The world we live in today is awash with a flood of information seemingly targeting ones senses at an intoxicating rate. I say this because I acknowledge that my brain is a sponge at the buffet table of data and I must say that all to often by the time the morsel of info surfaces from the recesses of my data storage unit I’ve not the slightest idea where it came from! Well it must have been worthy otherwise I would not have retained it…so it would appear!
I love words and the comical way they can be combined to create an image in ones mind. Take for instance, the current identifier “Peddling a Cycle”! Crafts a unique image in my mind. A combination of a cartoon character (Mr. Fudd) peddling about in a surreal environment in the more humorous portion of my minds eye. Quaint music playing the background, birds chirping, blue sky and colorful flowers, he’s happy, carefree, seemingly unaware of the reality of the three dimensional world. He’s not at all concerned about Carbon Footprints, Hybrid Vehicles, Trade Imbalances, Commodity Speculation ($4 / Gallon Fuel) or a Mortgage/Financial Crisis. In his world, couldn’t matter less! In the words of the creator of “Roger Rabbit”, “…I’m not bad, I’m just drawn that way….”
I don’t want to disappoint any particular group or ingratiate myself to another by identify who Mr. Fudd’s “3-D” counterpart is nor will I give up a clue to whom it might be. Let’s just say he represents an Ideal of the incongruent wanderlust in many!
I’m in the process of reading, for the third time, Mr. Greenspan’s writings and I’m trying to make sense of it. Oh I’m getting the clinical message of macro/microeconomics (been there done that) and world currency flows and destructive capitalism et cetera, et cetera, et cetera (for those of you who remember Yul Brenner in the “King and I”)! No, there’s much more to the message and it lies just below the surface of the printed word!
Several, to me, relevant points have surfaced from the material that sting with a most consonant dissonance! On the academic level they appear harmonious yet they sting with incongruence when attempting to find there true form in “3D”. A sort of sclerotic intelligence! I’m simultaneously stunned by his grasp of the details and his ability to recite them however I’m numbed by the seemingly odd resolve to the outcome. As if to say, we’ve got all the information there is to obtain and we can point to the trends that are compatible with the data however we don’t know why the trend is evolving and the patterns that they demonstrate! In other words a thallic form of economic prognostication!
I believe that Capitalism is a great medium with which to excite economic vitality and it, of all the “isms”, has demonstrated unilaterally its ability to do so. There is one consequent reality of Capitalism and that is that it requires constant expansion in order to sustain itself. Like all things in nature, you are either in motion or you are, likely, DEAD! There is nothing static in the universe and a component of the antithetic concept of static is consistent economic growth, though desirable, is simply not possible. There are Cycles and like the Seasons of the Year, they will continue to occur and it is quite possible to say that they are required. And, that is all there is to say about that!
I believe in the need for the many faces of prosperity and globalizing the concept has a great deal of merit. However, I see no logical foundation to suggest that exporting a Nations Economic Health in search of undeveloped markets without replacing the transplanted Economic Engine with a far more efficient one is nothing short of a recipe for disaster. Look at the plunge in U.S. per capita disposable income (adjusted for inflation) if you doubt my observations.
Mr. Greenspan, I imagine, would respond to my comments by saying that the “cross boarder flow of capital” as a percentage of GDP indicates sustainable growth! And then I would say, remove Government Spending, Military Spending, Farm Spending, Financial/Banking Income and Corporate Income Generated from Foreign Operations and/or their component effects on GDP and then tell me you’ve got sustainable growth! In other words Al, you can’t have the argument both ways. One can’t suggest that you have sustainable growth when your argument is based on the illusion of volume when all you’re doing is making ever smaller pieces from the same over-baked pie! Further, and lastly, there has never been a salient indication that consumer spending, sourced from debt creation, creates economic health. The model works only when the financed acquisition is in an area where the acquired is an integral component of an income producing function. Consumers don’t spend money on income producing systems, the spend, largely, on items of depreciating value that produce no income. In the Real Estate application, this illustration is even more appropriate and I’ll simply put it this way: your debt (Mortgage) doesn’t fluctuate with value, it is constant as most Folks don’t live in a home sufficiently long enough to vacate the debt and when values climb, they’re more inclined (than not) to increase the debt load and the statistic bear that out.
Economics like Politics, in there most vibrant and productive form are always measured (best) from the Bottom Up,…NOT,…the Top Down! An expansion in the disparity of incomes to the point where there is no longer a productive “middle” is a measurement more relevant! Nations with no “middle” litter history with their failures! If this Nation is not careful, it WILL be next!
Mr. Greenspan has my esteem and admiration if for no other reason than his knowledge base is rotund! It may be that his knowledge base is so severe that I’ve not the capacity to comprehend his insights. Acknowledged, humbly!
Yet even IF this were the case, I am still left with the same question. Is, even, Mr. Fudd not aware of the Cycle he’s Peddling? Or is the Peddling (the message) simply all that is required? Analogous to say: here’s one possible explanation for the pain you’re experiencing in your hand whilst ignoring the simple fact that that very hand is in a pot of boiling water! Perhaps we may be ignoring the obvious.
The Real Estate/Mortgage Markets, presently, clearly reflect what happens with the “every expanding” model and the hemispherical effect (grossly under reported) of Government meddling in the Real Estate/Financial segment of the Economy. The “Cycle” !!
Lastly and I’ve been storing this one and I’ve got to get it out there as an entre on the Buffet Table of data! With in the last two weeks a highly under reported tidbit of information was leaked and then quickly covered over. “North Dakota Oil Field Dwarfs Middle East Reserves”!! I doubt many picked up on it! Here’s all I’ve got to say: What the heck difference does it make whether you open up Anwar (Alaska) for drilling, the Coast of California or North Dakota for that matter if the oil is going to be shipped to markets other than the U.S.! Nearly 70% of the Oil presently coming through the Alaska Pipeline goes to the Pacific Rim (Japan, etc.)! Oil is just simply another commodity going to the highest bidder!
Just another day in paradise! Just be sure and keep peddling!
Until next time! Be well and good to one another!
Curtis C. Greco, Founder