Thu, Aug 25, 2011
From The Market Ticker
Huffington Post has an interesting article up this morning that, like much of what they publish, contains a nugget of truth wrapped in a fascia of nonsense.
The truth is found in the headline and first couple of paragraphs:
Companies are squeezing greater profits out of their employees, even as layoffs rise and the outlook for hiring and raises remains mixed, a recent study has found.
That’s called “productivity.” It is what drives economies. It is also what leads to a natural deflationary tendency in the economy over time – one that pundits and so-called “economists” try like hell to dismiss and claim doesn’t exist.
But the wrapping of the message in the “big lie” is found in the picture above the story – an older woman waving a sign in protest: I did not cause the recession.
Sorry, but the evidence is overwhelming that the common man and woman most-certainly did.
It was, indeed, two acts over the space of more than 30 years that caused the mess we’re now in:
- Belief that your home price will rise forever, and therefore you can treat it as something that will always go up in value and thus can be used as an ATM machine. Homes are durable goods but are in fact consumed over time. They are not “stores of value” or “appreciating assets.” In fact they’re depreciating assets (just as the IRS or, for that matter, stop performing maintenance on yours and see what happens.) Yes, the common man had plenty of help in forming that belief, but the responsibility for playing this game and deluding yourself remains yours.
- Demanding services from the government that you are not willing to pay for with current tax revenues, not levies on your children. In fact, your children would be entirely within their rights to disown you for what you’ve done and should do so. Were your acts to take place in the present tense instead of in a “deferred” fashion in many states you would qualify to be shot by them right where you stand! Theft is theft, no matter how you do it. That you have chosen to use the jackbooted leg of the government to press upon your children’s necks via demanding that the government take on more and more debt to provide services you refuse to pay for with your own acquired wealth and savings is an outrage and threatens to destroy our society. Yes, Mildred, it is your fault.
The fact is that debt saturation at all levels is why we’re in this mess. It is also why we cannot get out of this mess without recognition of the truth and removal of the excess leverage through the economy. Attempting to play games with these facts will simply make the malaise worse and risks an all-on collapse.
Fairy tales make for good bedtime stories but horrible public policy, and those who attempt to substitute them for cold, hard mathematical facts, along with the screaming mouthpieces that pen articles such as the above, deserve everything that is coming to them.
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