The vegetative State
If anyone was wondering if the economy is completely brain-dead and continuing to function solely on Washington’s extraordinary intervention, just have a look at these charts provided by The Global Macro Monitor blog, via Barry Ritholtz. According to the research of Steve Keen and others, employment growth has a .67 correlation with the rate of debt expansion. Private employment growth is unlikely unless we see clear signs of private debt expansion, but the source of debt expansion at present is that of the wholly unproductive national government sector.
The author of the post writes,
If, as the President says, ‘the flow of credit is the lifeblood of our economy”, the country would have died in 2009 had not the policymakers taken the extraordinary measures they did. These charts illustrate how close we were to the abyss and should give a clearer perspective on what Bernanke & Co. were/are up against. They are heroes, in our book, for stabilizing the situation and pulling us back from the abyss. The jury is still out, however, on long-term structural adjustment and preventing a global sovereign debt crisis.
We disagree with the author’s characterization of the 2009 intervention by Ben Bernanke and the Federal Reserve Bank — and the intervention by Washington generally. Of course, this disagreement stems from our differences over whether stabilization and “long-term structural adjustment” is preferable to the “abyss”. The only card Washington has in its hands right now is the constant, coordinated, relentless repetition from every “credible” source that the collapse of the bloated financial sector must lead to chaos and social breakdown.
Make no mistake, Washington and its supporters and paid hacks want you to believe that the economic security of the nation rests on these action, but the Too Big To Fail are being rescued in order to buy time for them to pass the “structural adjustment” of this crisis on to you. All the actions of Washington thus far has been aimed at this effort and none other.
This effort to spread panic and terror among the population — to cut off discussion and dissent — is no different than that which has you taking off your shoes and submitting to the impersonal gropes of would-be employees of McDonald’s just to board a plane — as well as that designed to make you acquiesce to the murder of thousands of Iraqi civilians and Afghanistan villagers.