After 365 days we’re a lot worse off … (A reprint of Vol. XVIII, Art. 24)
It’s being said, ad nauseam, that self-correcting market forces will eventually bring the nation’s tumbling economy to a halt, and that federal funding for “infrastructure”, such as bridges, highways, port expansion, clean this and green that – and anything else that crosses a politician’s mind – will stabilize the economy.
It’s bound to happen, they say. You’ll see. We just need to be patient because everything is cyclical. We bounced back from recessions in 1975, in 1982 and in 2001, they’ll remind you, and we even rebounded from the Great Depression. This glitch is just another one of those declines, and you’ll see an upturn sometime late in 2009 – or in 2010 – or in 2011 – or maybe in … . Well, just you wait. It’ll happen. It’s bound to.
Despite the unthinkable, the fact that automobile manufacturers are talking about throwing in the towel because bailout funds may not be forthcoming and because millions of our unemployed are no longer able to purchase vehicles, officials in the new administration have declared that billions will be spent on bridges, roads and other segments of the nation’s soon-to-be-deserted highway system. That’s the kind of illogical planning that got us into this awful mess.
Late in 2008, in an effort to confront staggering markets, the nation’s banks were given billions of dollars of federal bailout funds so that credit can be made available to – to whom? – to the same unemployed who cannot purchase automobiles because of bad credit ratings and no weekly paychecks? And does anyone seriously expect those banks to grant mortgages to wannabe homeowners with bad credit experience – and no weekly paychecks? So just what are these “self-correcting market forces” that analysts are talking about? Or, as we advised in an earlier commentary, let’s ask the prognosticators to tell us exactly “how” this recession can be terminated. You’d get a blank stare.
One of the most inane comments coming from analysts is the preposterous idea that the proposed expansion of the Panama Canal will encourage the construction of ever-larger containerships that will then deliver massive amounts of goods to those ports that successfully conned expansion funds from local and federal politicos. Are we to believe that port authorities are not aware that those imaginary goods (supplies) have no waiting buyers (demands)? Even a high school kid would question the motives of those promoting that kind of a scam. What else could it be but a ploy?
Every salesman is taught that “nothing moves until something is sold”. That’s just another way of emphasizing the importance of the “supply and demand” concept. Machinery and machinists remain idled until something is sold – and bought. And so the machinery and the machinists in factories throughout the world are slowly but surely being strangled and shut down because nothing is being sold, and bought, by the world’s economic catalysts – the American consumer.
That high school kid could point to the problem – U.S. unemployment – and to the simple solution – American Jobs! Jobs! Jobs! [“Are they walking around in a fog?” the youngster would ask.]