# 021 April 8, 2009
“Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.” Frederic Bastiat
Wonders never cease… it’s April 7th, the week before Easter and I just looked outside… it’s snowing! Just another interesting chapter in our topsy turvy year. Down is up, up is down, and now spring and it’s snowing in Georgia! What is next? I tell you, this global warming has got me worried sick.
Well, let us see what is next. Truth is stranger than fiction and government statistics are revised each month. The USG has revised unemployment figures for January upward an additional 86,000 jobs to a total of 741,000… the biggest in 59 years. My question; what would have happened to the markets if the truth had been released by the USG in February?
Let’s put the job losses in perspective. Since the “recession” began approximately 15 months ago, 5.1 million people have lost their jobs. One in twelve adult males are out of work. Job losses in March include:
126,000 Construction
161,000 Manufacturing
133,000 Business Services
48,000 Retail
5,000 Government (Local and State, not Federal, since Feb. 2008 the Federal Government has added 97,000 jobs)
What may be on the horizon? Take a look at restaurants. Restaurant expansion in the United States for the past 20 years has enormously outpaced population growth. Since 1990 the number of bars and restaurants has grown 49%, while the population has grown 23%. “Growth in the restaurant industry has even outpaced the U.S.’s appetite for squandering money. According to the National Restaurant Association, in 1985 Americans spent around 40 cents of every “food dollar” in restaurants. Today, we’re closer to 48 cents on the dollar, a 20% bump.
“Back in the 1950’s, the average Joe spent just 25 cents of his ‘food dollar’ in restaurants. If we’re to return to anything even resembling a post-Depression, post-War, way of life… tens of thousands of restaurants will go under.”
I think we may see the demise of many, many restaurants over the next few months.
More job losses and ultimately foreclosures on commercial real estate. If you have to make a choice between a gallon of gas and a Chick-fil-a… what will it be? If you can buy one beer at your local bar for $4.50 and you can buy a 6 pack at the grocery store for $10.00… what will it be?
You don’t have to worry, we have the promises of the Group of 20 and the USG telling us they are going to make everything alright. What is the price tag of these assurances?
So far the USG and the Federal Reserve have spent or committed $12.8 Trillion to the bailouts and recovery (and this is just in the U.S., not what the other governments have ‘invested’ worldwide).
This amount equals the value of everything the United States produced last year. The price tag for every man, woman and child in the U.S.: $42,105 each!
What is inconceivable to me is that the American people take the promises of our national politicians seriously. These are the same people that got into office by lying, making false promises and then by getting re-elected by lying more!
Remember Ronald Reagan’s smaller government pledge? Remember Bush I “read my lips, no new taxes?” Remember William Jefferson Clinton “I did not have sex with that woman?” Remember Bush II, “Weapons of Mass Destruction?” Remember Obama’s , “I can make a firm pledge… no family making less than $250,000 a year will see any form of a tax increase.” Hmmm, he broke that one in the first 100 days.
If we continue to lose jobs and businesses at the rate they are being lost, what will people do? Can the American people support themselves with garage sales and eBay? Is “network marketing” the answer?
I think the American people are still in a state of shock over the economy and to a certain extent – denial. “Let’s believe the lies of our elected leaders for a little while longer… maybe everything will be all right.”
What happens when the shock and denial wears off and Americans reach the next stage… anger? Gun sales are already at an all time high. The United States has been such a safe (relatively) place to live [that] our high profile citizens live in big homes, easily accessible and unfortified. When this “righteous” anger hits the fan (so to speak), what will happen to the big name traders, heads of corporate banks, and betraying politicians (or anyone else that appears to have money)? Will they be safe in their own homes? How do you protect yourself from a mob?
There’s a reason why third world business and political leaders live in fortified homes and enclaves (and I don’t mean a gate at the top of your drive). I’ve been to South and Central America – broken glass and constantino wire on top of walls surrounding your home is the norm – and this is in middle class neighborhoods.
In America there has only been one major period of prolonged civil unrest. The War Between the States was a nationwide conflict between two clearly defined groups, and it tore our country apart. Our country has no previous experience (other than limited and geographically controlled riots) with nationwide civil unrest. If we reach this point (unlike the War Between the States), there will be no clearly defined principles. There will be little interest in ideology, the only principles will be some weak notion of economic injustice and a fight for “fairness”. “I want what is due to me.”
As our standard of living drops (or continues to drop) – masses may very well take to the streets and God help the person or persons in the crosshairs of their anger. I’m not saying this will happen, but as we continue forward on the path of class warfare and division our media and politicians are promoting, the possibility increases dramatically.
I’ve said it before, and I will say it again, “Let us wake up to the threats around us. Let us learn to defend ourselves philosophically. The cost is much lower and the danger is much less than having to defend ourselves physically. “
Tom Coburn, an Oklahoma Republican has been very close to President Obama since they joined the Senate together in 2004 wrote this in a column on RealClearPolitics.com:
“I believe President Obama has proposed the most significant shift towards collectivism and away from capitalism in the history of our republic. I believe his budget aspires to not merely promote economic recovery but to lay the groundwork for sweeping expansion of government authority in areas like health care, energy, and even daily commerce. If handled poorly, I’m concerned this budget could turn our government into the world’s largest health care provider, mortgage bank or car dealership, among other things.”
I agree with Senator Coburn, but I do not lay the blame on President Obama alone. I equally blame ALL of Congress (with the notable exception of Rep. Ron Paul), Democrats and Republicans, our Central Bank, our Treasury Department and our complacent citizens, liberal, moderate and conservative – all of us.
One last thing… This will not be a “kinder, gentler, government. When the “new” rules are in place – the IRS will be more powerful, more forceful and more impudent. The police (federal, state and local) will be less tolerant, more audacious and more willing to charge you more and larger fines – virtually anything will be a crime. Your local, state and federal bureaucrats will be more empowered, less willing (if that is possible) to help and more willing to demand more onerous requirements from each of us. A spoken complaint could land you in jail for “terroristic threats” or “threatening language”.
“There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible to live without breaking laws.” Ayn Rand
The new order will be a “power” based order. Power based upon political favors and the love of power for no reason other than the fact that it is power over others. Power that is appointed… not elected and certainly not earned.
“In order to get power and retain it, it is necessary to love power; but love of power is not connected with goodness but with qualities that are the opposite of goodness, such as pride, cunning, and cruelty.” Leo Tolstoy
With warmth and regards (as always),
Allen
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