The Hoover-Obama Connection. All good rackets must come to an end.

Discussion in 'Economics' started by ByLoSellHi, May 29, 2009.

  1. The Sovereign Society Offshore A-Letter
    Friday, May 29, 2009

    Ding! Dong! The Recession is Over!
    Long Live the Recession

    Matt’s Two Cents on Some of the Hottest BS and Lies In the Mainstream Media and the Historical Record

    Dear A-Letter Reader,

    This ain’t a recession. And by no stretch of the imagination is it anywhere near over.

    I’m sorry…but it’s Friday, and I’m sick of another week of “Green Shoots” rubbish. Even some of my fellow contrarians are now jumping into the fray…with two of my fellow newsletter writers giving conflicting reasons for the end of the “recession”…

    Ooh…consumer confidence has bottomed! (Laughable, that one. Just wait and see.)

    Ooh…Unemployment claims have started to turn downward!


    First of all – as we said yesterday – there’s simply no reason to trust the BLS statistics. You want the long explanation, you’ll have to buy me lunch or hit the A-Letter archive. We don’t have the time for it here.

    Second…there’s absolutely no reason to trust the BLS statistics. Yeah, it’s the same as the first reason, but it’s that important.

    So why all the BS from almost all members of the media? Afraid of being labeled fearmongers? Maybe. It’s also damage control; at least in part. With such a fragile global economy…and such dim prospects for any kind of recovery…nobody wants to rock the boat.

    But I’m also convinced that it’s a problem of perspective…

    As I’ve said in previous A-Letters; not one of these yahoos was around for the Great Depression. A pity Sir John and Dr. Kurt didn’t make it to see this one. As such, these yahoos have only ever known inflation – one kind of economic regime.

    They’ve built their names, their lives, their fortunes, and their reputations in the biggest, most “idiot-proof” global economic regime ever contrived. Simply put; they don’t know deflation. That’s kinda like coaching a football team and not knowing about defense. Their whole lives, they’ve only coached offense…

    And now it’s coming apart. C’est la vie my narrow-minded friends. All good rackets must come to an end.

    But I can’t blame them entirely. Most were educated by a historical record that’s less historically accurate than Plan 9 from Outer Space (don’t even Google it…it’s the worst movie ever made.) So let’s crack our knuckles and bust this one wide open…

    The Hoover-Obama Connection

    History isn’t written by the winners. The winners are too busy enjoying the spoils. History’s written by the dim-witted meek guy that was standing behind the winner. And historically speaking, that guy’s an idiot.

    History’s also massaged over the course of…well…history…to the point where it often becomes more fairy tale than gritty crime drama.

    For example; much hullaballoo was made about the similarities between Obama and FDR. That’s an important thing – history says – because FDR’s radical “do-something” policies and the “New Deal” helped us claw our way out of the Great Depression.

    Hoover – on the other hand – was a freaking monster according to history.

    He didn’t do anything about the Depression, he let it run its course…and by the end of his term, people were destitute, picking through garbage dumps to find their next meal.

    Right. And I’m king of the moon-people.

    The reality – one that Dan Mitchell points out here in detail – is that Hoover absolutely mastered the “do something” mantra that FDR would take over. Sure, a ton of banks failed, but Hoover made sure that his administration still had its hand in the pot…mucking up the order of things.

    And when the “New Deal” came about, there wasn’t really anything new about it. It was almost as if they took Hoover’s plans to Emeril’s TV show…and with a Bam! here…and a Bam! there…they “kicked it up a notch.” In many ways, the New Deal was the same deal Hoover had been pitching for years.

    Funny thing is; the bulk of history books don’t really cover this.

    Dig up Murray Rothbard’s “America’s Great Depression” and you’ll find out about the AALL…a special program Hoover set up to keep wage deflation from taking hold. He also encouraged unionization and other measures that would impede the necessary progress of deflation through means of wage deflation…

    Don’t be intimidated by the big words; wage deflation just means falling wages overall. It kinda makes sense when your unemployment rate’s trudging up to 20% and everything else is falling in value (in other words; its part and parcel of healthy deflation).

    But it’s the third rail for knee-jerk, “do something” politicians. Getting paid less?! That’s unfathomable! No selfish idiot would ever want that. Even if it meant keeping the unemployment rate under control (which – in the little-known discipline of economics – it does)

    …Hmm…Sound familiar to anyone you know? Let me explain…

    Remember Ford motors? That fine American company that doesn’t need any free taxpayer money? Bless those guys’ hearts! At least we know there are still a few good capitalists out there.

    How do we know that?

    Because last year, their executives played some hardball with the UAW (something you’d never see Obama or Hoover do.) And they forced the UAW down to competitive wages. Instead of costing Ford almost $75 an hour – like GM and Chrysler – those dim-witted, car-assembling high school grads would only cost about $55…as much as the Japanese pay in their US plants.

    You see that? It’s wage deflation. They took it head on, and they’ll be better for it. They’ll be more efficient, more competitive, and more likely to truly survive the pain of the coming years.

    Meanwhile, what’s Obama doing with the other car companies? You guessed it; anything but bringing the wages down. He threw billions of dollars – dollars that belong to me, you, our children and grandchildren – at both companies, rather than let something as politically terrifying as wage deflation take place.
    The Reality: Is the Recession Over?

    That’s just the tip of the iceberg, folks.

    I could go on for hours…days…weeks even, about all the lies and BS in the historical record, and how they distort the political, social, and economic “lessons” we’ve learned from history. But that one point really stuck out like a sore thumb to me.

    The reality is that the worst New Deal programs were horrid atrocities; one of which was responsible for slaughtering thousands of heads of livestock, torching hundreds of acres of farmland, and starving thousands upon thousands of Americans (AAA).

    And the most “successful” of New Deal programs? Social Security…the SEC, the FDIC…Fannie and Freddie…yeah…sparkling successes those things were. In reality, the New Deal’s most successful programs only served to create long-term distortions that led us to where we are today.

    As our Chairman – New York Times bestselling author John Pugsley – can personally attest; the real “recovery” didn’t come until after WWII. He remembers the strict rationing; the difficulty of life during the war…and the fact that life wasn’t suddenly rosy after FDR “fixed the banking system.”

    So here’s today’s reality – one that all the wealthy financial “experts” in the world can’t seem to publicly grasp – the Great Depression was no accident. It wasn’t unexpected. It was the result of years of inflationary monetary policy…during which people started mistaking bank credit for real wealth.

    And today, we’re facing the exact same macro-issue. We may have more fail-safes…more backstops in place today…but our overall debt levels are worse than they were in the 1930’s, and our situation doesn’t look much better. In reality, the distortions of aging New Deal policies and Federal Reserve practices have created a deflationary recession…the likes of which hasn’t been seen at least since the Great Depression.

    Am I an entropist? A fearmonger? Do I just want to see it all burn down?

    Hell no. Unlike all these mainstream yahoos, I actually understand deflation. Deflation – and even recessions – are the economy’s way of telling us that we’re screwing up. That we need to re-think how we’re doing things, rearrange our capital…maybe put it to better use. Think its any more complicated than that? Well, you’d be wrong.

    Feel free to plug through the historical record. I’d start with Microsoft, Apple, HP, GE, Compaq and many of the other largest, most powerful companies on the planet. Each of those companies was started in the midst of recession – or worse – during some form of Depression.

    In other words; the future is here. It’s at our doorstep. And the longer we cling to the past – the same way Cramer clings to his popularity and Hank Paulson clings to his fortune – the more it will end up hurting. That’s the lesson of history.

    Will fortunes be lost in the coming years? Absolutely. Some riches-to-rags stories? Likely tons of ‘em. But for every dream that’s destroyed, for every ounce of capital that’s freed up in bankruptcy – there’s a more powerful dream…one belonging to the future…waiting in the wings…just itching for its turn.

    That’s it for today folks. I needed to get that off my chest. No Editor’s Corner today. Instead, I’ll ask you to look to the future.

    What’s your place in it? Don’t worry…you have one.

    You just have to look hard enough…to embrace new things. Once the old guard stands down and gets out of the way, the future will have begun. And anyone not on the bus gets left at the station.

    Keep your guns handy and your teeth gnashed. The “recession” is not yet over. Not by a longshot. And there’s a good-money chance that it’s never going to go “back to normal.”

    Yours in Personal Sovereignty,
    MATTHEW COLLINS, A-Letter Editor