Sunday Musings – The Economy Is Fine
The clip shown below from last nights opening for Saturday Night Live pretty much sums up how it is we are led to believe all is well.
In the clip the actor portraying VP Joe Biden waves his hand and says “The stimulus is working“. Unless you are a fan of Star Wars you would probably have missed the meaning of his waving of the hand as he spoke.
The tale of the Jedi Knights from Star Wars is that they can induce a thought by employing a mind control technique which was always highlighted by a wave of the hand in front of those with weaker minds.
The point I am emphasizing here is that we have always known that the Government will tell us one thing while reality is in many cases something completely different. But the level of putting on a happy face and hand waving by the Government has ramped up to what must be an all time high of ‘inducing good karma”.
There are so many examples of this technique from Washington that I would not even know where to begin. During this current economic crisis that the nation still finds itself embroiled in we only have to look back to the past few years with then Treasury Secretary Hank Paulson. Mr. Paulson spoke many times before the economy slid down the mountain that the fundamentals of the economy were sound. That sentiment was echoed by many others, Democrat and Republican were guilty of spreading good cheer when everyone else in the private media (bloggers) were saying the opposite. In the end we found out which was telling the truth.
On Friday we received the University of Michigan consumer confidence data and it dropped lower yet again. Consumer confidence is a ‘forward’ looking indicator as it conveys the attitude of the people who will be spending the money. And just where will that money come from to fuel organic growth with real unemployment nearing 18% (U-6 measurement), credit card companies jacking up interest rates to 30% and even cutting off millions of card holders by reducing their spending limit or outright canceling their accounts. Heck, you don’t even to have to have bad credit yourself anymore, but if you even shop at stores that is known to have a higher average of shoppers with bad credit then guess what… you are labeled one of them as well even if you have good credit history.
I hope one day more and more people will wake up and realize they keep getting sold a bag of lies and crap by those who supposedly represent us. Unfortunately when people do speak up the mainstream media (and Government) paints those individuals as radicals. The last time I checked the 1st amendment to the Constitution still allowed free speech. Even though the 1st amendment is still there the people are slowly giving up that freedom by allowing themselves to be taunted in the media and being spoken down to by the Government.
It was said centuries ago that when the people fear the Government, there is tyranny; when the Government fears the people there is liberty (Thomas Jefferson).
Today the situation goes one step further by adding into the mix the thousands of lobbyists who speak for the corporations and not the people. If you are rich and powerful you have a direct line to the White House. If you are a lobbyist you have elected officials on speed dial, if you are blue collar middle class you have no one that will listen to you, and if you are the poor you have no voice whatsoever.
Today I learned that some talking points echoed by Congress during the health care reform bill debate were actually provided by lobbyists that were hired by Genentech (ref NY Times).
The men and woman in Washington are supposed to represent YOU. But just try to call your local Representative and schedule an appointment to meet with him or her. The majority of the time their staff will just tell you they don’t have the time and request that you send a letter instead (I know this, I have tried it many times). If you are a representative of a major corporation and you contact the Representative you move to the head of the line.
So the next time your elected official waves his hand in front of your face telling you that ‘all is well’ surprise him by saying “your Jedi mind tricks won’t work with me any more”. And tell them to represent you for a change.
Lookup information on how to reach your representative —>Â CLICK HERE
Lookup information on how to reach your State Senator —-> CLICK HERE
Want to learn who is paying who in Washington —–> Open Secrets.org
Just for example, let us take Senator Chris Dodd (D- CT). Last week he released a draft bill that would provide regulation to the financial industry. But will his draft bill have any meat to it? Of course not, his biggest contributors are the financial firms themselves.
Chris Dodd top contributors 2003-2008 shown here.
The only way our elected officials will ever listen to us is if we outnumber the power of their pimps; the lobbyists.
How sad it is that people in this Country will take the time to send a message to American Idol to cast a vote, but won’t take the time to send a message to those who represent them in Washington.
Is this the United States of America or is it the United Corporations of America?
Very good post, Chuck. Thanks for the info.
I will take exception to the comment regarding the Michigan consumer confidence index. Once again, this is a great example of selectively cherry-picking data to support the desired conclusion. The consumer confidence data went down last month and it is “forward looking” but as the numbers were “rising” each and every month from February through June 2009 there was never a mention of the indicator being “forward looking”. Five consecutive months higher and it is “not” forward looking……..one month down and it becomes forward looking? The data only became relevent when it “fit”.
I think it is great that you reported the data. I can only assume if the consumer number rises next month (or a subsequent month) you will report that as a bullish “forward looking” data point?
For those that are interested, here is the consumer numbers for the entire year..(note — the October number is still the second or third highest number in almost two years). You decide if these “forward looking numbers” are trending for the better or worse”.
2009-01-01 61.2
2009-02-01 56.3
2009-03-01 57.3
2009-04-01 65.1
2009-05-01 68.7
2009-06-01 70.8
2009-07-01 66.0
2009-08-01 65.7
2009-09-01 73.5
2009-10-01 70.6
Note — Just so that I won’t be selective..the November index was “66″ and my comment above should have noted “two consecutive months down”. Still doesn’t change my central point that if numbers are used they should be used regardless of the direction.
Volume has been poor for a while now. With breadth doing well over the last several days it seems volume is leaning bearish while breadth is leaning bullish. Back in July a similar battle took place (although breadth indicators were a bit stronger at that time). Breadth won that battle. It’ll be interesting to see how it plays out here. With indicators, sometimes they just don’t matter…until they do. Is volume ready to matter? We’ll see.
Dave,
Thanks for the information. There was a trend up from Feb till June. A drop back in July-August. The rise in Sept/Oct no doubt had something to do with the Cash for Clunkers program. However, it looks like Chuck has given us something to think about. Now the drop back continues with Sept 73.5, Oct 70.6, and Nov. 66. There is a general lack of confidence and it has a lot to do with unemployment… it’s hard to have a lot of confidence when you are struggling to get by.