More things change the more things stay the same, such is the state of the world’s economies.
The EU and its dream for a better tomorrow lies shattered, survival is all it hopes for now. The European giant staggers along cowering in fear of the next monetary midget that will threaten its tipsy balancing act. Last week Portugal nearly became the next candidate to play the role of David in the European David’s and Goliath saga. The truth is might not take another confrontation with Europe’s troubled southern economies to bring the EU to its knees. Even Germany, the Atlas upon whom the Union has relied to keep it aloft, is faltering. As Germany goes, so will Europe.
In Japan stock broker spirits are high on monetary stimulus as a new housing bubble starts to form. On the other hand main street optimism is still falling, the Economy Watchers Current Index (Japan’s version of consumer confidence) fell even more than expected. Apparently the barbers and waiters that dominate the index know something the Bank of Japan doesn’t. The fact is Japan’s latest Keynesian push, affectionately called Abenomics, is no more likely to succeed in resurrecting the Asian giant than the many such stimuluses before it.
In the United States Paul Krugman, the perennially wrong guru of Keynesianism and supporter of Obamanomics, has finally admitted what everyone else already knew, that being the U.S. is still far from a recovery. In fact he wonders if it ever will. The paltry gain in employment last month was made up of mostly part-time service workers, a side effect of ObamaCare. When three hundred thousand full time workers magically become four hundred thousand part-time ones it is apparently good news. Not that all the economic news is smoke and mirrors but much of what isn’t is reliant on the Federal Reserve’s charity program called Quantitative Easing. It seems between the smoke of ObamaCare and the fog coming out of the FED it is hard to determine what is real and what is not. In the end it does not matter, the real state of the economy is bad, it just a matter of how bad.
The fact is world wide the economy is in trouble. If it weren’t for the more sophisticated problem masking of today’s central banks the present situation would be seen for what it is, a repeat of the Great Depression. A look at European real unemployment rates and those in the U.S. and the story is one of catastrophe. The reason the world’s great economies are not improving is also the same as it was in the 1930’s, governmental interference. It does not take a genius to figure out that if you want more business activity you make it easier to do business. This simplistic commons sense is beyond the comprehension of the money grubbers and social engineers running the world’s economic engine into the ground.
In Europe for example, fiscal reforms to payoff crushing debts has been done through massive tax increases, tight credit policies and many new regulations. In some places like France they might as well as put a sign at every airport saying “investment money not wanted here.” While belt tightening was in order, the sense of entitlement of European populous makes real reform impossible. On the other hand the tax breaks and regulatory relief needed to increase economic activity and subsequently tax revenue are hardly given a second thought.
In Japan its economic freedom index has been falling for years, about as long as its economic woes. The fact is just as Japanese business needed economic certainty the government injected the monetary chaos of ever increasing stimulus. That they have been trying this same strategy over and over again and still do not understand it doesn’t work is amazing. A people known for their ability to innovate and adapt have shown themselves inexplicably inflexible when it comes to the world of economics.
In the United States any hope of true economic growth has been all but abandoned. From its liquidity driven stock market and housing bubble to the depths of despair of those who no longer have the faith to even look for work, the situation is more dire than most want to admit. It seems the only thing more plentiful than Fed magic money these days is the uncertainty permeating everyone from contractors to conglomerate CEO’s. The true economic situation is reflected in the fact 3 of 4 American households are now living pay check to pay check. For the vast majority it seems just being able to pay the bills is something to be grateful for. All the while crippling regulations are added daily and ObamaCare looms ever larger. Even with the President’s illegal change in the implementation schedule his signature achievement is a heavy weight around the American economy’s neck. If there is any thought given to lightening the load for American businesses it is kept behind closed doors.
Such is the new normal, a world where unemployment is high and hope is in scarce supply. What was once bad news is now met with sighs of relief. If the job numbers seem to improve if only slightly it is touted as an economic breakthrough. No attempt to assess the facts is made by the MSM, they know better than to look a gift horse in the mouth. Like a cancer patient that is glad to just be alive when she wakes up in the morning, the world’s businessmen are glad each day to still be in business. Welcome to the new normal, where mediocrity and survival are all that is hoped for. Welcome to the world of Keynes, Merkel and Obama.
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