While some would look at the surge in government spending in
Q3 last year (ahead of the election) and subsequent plunge in Q4 as
conspiratorial, CNBC's Rick Santelli takes a step slightly further back as he
draws the analogy between the mystical monetary experimentation of Ben
Bernanke and his horde of central bank cronies and the "bloodletting
of leeching" of medieval medicine providers. The point being that if you
were sick in the middle ages, leeches were applied; and if you returned weeks
later (still sick), more leeches and blood-letting took place – with no lesson
learned . . . . .
Submitted by Tyler Durden on 01/30/2013 - 18:25
Following today's dismal GDP print, the massive ongoing
borrowing being undertaken by our government, and the Bernankian policies which
appear inescapable (and entirely ineffective for anything but the market), we
thought Ken Rogoff's recent op-ed from the FT was extremely appropriate. Many
foreign observers look at the US budget shenanigans with confusion and dismay,
wondering how a country that seems to have it all can manage its fiscal affairs
so chaotically. The root problem is not just a hugely elevated level of
public debt, or a patently unsustainable trajectory for old age
entitlements. It is an electorate deeply divided over the direction of
government, with differences compounded by changing demographics and sustained
sluggish growth. It is hard to escape the notion that today’s budget battles
are but a skirmish in a much longer-term war that won’t be settled soon. The
idea that one should just ignore all these problems and apply crude
Keynesian stimulus is a dangerous one. It matters a great deal how the
government taxes and spends, not just how much. . . . . . . . .
.
Submitted by Tyler Durden on 01/30/2013 - 16:52
Over two years ago (and reiterated last year)
Zero Hedge first wrote on what was and is an undisputed transition
within the US labor force: a shift from full-time to temp, or part-time
labor, with virtually no contractual or welfare benefits, and where workers are
lucky to get minimum wage. This is because in the "New Normal" where
copious amounts of structural slack are pervasive due precisely to the Fed's
constant flawed micromanagement of the economy, the US has now become an "employers'
market." Furthermore, we were the first to make the critical
distinction that it is absolutely not all about the quantity of
jobs, but much more importantly, the quality of the new jobs being
created. However, just like 99% of the general public, and all of the
mainstream media, has an inborn genetic disorder preventing it from grasping
the distinction between nominal and real, so these two critical aspects of the
US jobs market languished unperturbed. Until now, two years later, when we are
happy to see that the mainstream media has finally caught up with what our
readers knew in December 2010. . . . . . .
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