionaire.
So, he loaded up the truck, and he moved to Beverly.
Hills, that is. Swimmin pools, movie stars.
It is noteworthy that Ronald Reagan tried Supply Side Economics and huge Fiscal Spending to "fix" the economy ala Jack Kemp Keysian Policy.
This was after the Top in US Manufacturing, 1979. Reagan must have known at some point that the Economy was moving from Manufacturing Based to Service based. The "New Economy". And the Mergers started happening through the 1980s too. Jobs were being outsourced & off-shored. Costs were being cut while the Meme of Expensive Union Labor played out in the business environment.
When did the Federal Government know that Welfare could be used to off-set jobs losses in Manufacturing.??
I think Medicaid increased in 1968.
Today we have 150 Million Americans on some kind of Welfare.
IRS, Payment where earned income credit exceeds liability for tax 2014 = $60.09 Billion
IRS, Payment where earned income credit exceeds liability for tax 2013 = $57.5 Billion
IRS, Payment where earned income credit exceeds liability for tax 2000 = $26 Billion
IRS, Payment where earned income credit exceeds liability for tax 1998 = $23.2 Billion
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax 2014 = $21,49 Billion
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax 2013 = $21.6 Billion
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax 2000 = $806 Million (Million)
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax 1998 = Zero.....
2014 Federal Outlays for SNAP, Child Nutrition, & WIC = $102 Billion
2013 Federal Outlays for SNAP, Child Nutrition, & WIC = $109 Billion
2008 Federal Outlays for SNAP, Child Nutrition, & WIC = $60 Billion
2004 Federal Outlays for SNAP, Child Nutrition, & WIC = $45 Billion
2000 Federal Outlays for SNAP, Child Nutrition, & WIC = $32 Billion
1998 Federal Outlays for SNAP, Child Nutrition, & WIC = $33 Billion
Department of Health and Human Services (MEDICAID):
2014 Outlays Federal Grants to States for Medicaid = $301 Billion
2013 Outlays Federal Grants to States for Medicaid = $256 Billion
2008 Outlays Federal Grants to States for Medicaid = $201 Billion
2004 Outlays Federal Grants to States for Medicaid = $176 Billion
2000 Outlays Federal Grants to States for Medicaid = $118 Billion
1998 Outlays Federal Grants to States for Medicaid = $101 Billion
Department of Health and Human Services:
Administration for Children and Families:
2014 Total Outlays - Payments to States for Child Support Enforcement and Family Support Programs = $4.11 Billion
2014 Total Outlays - Refugee and Entrant Assistance = $1.28 Billion
2014 Total Outlays - Child Care Entitlement to States = $2.8 Billion
2014 Total Outlays - Payments to States for the Child Care
and Development Block Grant = $2.2 Billion
2014 Total Outlays - Social Services Block Grant = $1.75 Billion
2014 Total Outlays - Children and Families Services Programs = $9.4 Billion
2014 HHS Temporary Assistance for Needy Families TANF outlays = $16.267 Billion
2013 HHS Temporary Assistance for Needy Families TANF outlays = $17.107 Billion
2008 HHS Temporary Assistance for Needy Families TANF outlays = $17.532 Billion
2004 HHS Temporary Assistance for Needy Families TANF outlays = $17.725 Billion
2000 HHS Temporary Assistance for Needy Families TANF outlays = $15.464 Billion
2014 HHS Low Income Home Energy Assistance outlays = $3.537 Billion
2013 HHS Low Income Home Energy Assistance outlays = $3.532 Billion
2008 HHS Low Income Home Energy Assistance outlays = $2.663 Billion
2004 HHS Low Income Home Energy Assistance outlays = $1.891 Billion
2000 HHS Low Income Home Energy Assistance outlays = $1.495 Billion
2014 HHS Children and families services programs outlays = $9.373 Billion
2013 HHS Children and families services programs outlays = $9.722 Billion
2010 HHS Children and families services programs outlays = $10.855 Billion
2008 HHS Children and families services programs outlays = $9.008 Billion
2004 HHS Children and families services programs outlays = $8.677 Billion
2000 HHS Children and families services programs outlays = $6.152 Billion
Federal government current transfer payments: Government social benefits: To persons
2014:Q4: $1.885 Trillions of Dollars
Quarterly, Seasonally Adjusted Annual Rate, B087RC1Q027SBEA, Updated: 2015-01-30
http://research.stlouisfed.org/fred2/series/B087RC1Q027SBEA
http://research.stlouisfed.org/fred2/series/M1V (M1 seems to increase with Mortgages)
http://research.stlouisfed.org/fred2/series/M2V (M2 seems to show different bubble perhaps)
http://research.stlouisfed.org/fred2/series/MZMV (MZM seems to show peak in Economy 1981)
http://research.stlouisfed.org/fred2/series/A14187USA163NNBR
http://research.stlouisfed.org/fred2/series/MULT
http://research.stlouisfed.org/fred2/series/USNUM (fewer banks now)
http://research.stlouisfed.org/fred2/series/LNS12027714 (self employed unincorporated)
http://research.stlouisfed.org/fred2/series/LNU02048984 (self employed incorporated)
http://research.stlouisfed.org/fred2/series/LNU05000000 (Not in Labor Force)
http://research.stlouisfed.org/fred2/series/MEHOINUSA672N (Real Median Household Income, wow, way down)
All of this is NUTTIN' compared to the corporate welfare the big banks received. ...
For those of us with ADD and some other disorders - can you do a graph next time - tks
I hang my head in shame! I watched EVERY episode! I should know better. I bow my head in disgrace.
My favorite episode was when Granny spotted the little space aliens.
Gomer Pyle had the better alien episode.
But, Jethro's 'double aught seven' stuff was good, like when granny pulled the lever on the ejector seat.
Gilligan's Island for me.
Stranded with Ginger and MaryAnn. ( MaryAnn for me)
Stranded on a tropical island. We can make a telephone with coconut shells, but can't fix a wooden boat.
Priceless.
Forgiven. You made up for it with Musk's Martian Migration. Stockman's is a great book and you are right, unlike so many economic histories, this one is prescient. Unfortunately the scale of it keeps many away.
"So the siren song of energy independence now forty years old and reaching back to the foolishness of Nixon's FEA (Federal Energy Administration) is just being replayed in a different octave"
How is it that everything bad in America can be traced back to Nixon?
How is it that everything bad in America can be traced back to Nixon?
Because it can be traced back to Prescott Bush, who mentored Nixon...
Now I have to look that up. I see a lot of Deregulation.
1974 - Federal Energy Administration Act of 1974 (R. Nixon)
1974 - Energy Reorganization Act of 1974
1977 - Department of Energy Organization Act of 1977 (merged ERDA and FEA under USDOE & created EIA)
1981 - Executive Order 12287, (R. Reagan, removed price controls on Petrol)
1996 - Energy Deregulation (W. Clinton, followed by ENRON Scandal)
2005 - Energy Policy Act (G.W. Bush, subsidies, excluded clean air Water acts)
The Federal Energy Administration (FEA) was a United States government organization created in 1974 to address the 1970s energy crisis, and specifically the 1973 oil crisis.[1] It was merged in 1977 with the newly created United States Department of Energy.[2]
The Energy Research and Development Administration (ERDA) was created by the Energy Reorganization Act of 1974 and managed the energy research and development, nuclear weapons, and naval reactors programs.
Color me stupid, I thought everything was Bush's fault. At least that is what I have been told.
Not EVERYTHING.
But W is certainly responsible for the Lion's Share of it. ..
Bullshit.
Actually it all can be traced back to Prescott Bush, W's grandfather, who chose Nixon back in 1948...
But yer just a shallow, statist who has no clue as to the depth of the absolute corruption and deception...
Why am I bothering?
Stockmans epic Deformation is a bit of a slog to read because he replows old ground as he deconstructs every aspect of how we got from there to here and many diverging paths all have the same roots, but he gives fair warning that it is not a linear history in the introduction.
He'll punch holes in what you thought you knew and if you want to argue a point, you better bring a lunch because his command of the numbers to make his case are almost superhuman in depth and scope.
I tend to read a few books at a time, changing from one to another as my mood dictates, so this may be why I have yet to finish this impressive display of brilliance that uncovers the villains and a few heros in the tragic tale that is America today.
If you have an interest in Capitalism and it's inner workings, then this in depth forensic autopsy of a crime is a book you'll want to read.
Nice try Stockman!
Yeah I found a copy and spent a couple hours looking at it.
Stockman's opinions are similar to mine. It is an easy read, even though it is so many pages long.
Stockman doesn't like the MIC or the Neocons that profit off of the Federal Spending and War. This book is a great jumping off place for blogging or articles.
Some of the people that are afraid of communists taking over Greece should read Stockman's book too.
Excellent post in non-Palo-Alto news (as a South Bay Arean, I do enjoy your take on that), Tim, and thanks for the recommendation. I haven't read a full book in a year or more - will jumpstart reading again with Stockman's book.
Download it from Audible, put it on an ipod or listen to it on the computer. I have listened to dozens of books that I would never have the time so sit down and read otherwise.
Audiobooks are excellent for the car - I spend 250+ hours a year & have covered an immense booklist over the last 4 years. While we are on the topic of recommendations, Robert Caro's The Power Broker (the story of Robert Moses of NY construction fame) is an excellent & highly detailed look into the mind of a brilliant & power obsessed man. A lot can be learned about the mindset & ambitions of the TPTB.
It is also available on theaudiobookbay.com torrent.
You can likely get the book for a discount if you look around. I urge you to get yourself a copy as it is really good.
It's on Thepiratebay for free.
THE GREAT DEFORMATION: The Corruption of Capitalism in America
Required reading. Ranks right up there with G. Edward Griffin's CREATURE FROM JEKYLL ISLAND, 5th edition.
Once you read these books, the world will never look the same again.
But are you prepared to be " different" for the rest of your days?
Ignorance truly is bliss.
Edit: of course, if your here, you know this.
there is much more as well , that explain and dispell the many illusions we all live in and how they came to be
I have read the book and it's rivetting. It's almost too much to absorb in one pass so I'm currently re-reading it.
I am on my second pass thru "Creature..."
IF YOU ARE AT THIS SITE, YOU MUST READ THIS BOOK.
Hit me with knowledge. What sticks in your mind the most?
It lays out the bail out scam run by the banks with the help of political cronies. Ever wonder why we gave Panama the Canal? its in here. And why we bail out countries like Mexico? The Fed is just the beginning. IMF, WTO, etc are all part of tax-payer funded program to fleece the average tax payer in favor of the banks. This is why there are so many on this site who detest the financial and political elite.
Captain Kink, -- 'The Creature Fron Jekyl Island' is a reprint of 'Secrets of The Federal Reserve' 1952, by Eustace Mullins. Griffiin makes no mention of this. But I do.
"The commercial paper bailout incited by Jeff Immelt was utterly unnecessary. The Facts show the Bailsters conjured up still more economic goblins where none actually existed. What the commercial paper bailout mainly did was prop up the banking industries "gain on sale" scam."
- Stockman
2 Trillion dollar commercial paper Market is upwards of $1 Trillion in ABCP (Asset Backed Commercial Paper Segment)
Wall Street had gone to banks & credit card companies to purchase receivables and set up internet "Conduits" and used these to issue billions in commercial paper at AAA Ratings even though America's Receivables would be collected by the Banks & Credit Card Companies (gain on sale scam, GE Capital, Jeff Immelt, constructed false data for bailout through Paulson) (I probably have this all messed up, so you will have to look it up yourself)
Jeffrey Robert "Jeff" Immelt, In February 2009, Immelt was appointed as a member to the President's Economic Recovery Advisory Board, On January 21, 2011, President Obama announced Immelt's appointment as chairman of his outside panel of economic advisers, becoming "chairman of the Council on Jobs and Competitiveness, a newly named panel that President Obama is creating by executive order."[16]
David Stockman is calling out GE's & Obama's Immelt. Jeff Immelt had huge conflicts of interest in 2008-2009 as did many of the Elites picked to win.
Great Stockman call - thanks for bringing this to light TK. And a nice Booyah on the "bottom" call :-) +1 for snark complexity level. As to the LameScream media and the AnalCysts (new vocab word courtesy of a ZH poster) - I am surprised that you still comment on how useless they are except for contrary calls.
As to impending trends, Dshorts NYSE margin data supports the idea that the TOP is IN, and if the NYSE margin debt mountain continues to avalanche (a Rickards term) then this call will be confirmed. The momo's are slipping for the exits...
http://www.advisorperspectives.com/dshort/updates/NYSE-Margin-Debt-and-t...
...further, when you think about it the shale boom was the result of a "combination of horizontal drilling technology and hydraulic fracturing"..........but clearly there was a third element in this "technological frenzy".........3% money. Enough hundred dollar bills begets barrels and barrels (steins)............we have a Franklinstein market in the oil patch.
(Ok, it was only mildly amusing...franklinstein)
It is indeed happening here in the Bakken; companies that a year ago were allowing their workers 70 and 80 hour workweeks are now throttled back to 40 max; companies that were paying for housing no longer do; companies that were paying round trip airfare to/from wherever their workers chose to live (like Florida !) no longer pay for that; per day per diem meal allowances--gone; then entire menu of noncash compensation is being slashed by the day. The State of North, whose Legislature meets every 2 years for 80 days, by law, is now in session and short 4 1/2 Billion dollars out of a 2 year budget of 11 billion. They are frantic in Bismarck. Recently some service rigs were laid down. Not drilling rigs, service rigs. That means many of these fracked wells (older than 3 years) aren't even worth fixing at $50/oil.
Mr. Stockman is/was more prescient than even he might have thought when he wrote his book.
Sorry I posted my long-winded blather before noticing your man-on-the-scene comment. Any alterations you'd make to what I said above, I'd welcome.
Go to his website and sign up for his email alerts...good fun!!
Things will get worse but Wall St. and the Fed will lie and manipulate till there is nothing left to work with. I hope everybody is ready for the fun that's heading our way.
Since we seem to follow the UK, I guess we will get Zero Hour Contracts in the USA soon.
You know to go with our Temp Jobs, part time Food Service Jobs, and Retail Jobs.
https://en.wikipedia.org/wiki/Zero-hour_contract
North Dakota's population went nowhere between 1930 and 2000. It will be at 2000 levels by 2020.
My wife is from rural North Dakota (Bottineau). That's a town of about 2200. It's just outside the oil patch, so they haven't had a huge spike in population. Before the oil patch, Bottineau was the county seat and the biggest town for 50 miles in any direction. That's about as big a town as that area will support, without the oil patch.
Notice I mentioned my wife is "from" Bottineau. Most people who are "from" Bottineau don't live there anymore because there's nothing to support them there. When farming was much more labor-intensive, the railroads put a town ever 6 miles along the tracks, figuring a 3-mile round-trip was all a farmer could make in a day using horse-drawn carts. With the advent of trucks and other farm equipment, that range expanded so there were all these towns, every 6 miles, that no longer had a reason to exist. Most of them no longer do; the average distance between actual towns with a grocery, hospital, and other stuff you need is now closer to every 50 miles, and there are still a few fat parts of the road with a gas station and a bar in between.
Bottineau will get off easy because they never had the boom so they won't have to recover from the bust. Last time I was out that way, however, they were putting up particle-board buildings as fast as they could in crappy little towns like Tioga, Watford City, Stanley, etc. (never mind the anarchistic free-for-all in actual towns like Williston). All of those shacks will be empty and falling down shortly. The climate of the northern Plains will destroy a vacant building but fast.
The word "malinvestment" doesn't begin to do it justice. Anybody who didn't cash in their chips right at the outset is going to be devastated.
Yup, sorta reminds mme of SW MN. LOL. Crappy little towns and all. Every 6 miles on a railroad track. Most gone..... Hey I was from there. Prettiest sight in a rear veiw mirror.
And I agree with you, all those investors in it for the long haul are going to get the fucking of their lives.
........I live in bottineau; lived here my entire life; ran a small manufacturing company for 28 years there; reside in the Turtle Mountains now; my name is Jim Page.
Did I log onto OKC by mistake here, or what?