Posted by
Chad MacINNES on Tuesday, October 27, 2009 10:21:27 AM
The talking heads are all aflutter with the latest bout of economic news. For a couple of months now several prominent personalities have repeatedly proclaimed the “recession” to be over and that America is well on its way back to prosperity. How they could make such claims while looking at the same data the rest of us see defies both logic and common sense. The problem with the talking heads is that they have now committed themselves to their predictions of recovery while, in fact, we are very far away from seeing any such thing realistically materialize. They are focusing on individual bits of data that seem encouraging and positive, while ignoring warning signs and negative information. They are simply not looking at the bigger economic picture.
While they praise the perceived beneficial effects of the $787 billion stimulus package (less than 20% of which has been spent thus far) for bringing the economy back from the brink of total collapse, they conveniently ignore the fact that this so-called stimulus is only a massive “credit injection” that has been created literally out of thin air, is based on and backed by nothing, and can therefore ultimately produce nothing. It is entirely fictitious. And, while certain trends may indicate an improvement in economic conditions in the near term, what is certain is that any long term prospects for a real healing of this economic hemorrhaging are equally fictitious for as long as the "recovery" is dependent upon credit created out of thin air, based on nothing, and with no value.
Indeed, essentially every step taken by Congress, the administration (current and previous), the traditional media, and, sadly, many respected economists, to identify, assess and combat this growing financial crisis has also been based in fiction. The very fact that these same people who created the conditions that encouraged and enabled the behaviors that resulted in this crisis is alarming enough. Their elation over the latest housing numbers merely demonstrates the latest stage of denial and their almost universal ignorance of logic and good economic sense.
While celebrating the latest housing sales numbers, up 9.4%, and proclaiming this as the latest indicator that the “recession” is all but over, the talking heads seem to have forgotten about the commercial real estate market that is about to implode and drag many more financial institutions with it, as well as the flash-in-the-pan that was “cash for clunkers.” (
continued...)