Snipped from another thread but very relevant to my last post:
"Ah...but there are different kinds of economies," we replied. "There's the kind of economy that makes people wealthy - in which people make things and sell them at a profit. And there's the economy that helps rich people get rid of their money...a consumption-led economy, with few factories, but plenty of credit and shopping malls.
"Unfortunately, most economists can't tell the difference. And the GDP numbers make no distinction between a productive, wealth-creating economy and a declining, wealth-consuming one. GDP only measures activity. It is a bit like taking the temperature of a shooting victim; you mightn't spot the problem until the body cools."
"Every day, the lifeblood of the U.S. economy dribbles overseas," we went on. "Profits, jobs, revenues...all flow towards lower-cost production centers. Today's [Friday's] job report out of the federal government, for example, shows about 100,000 fewer jobs than economists expected. Where are the jobs that should have been created by this stage of the 'recovery?' No one knows. All they can think of is the novel idea that productivity and innovation [see more below] have now made labor unnecessary - just as they said the New Era made savings unnecessary. But is all fraud and chutzpah..."
The Feds try to rescue the situation; they attach jumper cables of credit...stand back...and give the body a jolt. The poor schmuck jumps from the table, refinances his houses, and falls again in a heap. But the juice ends up stimulating economies in China, Malaysia and India! That's where they make the things Americans want to buy.
Thank God for Zembei Mizoguchi. The VP of the Japanese Ministry of Finance keeps the patient on life-support. He spent $250 billion of Japanese taxpayers' money last year...buying U.S. debt. This year, he may spend $270 billion.
As long as the money pumps back into the U.S. economy, Americans' home prices rise...and they borrow and spend happily. No one, neither Republican nor Democrat, high nor low, drunk nor sober, seems to notice that the patient is bleeding to death " |
