FRONT PAGE CONTRIBUTOR
Can The Lie Come True?
“You lie!” Yelled the indignant Congressman from the Palmetto State.
To me, this statement was probably Rep. Joe Wilson’s greatest contribution to representative democracy since his election. It was factually accurate, succinct, impossible to misunderstand and true in almost every philosophical sense that the problem can be examined from. Predictably, Joe Wilson was therefore savaged by over-credentialed morons like “Cow School” Keith Olbermann.
President Barack Obama was lying, does lie, will continue to lie and, quite frankly, wouldn’t consider the planting done until the fields were adequately fertilized with an ample dosage of his rhetorical scatology. It’s a good thing reality bites Barack Obama’s rear end some days, or the man would no longer acknowledge its continued existence.
A good carpenter will collect a variety of tools over a successful career, politicians will develop a style and methodology of how to lie. Just as a carpenter uses tools for a variety of different jobs, politicians tell lies for a variety of different reasons.
The most common type of lie is one of obfuscation. Mark Sanford tries to tell people he flew Southwest Airlines to Buenos Aires to discuss more business opportunities for the State of South Carolina. This beats admitting that he took the state’s private jet, banged out a slore, and spent state monies on her entertainment and upkeep. The former is an inglorious part of his grinding daily routine. The latter forces the South Carolina legislature to vote him out of office or admit that their state is pretty much just a joke.
A second type of lie is also familiar. The lie of demonization is used to marginalize the opposition and make people on the fence somewhat self-conscious about wanting to associate with them. Nobody wants to hang around bitter people who cling to guns and bibles. The cool people don’t do that. If 52% of the electorate would rather be cool than informed, you too can lie your way to being called Mr. President.
Barack Obama adds a new lie to the tool kit. His is a brilliant addition, which only Joseph Goebbels had thought of before. A lie that gets repeated until it becomes true. The Transubstantial Lie.
Upon this Philosopher’s Stone of disingenuous communication, Barack Obama increasingly seems to pin his hopes of economic recovery. Barack Obama intends to lie that the economy is better off than it really is. This will make people act like the economy is better off than it is. The economy, as a result of this change in behavior, will be forced to produce more jobs and more goods to meet this new demand. Thereby President Obama has just made chicken salad out of something far less savory.
Recent activity in the stock markets suggests that this approach has some validity. Money has left the sidelines, the DJIA, the S&P500 and the NASDAQ all are well off their Marianas Trench lows of late last Winter. On the 8th anniversary of the 9-11 Attacks, the world’s stock markets rocketed upward like the day was of no significance.
Yet for all the wonderful “Green Shoots” that bloom in our garden right next to the Money Trees, there still is cause for distress. No one rains on a garden party quite like the lovely and talented Meredith Whitney. She opened up the sprinklers on yesterday’s CNBC Squawk Box. She started with the specter of increased mortgage defaults.
“No bank underwrote a loan with 10 percent unemployment on the horizon,” Whitney said. “I think there is no doubt that home prices will go down dramatically from here, it’s just a question of when.”
Wall Street economist David Rosenberg would seem to have everything to gain, plus bonus, for talking up the economy as a bonzo-screaming buy right now. He does, except for the following excerpts.
On corporate earnings :
“First, with household net worth down $14 trillion, employment down 7 million since the start of the recession and consumer credit down $110 billion from last year’s peak, it would seem to us as though there are too many gaping holes to believe we are going to be seeing anything remotely close to “normalized” earnings any time soon.”
On growth :
“We did some digging and found that all of the world economic rebound in 2009 — that is, 100% and then some — is being accounted for by fiscal stimulus.”
And on employment :
“Jobless claims stuck at 570k — basically in line with a sustained 200k-300k
payroll losses. Temp agency job losses are continuing even if at a slower pace — this is not
good news. Downward revisions to the prior data — these tend to feed on themselves. No change in the record-low work-week. The Challenger and JOLTS data reveal an ongoing decline in hiring intentions. And now we can add the Manpower Survey to this list.”
If only John Wilkes Booth weren’t on stage, Mrs. Lincoln would no doubt enjoy the play as well. So someone is lying and someone is wrong. I think Congressman Wilson explained who that would be quite effectively. It’s just how the lie was constructed that mordantly fascinates.
Lila Rajiva describes the way in which the current administration has manipulated the news to make our economy “recover.”
Fudge One: Goldman Sachs had a great quarter, making a profit of $3.5 billion and the government made $1.4 billion on its investment in Goldman Sachs. The government also got a 15% return on its investment in the eight biggest banks.
Truth: Goldman had a great quarter only because it moved its reporting calendar to cut out December 2008, when it had a loss. And the government only made a profit on the TARP money it gave to Goldman.
Fudge Two: The labor market is getting better because jobs are growing. The unemployment rate fell from 9.5% in June to 9.4% in July.
Truth: That number only shows a slowing in the growth of unemployment. And even that small improvement has been offset by other aspects of the labor market that are worsening quite sharply. The duration of unemployment is increasing, temporary jobs are declining. The percentage of the eligible population receiving unemployment insurance has increased (0.1 percentage point to 4.7%. by September). The four-week moving average of initial claims has moved to its highest level in a month.
Fudge Three: Increases in real personal income in April and May will increase consumer spending.
Truth: The increases were caused by tax-rebates and unemployment benefits kicking in, and most of it was saved, not spent (80 cents on the dollars). There was a temporary lift in consumer spending, but it petered out quickly.
Fudge Four: The bank stress tests came out better than expected. The bank stress tests led Ben Bernanke to conclude that nearly all of the banks had enough capital to absorb higher losses should the economy worsen, and that the Treasury stood ready to provide more.
Truth: The bank stress tests used an unemployment figure of 10.3% (the most adverse case). But unemployment is likely to be 11% and above by next year. If you take into account discouraged and partially employed workers, some economists suggest the figure is more likely to be 16%.
Fudge Five: The housing market is improving. In July, the Pending Home Sales Index was up 3.2%.
Truth: The improvement in home sales has been mostly in the lower end of the market and it largely reflects foreclosure sales and government credit, not real improvement in the market.
Thus, if you are willing to believe 100 hundred impossible things before breakfast, the time to invest your money in the US economy is right now. If everyone is willing to believe all 100 of these impossible things, investment growth will go through the roof. Happy days will be here once again. What in the world could possibly go wrong?
Yet unless you believe Mark Sanford enjoys walking the Appalachian Trail and that all the really cool people really do love Barack Obama, reality will reassert itself. The news media will make sure this phenomenon occurs quietly, but the laws of reality will make that resurgence of truth irresistible.
As the edifice of lies tumbles down, all the investments, hopes and dreams built on these lies go down along for the ride. To quote RS poster Mitrebox, “The cake is a lie!” When everyone figures out that they’ve just been had, you do not want to be the sucker left long and holding the bag.