Voodoo Economics

Even Wall Street pundits are trying to snow us. Blue skies, economic recovery, double-digit gains for stocks – the Wall Street Journal’s Economic Forecast Survey covered it all in the January 14th issue. Under the headline, “Economists Optimistic on Growth,” here’s what we’re being told to expect in 2011:

– 3.3% GDP growth;
– unemployment declining to 8.8%;
– inflation contained at 1.9%;
– crude oil around $ 90 a barrel;
– improved housing starts in a depressed market;
– on average, 180,000 monthly jobs created;
– no Fed interest hike until 2012 at the earliest;
– continued QE II buying of $ 600 – $ 900 billion in government bonds; and
– an overall upbeat sentiment for economic recovery and growth. –

If the Wall Street Journal sees it that way, it must be so – right? Wrong. They’re singing the same tune they sing every January, and the sheep are swallowing it – again. But not all of them. Stephen Lendman points out that long-time insider/market analyst Bob Chapman strongly disagrees with such drivel. Current economic policy shows no sign of promise, he warns, and the destabilizing effects of present day economic strategies can only bring disastrous social costs. Conditions are going to be downright nasty in 2011 and the handwriting is on the wall, he warns, but few are listening.

Stephen Lendman continues – “On January 20, the Financial Times headlined, ‘US States Face a Fiscal Crunch,’ saying: ‘Undue budget tightening will jeopardize recovery whether applied at the federal level or lower down … The squeeze is now upon them; the federal stimulus is fading away, and the gimmicks are all used up. For state finances, the year of reckoning has arrived, and the timing could hardly be worse.’

“Global European Anticipation Bulletin (GEAB) analysts are also expecting hard times. On January 16, their latest economic assessment headlined, ‘Systemic global crisis – 2011: The ruthless year, at the crossroads of three years of global chaos,’ predicting ‘entry into the terminal phase of the world before the crisis.’

“Since 2008, policies taken hid economic deterioration instead of resolving it. The present year ‘will mark the crucial moment when … palliative measures’ no longer work, and ‘the consequences of systemic dislocation … dramatically surges to the forefront.’

“In 2011, ‘violent shocks … will explode the faulty safety devices put in place since 2008’ and will erode the ‘pillars’ on which the ‘Dollar Wall’ rested for decades until gold no longer backed it. Overall, 2011 will be chaotic. All bets are off. ‘The crisis ball rolls and everyone holds their breath so it doesn’t fall’ squarely on them.

“Prices for food, energy and other commodities will continue to soar. Inflation will rise. It’s higher than reported. Tunisia is instructive. Impacted by high food and energy prices as well as unemployment, American and other ‘godfathers’ couldn’t prevent protests collapsing a friendly regime, now struggling to reinvent itself.

“America’s leadership is eroding. Europe is weak, and BRIC countries (Brazil, Russia, India and China) are not ready to control the global economy so can only ‘quietly undermine what remains of the foundations of pre-existing order.’

“Fragility defines 2011 with many nations ‘on the verge of socio-economic break-up,’ especially America and Europe where real unemployment and poverty are rising, social benefits are disappearing, and angry people are beginning to react. The incendiary mix ‘has the making of political time bombs.’

“History often signals warnings ‘before sweeping away the past.’ It came in 2008 … 2011 to ‘do the sweeping.’ Only nations that have ‘adapted to the new conditions’ will weather them. ‘For the others, chaos is at the end of the road.’

“Trends forecaster Gerald Celente says 2011 will be a ‘wake-up call for how grave economic conditions have become’ because of ineffective, self-serving counterproductive solutions. As a result, he sees ‘crack-up’ ahead based on reliable indicators like unemployment, housing, currencies and sovereign debt problems, ‘all bordering between crisis and disaster.’

“Teetering economies will collapse. Currency wars will continue. Trade barriers will be erected. Economic unions will splinter, and ‘the onset of the “Greatest Depression” will be recognized by everyone.’ As governments ‘extract funds to meet fiscal obligations,’ working populations will be hurt most, and they’ll react publicly, including by hardship-driven crimes, whatever it takes to survive. The closer we get to 2012, the louder the calls will be that the ‘End is Near!’ For many, it’ll feel that way because of harder than ever hard times.

“Economist Michael Hudson’s latest article headlined, ‘The Specter Haunting Europe: Debt Defaults, Austerity, and Death of the “Social Europe” Model,’ saying: ‘EU policy seems to be for wage earners and pension savers to bail out banks for their legacy of bad mortgages and other loans that can not be paid – except by plunging their economies into poverty. If wages decline, high debt burdens become even heavier … Aside from the misery and human tragedies that will multiply in their wake, fiscal and wage austerity is economically self-destructive.’

“Eventually demand is crushed, turning recessions into depressions. Instead of creditors getting hurt, however, imposed ‘post-modern neoserfdom … threatens to return Europe to its pre-modern state.’ Working Americans face the same plight under bipartisan planned austerity, heading a once prosperous country toward third world status, complete with militarized enforcement once anger erupts. It’s the debt of bad government stupidity, a pig no amount of lipstick can hide, and when it explodes, reverberations more than ever will be felt globally. It’s coming, but nobody knows when, despite the above forecasts.

“The tougher things become, the more deceptive MSM assessments get saying crisis has passed. Claiming better economic times ahead doesn’t wash in the face of a global debt crisis, accelerating, not abating. Strapped US states are teetering on insolvency, failing to contain their own debt burdens through draconian austerity budgets on the backs of American workers, people least able to cope.

“Obama’s solution is less, not more regulation. His January 18 Executive Order (EO) headlined, ‘Improving Regulation and Regulatory Review’ proposed ‘Flexible Approaches’ requiring review of all existing regulations to ease them for powerful corporate interests. It requires federal agencies to ‘adopt them only upon a reasoned determination that’ benefits justify costs.

“After decades of regulatory implosion, Obama plans more, no matter how destructive freewheeling freedom became, especially after global economic crisis took hold, heading for worse hard times, not resolution lifting all boats.” –

In our preceding commentary, Article 9, we provided evidence of the deindustrialization of this country. We acknowledged that the information provided by Michael Snyder and Timothy Gatto was not “general knowledge”, but it’s safe to assume that those in authority, including our Chief Executive, must surely be aware of this worldwide economic decay. So why is Mr. Obama trying to put out the fire with gasoline? Well, maybe he isn’t trying to put out the fire. Economy isn’t his bag, remember, he was a lawyer. When he was an undergraduate at Columbia, he was … he was … well, George Stephanopoulos of ABC News graduated with him and said … Hmmmm. Mr. Stephanopoulos, in fact, questions why no one has acknowledged that the president was in their classes or ate at the same cafeteria or made impromptu speeches on campus. He says he himself never had a single class with the president, and if he’s such a great orator, he asks, why doesn’t someone remember him? And why won’t he allow Columbia to release his records?

Fox news contacted 400 students who attended Columbia when Obama claims to have been there but no one remembered him. Wayne Allen Root who was, as Obama claims to be, a political science major at Columbia during that period said, “I don’t know a single person at Columbia that knew him, and they all knew me. I don’t have a single classmate who ever knew Barack Obama at Columbia. EVER!” Root added that he was also like Obama, “Class of ’83 political science, pre-law” and said, “You don’t get more exact or closer than that. Never met him in my life, don’t know anyone who ever met him. At the class reunion, our 20th reunion five years ago, who was asked to be the speaker of the class? Me. No one ever heard of Barack! And five years ago, nobody even knew who he was. The guy who writes the class notes, who’s the kind of the, as we say in New York, the Macha who knows everybody, has yet to find a person, a human who ever met him.”

And Obama’s picture isn’t even in Columbia’s 1983 Yearbook! Hmmmm. So, who is Barack Obama anyway, and who’s pulling his strings? Is the president merely a puppet marching to the beat of someone else’s drum?

Could this be the reason why an Emergency Shipbuilding Program isn’t being initiated by the simple “stroke of his pen”?

We may be a lot worse off than Bob Chapman thinks.