Federal Reserve Open Market Committee Chairman Ben Bernanke's told the congressional Joint Economic Committee of Congress October 4 that he has the remedy for the ailing economic recovery he admits is "close to faltering": More of the same deficit spending, monetary stimulus, and work to re-inflate the housing bubble.
Bernanke acknowledged to Congress that deficit spending is out of control. "One crucial objective is to achieve long-run fiscal sustainability. The federal budget is clearly not on a sustainable path at present," he told members of the House-Senate joint committee. The Fed Chairman termed the work of Congress' other joint House-Senate "Super-Congress" committee, charged with cutting some $1.5 trillion of the estimated $8-9 trillion in expected deficits over the next 10 years, "a substantial step; however, more will be needed to achieve fiscal sustainability.... In sum, the nation faces difficult and fundamental fiscal choices, which cannot be safely or responsibly postponed."
By those remarks, Bernanke didn't mean that federal, state, and local governments should balance their budgets and stop using deficit spending to continue their stranglehold on the credit markets.
Twenty years ago, hysteria swept through the media over "hunger in America."
Dan Rather opened a CBS Evening News broadcast in 1991 declaring, "one in eight American children is going hungry tonight." Newsweek, the Associated Press, and the Boston Globe repeated this statistic, and many others joined the media chorus, with or without that unsubstantiated statistic.
When the Centers for Disease Control and the Department of Agriculture examined people from a variety of income levels, however, they found no evidence of malnutrition among those in the lowest income brackets. Nor was there any significant difference in the intake of vitamins, minerals and other nutrients from one income level to another.
That should have been the end of that hysteria. But the same "hunger in America" theme reappeared years later, when Senator John Edwards was running for Vice President. And others have resurrected that same claim, right up to the present day.
Politicians who are principled enough to point out the fraud of Social Security, referring to it as a lie and Ponzi scheme, are under siege. Acknowledgment of Social Security's problems is not the same as calling for the abandonment of its recipients. Instead, it's a call to take actions now, while there's time to avert a disaster. Let's look at it.
The term was derived from the scheme created during the 1920s by Charles Ponzi, a poor but enterprising Italian immigrant. Here's how it works. You persuade some people to give you their money to invest. After a while, you pay them a nice return, but the return doesn't come from investments. What you pay them with comes from the money of other people whom you've persuaded to "invest" in your scheme. The scheme works so long as you can persuade greater and greater numbers of people to "invest" so that you can pay off earlier "investors." After a while, Ponzi couldn't find enough new investors, and his scheme collapsed. He was convicted of fraud and sent to prison.
The very first Social Security check went to Ida May Fuller in 1940. She paid just $24.75 in Social Security taxes but collected a total of $22,888.92 in benefits, getting back all she put into Social Security in a month.
If there was ever any doubt that the Democrats take the black vote for granted, that doubt should have been put to rest when Barack Obama told the Congressional Black Caucus, "Stop whining!"
Have you ever before heard either a Democratic or a Republican leader tell his party's strongest supporters, "Stop whining"?
Blacks have a lot to complain about, not just about this Democratic administration but about many other Democratic administrations, national and local, over the years.
Unfortunately, black voters, like many other voters, often judge by rhetoric, rather than realities. When it comes to racial rhetoric, the Democrats outdo the Republicans by miles.
Even Ronald Reagan, the great communicator, had problems communicating with black voters, as I pointed out years ago in my book A Personal Odyssey (pages 274-278).
Robert Johnson, business magnate and founder of Black Entertainment Television (BET), has joined the mounting list of CEOs and business leaders who are questioning President Obama’s incessant demagoguing of America’s wealthy. On "Fox News Sunday," Johnson suggested that the President "recalibrate his message," so as not to "demean" or "attack" the achievements of so many hardworking Americans. "I’ve earned my right to fly private if I choose to do so," he declared, "and by attacking me, [Obama] is not going to convince me that I should take a bigger hit because I happen to be wealthy."
Although Johnson did not directly address President Obama’s "Buffett Rule" (a proposal that would allow millionaires to pay a lesser share of their income in taxes than middle-income earners pay, such as Warren Buffett's secretary), he grimaced at the notion of raising taxes on the wealthy, as he described how he joined the business world to "create jobs and opportunity [and] create value for myself and my investors." Raising taxes and alienating America’s job producers would only suppress such ambition, he implied.
According to Harvey Rosenblum, a top economist at the Dallas Federal Reserve Bank, the American economy is at the “knife edge” between growth and contraction. He spoke at a forum sponsored by the San Antonio Chamber of Commerce on September 27. “We are in the midst of the Second Great Contraction,” he observed, adding that he didn’t think that “monetary policy tweaks” would help much. “The patient isn’t responding well to the medicine,” he said.
And so, the Fed’s inflationary policy is not creating job growth. But, according to Bernanke, it may be preventing deflation, which led to the Great Depression. But while the private sector has formidable assets which could become the basis for future prosperity, unfortunately we are stuck in the mire of uncertainty that socialist Obama and his leftist colleagues have driven us into.
And there are good reasons why this economy is treading water. First, we have a horrendous national debt which Obama refuses to reduce. Indeed, he and his socialist buddies want more debt in order to destroy our capitalist system. In fact, he has engineered the largest expansion of government in U.S. history by enacting ObamaCare, which will increase the national debt even more.
The 12-member congressional supercommittee created by the August debt-ceiling deal is tasked with finding $1.5 trillion in cuts to the federal budget over the next decade. With that kind of money on the line, was there ever any doubt that lobbyists would come knocking on the committee’s door?
In fact, says the Washington Post, “nearly 100 registered lobbyists who used to work for members of the supercommittee are now representing defense companies, health-care conglomerates, Wall Street banks and others with a vested interest in the outcome of the panel’s work.” In addition, writes the paper, half the members of the committee — three Democrats and three Republicans — “also employ former lobbyists on their staffs.”
Furthermore, notes Poltico, while the supercommittee “has met more frequently in secret than publicly and has rejected calls to disclose its donors and post its documents online,” lobbyists are having relatively little difficulty finding out what’s going on behind closed doors.
Last Friday Laksman Achuthan, co-founder of Economic Cycle Research Institute (ECRI), announced that not only has the economy entered a new recession, but that “it’s going to get a lot worse. The vicious cycle is starting where lower sales, lower production, lower employment and lower income [leads] back to lower sales … you haven’t seen anything yet.” Despite some evidence that the economy is growing in places, it’s not enough to overcome the significant array of indicators that Achuthan has used successfully for years to predict the economy. According to The Economist, ECRI has never issued a “false alarm,” and this time should be no different.
On his website, Achuthan stated:
Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off.
ECRI’s recession call isn’t based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down — before the Arab Spring and Japanese earthquake — to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes…
The stock market in Europe took another hard hit when the Greek Finance Minister announced that his nation’s government will not meet its deficit reduction goals.
After the cabinet meeting, the Finance Minister said that the Greek national deficit would be $25.2 billion or 8.5 percent of the nation’s GDP, compared with the target goal of $22.8 billion or 7.6 percent of GDP. Even this projection was issued with caution. In an official statement the Finance Ministry said: "Three critical months remain to finish 2011, and the final estimate of 8.5 percent of GDP deficit can be achieved if the state mechanism and citizens respond accordingly."
In that cabinet meeting on Sunday, a draft budget for 2012 was approved. It was this meeting that produced the projected deficit of 8.5 percent. It issued more bad news: The Greek economy will shrink even faster than was previously stated. A 5.5 percent reduction in GDP is now projected for this year. The government tried to sound steady and sure. Minister George Papandreou told an extraordinary Cabinet meeting Sunday to approve a 2012 draft budget: "I want to repeat that we will be unswerving in our goal — to fulfill all that we have promised to ensure the credibility of our country.”We have a single and steady goal — to meet our commitments so that we guarantee our credibility." Papandreou’s budget called for reducing the pay, firing, or forcing into early retirement 30,000 government workers.
The name John Gorrie is little known today, though a sculpture commemorating his contributions to the lives of every American stands in National Statuary Hall in Washington, D.C. He is the father of refrigeration and air conditioning, and by virtue of that title can also be considered one of the founding fathers of our modern industrial economy.
Gorrie was born 208 years ago today on an island in the Caribbean and grew up in South Carolina. He went on to earn a medical degree in New York. But it was on the Gulf Coast of Florida where he settled in 1833 that his medical research evolved into a life-long quest to combat the effects of temperature and climate on disease. He saw his patients at the U.S. Marine hospital in Apalachicola suffering from malaria and yellow fever. Popular thought at the time attributed such tropical diseases to bad air. (The word malaria means "bad air disease.")
He set up a primitive cooling system in the sickroom with ice-filled basins suspended from the ceiling. When his supply of ice was interrupted by regional trade disputes, he concocted the first patented ice-making machine in history. Gorrie also had the foresight to drain area swamps and use mosquito netting in the hospital long before the protozoan source of malaria was discovered.