Daily Archives: February 10, 2009

Listening to our elected officials talk about the current economic “crisis” has been quite confounding to me and some of my blog readers as well. Essentially what we have here are people that know little or nothing about running a lawn mower, yet they are trying to convince us that they know how the economy tanked and they know how to fix it. Nothing could be further from the truth.

What I see today is the same thing I have seen three times before in my lifetime. I see the banking and mortgage industry laughing all the way to their vaults for the last eight years, then when the bubble in the real estate industry blows up, they cry about their losses and now for the third time in my life want the U.S. taxpayer to bail them out. This problem has been exacerbated by a Federal Government that over the last 40 years has consistently caved to the special interests that help to get them re-elected time and time again.

There is a need to keep in mind that the majority of Congressman and Senators have held that office for more than ten years. Some have been in office for more as many as 40 years. Keeping that in mind it’s not hard to understand that some of these elected officials are as responsible for the current economic picture as the banking industry. It was not that long ago that Charles Keating and the Lincoln Savings and Loan scandal with the Keating five were headline news. But it seems that most people don’t remember that.

Have we already forgotten about the dot com explosion in March 2000? When the dot-com bubble burst on March 10, 2000, the technology heavy NASDAQ Composite index peaked at 5,048.62, more than double its value just a year before. The massive initial batch of sell orders processed on Monday, March 13 triggered a chain reaction of selling that fed on itself as investors, funds, and institutions liquidated positions. In just six days the NASDAQ had lost nearly nine percent, falling from roughly 5,050 on March 10 to 4,580 on March 15. The dot com party was over. A recession and a two year bear market followed.

Then on September 11, 2001, the American economy took another hit with the terrorist attacks on the World Trade Center and the Pentagon. Some 538,000 Americans applied for unemployment insurance benefits in the last week of September 2001. Depending on who you choose to believe, unemployment peaked in the summer of 2003 at just under seven percent.

The media was full of stories about how this was it for the U.S. economy. The party was over. We were heading into deep recession that could turn into an economic depression. President Bush called on Alan Greenspan to lower interest rates to help a sluggish economy. Does anyone even remember the terrorist attacks of 9/11? The dot com bubble? I guarantee that few if any of the Obama voters remember or for that matter even care.

I used to be amazed about how quickly the average American forgets about the bad times. Now it occurs to me that the reason that most people forget about bad times is because the times were not really as bad as we were all lead to believe. In fact, most people can’t remember what they had for dinner last night.

Americans can’t remember a thing and this is exactly what our elected officials understand but more importantly, this is exactly what the media understands. The media is predicated on fear. The media knows that fear sells. Fear keeps people glued to their TV sets. They understand that fear sells. To the media, the broadcast media in particular, keeping their jobs is even more important than pushing their socialist agenda. So they will have their writers write about what sells. Fear sells. Then they use voice inflection to make even the most mundane story sound like a story about the Hindenburg crashing into the Titanic during a tsunami that was created by a magnitude ten earthquake during a hailstorm.

So using this knowledge as a guideline, it’s not hard to look back to August 19th 2008 and see that this is when the economy took a huge dive because that’s the day that the media chose to begin to make the economy front page news. You can look back at a historical chart and see that the day the markets collapsed, the day they economy began to stand still, the day the American consumer decided to stick it’s collective head in the sand and bury their wallet next to them was the day the media put the economy on the front page.

Within a week of August 19th 2008, the effect on the economy was quite obvious. There was weakness in the economy before that and this is something that a layman like myself would never deny, but the real breakdown on the U.S. economy came within a week of the media Starting the news with ten minutes of bad news with regard to the economy. Ironically enough it was about this same time that Senator John McCain was getting tighter in the national polls for the presidential election.

It has been a long held theory of mine that the media desperately wanted to get Barack Obama elected president for a multitude of reasons, but the biggest reason was and is for ratings. They have made a bundle already and the river of money will continue to flow for years to come in the form of high ratings. The only thing standing in the way of Obama winning the presidency was a lynch pin issue. The war wasn’t having as much of an effect on the average American voter. Gay rights didn’t do it either. But if the media could make the American voter believe that the republicans were somehow responsible for a GLOBAL economic downturn, well that might just work.

Enter Sarah Palin for Vice President. Suddenly the Republican base is charged with energy. McCain leaps forward in the polls. Sarah Palin is young, fresh and has a good track record in Alaska. Almost immediately the attacks on Ms. Palin Start. First with her having five children, is running for vice President the “responsible thing to do.” This from the same media that told America that we were ready for a woman president and that it was okay to have kids and a career too. Then the media called her stupid and made fun of her for being enthusiastic when speaking. Still this was having little effect on the poll numbers.

The media had to think, and think fast. With the help of the Democratic National Committee, they decided to manufacture a crisis. The European Union was having financial problems and trying desperately to keep the Euro artificially inflated in Value. The American and Asian economies were beginning to show signs of fatigue. A Struggling economy is always a good election year issue. The DNC and the media know this. McCain was part of the Keating Five. The media could ensure a victory for Barack Obama if they could make a sluggish economy front page news.

Overnight the “big issue” in the 2008 presidential election became the economy. The news stories about the war in Afghanistan and Iraq all but disappeared from the political landscape. The media had concurred that if they can make the stupid and inept (that would be the average American voter and the ideological college student as well as the MTV crowd.) in America believe in global warming, well then surely they could make the stupid and inept believe that we were heading for an economic depression.

Like SARS, Avian bird flu, global warming, acid rain, deforestation, etc, the dullards that make up the American populous bought it hook, line and sinker. Barack Obama becomes president and the media gets huge ratings for years to come. The media can produce countless specials about the new “Camelot.”
They can cover the inauguration wall to wall all day long for huge ratings by proclaiming the election of Barack Obama “historic.” There is only one problem.

The economy. Now that the national media has frightened the American public into not spending any money, now that there have millions laid off from work, how can the media reverse this mess that they and the democrats have manufactured? By creating the Barack Obama Stimulus Package! Eureka! They have now figured an angle to get the economy running again, save face with the public and make President Obama the savior of the free world.

I have been saying all along that there really is no crisis. The American economy began to show signs of a bottom in November 2008. This is the reason for expediency with regard to the Obama Stimulus Package. This economy is about to do what it has been doing for more than 100 years. Recover on it’s own. Warren Buffet is buying. He has been buying all the way down and continues to buy because he knows the truth about the current economic situation. Mr. Buffet doesn’t listen to those empty heads on the television set. He knows the truth as I do. There is no crisis. By this same time next year unemployment will be below 6.4 percent. In two years it will be below 5.4 percent. In three years Obama will be taking credit for it all when in reality, the economy will recover because of the American consumer. It always does. JD