How to fix the economy: throw your wife back in the kitchen, barefoot and pregnant is optional (Part 1 of 2)

This is a two part blog entry regarding how to fix our rigged economy despite 200 or so detractors at every avenue of every corner at both the micro and macro economic chess game. Enjoy.

Recently, I was at an ACL lab here in town waiting to have a routine blood panel. It’s been about four years since I have been to my family Doctor. I’ve been relatively healthy outside of a cold virus here and there so I have had no reason to go. This changed about two weeks ago when I got a letter from my doctor reflecting my noted absence.  Being a proactive individual (yet a habitual procrastinator) I figured it would be a good time to go and get a check-up.

So, a week later, there I am surrounded by CNN and an orgy of magazines. As I work my way through the titles I stumbled onto this Time Magazine cover-story, entitled:

The Richer $ex: Women are overtaking men as America’s breadwinners. Why that’s good for everyone.

This article was penned by Liza Mundy, whom also wrote the book: The Richer Sex: How the New Majority of Female Breadwinners Is Transforming Sex, Love and Family.

 
Now, it wasn’t until the last page of this piece before I realized it was from March 26, 2012 (mornings after a 12-hour fast is cruel and unusual punishment to this 6-1 235lb frame). With that being said, the article brought up a great point: women are becoming more assertive in the work force and in board rooms all across the country. And me being of the freedom of choice mindset; god bless.

Although the article did a decent job of pointing out the gains of women and the subsequent natural losses of men; I felt a bit empty inside however after finishing it up. This could have been due partly to my empty/gurgling stomach but nonetheless, it made me think and ask myself; while this is obviously great for one sex, is this really great for America as a whole? Are we all really 'better' for it? The short answer, I would say is this: it’s complicated. The long answer... its even more complicated.

On the surface, superficially, it’s obviously great. Nobody should be not hired based on anything but the ability to live up to, if not exceed, expectations of said job. Now, from a true Libertarian mindset this could get complicated because business owners should be able to decide what’s best for their business regardless of what is considered 'fair' but that’s another topic for another day.

What you and I consider to be the ingredients for functional/prosperous economy is always going to be different. From my viewpoint it’s simple. Sound money, home ownership, strong middle class & strong families are a cornerstone to a strong, free economy for all. We can scratch sound money off the table (thank you Federal Reserve, complicit banksters, elected and unelected political whores). What about Home ownership? We have seen that to a mixed bag at best, especially of late.

How about strong families?

According to this article, in 1960, five-percent of children were born to unmarried mothers; in 2010 there was 41%. Now social factors have to be taken into account. For example; people do not always marry before or after having children today, when in 1960 it was culturally looked down upon to not be married before hand. With that being said, the numbers are staggering. In the black community alone those numbers of children born to unmarried mothers are almost in the seventy percentile (67%).

Once these baby’s are born, more times than not, they are sent off to some form of childcare and with more and more women having children unmarried; it’s often out of the home in the hands of strangers.

May Saubier who authored: ‘Doing Time: What It Really Means To Grow Up In Daycare’ says in her book:

“A baby who spends five years at one center will lose one-third to almost half of her caregivers every twelve months or so.”

Not only do you lose the one on one relationship that comes with one parent at home to classes with sometimes a 10-1 child to caregiver ratio you also have to factor in the fact that 40+ hours a week that baby is out of the home not bonding with loved ones. If it wasn’t for weekends, you would have strangers raising a child as much as the parent(s).

This is not to say having your child in childcare outside of the home makes you a bad parent. Without work and income there is no stability. However, to say its “good for everyone” as the author of this Time article suggests in the subtitle, is incredibly shortsighted.

There was also an English study, released in 2009, that centered around 12,000 British schoolchildren. The study determined: mothers who worked full-time had the unhealthiest followed by those who worked part-time. The study published in the Journal of Epidemiology and Community Health went on to state that:

“Currently, approximately 60% of women with a child aged five or younger in the UK or USA are employed. For many families the only parent or both parents are working.” 

Now you might look at this study and say what does 12k students in England have to do with the 315 million people here in the states. Statistically the sample size is small but I would also think, just based on common sense, that a parent in the home as opposed to a parent not in the home just works better. It would more often than not, lead to better choices all across the board.

There was also a revelation regarding Head Start, which is primarily a low income based program for pre-school aged children.  A Congressional mandated study of the Department of Health and Human Services (that fund Head Start) found that there was no benefit to the program for kids. In fact, in some cases it was actually a negative influence. But don’t allow those facts get in the way of this 8 Billion dollar job’s program. Don’t take my word for it either; this column by Mary Katharine Ham (Hotair.com) neuters this failure quite efficiently enough.

 Do we see a connection yet?

We have more and more mothers not marrying at alarming rates. However, we still have a healthy birth rate. We also have more women entering the workforce, more so than ever before and the kids home alone or in daycare are at a sided disadvantage versus kids with one parent who is always at home. Yet, it’s said to be “good for everyone”? I must confess, from the kid’s standpoint – I would emphatically disagree.


Part 2 tomorrow centering on the economic impact.

The sky IS FALLING (in graphs)

The NCAA tournament isn’t over yet but we know its coming to an end in exactly 16 days. If I was to tell you it’s not over yet, I would be correct. But does change the fact that is will end? Of course it doesn’t. For many people, because we haven’t seen bread lines or riots in the streets the “sky isn’t falling” yet. Does that change the reality that our economy is on the downside of the bell curve?

When the FED dropped interest rates back in ’07 the idea was that it would incur borrowing from the public & private business; therefore creating new/bigger business and in the process creating jobs or at least not hemorrhaging more than the economy was already in the process of doing. Then the rates kept dropping and dropping and wont go up until the very least 2014 and then what? Go up? The debt will explode in a hyperbolic fashion.

This graph shows we paid MORE in interest on our debt in 2008 (10,024,724,896,912.49) then we did in 2012 (16,066,241,407,385.89). How do you pay LESS interest on six trillion more in principal? There is only one solution; you pay substantial less interest. 

As we know, unemployment has dropped from its high of 10.0% back in ’09 to 7.7% as of last month but at what cost?

GDP has only seen moderate gains during the last five years and in fact, as you can see below, the last quarter actually seen our GDP in decline; despite the fact that private GDP rose in the same period. 

Some people will point to the cuts in defense spending as the main culprit and they would be correct (as defense have seen a 22% drop in spending) but if running nothing short of an empire and that is how we are keeping afloat in the first place, well… 

Mortgage rates are now at their lowest rate in recorded history and this has been a yearly trend these last few years. Only now in March of 2013, are we beginning to see signs of the real estate market coming back to life; despite a plummet in interest rates the last six years that were supposed to (as said in my opening) entice borrowers. Was it worth it?

Was it worth it and at what cost are the two questions I pose to you today. At what cost and is it worth it to live for today at the expense of tomorrow?

The CBO estimates of this nation’s debt keep getting worse, study after study. This is a quite simple process: the interest rates remain low, the debt piles up and the economy barley moves. These projections below are based on current conditions. Remember, zero is the end game; there isn’t much that can be done after that. We are basically at zero interest rates now.  

These examples I gave are just the tip of the iceberg and they are all interconnected. And that iceberg is the general public of this nation being so inundated in debt, so much so that we are getting to the point where offers of basically free money can’t move the needle any longer. These last four years of record low interest rates with barley a crawl until four, five sometimes six years later illustrates this quite luminously.

With wages not keeping up with real inflation (not the phony government statistics) and the globalization of the market, incomes for the average American (an overwhelming majority of) are stagnated; if not in decline. Is there any way that changes? Of course not, this is the new reality.

So to keep up, for most Americans, debt is the only logical solution. Afterall, we know saving via the conventional bank route is futile with rates being under 1%. And as we know debt = money, so when the economy can’t jump start and the FED’s QE programs don’t jump start growth; what else can the FED do? It’s been said by Bernanke that the quick death of deflation will not occur, so that only leaves one alternative; go to zero and close its eyes. Then hold on for limb and life as the decent to a slow death via hyperinflation begins.

The political process here has become a joke. A crooked game ran by self-serving lawyers and career politicians hell bent on seeing who can kick the can down the road the furthest. What was once a calling of statesmen has been replace by a bloodthirsty pack of statists. Republicans blame Democrats for not cutting spending despite having no solution themselves and god-damn you if you want to cut a bloated defense budget! Democrats want to actually ADD to the problem with a monstrosity addition to healthcare. While both “sides” will tell you it’s the other guys fault. Then all the puppets and zombies watching/reading the propaganda will parrot it. You think this is going to change?

At this moment, under these terms we are watching the beginning of the end finally become visible before our very eyes. Americans and their distractions have reached the crescendo. They can no longer afford them. The sky isn’t falling, but our economy is. It’s circling the drain, not as fast as Greece or Spain but its circling nonetheless. So move over American Idol, the freak show isn’t just in your living room its right outside your window. Get ya’ popcorn ready.

The chequeing scheme, where micro meets macro

This is about as a rounded and admittedly loose connection as one can make but a connection nonetheless. Let me get straight to the back story.

My lady friend of 18 years & counting refuses to use a debit card. She despises credit. She also prefers to not use cash either. She's still the mindset of 20 years ago when everything revolves around cheques. Now, in her defense there is a practical reason behind it. She feels if you really want to buy something that added step of writing it out reduces impulse buying and judging by her sterling accounting of our finances; I offer no debate.

A few weeks ago she unexpectedly ran out of cheques. Unfortunately this coincided with the long Martin Luther King Day weekend thus the banks were closed. So with no ability to access her money, she had two choices: use credit or dont buy what she needed until the next day. As we were just one day from our annual winter getaway to Florida... I enter with option three: me picking up the tab. And being the loving spouse I am, I chose to use my cheques. One part out of respect for her and partly because I just haven't written one in so long. At the same time, I felt it would make it an interesting exercise to practice my cursive. 

So a few transactions and a few chicken scratches later, we were on our way. When we got back home is when it got interesting. It seems due to inactivity and I moving my direct deposit out of that bank, my account was closed. Unbeknownst to me, I had written three cheques without having an account at all. I quickly made contact with the vendors and paid in cash the amount + fees. This suddenly made me remember why I stopped using cheques over a decade ago: overdrafts.

Now at this point It was behind us. One week later came the letters from collection agencies demanding the funds to cover said cheques. So, I called to explain to them the situation. A manager on duty of the collection service then hit me with this...

"Sir, if you dont have proof you made good on these cheques we require a payment to take care of that. We except two forms of payment. Western Union and Cheque by phone."

Cheque by phone, I asked? I told her I wrote a bad cheque, why would they accept another cheque? She then begins to tell me it happens all the time. That people knowingly write bad cheques and then make payments to the collection agencies with more bad cheques. If this process seems completely irrational and made up; its only the same exact thing that our government does (and gets away with) regarding the dollar.

Now I did say it was a loose connection and you made it this far so bare with me.

We effectively print dollars with no tangible backing whatsoever, just "confidence" that the dollar will not crash and that in turn will not lead to a run on the bank. Remember, due to the modern practice of fractional reserve banking, bank's tend to only keep a small fraction in liquid reserves. Thus any major fluctuation of withdrawals in a one day period can make things very interesting for a bank.

Now with that said, after the banks make these monopoly based dollars, they just sit back and operate the biggest shakedown modern civilization has ever seen.

By way of OPEC taking only US dollars for its oil (thank you President Nixon and King Faisal), it forces oil buying nations (read the entire world) to naturally obtain US dollars so they can obtain the OPEC oil (which holds about 2/3 of the worlds oil supply). OPEC then takes those US dollars and reinvests them into US banks further strengthening our place as the preferred empire of the world over.

So, like a guy armed with a closed chequing account and a fistful of cheques, you too can play the game of tangible assets/commodities for nothing too. Buy the goods and services with cheques that, like our dollar, are essentially worthless paper backed by nothing; THEN use the same cheques to pay off the creditors! You come out with goods and everyone else is stuck holding worthless paper. Then rinse & repeat.

The difference between the guy running that scheme with a closed chequing account is eventually the jig will be up. Unless you’re real slippery and willing to constantly move and change your name quite often; it will all come to an end. But what about the US petrol-dollar scheme? How long before that hustle is over? When you think about it, from the US point of view, it’s paramount that the US remains the reserve currency for oil. For if not, we can expect a lot of dollars coming back home and when I say a lot, I am talking the SHIT-TON of quantities.

If that happens our standard of living (even at a declining rate) will all but disappear. This will create instant hyperinflation and eventually a sell-off so large that the immigration issues on the borders wont be commonly known from Mexican people trying to get as they are today but instead it will be American citizens trying to get out.

Its pretty obvious the lengths our leaders will go to keep this asset bubble propped up. So, what happens if you don't agree with this petrodollar recycling scheme? What if you are in favor of, say a more "open competition" regarding how to pay for oil? As I stated last year in this piece; it usually doesn’t end well for you.

Now with Iraq and Afghanistan wrapping up, all the sabers are waving towards Iran and they are running out of time. Friday, President Obama put them on notice Friday saying:

"Right now, we think it would take over a year or so for Iran to actually develop a nuclear weapon"

Then eloquently added:  "but obviously we don’t want to cut it too close.”

The President then went on to call a nuclear Iran "a red line". You have less than a year Iran. Less then a year before you continue or end your nuclear program. But remember, the nuclear program is a guise. The real threat remains the precedent you are making with disrespect for the dollar. So, close your oil bourse and fall back in line or else.

Now picture that guy again with the cheques and the false chequing account. Hes cashing cheques and receiving goods and when you want to collect or end the scheme he shows up at your place of business with an army and guns and tells you if you dont change your ad's or paint your store Tropicana yellow hes gonna shoot the place up and remove you. You like your job dont you? Your kids eat waffles dont they? You need money to buy waffles. The American hegemony alive and well; Tony Soprano don’t have nothin’ on us.