Killing the Goose

Killing the Goose by Jeff Thomas – International Man

I’m frequently asked by Americans how long I think the “recovery” will take. From my point of view, the answer is obvious, but then, I don’t spend my evenings watching American news programmes that have, since 2010, been endlessly claiming that a genuine recovery is right around the corner.

It would seem logical to me that when the news anchor who cried wolf (claimed the imminence of recovery over and over with no result) proved to be either exaggerating, or just plain misinformed, my faith in him, his programme, and his network would diminish considerably.

But, what if all the news anchors on all the programmes on all the networks claim that a recovery is unfolding? Surely, there must be truth in the claim.

Unfortunately, no.

To be sure, there are some indicators that imply increasing confidence, such as a rising stock market and reports of new jobs being created. However, rather than take these reports on face value, we find that, since 2008, governments have been buying up stocks and even the companies themselves have been buying back their own stocks. In both cases, this has been done to give the appearance of a recovery, to hopefully trigger an actual recovery. It hasn’t worked.

And, if we hear a report that the number of barmen and barmaids has increased significantly, this is not a sign of renewed prosperity, but rather a sign of diminished hope. (In the Great Depression, the numbers of purveyors of alcohol increased as well. When people are confident, they drink. When they’re worried, they drink more.)

So, are these “indicators” evidence of a decline? Well, no, but neither are they evidence of a recovery. In attempting to predict the future of America’s economy, we should not look to peripheral symptoms, but to fundamentals.

So, then, let’s have a look.

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