This hapless Administration gravely miscalculated when it jumped ahead of the Arab Spring (read Radical Islamist Springboard) with utopian blather about the liberal forces in control of events (read thug bait and useful idiots). Now the “retrovolution” in the region (i.e., the return to the Iranian revolution of the Carter period) has shown its teeth; and (mark this for future reference) it took place with the ill-concealed support of Iran. No internet movie, whatever its provenance, can explain a deliberate, premeditated, well-coordinated series of attacks on US embassies clustered around 9-11-12. [Note my post on 9-11-12 on this very danger < http://jaygaskill.com/dot2dot/2012/09/11/nine-eleven-2012-its-not-just-the-economy-stupid/ > .]
Enter the late-breaking action by the fed under the leadership of Mr. Bernanke to inaugurate open-ended and never-ending Quantitative Easing (read Quantum Error). At best, this is an ineffectual blunder. While QE Forever may help with the mortgage market, it raises insecurity about the national debt and inflation and – because, frankly it seems so desperate – it fuels doubts about whether we are in a recovery at all.
Temporarily lifting the stock market by supporting real estate bonds with fiat money will not generate jobs. This administration, its economic team, Mr. Bernanke and the cheering section (Paul Krugman), all erroneously think that pushing consumption (here through the injection of fiat money to support the housing mortgage market) will correct the structural problems with American job creation. It has not worked yet and it won’t work this time for the same two reasons: (1) A traumatized public, insecure about job retention, will not easily be persuaded to embark on a buying surge, especially between now and the end of the year, just because real estate prices stabilize (if they do). (2) A slight boost in consumption will primarily benefit foreign manufacturers, as any trip to your local hardware store and other vendors will quickly demonstrate.
The unemployment needle will not move until we loosen the brakes holding back American production. The American economy was not built on well employed real estate agents and mortgage brokers and it cannot be repaired by them. [Note my post, America’s Best Play at http://jaygaskill.com/RomneysBestPlay.pdf .]
Copyright © 2012 by Jay B Gaskill, Attorney at Law
As always, links, forwards and quotes with attribution are welcome and encouraged. For everything else, please contact the author via email at < email@example.com >.