Wakeup Time! Come On!

From the wires:

“The jobs picture is much worse than they’re telling you. Forget the “official” unemployment rate of 9.5%. Alternative measures? Try this: Just 61% of the adult population, age 20 or over, has any kind of job right now. That’s the lowest since the early 1980s — when many women stayed at home through choice, driving the numbers down. Among men today, it’s 66.9%. Back in the ’50s, incidentally, that figure was around 85%, though allowances should be made for the higher number of elderly people alive today. And many of those still working right now can only find part-time work, so just 59% of men age 20 or over currently have a full-time job. This is bullish? (Today’s bonus question: If a laid-off contractor with two kids, a mortgage and a car loan is working three night shifts a week at his local gas station, how many iPads can he buy for Christmas?)”

I don’t post this to be a downer. No doom and gloom here. However, I am so frustrated that the so-called leaders are leading millions to a dead end. There is a way out, but we are not headed that way. For starters:

1. Stop spending the country’s credit card.
2. Start the rollback of government employment.

Will this make things better in the short term? Of course not. But if you have a fat kid you don’t give him more food. You make him run!

---
You might like my 2017 epic release: Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets (Fifth Edition). Revised and extended with twice as much content.

16 thoughts on “Wakeup Time! Come On!

  1. Michael

    For once, we are in complete agreement! 🙂

    Ploughing more and more money into the economy merely delays and intensifies the inevitable pain that’s to come. If it was going to turn America’s economic fortunes around, surely we would by now be seeing plenty of self-sustaining growth.

    The government here in the UK has the right idea – government departments will have their budgets cut by up to 40%. The cuts will be painful, but Britain will be able to make inroads into reducing its huge public debt, and avoiding ending up like Greece (but possibly without anyone to bail us out)…

    Jeff

  2. Just before the McCain-Obama election, someone told me that it won’t matter who wins the election because the next president’s goal will be to spend as much money as possible while the dollar still had some value.

    Mathematically, the US can’t pay the debt, even if the debt is monetized. At some point, all governments eventually default on their debt.

  3. Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. […] Is there no other way the world may live?

    –Dwight David Eisenhower, “The Chance for Peace,” speech given to the American Society of Newspaper Editors, Apr. 16, 1953.

  4. Jesse –

    One way President Obama could cut government spending is by reducing the size of America’s armed forces. It’s not like the US is going to be invaded by Canada, Mexico or Cuba anytime soon!

    OK, a smaller military would mean that America would have fewer resources available with which to fight its War on Terror. But ironically, that war plays into the terrorists’ hands! Every time an innocent civilian is killed, the terrorists win a propaganda victory. America and Britain are fighting costly and unwinnable wars in Iraq and Afghanistan; it’s Vietnam all over again…

    Jeff

  5. Jeff, is there room to debate the size of U.S. military? 100%. Do American troops at some stage need to pull back even if there is a good chance it all goes to hell and hand basket all over again? Yes. However, there are not many Americans, except the extreme far left who would never fight even if their families were being slaughtered, who are comparing anything current day to Vietnam.

    As far as what motivates terrorists? They will kill people with no military involvement, or with military involvement. There is no happy place where we figure out their ‘feelings’ and we all get along. Come on. Many of these true believer terrorists are literally still in the stone age. They aren’t leaving.

  6. It’s all connected and somewhere everything connects back with our attitude. We change our attitude and they change.

    “We cannot change our past… we cannot change the fact that people will act in a certain way. We cannot change the inevitable. The only thing we can do is play on the one string we have, and that is our attitude. I am convinced that life is 10% what happens to me and 90% of how I react to it. And so it is with you… we are in charge of our Attitudes.” -Charles R. Swindoll

  7. Michael –

    I’d have thought the parallels with Vietnam would be obvious. In both conflicts, you are fighting an unseen enemy who hides in civilian clothing amongst the general population. And both conflicts have resulted in the untimely deaths of many US soldiers, with precious little to show for their sacrifice.

    As regards what motivates a terrorist, one of their motivations will be a sense of injustice. This would explain the video producted by one of the July the 7th bombers (http://news.bbc.co.uk/1/hi/uk/4206708.stm). It would also explain why you never hear about countries like Belgium or Holland being threatened with terrorist attacks – those countries know better than to invade countries which pose no threat to them. And if you look at the terrorism over recent decades related to Israel and Northern Ireland, much of it has resulted from perceived injustices from what are seen by many in the local population as occupying forces.

    I disagree with your assumption that terrorists will continue to kill people come what may. Look at what happened in Northern Ireland. Also, let’s consider the issue of the taking of American lives in particular, given that the US is supposedly in Iraq and Afghanistan for reasons of national secuirity. Surely the terrorists are more likely to take American lives when the US in their backyard than when the US poses no threat to them. They must know that every body bag makes it harder for the politicians to justify maintaining America’s presence over there.

    Jeff

  8. I get the impression that no one in this particular conversation has ever, as they say, worn the uniform. Not any combat hero, myself – however, a warning about a “Military/Industrial Complex” from a Dwight Eisenhower, or about military strategy from a Colin Powell is one thing; repeating the ancient Lefty fantasy about infinite welfare money, If only those horrid military people would go away, that is not useful in any area, or era, of political economy, is it?
    Purging lobbyists’ bribes & other political corruption out of military procurement is good & necessary, as I think Mike is implying.
    However, an overlooked (by academics) point about military capability is its economic value to a nation’s currency, & thereby to the buying power of that nation’s people; safe haven starts with safety, yes?
    If one snickers about not being attacked by Mexico, Canada or Cuba (try Venezuela…), one overlooks the nature of modern aggression. Massed uniformed troops, a la Stalin or Mao? Not too likely right now. Of course, there are those rocket/missile thingies…yuk.
    The integration of drug gang violence with coordinated (& state-supported) terrorist organizations is probably the higher risk source of violence, even in the U.S. today.
    The 3rd form of contemporary threat – call it aggressive immigration – is actually ancient (Russian history, Roman Emp., Near East).
    Intelligence professionals today are actually citing the danger of these 2nd & 3rd forms mentioned, along the U.S./Mexican border – as threatening the collapse of official gov’ts of Mexican cities/States there.
    So, yes, no way to trade this.
    But, look at an efficient military as productive, economically, when held in its sphere, & used wisely.
    Cut back gov’t employment of the obvious hacks; they’re in the civilian side.

  9. For a second take away all of the American shortcomings, real or perceived, and let’s examine the logical ability of some of these Islamic terrorists (that is not a knock against all of Islam, just the nuts). What do the extreme ones do? They practice Sharia law among themselves. People that far off on a limb are not motivated by logic or rationality. They will kill for some excuse forever — embedded in the stone age — no matter what the West does or how they react.

  10. Surely, they have a very violent and repressive culture. We can see that part. What we seem to have difficulty with is observing our own behavior and so human reactions.

    Our conclusions can be completely wrong even though our logic is completely right.

    “The next morning, the rabbi called his initiates together. “There is no truth,” he said, “only argument.” – David Berlinski

  11. Michael (Covel) –

    The fact that someone believes in Sharia law doesn’t make them beyond reason.

    No legal system is perfect. People who believe in pure Sharia law are no more blinkered than people who believe unquestioningly in their own country’s justice system.

    No doubt history will judge some aspects of today’s Western legal systems as barbaric, others as ridiculously lenient, and others as illogical. It’s all a matter of perspective…

    Jeff

  12. Well, maybe the nut-aspect of Sharia law can be traded, after all.
    Building a nice base in crude?

    Anyway, due respect to Trender, the rabbinic tradition has always insisted on respect toward opponents in debate, not least because the serious desagreements tended to concern Higher stuff, hence unverifiable by humans.
    If our more local conclusions are wrong, our logic is, too – likely based on assumptions rather than observation & measurement.
    As in, maybe, Keynesian economics?

    Speaking of measurement, this just in from Martin D. Weiss, PhD:

    “According to the Special Inspector General for TARP, Washington has spent a total of $3.7 trillion on bailouts and Fed money-printing — NOT including trillions in other government guarantees — to fight this recession so far.
    Meanwhile, since the labor market began recovering a bit this year, a total of 654,000 jobs have been created.
    So let’s do the math: Just divide $3.7 trillion spent by the 654,000 jobs that were created, and you’ll see that
    Every one of those new jobs cost
    a staggering $5,657,492 to create!”

    What was Mike saying about mob psychology?
    Or, did the Fed & Treasury actually calculate the breakeven on this?

  13. “The fact that someone believes in Sharia law doesn’t make them beyond reason. No legal system is perfect. People who believe in pure Sharia law are no more blinkered than people who believe unquestioningly in their own country’s justice system. No doubt history will judge some aspects of today’s Western legal systems as barbaric, others as ridiculously lenient, and others as illogical. It’s all a matter of perspective…”

    This is f****ing nonsense.

  14. Shalom @ Michael David Rubin,

    Also, our logic may be accurate(perhaps we read it somewhere or heard it from someone) but divorced from our own experience and intuition, which often results in local conclusions that are often wrong.

    This is no different from most traders that try to follow someone else’s system(rather than making it their own) but fail.

    “Everything that logic can give us is ultimately founded on something other than logic, call it faith, or common sense, or intuition, or insight, or primary intellectual conviction.” – C. S. Lewis

Comments are closed.