The Politicians Have To Stop Doing What They Have Done Since WWII Or "The Markets Will Do It For Them"
In an interview on Bloomberg TV, RDM Financial's Ron Weiner summarizes the thing that keeps him up at night as in over thirty years he has never seen "The fate of the world economy rests so much on politicians." Pointing out the sad reality that since WWII the US has always spent more than it earns; he warns that if the politicians don't make it right, then "the markets will!" The heuristic bias to accept the spending status quo, as for most young-to-middle-aged people 'it has always been this way' - just like rising home prices (and the current hope-for-a-housing-recovery myth - which Bloomberg's Joe Brusuelas destroys in a single-chart of shadow inventory and discussion of the opacity of bank balance sheets), is so entrenched, thanks to the last sixty years or so of 'growth', that when asked 'if it is possible to cut spending', he replies "you have to!" and if it's not politically possible then once again "the market will take care of it". This brief three minute clip reminds us of the disbelief and head-in-the-sand mean-reverting bias so widespread in developed nations (citizens and politicians) and summarily dismisses it with a reminder that 'it just has to be reasonable men that we elect to do it" - and better that than let the market force their hand.
Weiner's epic (and realistic) rant is the first 2:30 followed by Joe Brusuelas' destruction of the housing market recovery myth: