I have posted my article on David Stockman's new book, The Great Deformation - The Corruption of Capitalism in America, http://www.thepurplemuse.com/id56.html. This is a tough book to read and accept in many respects.  The book is over 700 pages long and contains a truthful analysis of our nations leaders for the past 100 years.  As many of us know sometimes the truth hurts.  Mr. Stockman presents in a great detail the path we have taken to create the government dominated crony capitalism dominated, warfare and welfare state that our country has become.  The book is not a pleasant read for those that care about our nations economic, fiscal and monetary health.

The time has come for fundamental change.  Are we strong enough as a nation to absorb the pain the changes will create?  Will enough Americans make a determined effort to remove from power and influence those that are in the process of destroying our nation?  We will find out the answer to that question in months and years ahead.

TPM

P.S. I added some additional material to my article since I first published it.

This morning I was watching Congressman Steny Hoyer being interviewed on CNBC's Squawk Box morning show.  Hoyer made the comment that the US is "the richest nation on earth" during a discussion on economic issues.  How many times have we heard politicians make that statement?  I think we would all answer that we have heard this many times over many years.  My question is "Do you believe this statement is true?"

What makes a person, family, company, organization, government or nation rich?  Many people look at things that are visible from the outside.  If someone lives in a big expensive house, drives exotic new cars and buys the latest and greatest stuff all the time most people would judge that the person must be very rich to afford their level of consumption.  If one applies the same perspective more broadly and looks at many areas of the US, we could make an assessment that the US looks like the richest nation on earth.  Or should we have a different perspective?

If the person with the expensive house, new cars and great stuff paid cash for all the things they bought, has a substantial amount money in the bank or invested and has a job or owns a business that generates a high income, it is likely they are truly rich.  But if the person borrowed the money to pay for all the stuff, doesn't have much money in the bank and is barely paying their bills every month, is that person rich or merely creating an image of wealth when in truth their net worth is very low or perhaps negative.  I would make the case that creating an image of wealth doesn't make anyone really rich.

When I look at the US I see a nation that used to be rich and has an image of wealth but is no longer rich.  Any nation that has a total debt (consumer, business, governments) to gross domestic product ratio as high as ours is not really rich.  We have succeeded in creating a façade of wealth.  Over the years the US has consumed much of its wealth through war expenditures, excess consumer consumption and non-productive government expenditures.  The US has lost much of its manufacturing industry that generated a great deal of its national income.  If one looks only at the visible aspects of our nation we still look pretty good, but the numbers don't lie, there is a mountain of debt and government unfunded liabilities that is growing much faster than the national income as measured by the growth in gross domestic product.

One of the reasons why the US retains an image of being wealthy is that the US continues to provide opportunities for individuals and companies to become very wealthy.  The US has created numerous billionaires concurrently with tens of millions of people living in poverty or dealing with a significantly reduced standard of living.  In what other country can an individual company like Apple be so successful that it has more cash in the bank than the US government?

The US is consuming its wealth on a net basis, not creating it.  When tens of millions of its citizens are on federal government issued food stamps that are being funded through deficit spending this is not the sign of a country that is rich or building wealth.

Politicians like Hoyer need to stop making statements like the US is the richest nation on earth and start talking honestly to the people about where we stand as a nation.  We need a massive restructuring of government policies and programs to reverse the current trends.  The US has capability to rebuild its wealth but it will take a lot of very hard work to make it happen.

 

TPM

I was reading and listening to some CDs of my favorite band, the Doobie Brothers, this afternoon when I realized that my web site needed a theme song and video.  What better song and appropriate title is World Gone Crazy, the title track of the Doobie's 2011 album of the same name.  There is no doubt that our world gets crazier every day.  Take a few minutes and watch and listen to the Doobie Brothers' World Gone Crazy.

TPM

I suggest everyone that cares about the US and world economy read Richard Duncan’s book, The New Depression – The Breakdown of the Paper Money Economy.   My review of the book is in a new article I posted today, http://www.thepurplemuse.com/id55.html.  The manuscript of this book was finished in late 2011 and the book was published in 2012.  Recently, Mr. Duncan provided an update to the conclusion of his book on his web site.  Here is the link to his update, http://www.richardduncaneconomics.com/2013/03/08/when-will-this-new-depression-end/.  

This is not a long book but it is the best summary of what has happened to the US economy and our government’s conversion to fiat money that I have ever read.  Mr. Duncan does a great job of showing how our government and the Federal Reserve have put our nation between a rock and a hard place. 

TPM

During the past week two significant events have occurred that are worth some commentary. 

The first topic is the Patriots Day bombing in Boston and the subsequent events including the death of one of the bombers and capture of the other.  Four people have died and over 180 people have been injured, many very seriously, as a result of the bombing and its aftermath.  It is becoming very clear that the two Muslim brothers built the bombs, acquired an arsenal of weapons and were intent on killing or hurting as many innocent people as possible because they were infidels.  Somehow these two brothers changed from being rational human beings to terrorists.  It is extremely unfortunate that the FBI failed to take seriously a warning it received from the Russian (or some other) government concerning the behavior of the older brother.  It remains to be seen if other people were involved or if the brothers received aid from a foreign terrorist organization.  The bottom line is that we will always be in danger of attack by Muslim extremists from within the US and outside the US as long as the turmoil in the Middle East continues.  If one assumes that Israel will exist as a nation forever, then the threat of attack on innocent US civilians will continue indefinitely.  It is imperative that the US government through its security agencies maintain a sharp focus on the activities within the US Muslim community in its efforts to prevent further attacks. It is not politically correct to focus on a single ethnic or religious group as a danger to our nation.  However, the time has come to throw political correctness in the trash can and do what is necessary to protect the vast majority of US citizens. Will President Obama and his team learn a vital lesson from this horrific event?

The second item I want to discuss is the work slowdown by the FAA's air traffic controllers. This items is a nuisance for those that need to fly around the country to conduct their business or pursue their personal interests. The US is proving to the rest of the world that its government is stupid.  It doesn't matter if we have or don't have a sequester, there is no reason for this situation to occur. There is no reason for government employees to purposely make our nation less efficient. From my perspective the person that must take responsibility for these actions is President Obama. Our President has proved again that he is a failed executive and leader. Instead of working to minimize the impact of a small spending reduction, he has allowed the government to negatively impact a major US industry (the airlines) and create needless inefficiency for tens of thousands of people. This is another failure of Obamanomics. Hopefully, this situation will be corrected quickly so we stop talking about it and move on to dealing with much more important issues, like Muslim terrorists and our long term government spending problems.

TPM