Last week, President Obama released his new budget proposal, which in February he said would be the end of austerity. First let’s ask, what is meant by “austerity”? As a policy, was it ever tried?

As discussed by myself and others, “austerity” means tax hikes (not spending cuts) in practice. Lefties hurl the word “austerity” to demonize the idea of spending cuts. But few of the countries which left-liberals accused of cruel austerity in the last few years cut their overall government spending levels; the majority continued to increase spending. So spending cuts can’t explain those countries’ poor economic results. What can? Well, most of them raised taxes.

Clearly, we should end (or reverse) the tax hikes. That would be a great “end of austerity”. But Obama’s meaning is that we should undertake spending increases; which, for reasons touched on below, probably mean deficit increases.

Before going into Obama’s proposal, let’s review the current state of the U.S. budget. (more…)

The Treasury Department appears to make a subtle concession of the impact of Obama’s massive public spending and Quantitative Easing policies on the value of the currency of the United States.

Most of us know the term “QE” as the central bank’s euphemism for creating lots of new money, but if you are not sure, I have an explanation here.

Recently, President Obama nominated Janet Yellen as the new Fed chairman. She is expected to continue or increase QE. At her confirmation hearing, she said:

I consider it imperative that we do what we can to promote a very strong recovery. It’s important not to remove support [QE], especially when the recovery is fragile and the tools available to monetary policy, should the economy falter, are limited given that short-term interest rates are at zero. A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases [QE]. Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.

Yellen’s comments are tragic because QE cannot and does not promote economic recovery. It does the opposite. Why is that?

Jobs come from something called the division of labor. It’s the fact that people can produce more when they specialize intelligently. A “job” is really a package of specialized tasks that an employer needs someone to do because the specialist can do more for less (or can help the whole organization to do more, etc.).

The superior productivity of specialized labor comes, in turn, from something called capital.

• Productive capital is the accumulation of knowledge, tools, machines, organizations and infrastructure that enables human labor to be productively specialized.
• And financial capital is the accumulation of money (cash, shareholders’ equity, savings, etc.) that will buy or develop productive capital and direct its motions.

It is crucial to understand that not all capital is created equal. It takes work, sacrifice, talent and vision to form productive capital. Capital can be invested badly (called malinvestment, which flourishes under QE and 0% interest rates). Thus, raw investment spending levels do not matter. Financially sustainable jobs come only from the capital which has been invested well, for productive success.

QE undermines productive capital. When Obama/Bernanke/Yellen print money, they devalue money; they make it buy less than it would otherwise. So the financial capital of successful business people doesn’t go as far. QE, and 0% interest rates, also kill the return on capital: the incentive to use it very carefully (productively). Thus, QE messes up the economy’s capital, making financial capital perversely less effective for good projects and more available for bad projects, a toxic mix that injures the division of labor (the creation of economically efficient, valuable jobs). It’s as if the economy is on a narcotic and gradually getting more stupid.

The way it looks to businesses is: They thought they had some good capital, but now their capital doesn’t go as far. Everywhere they look, costs are a little higher than projected (or much higher, in the final stages of QE). Simultaneously, at 0% interest their marginal (unproductive) projects look better than those projects are. For both reasons, businesses’ capital is wasted. It somehow doesn’t go as far on their good projects – at the same time they’re tending to either idle it, or blow it on bad projects.

Businesses then need to squeeze out greater financial profits just to maintain their capital base. They do it by hiring fewer people. Some businesses seem very healthy (high-profit) after their job cutbacks. But fewer new businesses are started, and the healthy ones tend to grow by merging with (or buying out) competitors, which lowers employment. The overall economy either stops growing, or grows in unhealthy directions. The unemployed survive on government aid (which is surprisingly plentiful), while stories abound of people who ‘score’ with speculative investments, which tend to rise.

Does all that sound like the world we live in? Yes! Remember: The price of gasoline, the stock market, and the welfare/disability rolls have all roughly doubled in Obama’s reign so far. While new jobs have been far harder to come by. QE enables (at least) those disparate effects.

To be clear, QE is not the only reason Obama’s recovery has been lame. Other Obama policies also increase the cost of employing people, and other costs that businesses face. But QE doesn’t help; it adds to the economy’s burdens.

If you can think of a country that has emerged into vibrant economic recovery because of their doing large-scale QE, please post it in the comments. I haven’t been able to think of an example. And Japan, which has been doing QE since the 1990s and now faces rising costs, clearly isn’t an example. Neither will we be one.

To “celebrate” Dow 16000 and S&P 1800, both of which the stock market just hit intra-day, I’ve gathered a few links on rising economic inequality in the U.S. A few remarks first, to set context.

As a capitalist, I have no problem with inequality – when it comes about for the right reasons, that is, when sovereign consumers have awarded it by their actions in free markets. The problem is that, under President Obama, we have inequality for the wrong reasons.

Obama puts government in control of more and more of the economy, and he has the Federal Reserve bailing out the biggest players on Wall Street (as well as the government) and goosing the financial markets ever higher. That doesn’t come for free.

Whenever someone is bailed out, somebody else was “bailed in”; somebody else lost wealth (or purchasing power). Obama’s policies stealth-transfer it from the wages, pensions, savings and balance sheets of productive people to those who happen either to (1) receive government spending, or/and (2) own financial assets (stocks, bonds, etc.).

Many of those are productive people; but many are not and, in any event, everyone should have to earn wealth the real way, by pleasing their employer or their customers in the market. None merit bailouts. No one deserves government-orchestrated wealth transfers (stealthy or otherwise). No one.

I want small government, natural rights under Rule of Law, sound money and free markets because they are both moral and populist. They form the only moral social system (the only system that lets people be free and doesn’t steal from them, or enslave them). And, as a consequence of being moral, they form the only practical system where masses of deserving poor and middle-class people can and will get ahead.

The Big Lie of Leftism is that leftism somehow stands for the People, or the little guy. It doesn’t. As we see today with President Obama’s policies, producing a result of record inequality – for all the wrong reasons.

OK, now for some data. First, via Marc Faber and Zero Hedge, here is household net worth by wealth percentile:

You can see that, in the last six years, the share of wealth held by the bottom 75% has plunged from 12.7% to barely 10%. (more…)

I got onto this idea last May; for take one click here, and for take two click here. My key notion:

Even as I read about the stock market making new highs, I keep reading about more Americans on food stamps than ever before, more Americans quitting the workforce, old people who can’t get a decent income…business people who can’t start businesses…This is in Obama’s fifth year. Whom is Obama’s economic recovery for?…

Obama’s policies benefit the Big Government – Big Banking – Big Labor elites – in that order of seniority…[so] Why aren’t we all laughing in Obama supporters’ faces, when they pretend to stand for the People?…

Part of President Obama’s toolkit to benefit the One Percent is the Federal Reserve’s ‘Quantitative Easing’ policy, which I have explained (and slagged) many times; for example, here and here.

Nothing has changed since May. Now a former Federal Reserve official, Andrew Huszar, explains – and apologizes:

Confessions of a Quantitative Easer

I can only say: I’m sorry, America…I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

As I’ve been saying for years! Except that, even more than a Wall Street bailout, QE is also a Big Government bailout. Whether the Fed buys Wall Street’s mortgage bonds, U.S. Treasury bonds, or anything else, the new money sooner or later funds the government’s spending and deficits, including Obama’s $6 trillion (and rising) of additional U.S. debt.

Although Huszar’s piece neglects the Big Government angle (focusing almost exclusively on the Wall Street angle), it gives some interesting color and is worth reading in full.

UPDATE: If you prefer wonky video, CNBC interviews Huszar here.

If the “science” of economics has two consistent findings, they are:

1. Rent control doesn’t work. It only leaves a city’s rental market more messed up and expensive than ever before. And,
2. Raising the minimum wage is a great way to raise unemployment, denying jobs and hope to the poor, the young, and other relatively unskilled people.

Do left-liberals care? Noooooo. With their unreasoning devotion to Big Government as Fantasy-Mommy-Daddy Which Picks Our Food From Unicorn Bushes, they continually advocate both rent control and minimum wage hikes.

But the U.S. already has a fairly high minimum wage, as shown on this neat-o infographic from ZH:

Note that Australia’s vaunted minimum wage is under $10, in real terms (adjusted for PPP). Add in the fact that Australia is actually a freer country than the U.S. – #3 for economic freedom, where the U.S. under Obama has sadly sunk to #10 – and a resource-producer for China, and one can see why Australia has not had more glaring damage from their minimum wage…yet.

I’m sure that Nancy Pelosi, Barbara Boxer and others will not rest until the U.S. is “Number One!” in minimum wage – and in unemployment.

I’ve commented before on how the government has changed its methods over the years for calculating the economic stats, to make itself look better.

For example, consumer price inflation has been running about 8-9% per year under the 1980 method. I don’t claim the 1980 method is right; but the government claims only 1% CP inflation from its newer methods, and that number violates many people’s first-hand experience of rising prices and declining living standards.

Or with unemployment: by 1930s methods, it has been running 15-20%, which means we are already in the Great Depression 2.0. Again, I don’t view the older method as sacred; but that number fits many people’s experience better (as they have been forced into permanent unemployment, part-time work, etc.) than the government’s claim of 7.4% unemployment.

The people who change the statistical methods always have excellent-sounding reasons. There’s just one problem. Their changes always run in one direction, to make the government look better.

Somehow, they never adopt changes that could make things look worse. The latest example is GDP (Gross Domestic Product). Last week, the government published new data from new formulas for calculating GDP.

Guess what? The changes make the government look better. Suddenly, America’s GDP is supposed to be $550 billion higher. Which improves America’s debt-to-GDP ratio magically; that is, even though nothing has changed in reality.

But some of the changes they made are unreal, almost too silly to believe. The first ZH link above provides neutral-sounding descriptions from Bloomberg. Peter Schiff gave clearer and more colorful descriptions, in a preview back in April: (more…)

…at some point in their lives. From an AP / USA Today article earlier this week:

Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives…

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.

More than one angle here is worth exploring, and I may do so in future posts. But for now, I’ll try to keep it brief.

Most obvious (and important) is the simple failure of President Obama’s economic policies. It’s not a matter of giving him more time; he’s had more than four years. The problem is that his policies can never work, because they are the wrong policies.

As a committed leftist, the man simply does not understand how the real economy works, how the American middle class came to be, or what produces good jobs and rising living standards for large masses of people.

Obama gave a speech on the middle class this week which was as misguided as any he’s given, and which I may review later in more detail. For now, let’s just say that Obama’s Big Government, debt-inflating policies are the thing causing the conditions that he decries (rising wealth inequality, loss of manufacturing jobs, etc.).

Another possible angle, on the above article, is race – specifically, “the stupidity of race” (as I almost titled this post). Because it goes on to be fairly obsessed with race, saying: (more…)

Some of us are broken.  We were given both envy and high principles.  We can’t even contemplate bringing others down to level things, but instead we work madly to increase our status.  (No, it’s not how I think about it, but it’s probably what’s going on in the back of the monkey brain.)  Most of humanity however is functional.  Give them enough to eat, and a place to live, and no matter how unvaried the diet and how small/terrible the place, most people will stay put.

Via The Circle Bastiat. Franklin D. Roosevelt, greedy to increase his power over Americans’ economic lives, confiscated their gold bullion & currency. People who wanted to keep their own money (because gold and gold-backed notes had circulated as U.S. money, until then) were labeled “slackers” and “hoarders”, then prosecuted:

You can see a clearer, larger image of the article here. Those who cooperated received, for the most part, only partial compensation (paper dollars which Roosevelt then devalued, the next year).

Such a confiscation would have been unthinkable to America’s Founders. They revolted against King George III for less. Are property confiscations part of America’s future under Obama? Time will tell.

After establishing the Constitution, the Founders fixed the U.S. dollar as being just under 1/20 oz. of gold, because paper-money experiments during the Revolutionary war had taught them that sound money was a crucial element of a sound, free and prosperous society. That 1/20 oz. value guided the American economy for roughly 140 years, through the greatest net economic expansion in human history.

Beginning with Roosevelt (who, again, confiscated the gold dollars, then devalued the paper ones from an official gold value of 1/20 oz. to around 1/35 oz.), the dollar’s value has dwindled, as the government taxes us all covertly by printing more and more money.

Americans regained the right to own gold bullion in 1974, but the dollar has remained mere paper. On average (or with some ups and downs), its value continues to dwindle. The dollar’s market value in gold was roughly 1/250 oz. when Bush 43 took office, 1/800 oz. when Obama took office, and is near 1/1300 oz. today.

I believe that further depreciation is to come.

If the economy is getting better, why do so many people feel they’re struggling?

On the positive side: The official data say that we’ve had some growth in jobs. And, while the federal deficit is still high, it has begun to drop (due both to rising tax receipts, and the GOP’s insistence that we have at least some fiscal discipline). And the stock market is making new highs.

On the negative side: The growth in jobs is so anemic that if a Republican were president, the media would be screeching nonstop about the “jobless recovery”. And the stock market’s rise flies in the face of weakening fundamentals, suggesting that the rise is just a “bubble” process (or a process of inflation).

Moreover, as Peter Schiff writes, imports are dropping while real consumer costs rise, which fits a pattern of declining living standards (people having to spend more on necessities). His argument is long, but worth considering:

Tyson Foods…announced that although their top line sales revenue increased by almost 2% (roughly in line with U.S. GDP growth), operating margins collapsed by almost 50%, leading to a 43% decline in profit. Consumer shifts away from relatively higher priced/higher margin beef and pork products to lower cost/lower margin chicken products were to blame….

According to government statisticians, the Tyson announcement would reveal modest growth and low inflation. After all, revenue at the company grew and spending on their products had increased modestly. But rising prices were obscured by consumers purchasing lower quality products. Not only are consumers avoiding the beef and pork that they otherwise may have preferred, but they are opting out of the convenience of prepared foods…This is known as getting poorer.

The trend corresponds with the steady increase in the share of income that Americans devote to food and energy…in 2002 Americans spent about 17.8% of income on food and energy. In the first quarter of 2013 the share had risen…to 21.3% of income…In the poorest countries almost all of income is devoted to such things.

…[A sharp drop in imports has meant that] our trade deficit with China in March dropped by a whopping 23.6%…[but overall] personal spending [still rose] in March. If we are buying less stuff from abroad, where are Americans spending the extra money? …Americans are buying fewer Chinese products because they are spending more money on food, rent, utilities, healthcare, insurance, and other necessities that can’t be imported. Again, this is consistent with a falling standard of living…

The combination of these symptoms suggests that the extent to which people are being impoverished by accelerating inflation is not reflected in official government measurements. This explains why unemployment remains high even as GDP appears to rise…the unprecedented expansion of the money supply under the current Fed leadership is pushing up prices for stocks, bonds, real estate, and consumer goods. Market indices neatly capture the price increases for all of these categories except for the latter, which has been concealed by an overly adjusted CPI.

If consumer inflation data were reported more accurately, it would be revealed that much of the apparent growth is an illusion.

In a previous post, I wrote about Obamacare Schadenfreude, that feeling of amusement when some ardent supporters of Obamacare realize that that monstrous piece of legislation will have negative consequences for them or for causes about which they claim to care.  I was reminded of that post again yesterday when I heard that one of the authors of Obamacare, Max Baucus (D-Montana), complained that the implementation of Obamacare was going to be a “huge train-wreck coming down.”

Likewise, a little over a week ago, Jay Rockefeller (D-West Virginia) complained about the incomprehensible complexity of the law:  “‘I believe that the Affordable Care Act is probably the most complex piece of legislation ever passed by the United States Congress,’ he said, as quoted in the Washington Examiner. ‘Tax reform obviously has been huge, too, but up to this point it is just beyond comprehension.’”  My response to both Senators is simply to respond:  well, isn’t that just too bad.

Today, though, I’d rather write about another Obama-era affliction which I’ve been suffering with since late January 2009.    It is something akin to depression, and it is brought on or exacerbated by the daily outrages resulting from this administration’s policies.

Sometimes it boils up to anger which gives me more energy, but at other times I feel listless and unmotivated or even hopeless.  At times, I get by just focusing on the routines and necessary activities of my daily life, but sometimes even those feel like a burden.  Writing about the issues can be therapeutic, though there are many times when I’d rather not think about them at all.

So what to call this condition?  “Obamalaise” came to mind, but I think others have used that to describe the lingering weakness in our economy.

I also thought of “Obama Weltschmerz.”  That conveys the angst and depression, and I like the fact that, like Obamacare Schadenfreude, it uses a German word.  As I see it, the use of a German word helps to communicate my sense that Obama’s America feels like it’s headed towards the sort of economic collapse which characterized Weimar Germany.

Maybe that’s too dark.  “Obamanomie” communicates a sense of impending social instability and alienation.  That might get at the matter a little better, though it’s perhaps even more depressing to think about.

In any case, I know I’m not the only one suffering with this condition.  I suspect many of our readers are, too.  What would you call it?

This is a pretty good website to illustrate how awesome it is that King Barack I is taking a whopping 5% pay cut.

SHEESH.

-Bruce (@GayPatriot)

In the New York Times on Sunday, David Stockman made some points that I’ve been making on this blog: that America has lost its way in a decades-long orgy of government spending, deficits and money-printing, creating a “bubble economy” where the real prosperity is rather less than the statistics claim, and each bubble’s burst is greater than the last, meaning that we’ve got a doozy coming.

Stockman’s piece speaks for itself, encasing relevant facts in very sharp rhetoric. I won’t quote it here, just recommend it to your interest.

His piece isn’t perfect; it contradicts itself in a few places. For example, Stockman rips (rightly) on Keynesian economic theory, but also affirms (wrongly) the neo-Keynesian story for why the Great Depression ended (that it was somehow due to WW2 spending). Or Stockman characterizes the last several decades both as rough times, and times of living “high on the hog”; that could seem contradictory if you don’t fill in the missing context yourself (that it’s been “higher” for the politically-connected and a little rougher for the rest of us).

And, while I agree with Stockman’s knocks on Alan Greenspan, I find him unfair in his treatment of such figures as Milton Friedman, Ronald Reagan and Paul Ryan. But Stockman’s piece is a polemic, and no polemic is ever perfect. It’s a good one if it manages to get a lot right, and Stockman’s does.

UPDATE: John Tamny at Forbes critiques Stockman’s piece in more detail, from a perspective that I respect. (Non-Keynesian; perhaps Supply-side or even Austrian?) Like I did, he acknowledges large areas of agreement.

(NB: As often happens with my posts, I’ve tweaked a couple phrases since publication to better fit what I really had in mind.)

France’s President Hollande is determined to confiscate wealth; mere constitutions and courts can’t stop him:

French President Francois Hollande declared on Thursday that companies would have to pay a 75 percent tax on salaries over a million euros after his plan for a “super-tax” on individuals was knocked down by the constitutional court…

Irony alert:

On the defensive, with his approval ratings in tatters, Hollande acknowledged he had failed to anticipate the crisis dragging on for so long…

Gee, I anticipated it, from 6,000 miles away. I’m not very smart, I just understand that no country can tax its way to prosperity.

Moving along – It seems that in the wake of Cyprus, a top European official accidentally told the truth:

Monday March 25 – Markets took fright after the head of the group of eurozone finance ministers indicated that the Cyprus rescue could be a template for similar situations…

…Jeroen Dijsselbloem, the Dutch finance minister, told Reuters…”If the bank can’t [survive], then we’ll talk to the shareholders and the bondholders…and if necessary the uninsured deposit holders”…

“Talk to” means “take from”, of course. A chorus of other top officials swiftly denied it was true and said, “Because, shut up.” Which means they’d do it again in a heartbeat; after all, one of their top bankers once confessed that lying to the public was part of his job.

UPDATE April 4: A top Italian banker says yes, actually, taking from the depositors is acceptable.

Over the summer of 2012 and during the last few months of the presidential campaign, a number of us watched the changing employment numbers and labor statistics with an increasing sense of skepticism.  The lamestream press would dutifully report the administration’s numbers and note that the unemployment number was going down slightly, but anyone who looked into the numbers quickly realized that the only reason the numbers ever went down was that with each successive report, the number of people in the workforce kept shrinking.  And so things have continued throughout the first few months of 2013.

Tuesday on his Twitter feed, Bruce linked to this article by Mortimer Zuckerman in the Wall Street Journal, which once again confirms what many of us have come to believe about the Obama economy:

The Great Recession is an apt name for America’s current stagnation, but the present phase might also be called the Grand Illusion—because the happy talk and statistics that go with it, especially regarding jobs, give a rosier picture than the facts justify.

The country isn’t really advancing. By comparison with earlier recessions, it is going backward. Despite the most stimulative fiscal policy in American history and a trillion-dollar expansion to the money supply, the economy over the last three years has been declining. After 2.4% annual growth rates in gross domestic product in 2010 and 2011, the economy slowed to 1.5% growth in 2012. Cumulative growth for the past 12 quarters was just 6.3%, the slowest of all 11 recessions since World War II.

And last year’s anemic growth looks likely to continue. Sequestration will take $600 billion of government expenditures out of the economy over the next 10 years, including $85 billion this year alone. The 2% increase in payroll taxes will hit about 160 million workers and drain $110 billion from their disposable incomes. The Obama health-care tax will be a drag of more than $30 billion. The recent 50-cent surge in gasoline prices represents another $65 billion drag on consumer cash flow.

And that’s just the beginning of the article.  Read the whole thing if you want to feel even more depressed about the state of the economy than you felt already.

But that’s not even the whole story.  Tuesday when I was driving to lunch, I heard Tom Sullivan discussing “America’s Disability Scam Crisis.”  The facts of the disability crisis are alarming enough as it is, but even more surprising was that the facts which inspired the discussion on the Tom Sullivan show were first reported by NPR.   Scott Johnson at Powerline noticed and wrote up a post about it entitled “NPR goes Rogue.”

The NPR story linked above is quite long, but it focuses largely on the fact that since Clinton signed “welfare reform” into law, more and more people have been going on to disability and the disability rolls have grown to unsustainable levels.  It also mentions  the fact that many lawyers and doctors have found a lucrative business focusing on disability cases.

And it gets even worse.  As the NPR story reports: “signing up for disability benefits is an excellent way to stay hidden in one key way: People on disability are not counted among the unemployed.”  The story continues: (more…)

“Cyprus in your Heart” is the tourism slogan of the small Mediterranean nation of Cyprus. It is a member of the Eurozone. Perhaps you’ve seen headlines, the last couple of weeks, about its banking crisis. This post is to sum up a few points about it.

• The Europeans plan to resolve the crisis with yet another bank bailout.
• This bailout is different. For the first time, bank customers (depositors) will be hit with losses. “Small” or “insured” depositors under 100,000 Euro will be left alone; but over that amount, depositors could lose 20%, 40% or more of their money in the bank.
• That’s important. It’s a dangerous precedent. It means that “money in the bank” isn’t all that safe. Not in Europe; and if you believe a similar crisis could happen in the U.S. eventually, then not here.
• They were originally going to hit even the depositors under 100,000 Euro. That would have been an even more dangerous precedent. Thank God, the Cypriot parliament refused.
• The Russians are quietly furious with Europe, over all this. Cyprus had been sort of the Russians’ Cayman Islands or Switzerland; the Russians’ banking haven. Russian depositors may be hard hit (although some say that the clever Russians had already withdrawn their money).
• Also, Cyprus has a strategic location near Turkey and Israel, and important natural gas fields. So Russia and the EU both want it as their satellite. The Europeans were determined to keep Cyprus from withdrawing from the Euro.
• *IF* this outcome means that Cyprus stays with the Europeans (rather than the Russians – and I’m not sure if it does mean that, in the long run), it’s probably good for Israel.
• But for now, Cyprus will be hit with a severe depression, as its “Russian banking tourist” industry is gone, probably forever.

These developments have the Cypriots up in arms, feeling like their futures have been stolen. A few pictures here.

This all goes to the importance of money as a social contract. People put their trust in money as the basis for trading with each other, in all kinds of ways. If people’s bank accounts are violated – and/or, if the value of money is violated – then people feel hurt and disoriented, because a key social contract has been violated. I may say more about that in a future post.

This is a nice illustration of the point that a large government debt and a sluggish economy go together:

Hat tip, David Houle at Seeking Alpha. The “EM” means, a whole bunch of Emerging Markets economies.

The picture shows that the higher-debt countries tend to have lower growth; the lower-debt countries tend to have higher growth. I would argue that the direction of causation is mostly that policies of high government spending, high deficit and high debt will burden an economy, slowing its growth.

But one could argue for at least some causation in the other direction: if a country is low-growth to begin with, it will be higher-debt, just because it can’t grow out of its debts as easily. My counter-argument is that it almost doesn’t matter: The picture suggests that, once your country is stuck in a high debt / low growth mode, adding more debt (or Keynesian “stimulus”) just makes you Greece.

Lately I’ve noticed more and more posts from people on Facebook about how to do a, b, or c yourself or to make your own x, y, or z.  It could be that my personal social network overlaps more with the “crunchy” demographic which shops at the local food co-op and Whole Foods, but it could be a larger social trend.  I think it is a little of both, but I’m curious to see if other GayPatriot readers have noticed the same thing.

In the past three years or so, I’ve started learning to make many more kinds of things for myself than I had in the past.  Most of the stuff I make for myself has been foods that I used to buy at the store, and the transition originally occurred because I wanted to have a healthier diet.    I was a tolerable cook before, but I depended on lots of store-bought staples.  But the more I’ve learned to do for myself, the more I’ve wanted to learn how to do, as well.  I’d say that while I was originally motivated by a concern for health, as time has gone on, I’ve also been motivated by the increased sense of independence in learning how to make things I used to buy, by the ability to control my own ingredients, and by the opportunity to be able to make better quality foods than I would have bought in the past and still have a cost savings.

Although I started with food, I’ve also made some of my own household cleaning products, and I’ve considered making my own personal care items, as well.   I have a friend who makes and sells her own deodorant and is thinking of making other products, as well. But there’s no need to stop there.  When television stations switched from analog to digital broadcasting, I built my own digital TV antenna using coat hangers and a 1×4 using plans I had found online.

One of my favorite websites to browse in the last few years has been Ana-White.com which contains hundreds of build-your-own plans for furniture.  The site, which is maintained by a self-described “homemaker” in Alaska, was originally called “Knock Off Wood” because it started with home-built knock-offs of items found at stores and in catalogs.  I’ve not attempted building any furniture yet, but I would like to try doing so at some point in time.

I haven’t taken the time to research this topic yet in depth, but it’s my belief that part of what we’re seeing with this trend is a reaction to the Obama economy.  As people worry more about their finances, frugality and independence become more important–at least for a certain segment of the population.  During the Great Depression, these kinds of household arts were quite common, partly out of necessity and frugality, but also partly because the population wasn’t quite as urbanized.   Store-bought items were  both a rarity and a luxury.  I don’t see it as a coincidence that make-your-own and do-it-yourself projects are proliferating these days, much as they did during the Depression years.

What do other people think?  Have you noticed this trend, as well?  Have you made such changes personally?  Are there items that you used to buy at the store that you’ve started making for yourself?

As a GP commentor once put it, “The stock market relies on confidence, and the stock market has done incredibly well since Obama took over. How do you explain that?”

A picture is worth a thousand words:

But here’s the summary. Fed pumping gobs of money into Wall Street? Market drifts upward. Fed stops pumping? Market doesn’t. The so-called “confidence” is drug-induced.

Hat tip: Zero Hedge

UPDATE: This is your town, on food stamps. Once per month, the town of Woonsocket, RI springs to life as residents receive (and spend) their benefits. The Obama administration has more people on food stamps than any in U.S. history:

Spending on SNAP has doubled in the past four years and tripled in the past decade, surpassing $78 billion last year. A record 47 million Americans receive the benefit — including 13,752 in Woonsocket, one-third of the town’s population…