Davos: A Monday Morning Staff Meeting …

January 17, 2017

…at a company that went bankrupt on Friday.  Other analogies come to mind:  an emergency meeting of the damage-control committee on the Titanic.  A meeting of parasites as the sick animal host walks away following a dose of antibiotics.

The participants at Davos stare across the table at each other, carrying out their agenda in robot-like fashion, but knowing full well the reality of the situation they now face.  They’re irrelevant – vestiges of a failed experiment staggering along in a zombie-like state.

As reported in this Reuters article, their agenda has taken on a new theme.  They’re suddenly, but disingenuously, interested in the fate of American workers who’ve been left behind by their globalization regime:

The titles of the discussion panels at the WEF, which runs from Jan. 17-20, evoke the unsettling new landscape. Among them are “Squeezed and Angry: How to Fix the Middle Class Crisis”, “Politics of Fear or Rebellion of the Forgotten?”, “Tolerance at the Tipping Point?” and “The Post-EU Era”.

This morning, the meeting opened with an address by Chinese president Xi Jinping, in which he declared that “no one will emerge as a winner in a trade war.”  It’s ironic that the biggest winner in today’s trade war (and make no mistake, that’s exactly what we’ve been in for decades) would lecture the biggest loser – the U.S.  It’s no different than if Japan’s Emperor Hirohito had lectured America about standing up for itself in the wake of Pearl Harbor.

He went on to denounce “protectionism,” conveniently ignoring the vast network of protectionist measures employed by his own country.  Like all participants at the Davos forum, Xi likes to forget that the enforced flow of jobs from America to China and other nations unable to grapple with their bloated labor forces, denying America the ability to engage in trade deals that are mutually beneficial – is a rigged system that it has dubbed as “free trade.”  And it decries the freedom to operate our economy as we see fit as “protectionism.”

The winners in the World Trade Organization-enforced regime, China being the biggest winner, frequently declare that trade deficits don’t matter.  If that’s true, then they shouldn’t mind taking their turn at it.  Your turn, China.  It’s time for you to relinquish your trade surplus with the U.S. and suffer a deficit for a while.  Then let’s see how you feel.

 


American Millenials Far Worse Off Than Their Parents at the Same Stage in Life

January 16, 2017

http://www.usatoday.com/story/money/2017/01/13/millennials-falling-behind-boomer-parents/96530338/

An analysis of Federal Reserve data by the advocacy group “Young Invincibles,” released on Friday, finds that the millenial generation – especially white millenials – are far worse off economically than their baby-boomer parents were at the same stage in life – in 1989.  (See the above linked article.)

  • The median net worth of millenials is 56% lower.
  • Median income has fallen 21% in spite of the fact that a larger percentage of millenials (approximately 50% more) have a college education compared to baby boomers.
  • Home ownership is down by 3%.
  • Millenials are saddled with “drastically higher” student debt.

The article observes that “the analysis fits into a broader pattern of diminished opportunity.”

Looking beyond the Federal Reserve data, millenials are clearly much worse off than their parents in many other ways:

  • While most employers offered pensions in 1989, few do today.
  • The cost of health care is orders-of-magnitude higher than it was in 1989.
  • Good jobs were still fairly plentiful in 1989.  Not today.  The example cited in the article of a college-educated lady earning minimum wage making pizza isn’t a one-off.  It’s pretty typical.
  • The millenial generation is famous for depending on their parents for housing and additional support beyond that.  It’s not a matter of immaturity among millenials.  They do it out of necessity.  In 1989, no self-respecting baby boomer would be caught dead living with his/her parents.  There was no need.

None of this should come as any surprise to those who understand the consequences of the inverse relationship between population density and per capita consumption.  It’s precisely what I predicted in Five Short Blasts, which I began writing in 1993.  Since 1989, the U.S. population has grown by approximately 25%.  But, worse than that, our effective population density has exploded by 200% since 1989 by economically erasing our borders and attempting to trade freely with badly overpopulated nations who prey on our market and bring nothing in return to the trading table but bloated labor forces, hungry to take jobs from Americans.  Diminished opportunity and worsening poverty is inescapable in those circumstances.

Sadly, most millenials are oblivious to what’s been done to them through globalization, which has been slickly packaged and sold to them as some sort of utopian state where we all live in perfect harmony together, masking the underlying truth – that their economic civil rights have been trampled by the greed of global corporations who feed on population growth to stoke their bottom lines.

 

 

 


The New Civil Rights Movement

January 15, 2017

On Friday, Democratic Representative John Lewis, a pioneer of the civil rights movement, announced that he would not attend Donald Trump’s inauguration, denouncing Trump as “not a legitimate president.”  Mr. Lewis should rightly be proud of the major role he played in the civil rights movement of the ’60s, winning equal rights not just for blacks but for all minorities, and the nation owes him a great deal of respect and a debt of gratitude.

However, while Mr. Lewis and Dr. King and others were fighting for the right of minorities to be equal members of society, a new kind of civil rights abuse – one more subtle, arguably just as insidious and even more pervasive – was in the making.  The right of all Americans to make a decent living by putting their God-given talents to work as important cogs in their own economy, was already being usurped by global organizations bent on fleecing the American economy.  Americans – all Americans – black, white, Hispanic and all the rest – have become the new slaves to a new Confederacy of plantation owners:  the New World Order and its global corporations.

The American economy has been drained of trillions and trillions of dollars.  Americans’ savings have been depleted.  Wages are down.  Pensions are gone.  Health care is unaffordable.  Our infrastructure is crumbling.  Our youth are drowning in student loan debt.  No one today feels the lash of a whip, but the threat of being cast out into an economy practically devoid of opportunity might now be just as fearsome for American workers.

Mr. Lewis and others fought the good fight and won the battle.  Though prejudice will always be with us, equal rights for all are now codified into the law of the land.  So successful has that battle been that Barack Obama was embraced by the nation, including whites, as our 44th president, not once but twice.  But it was actually the dawn of this new fight for civil rights – Americans’ economic civil rights – that swept Obama into power.  Once the economy completely collapsed in 2008, American slaves to the New World Order would stand no more.  Obama’s promise of hope and change, his promise to fix our trade problems, and his “yes we can” mantra rang true to the majority of Americans who perceived the country to be “headed in the wrong direction.”

But Obama, along with both political parties, underestimated the depth of the bitterness Americans felt for their economic plight.  They propped up the bankrupt financial and auto industries, implemented some stimulus spending and, beyond that, simply set about restoring the status quo.  The G20, the World Economic Forum, the World Bank and the World Trade Organization, just to name a few, happily returned to the task of sustaining the host-parasite relationship between America and the rest of the world.  Democrats and Republicans alike shamefully became willing accomplices, grovelling at the feet of the globalists to fund their campaigns.

In the 1960s, Bob Dylan sang:

“Come senators, congressmen, please heed the call.

Don’t stand in the doorways, don’t block up the hall,

for he that gets hurt will be he who has stalled.

The battle outside ragin’

will soon shake your windows and rattle your walls,

for the times, they are a-changin.”

Now, the times are changing again. Indeed, the windows and walls of Washington have been shaken and rattled to their very foundation.  Donald Trump has been swept into power by the same forces that caused Americans to put their faith in a black, freshman senator eight years ago.  This time, however, Trump has gone further, promising to break our enslavement by these global organizations.  The new civil rights movement is on.  The fight for all Americans of all colors to make a decent living and provide opportunity for their children, whether they live in the inner cities, in the suburbs or in rural America, has begun.  As Dylan said further on in his song:

“…get out anyone if you can’t lend a hand,

for the times, they are a-changin’.”

Be proud of what you’ve accomplished, Mr. Lewis, but either get involved in helping this fledgling new civil rights movement or “get out” and make way for others who will.


Employment & Trade Data Sum Up Obama’s Presidency

January 11, 2017

https://www.bls.gov/news.release/empsit.nr0.htm

On Friday, the Bureau of Labor Statistics released the employment/unemployment report for December, while the Bureau of Economic Analysis released the trade data for the month of November.  I usually comment on these two reports separately but, frankly, in these waning days of the Obama administration, these looks backward seem rather irrelevant.  In each case, we knew what we were going to get with the economy locked into a “new normal” status quo by Obama’s trade policy.  Nevertheless, it’s worth taking a look at them since, together, they kind of “sum up” the economic results of Obama’s presidency.

It was yet another so-so month for the employment report.  The job growth number was respectable, but wasn’t corroborated by the “employment level” portion of the household survey, which rose only 26,000.  In fact, the employment level rose by only 43,000 in the last three months.  Not only that, but the civilian labor force actually contracted by 72,000.  As a result, unemployment rose slightly.

Meanwhile, the trade report was bleak.  The deficit in manufactured products rose to $60.5 billion, just $0.5 billion off the record high deficit set five months earlier.  Manufactured exports remained stuck at the same level as in March of 2011.  That’s five and a half years of zero growth.  Remember Obama’s pledge to double exports in five years?

These two reports aren’t the kinds of numbers you’d expect from a healthy economy.  President Obama likes to highlight the number of jobs created and the drop in unemployment as evidence of a healthy labor market.  But it’s more a case of him drinking his own Kool Aid.  Those numbers are gimmicked by workers who mysteriously dropped out of the labor force and by a proliferation of low-paying, part-time jobs.  He may fool himself and try to fool you with these numbers, but other statistics tell a different tale.  Death rates don’t rise and life expectancies don’t fall in a good economy.  Nor are wages stagnant.  And “the country is headed in the wrong direction” isn’t the number one issue on the minds of voters in an election in a healthy economy.

Taken together, these two reports do a good job of summing up the economic results of the Obama presidency – economic stagnation at best or, more realistically, a decline fueled by an ever-worsening trade picture – the very thing he promised to fix during the 2008 campaign.


2017 Predictions

January 2, 2017

I just posted my annual predictions for 2017.  I usually do this in November but, in the wake of the election, I decided to wait and see whether Trump would provide any clues as to how his presidency will unfold.  He did, and the clues were pretty consistent with his campaign promises.  It’s going to be a wild year – potentially a very good one for Americans, but with some scary stuff on the horizon.  Check it out:  https://petemurphy.wordpress.com/more-good-stuff/predictions/2017-predictions/.


On Tariffs, Indications are Trump Means Business!

December 22, 2016

http://www.reuters.com/article/us-usa-trump-navarro-idUSKBN14A27N

http://www.cnn.com/2016/12/21/politics/donald-trump-tariffs/?iid=ob_homepage_deskrecommended_pool

I’ve provided links above to two articles reporting on some very important developments in the Trump transition that have taken place over the last two days.  First of all, Trump has chosen a real trade hard-liner, Peter Navarro, University of California economics professor and author of Death by China: How America Lost its Manufacturing Base, as head of a newly formed White House National Trade Council.  The second article reports that the Trump team is planning to slap up to 10% tariffs not just on imports from China, but across the board on all imports.

These developments are an indication that, instead of merely pandering to populist sentiments during the election, Donald Trump was deadly serious when he made trade the centerpiece of his plan to “make America great again.”  Never mind threatening to label China a currency manipulator, complaints about unfair trade practices, enforcement actions taken up with the World Trade Organization, or any of the other mamby-pamby “actions” taken by previous administrations.  It now appears likely that Trump will go right for the jugular.  A 10% across-the-board tariff on all imports would be a death blow to globalization.

To put such a tariff in perspective, in 2015 the U.S. imported $2.76 trillion worth of goods and services.  A 10% tariff would raise $276 billion per year in federal revenue.  Opponents say that this is actually a huge tax on American consumers.  They’re lying.  Tariffs are paid by the companies who ship the products to the U.S.  Those companies then have a choice.  They can try to maintain their profit margin and pass it along to consumers, but that opens the door to domestic manufacturers who could undercut them on price.  Or they can “eat” the tariff and not raise prices, maintaining their market share but eroding their profits.  Either way, there’s a huge incentive to shift manufacturing to the U.S.

Consider another benefit.  That increase in federal revenue can be used to fund an equally large cut in income taxes for American taxpayers.  So, even if the importing companies pass along the cost of the tariff, you’ll have that much more money in your pocket to cover the higher cost.  Essentially, the tariff takes the money right out of the pockets of the global corporations and puts it into the pockets of walk-around Americans.  For all of you who have railed against the worsening income disparity between the top 1% and the rest of us, this is exactly the right way to go about addressing that problem.

For those who doubt the effectiveness of tariffs in boosting domestic manufacturing, consider this:  in spite of the fact that U.S. automakers lost half of the domestic market to imports, nearly every truck on American roads is still built in the U.S. Why?  Because trucks are one category of product on which the U.S. still maintains a 25% tariff.   Without that tariff, it’s likely that most trucks would now be imports and the “Big Three” automakers may not have survived.

Brace yourself, folks.  All hell is going to break loose on January 20th!  It’s been a long time coming and it’s going to be fun to watch.  I can’t wait.


Obama and Democrats are Utterly Clueless

December 19, 2016

http://www.cnn.com/2016/12/19/politics/president-obama-npr-interview/index.html

Almost as amazing as Trump’s victory in the election is the inability of the entire Democratic Party, from the very bottom to the very top – President Obama himself – to grasp the reasons behind their loss.  In a recent interview, detailed in the above-linked CNN article, President Obama blamed the Democrats’ stunning loss on their failure to “show up” in the states that swung from Democrat in the previous two elections to Trump in this election.  The problem, claims the president, is not the message but the messenger.  Hillary should have campaigned harder in the midsection of the country.

Seemingly lost on the President is that West Virginia – a state where Hillary did campaign more than once – made the biggest swing  from Democrat to Republican of any state in history, losing by 69% for Trump vs. 27% for Clinton.

Why did she lose so badly there?  She came right out and said that she was going to put the miners there out of work.  In a subsequent attempt at damage control, she promised “retraining” for laid off mine workers.  Retraining to do what?  She had nothing.

The message she gave West Virginians, though more pointed and targeted to that particular demographic, was consistent with the globalist message that both the Democrats and Republicans have been selling for decades – that your manufacturing jobs are never coming back, that this is somehow in your best interest and if you’re just patient enough you’ll come to understand, and that we’ll retrain you to do some other job – a job that doesn’t exist.

The problem for Democrats is that nobody believes it any more.  Their message has been proven to be a load of crap.  Along comes Donald Trump and, in spite of his many flaws, immediately seizes the spotlight with a new and very simple message:  I’ll slap tariffs on those imports.  Your jobs are coming home. We’ll make America great again!  (Not to mention his message about putting a halt to the illegal immigration that both parties embraced in an effort to pander to the Hispanic vote.)

Republicans shouldn’t be smug.  They too fought Trump tooth and nail every step of the way, clinging to the same globalist message.  Only because Trump chose to identify himself in this race as a Republican do they now find themselves in control of so much of the political landscape.

The Democratic Party used to be the party of working-class Americans, but has morphed into a money-grubbing carnival barker for the New World Order.  But they don’t see it.  They still want to believe that if they had just polished that turd a little brighter and sold it a little harder they’d have won the election.