2014.12.12 the “fixed” economy?

“Reality denied comes back to haunt.”

Philip K. Dick, from Flow My Tears, the Policeman Said

Previously, in when reality is superseded by the tribe, I mentioned a Facebook episode, in comments following a “share” of an Andy Borowitz satirical one-liner that depended on the assumption as common knowledge the notion that President Obama had fixed the economy. The problem there is the idea that the economy has been fixed, never mind credit to Obama. As I mentioned before, saying this brought some objection.

It ended up being a demonstration of the kind of thing I’ve been calling bipolar political disorder for shorthand reference. Even bring that idea up to describe a lot of problems we’re having in understanding and communication turns into an even bigger farce. In this particular case, merely suggesting that, in fact, Obama was not due credit for something wonderful happening, because that thing has not actually happened, generated some interesting reactions. One part of the scene that was either really irritating or really funny, depending on how you look at it, was first being told that my initial comment was partisan and ignorant, although it certainly wasn’t ignorant. I’ve been trying my best to pay attention to what’s happening, and it’s a subject of its own to sort out how what I said was partisan. [If I remember right, it was “let’s see what happens when he fixes the economy”.]

But, then, it doesn’t take much to figure that out. I said something that suggested the president was not worthy of praise for something he hasn’t actually done, nobody has done, so, in some people’s minds, this qualifies as an attack on Obama, which, then, must be explained as a partisan attack from the enemy Other Side.

And there you have one of the symptoms of bipolar political disorder.

In the following comment blocks (Facebook comment blocks not being exactly a great layout for a serious written discussion, by the way), I was told that what I was saying was “typical Republican response“, “typical GOP“, “typically Conservative“, and “further Left than Obama“, therefore I “think Obama is right-wing“.

See if you spot anything odd there.

It’s not the first time I’ve encountered this kind of distracting and confused diversions from a topic at hand, obviously, leading to the moment where I thought that “bipolar political disorder”, while I might seem silly and flippant, was actually a pretty good term to act as shorthand for a serious problem in the contemporary American public realm. I couldn’t count how many times assorted different people, presented with something that somehow didn’t fit with what they thought (which was probably much more about what they had been trained to think than what they actually thought), reacted in some cases with something like “oh, sure, you Democrats, you Liberals, you would say that, with your Leftist propaganda“, and other people responding to something chattering about “far-Right wingnuts“.

Among the chatter that flowed in the little comment boxes on that social media page were comments about the relative merits or flaws of Obama compared to Republicans (like the loathsome Senator McConnell, for one example), or that if Obama was flawed, what/whom would be my choice for something better, or suggestions of, as I said, being “partisan”, or “typical Republican, typical GOP”, or even really pulling things out of presumption and imagination to suggest that I might be implying “equivalence”. People just bouncing off the walls all over the place, in response to a simple item… there’s the idea around that “Obama fixed the economy”, and the idea that the economy is anything like “fixed” is just nonsense that’s seriously counterproductive.

It’s even harder than it inherently is to solve a problem when people won’t face that it’s a problem, and start working on defining the problem to solve.

Point out just about anything, and somebody goes apeshit and makes it a political argument, with everything shoved into their bipolar bins. Any chance of a serious maybe reasonably useful discussion is sucked into the vortex.

I was just about to continue on here and remembered one more little item in all that; some comment to the effect that instead of directing my hate toward Obama, I should direct it toward the Brand R gang. Hate? Who said I hate Obama? I said that the economy is not “fixed”, and given that, then the obvious next item is that giving Obama credit for “fixing the economy” is absurd.

Somebody offered up this list as their presentation of facts, as evidence to support the idea that the economy is “fixed”, and that Obama “fixed” it-

Unemployment: lower.

Market: higher.

Spending: cut.

Deficit: lower

Debt lower.

Recession: ended.

Well, then. So that’s that, then, is it?

Let’s consider this stuff.

Unemployment: lower.

This is one of the tricky items, right off the start. What’s so tricky about it, so might ask?

This item is just one of the examples of a subject that pops up a thought or two about the old Mark Twain line about “lies, damned lies, and statistics”.

Another Fabricated Jobs Report — Paul Craig Roberts

Something Doesn’t Compute: Inside The BLS Jobs Data

One notable item about the list I quoted is that the guy offering this was chattering about lack of facts, in my statement that the economy simply was not fixed, and then did a little show of chest puffery in claiming he was sticking to the facts (unlike me, sez he), and offering that list with an obvious lack of any actual facts in support.

Now, in these items, you can gather statistics related to these things. For a start, on this item, the standard is to refer to releases from the Bureau of Labor Statistics. Somebody will refer that, come up with the official numbers about unemployment as a percentage, job losses and/or jobs added, and, there you are, done! The statistics, in this saga, are questionable and suspect, to say the very least about it. Other people say they’re useless, even a conscious deliberate fraud, and I tend to lean more toward agreeing with that general assessment.

So, the obvious next question would be, what is the real unemployment number? The problem is just as obvious, unfortunately. How do you do statistical analyses of the people who are not counted?

They just become The Disappeared when this subject appears, and noisy nonsense ensues. Often, this involves politicians spewing nonsense and fiction for their own intents and purposes.

Despite that, it’s a regular, common, even standard accepted thing, this, to shout “look at the unemployment numbers! it’s so much better now!”, even astonishing nonsense that sort of maintains the pretense that a certain percentage is “normal”, which becomes, in some conceptual twist, “full employment”, and we’re just about normalized again. This is just staggering to contemplate, especially when it’s presented to you from people who, as far as I can tell, are dead serious, totally earnest about it.

Market: higher.

oftwominds-Charles Hugh Smith: A Brief Note on the Difference Between Trading and Investing

That’s one hell of a subject all by itself. The simplest story is an old ongoing phenomenon, the common belief that the stock market is the economy, and that, more than that, some statistical summary, such as the Dow Jones Industrial Average, is the stock market, never mind specifics of what happens with the stock prices and trading activities of any particular company’s publically traded stocks. Part of the problems we have now, in economic terms, revolve around an increasing disconnect between stock prices and trading activity and any rational and realistic sense of actual value of anything. The biggest element of this story, for several years now, has been the whole surreal saga of essentially zero-interest money pumped into the system where the entities availing themselves of this just play all kinds of casino games and games of statistical math trading, that have come completely unhinged with notions of actual investment, of putting capital into useful work and actual value for some return based on added value in something over time.

It doesn’t require a financial expert to get a sense of what is happening, and has been happening. In fact, people who do know quite a lot about the matters have been observing the increasing distortions and general unreality, and warning about it, but, then, it appeals to the sense of some sort of advantage to be gained, for many people, to maintain the games, and/or notions that all this represents a “recovery” and a healthy economy.

The full state of economic matters is such a massively complex subject as it is, with all the further reality distortions of all kinds, it’s no wonder that all kinds of confusion and even flat out delusions reign, making things even worse. Then, when the general subject of “the state of the economy” pops up, we get simplistic nonsense such as “market: higher”, probably pointing to some new record high number of a statistical summary (often by people who probably can’t tell you what the fucking number means), and then have this asserted as being a conclusive fact.

now, there are added complications at hand. Added to the huge teetering edifice of what can only be regarded as a major bubble, all coupled and interwoven with all the insanity and distortions of value in the broad subject of the financialization of everything, now, we have the fairly rapid sinking of crude oil prices, in the general world market benchmark (Brent) and the American benchmark (West Texas Intermediate). That’s another hell of a complicated issue, all by itself, with one of the bad aspects of this being the general ignorance or massive confusion about our oil situation that dominates general public consensus and conversation.

In short, there is little to no clue of what the problems are among people who only know what they’re paying today for a gallon of gasoline, and whatever bits of noise they hear or read in the daily news. In the kinds of simplistic confusion I’m writing about today, you probably already guessed what the usual line is. “Oil prices are down, so this is good for the economy”, you’ll hear, and this asserted as plainly obvious, since high oil prices (with the high prices following on, in refined products) are obviously a serious burden sucking cash away from other things. The twist to the plot is that while that part is certainly true, what’s largely ignored (and there are plenty of people who want all this to remain ignored) is that the effects of this are maybe not such good news in a couple other interrelated ways.

For just a bit of general reading:

oftwominds-Charles Hugh Smith: The Financialized-Oil Dominoes Are Toppling

Shale Liquidations Begin? Sub-$50 Oil Appears In North Dakota | Zero Hedge

Ten Reasons Why a Severe Drop in Oil Prices is a Problem | Our Finite World

Can The US Bail Out Its Oil Industry? – The Automatic Earth

Wells That Fizzle Are a ‘Potential Show Stopper’ for the Shale Boom – Bloomberg

There’s just a general quick introduction.

All of this is seriously complicated, involving the reality of the diminishing returns in petroleum that are covered under the general shorthand reference umbrella term “peak oil”, which leads to even more complications from misunderstanding of what that term actually means (something I’ve written about endlessly, so I’m not repeating it again here), and what that does in economic terms. People have talked and written about the complex interactions involved between physical reality of geology and engineering, and business and finance and economic terms, referring sometimes to a result of complex erratic changes in oil consumption and demand and production rates, and crude oil prices, in a phenomenon called a bumpy plateau, or wobbly plateau.

Part of this complex story involves the reality of what people like to call “the shale oil boom” or “fracking revolution”, which is that it’s the inherent nature of the stuff involved, tight oil deposits in shale rock (often called by the misnomer of “shale oil”), to be more complicated to extract, making it more expensive, and is found in smaller deposits, quickly peaking and depleting, making the economics even worse, among other problems.

Put simply, reduced selling prices makes the enterprise questionable, or simply a major loss. This has potential major and serious effects in the extraction rates of this supposed “oil boom”, and all the happy delusions people have implanted based on the notions of a wonder miracle ending oil depletion problems. Beyond that, there are all the issues of business problems for people in the tight oil extraction enterprises, and beyond that, all the financial issues involved, which ties right back into all the games of, here’s that phrase again, the financialization of everything.

We had financial bubble of “the dot-com boom”, with the ugly ending when things inevitably imploded.

Then we had the financial bubble of “the housing boom”, with the ugly ending when things inevitably imploded.

So, now, we have what smells a lot like the “shale oil <sic> boom”, heading for an ugly ending when things inevitably implode.

This is a serious and complex batch of problems, and, unfortunately, maybe even tragically, when you turn to the realm of American politics, the current president, like every president in recent decades since the US oil production rate peak of 1970-1971, just makes occasional noises and coughs out platitudes that go nowhere about oil, along with nearly all political creatures of Brand R and Brand D alike. [And this is still another subject I’ve hammered on repeatedly.]

Moving on, there was this set of items that were odd and puzzling for the simple reason that it’s all about the matter of government finances, not the economy. But that leads into a whole other realm, where people can’t seem to distinguish the two realms.

Spending: cut.

Deficit: lower

Debt lower.

While the person putting up this list didn’t specify (they weren’t terribly specific about much of anything, other than things like telling me I was “full of shit”), I can only assume this refers to federal government spending. Of course that opens up a whole problem in discussing anything in the realm of government involving the US federal government, which is that while the president and the executive branch manage an awful lot about government spending, the actual funding of anything is, constitutionally, in the hands of Congress. But that’s a whole other can of worms.

Putting that aside for a second, it does raise a different case of the problem of bipolar political disorder madness affecting people’s ability to see anything as it is, apart from what they figure they’re supposed to think. In this case, there is the actual factual record showing that while Barack Obama has been president, once getting past the first year with budget inherited from the Bush administration term, the annual deficits of the finances of the US federal government have been shrinking. I addressed this a couple of years ago, so there is more water under the bridge, comparing the numbers in this area under the first term years of President Obama and President Ronald Reagan. Go look. The short version is that the reality is completely different from the notions you get in some political herd mentality that rattles on about Obama as “out of control spending massively increasing the deficit” versus what they hold up as their ideal model and hero of “fiscally responsible and conservative spending reducing Big Government and out-of-control government spending”, Ronald Reagan.

Here’s a more up to date view.

But, given the epidemic of political insanity, there are loads of Republicanistas and Fox News victims who will never believe this, even if the numbers are laid before them, because this might mean a dent in their notions about Obama.

In any case, all that aside, how is this “fixing the economy”?

Somewhat related was the line-

Debt lower.

Aside from how this, again, relates to “fixing the economy”, this requires a quick bit of attention to simply say that this is bullshit. False. I don’t know where this notion came from.

For reference.

And last…

Recession: ended.

Really?

According to what, except another broadly generalized notion based on a number added up as a total GDP number or something?

That, all by itself, is probably a whole large topic of its own, but basically all coming down to notions of “growth”, which not only end up getting into all kinds of tangled contrivances of finance and banking, but don’t really reflect details of practical reality in the idea of an economy that actually means something, the real economy, of work getting done, people getting paid, and work and things of actual usefulness and value.

But this becomes very tiresome.

Let’s just wrap this up by repeating an old point. Nothing good, nothing positive, not much that’s just plain real can happen until people ditch loads of presumptions, dogma, cliches, outright fiction, and general nonsense, and start by simply doing our best to see things as they actually are.

“When societies get badly stressed, delusional thinking increases. We are now in that situation.” – James Howard Kunstler

 

Another Fabricated Jobs Report — Paul Craig Roberts

Something Doesn’t Compute: Inside The BLS Jobs Data

 

Stuck In Reverse And Descending Into Trauma – The Automatic Earth

oftwominds-Charles Hugh Smith: Prosperity Amidst the Ruins

oftwominds-Charles Hugh Smith: Nothing Has Changed–and That’s the Problem

oftwominds-Charles Hugh Smith: A Brief Note on the Difference Between Trading and Investing

US Middle Class Wealth Has Collapsed, Consumed by the Gods of Finance

oftwominds-Charles Hugh Smith: Our “Make It Look Good” Economy Has Failed

 

 

Federal Debt: Total Public Debt

Federal government budget surplus or deficit

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