When it comes to jobs and the economy a lot of people are relying on
the "invisible hand" theory.
The problem is that THIS TIME, the Invisible Hand seems to be LOOTING
the economy; NOT HELPING IT.
Of course, we hear a lot of stories about Henry Ford and the "buggy
whip makers" these days.
From Greenspan on down everyone is being urged to "be patient," and
everything will be OK.
But, is this "faith-based" policy ill founded?
Consider:
When Henry Ford put the buggy whip makers out of business, he hired
them to make seats for automobiles.
And, the carriage makers, like the Fisher Brothers didn't "go out of
business" they made Auto Bodies by Fisher! Right?
Further, when people left the farms for the factories, THEY WERE
UPWARDLY MOBILE ON THE INCOME SCALE! NOT DOWNWARD!
UNLIKE TODAY, WHERE LOW PAID JOBS ARE REPLACING HIGH VALUE ADDED JOBS
ALL OVER THE US ECONOMY.
SO, NET-NET;
IS OUR FAITH IN THE "INVISIBLE HAND" MISPLACED THIS TIME AROUND?
I think it is.
And, this is an increadible risk to Washington and Wall Street,
because the RESULTS of the invisible hand approach to the economy
will be know SOON; perhaps even before the November elections.
It should be noted that back in 1993, when we had another "job-less"
recovery; Greenspan lowered rates all the way down to 3%, and even
then jobs didn't come back quickly.
JOBS DID COME BACK MAINLY THANKS TO THE LATE 90'S INTERNET BUBBLE!
BUT, WERE THOSE DOT COM JOBS, "REAL JOBS," OR MERELY THE PRODUCT OF
LOW RATES AND THE FORTUITOUS BUBBLE ABOUT A SUPPOSED "NEW ECONOMY?"
See the point?
Now, we are back in ultra-low rate mode.
But, there is NO MOJO behind it! No "NEW ECONOMY" to take advantage
of Greenspan's easy money.
Indeed, was it SOLELY the "new economy" that saved Greenspan's bacon
in the mid 90's?
WAS THE 1993 LOW-RATE FED GAMBIT JUST DAMN GOOD LUCK? LUCK THAT WILL
NOT REPEAT AGAIN?
SO, LOW RATES STRICTLY FOR SPECULATION IN THE MARKETS MAY
NOT BENEFIT THE REAL ECONOMY THIS TIME! BUT IT COULD CRASH THE
DOLLAR!
And indeed, this may not be the way to go; especially with record
deficits, and an economy that has been pretty much "looted" by the
Cult of the CEO.
The point?
WE MAY NOT GET A NEW ECONOMY "DEUS EX MACHINA" RECOVERY THIS TIME!
MAYBE, THIS ISN'T GOING TO BE 1993 REDUX!
And, if it isn't?
A TRULY SCARY DOWNWARD PLUNGE IN AMERICAN FORTUNES COULD BE BREWING!
AND A LOT SOONER THAN MANY PEOPLE THINK.
