Nightfall in Obamerica

• Tweet
• Pin It

Yesterday, I talked about how capital spending remains low while corporate America sits on over $1.7 trillion in cash.

I also pointed out that all that cash is earning absolutely nothing after inflation is accounted for…

And that the reasons why so many American businesses are sitting in cash and not investing in capital expenditures are not just the uncertainty of what new taxes or new regulations the administration would be leveling against businesses (although they are plenty, it turns out)…

But also the fear of what is already evident in the economy and what has yet to hit but is on its way.

Of course, the White House is quick to lay blame on the doorstep of businesses for being stingy and not spending their money the way they “ought to” in order to “stimulate” the economy.

The thinking—if you can call it that--at 1600 Pennsylvania Avenue is that if only business would spend more money, consumers would then return…

“If you spend it they will come”

It’s kind of like the whole ‘building a baseball diamond in a cornfield’ thing…

Problem is, to continue the metaphor, just like the ball players in the movie, the erstwhile American consumers that would supposedly step from the cornfields—or the suburbs--to rescue the economy if only businesses would spend money, are phantoms from the past, from the pre-credit crunch, before the housing crisis and the global recession, pre-Obama, pre-Affordable Care Act past…

A past that, by definition, is no longer.

Memo to the President:  The cornfield is burning.

But that doesn’t mean one can’t point fingers, does it?  It’s the political season, after all, and finger pointing at others is what one does when one can’t proudly point to himself and his adminstration’s accomplishments.

Ah, but pointing fingers at those with any money—corporations, small business owners, and basically anyone who has managed to hold onto at least part of their personal wealth, whatever it may be—is the sport of class warfare dictators and foreign tyrants…(forgive any redundancies that might be apparent here).

Perhaps it would be wise to take a page out of corporate America’s book, and see that they—the American consumers--won’t be coming back for a while yet, and maybe even a very long time…

So today, let’s look at the other part of the economic equation:  the consumer economy.

The fact is, they’re not spending any money, either.  But of course, there’s a different reason altogether why they’re not…

It’s because they don’t have any.  At least, not like they used to.

Newsflash to the powers that be:

The American economy is about 70% consumer driven.

Need further explanation?  Consumer demand is what determines producer output, not the other way around.

And what creates consumer demand?

Well, at its most basic, consumer demand is a combination of:

A) consumers having money in their pockets, i.e. disposable income

B) with a steady source of income, that is, a good job that pays well, and

C) rational expectations that things are better and will continue to get better.

Failure of Obamerica

Now, how does Obamerica stack up to these three factors?

Consumer disposable income has dropped since steadily since late 2010, when the stimulus money ran out, and is dropping still.

Consumer credit is still tight, even though trillions of stimulus money has gone into the Federal Reserve banks and other major banks.  Just because banks have money doesn’t mean they’re going to lend it.

Why would they, so goes their reasoning, in this economy?

Come to think of it, why isn’t the finger pointing from Washington pointing at the banks?   They’re the ones with all the free money, for heaven’s sake.

But let’s continue…

A steady source of income is also a key to consumer spending.

Now, let me be clear, (sorry; but well-deserved mockery of the Idiot-In-Chief is hardly unfair at this stage of decline) working two jobs to replace just half of the income you lost from your old job does not count as a steady source of income…

That’s called hanging on by tooth and nail.

Nor do unemployment benefits constitute steady or substantial income.  And there is certainly no rational expectation that it will last for very long.

Speaking of rational expectations, today consumers are like corporate CFOs; they will not spend money if they see the economy getting worse before getting better.  That’s called ‘consumer sentiment’, which is negative and has been dismal since 2008.

And why shouldn’t it be?

The housing market is a thousand feet below sea level, foreclosures will hit record numbers this year, and 12-20 million Americans are out of work.  Many of those who are working are terribly under employed and wages remain stagnant, as does job creation.

Did I say ‘job creation’?  Shame on me; I’ve got it all wrong.  That’s not what America is about.  That’s what American government is about, isn’t it?  That’s the story, anyway.

But let’s look at reality.  The biggest, most efficient source of job creation in the US is small businesses.  Not corporate America, and certainly not the steaming pile of fascist Obamerica we’re being served today.  Nope, it’s just good old small business America that creates 70% of the jobs in the country.

And what, pray tell, is this Administration doing to small businesses?  Why, taxing and regulating them out of business, of course.

Having Americans create jobs for other Americans has the stench of American individualism to it and puts the lie to every utterance and every wealth-destroying policy that the Idiot puts into place.

After all, it’s hard to “move the country forward” when even after all that’s been done to them, there are still way too many Americans moving forward on their own, without federal oversight.   But not to worry, there’s certainly a federal program on the way to fix that problem, and fix the economy but good.

And those are…The Gorrie Details.

facebook   twitter   linkedin   reddit   email  

Related Posts

• 

  Money for Nothin’
  Money for Nothin’
• 

  Shoving It in America
  Shoving It in America
• 

  Someone Else’s Economy
  Someone Else’s Economy
• 

  China, Gold, and the Dollar, Part 4: The Uses and Impacts of Inflation
  China, Gold, and the Dollar, Part 4: The Uses and Impacts of Inflation