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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

 
Best of Aubie Baltin
July 1, 2009
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It seems to be the accepted precept that it’s better to do the wrong thing than to do nothing at all. Well nothing could be further from the truth as doing the wrong thing only serves to exacerbate the problem and elongate the negative aspects of all the meddling. And we are definitely doing the wrong things, which is the primary reason for my insistence that a DEPRESSION is looming on the horizon.
The basic fundamentals of our economy have changed from a Capitalistic Free Market Economy rooted in equal protection under the law into a government dominated, semi-dictatorship with the Government’s whim and Ideologue judges, replacing the rule of law in complete disregard of our Constitution. So much so that comparisons with past economic recoveries is at best misleading and at worst completely wrong. There has never been a Mob Ruled, Centrally Planned Government dominated economy that has ever succeeded. Using just our own history as a guide: Every Recession or Depression has been induced by Government meddling in the Financial Markets. The ones that recovered the quickest were the ones where Government’s subsequent interference in the economy was the least. So far, we are on a track that looks far more like the Great Depression (our single most government dominated economy to date) than any of the other recession or depression in our entire history.

THIS TIME IT REALLY WILL BE DIFFERENT.
SAVINGS: Just for starters, the savings rate has increased from near 0% to over 6% and climbing in less than 6 months. In actuality, it is much higher than that if we were able to include as savings, all the Gold Coins that are being accumulated for CASH (for fear of an FDR type confiscation of Gold). I expect savings to increase to 12% in short order. That means that consumer spending will drop by at least 12%. Since consumer spending was 70% of GDP that means a new lower level of consumption that will not return to being 70% of the economy any time soon, especially given our 15% (realistic) rate of unemployment.
Capacity utilization is now near 65%. The last time it was this low was in 1937. Anything under 80% is really bad news as there will not be much lift to the economy from investment in the near future as one company after another shrink operations or close their doors completely. We have an oversupply of just about everything from buildings, cars, homes to shopping centers and all manner of strip malls and other retail establishments. What does that mean for the banks going forward? Both the rest of the world as well as the USA are suffering from massive over-capacity in manufacturing as well. To make matters worse, does anyone really believe that businesses in general will be expanding here in the USA with Government picking winners and losers while extolling their strong anti-business rhetoric?