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Reporting from Taipei, Taiwan... "Watch out for false prophets. They come to you in sheep's clothing, but inwardly they are ferocious wolves. By their fruit you will recognize them." The Nazarene borrows from Aesop's fable, as relayed in the Gospel of Matthew (7:15-16) It's a strange freedom indeed when the cost of attainment is freedom itself. In a misguided effort to rescue the economy from the untold horrors of the "abyss," the prophets of modern central planning seek to transfer society's means of production from the most to the least productive class; from private fist to public mouth; from worker to moocher; host to parasite, as Mr. Bonner likes to say. In doing so, these charlatans shackle generation upon generation of those they affect to represent to a life of drudgery and servitude. A strange brand of freedom this is, indeed. Who in their right mind would go in for this twisted arrangement? Many of whom do so voluntarily, no less! More on that in a second, but first, a brief recap of the vile trend afoot. We got a whiff of it earlier this week, when the government posted what should have been widely viewed as another gross misallocation of (taxed/begged/borrowed/stolen) resources. For the 19th consecutive month, the national budget fell disastrously short of anything close to balanced. According to the Treasury Department's own figures (itself a highly suspect data origin) April's $82.7 billion deficit was almost four times the shortfall registered in the same month last year. Addison put it thus in Thursday's edition of The 5-Minute Forecast, "[T]his year, the bleeding is nearly four times as bad." As you might expect, the official tally only tells part of the story. Sadly, it was the "best" part. Continued Addison, "That figure of $82.7 billion is merely the BS figure Treasury puts out there when it reports the deficit. The real tell is how much the national debt grew. And in April, that figure was twice the size of the 'official' monthly deficit - $175.6 billion. "Don't look now," Addison went on, "but we're just a couple of weeks away from the national debt breaking $13 trillion. If you must know, the exact number this morning is $12,931,157,737,293.42." The "official" monthly deficit figure was also more than double what a handful of Wall Street economists surveyed by the newswire Reuters had forecast, as if we needed any further evidence that these pillars of certainty were incapable of anything beyond extrapolating two dots on a graph into the future. Historically, April tends to produce a modest surplus (or at least a mitigated deficit), thanks largely to the influx of tax receipts due around the 15th of that month. But despite the administration's assurances that the employment landscape is steadily improving, receipts were down more than $20 billion from the same month last year (2010: $245.27 billion; 2009 $266.21). Outlays, meanwhile, rose to a record level of $327.96 billion, up sharply from $218.75 billion in March and $287.11 billion in April 2009. Rising from 9.7% to 9.9% last month, the unemployment situation is clearly NOT improving. The government's own Bureau of Labor Statistics showed that the number of long-term unemployed individuals (defined as those without work for at least 27 weeks) continued trending higher, reaching 6.7 million last month. 45.9% of all unemployed people in the US now fall into this category. Those sometimes referred to as "involuntary part-time workers" (workers whose hours had been cut, for example) still stands at 9.2 million. Again, not counted in the unemployment figure are another 2.4 million "marginally attached" workers, including 1.2 million "discouraged" workers who, for all intents and purposes, have simply given up looking for employment. That figure is up 457,000 from a year earlier. That a supposedly benevolent Big Brother can merely define these destitute individuals out of existence is nothing short of a disgrace of the highest order and should, at the very least, give some indication as to the real motivations of those supposedly acting as public "servants." But isn't that just the point? To return to the question we posed earlier, who are those among us who still expect the government to fix all of our problems? Surely by now we must realize that state coddling is not the solution. Quite the opposite, in fact. As the Big Brother in Chief himself rolled into Buffalo, NY, on Thursday afternoon to cheerlead his administration's "success" on the jobs front, he must have seen a giant billboard by the side of the road. The sign, erected by a group of unemployed locals, read: "Dear Mr. President, I need a freakin' job. Period. Sincerely, INAFJ.org." What these unfortunate people don't seem to grasp is not that Mr. Obama doesn't want to give them a job (something that would surely help his southbound popularity rating come the next election)...but that he can't; not a productive one worth counting, anyway. The best he can promise is a job at the IRS, whereby employees police legalized theft from their fellow citizens, or a desk at the census bureau, whereby they sit around counting each other's fingers and toes for a few months. Far from helping improve the cancerous debt crisis spreading to the nation's vital organs, such phony make-work programs only exacerbate the dying patient's condition. Contrary to popular belief, the achievement of the parasitic welfare state is not that it confers necessary services on the governed, or that it provides a magical safety net for the underprivileged and unwashed among its masses. Instead, like the wolf in Aesop's fable, its greatest accomplishment is one of cunning deception. To wit, the welfare state manages to convince - on a grand scale, no less - otherwise reasonable voters that it is not in the business of peddling unnecessary disservices at great taxpayer expense when that, in a nutshell, is its very essence of being. The fact that voters willingly support those who hold their prosperity and freedom hostage demonstrates a curious and alarming case of mass political Stockholm Syndrome, and on a national scale. Beware these wolves, fellow reckoner. By their rotting fruit you will recognize them.
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| ALSO THIS WEEK in The Daily Reckoning... Prudence in Volatile Times - A Case Study By Eric Fry Laguna Beach, California Prudence can seem very imprudent in a runaway bull market. In fact, it can seem downright stupid. Jean-Marie Eveillard's career provides a delightful insight into this irony - both the downside of exercising prudence when share prices are soaring; and the satisfaction of exercising prudence long enough to prove its value. Eveillard knows this reality firsthand. Money for Nothing By James Howard Kunstler Saratoga Springs, New York The European Union came up with a trillion-dollar bailout for itself at the dawn's early light yesterday. Initially, the bailout plan goosed the euro back above $1.30. But by day's end, the euro's value had gained almost no ground whatsoever. Hardly a resounding success on Day One of the campaign. Europhoria By Dan Denning Melbourne, Australia Monday was the day the world's capital markets turned into a giant fiat money casino. Consider yourself forewarned. You might be able to trade your way to profits in this market on the tide of easy money being printed now by the Federal Reserve and the European Central Bank (ECB). But the financial markets are setting up for the mother of all collapses. Buy Japan By Addison Wiggin Baltimore, Maryland When we revealed our new Trade of the Decade in The Daily Reckoning earlier this year, the reaction we got from a lot of readers could be summed up in one word: "Huh?" Almost no one quarreled with the first part of our trade, "Sell US Treasurys." But almost no one agreed with the second half, "Buy Japanese stocks." Good Money After Bad By Bill Bonner Courtomer, France As in the US, the spectrer haunting Europe is debt. In America, bad debt in the private sector - led by sub-prime mortgages - caused havoc on Wall Street in the autumn of 2008. It was as if all Hell had broken loose. The feds rushed to the rescue; but what could they do? They could not exorcise the evil spirits. They could only move the debts from one debtor to another - putting at risk an additional $8 trillion of the taxpayers' money. The Weekly Endnote: Your editors will be reporting from behind the Great Wall next week. Addison, Bill, Chris Mayer and yours truly are off to Beijing to get a look at the whole bubble versus boom theatre. Watch this space for more... Until then, enjoy your weekend. Cheers, Joel Bowman Managing Editor The Daily Reckoning ------------------------------------------------------- Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com | ||
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