Bureau of Economic Analysis National GDP Report

Tags: BEA 2011 GDP

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You can’t create a twenty-first century society based upon an educational system promoting the myth that you can be all you can be — by just showing up; enforced by an mediocre bureaucracy – which essentially just shows up; built on a twentieth century industrial model to create workers for factories — that no longer exist; and enforced by a geopolitical financial establishment — totally hedged against any risk.
— Jerry Bannon, The Wonder Springs Chronicle, 25 January 2012, Publisher and angry American citizen

On Monday we posted a homework assignment with two videos and two real articles on why America is no longer competitive in the real world. Besides the links we suggested this was going to be a unique week, when starting Saturday we had a major political upset in the South Carolina presidential primary and then last night the president’s State of the Union address. Not being all that into the current political spin, I wasn’t aware of Monday night’s eighteenth Republican candidates’ debate.

Just before the debate I made the mistake of watching the DVD of Waiting for Superman, the documentary about the failure of American education, which really is the cause and effect for the Wonder Springs’ homework post earlier Monday. NBC’s Brian Williams began the debate by again asking “baiting” questions of both Romney and Gingrich, to wit they actively entered the fray. This continued, while I did a little housekeeping. Fifteen minutes in and no change on the horizon, I decided there must be a better way to spend my time. A rapid surfing of the channels provided only commercials and nothing of equally redeeming social value, so I decided to go to bed; a very good decision.

Not so strangely Waiting for Superman proposed an education solution based upon this series title, increased productivity and a greater and more efficient utilization of both finances and other resources through decentralization. The problem with Superman however was that his goal in life was to have a college degree. Aren’t-weren’t the Occupy protests mostly based upon the futility of financially leveraged college degrees, based upon a progressive warm-fuzzy nonexistent utopia?

So departing from my previous script of looking at details related to greater efficiency and decentralization, this week we will wander into the desert of American education and beyond, things I am probably better versed anyway.

Tags: Waiting for Superman, education, SAFER Process, biofuels, research, Laffer Curve, high marginal tax rates

Tags: Newt Gingrich, Mitt Romney, Barack Obama, Davos Economic Forum, Bill Moyers, David Stockman

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This is econ 101: when a family is richer, its older workers demand higher wages to stay in work and its younger workers demand higher wages to take a first job. The dynamic contracts available jobs unless offset by an equal or greater rise in productivity.
— Edmund Phelps, Financial Times 11 January 2012, 2006 Nobel Laureate in Economics

Late in last week’s article I used an archaic word, which at the time I had not noticed. But shortly thereafter, I wondered if any American still understood what I was writing about and even if they had an inkling of its meaning, if they could at all grasp the implications of what that word, if really put into practice, would actually do to the economic muddle we now find ourselves. Dear readers that word we don’t hear anywhere anymore is: decentralization.

In my lifetime the United States of America, has become really the federal government unitasker of the world and its current and potential prosperity. There was some talk within the early days of the Tea Party and the talking points of Republican candidates for the presidency, about states rights; and of course Ron Paul and his libertarian base speak of smaller government and in favor of individual rights, sometimes bordering on anarchy. The word decentralization however is to be found nowhere in anybody’s conservative lexicon.

As far as Barack Obama, the liberal-progressive-left and the Democrat Party, it seems that they think there is no problem that more government spending will not cure, particularly if it originates within the federal government unitasker, an then forces the un-sovereign states to fund what the federal government doesn’t have the political will or the constitutional power to implement.

Furthermore, like all elitists of their persuasion, they believe that new wealth can be created, as do most Republicans, through tax incentives to crony capitalists, which through mergers and acquisitions, will provide the economic basis for the continuing growth of government programs, including entitlement programs and wealth redistribution.

Late Sunday we posted a short video from CNBC last Friday with Edmund Phelps, whose quotation above, from a recent article in the Financial Times, begins our discussion this week. In that video he speaks of the role of particularly southern European governments who sponsored wealth creation for their citizens through entitlement programs, yet through unintended consequences are linked to both a decline in national productivity as well as a significant cause of the euro crisis.

Tags: economics, Edmund Phelps, productivity, wealth, efficiency, USA, liquidity, Business Ecology, Great Depression, Collectivist Elitists, Laissez Faire Scoundrels

Tags: productivity, wealth, MADP, Edmund Phelps

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If you want it done precisely your way, you better do it yourself!
— Ancient Chinese Proverb

Late last week I bought a new over the air TV antenna from Costco, no more cable or satellite television for me. Now just the twenty minutes of advertising per hour rather than paying around an additional hundred bucks a month for the privilege of watching hundreds of channels I care nothing about, and I suspect few supply much positive influence to change our nation or the world.

To celebrate I decided to watch the Saturday evening Republican Debates. This was debate number 15, or so I was told. They all seemed like decent, somewhat committed guys, but I didn’t see a national messiah amongst the crew. But just like the current incarnation of our president, it seems that they all still believe that the federal government is the source of the solutions to our current woes.

Over the past three years we have learned that Barack Obama was not the national messiah either. But in the first real job he ever had, it seems that he was amazed, just as much as most of his supporters, that achieving nirvana in this world was not an easy task. Falling back to a more realistic desire shown in Machiavelli’s The Prince, he also seems not to have either the talent, the ambition, or the constitutional ability to achieve that desire either.

When you look around the world, even though there seems currently a little temporary stability coming to the United States, we still seem incapable of even dealing with our universe of ever expanding debt; solutions are just as far away as they were a year ago; yet the current plight remains a juggernaut to a stable future.

What all this means is things are going to get worse, possibly much worse before they get significantly and sustainabiy better. In the context of last week’s article on The Normalcy of Deviance, this climax may probably come about not through a slow demise of prosperity but rather a global stupendous collapse. Could it be the Mayan’s got it right, long ago, for reasons they could not understand?

Tags: normalcy of deviance, Barack Obama, GDP, MADP, risk, debt, capitalism, entrepreneur, Entrepreneurial Pioneer Area

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If you don’t fundamentally change structure and culture, you are doomed to repeat history.
— Diane Vaughn, Columbia University; Author: The Challenger Launch Decision

We begin this year and this week with a quotation from Diane Vaughn that we used in our introduction to our September 7, 2011 article on Climax Entrepreneurs & Entrepreneurial Pioneer Areas. Diane’s work was again brought to my attention by an article by Gillian Tett in the Financial Times that appeared late last year and widely reported in many sources about the potential for another Flash crash threatens to return with a vengeance. This refers to an episode that happened on May 6, 2010 when US equity markets froze because of unexpected high volumes.

In the flash crash article “Normalcy of Deviance” appears, referencing the Challenger spacecraft disaster and how NASA scientists and engineers truly believed that such an occurrence was impossible because they assumed they were essentially too good to allow the impossible to happen.

I spent some time looking for more information on the normalcy of deviance and found outside the Challenger incident and the flash crash reporting, “normalcy” and “deviance” were seldom if ever linked. I assume that means that “normal” is sort of by definition never “deviant.” Or perhaps more to the point, we just don’t have the guts to look for such a stupendous reality.

As we begin 2012, it occurs to me that our new normal is totally deviant from historical standards, at least for a half a century and perhaps a whole lot longer. For example never before in history, will the Mayan end of the world prophesy come into play at the winter solstice on December 21, 2012.

In that perspective, a potential equity flash crash is the least of our worries. Furthermore it doesn’t take long to come up with a whole list of potential economic catastrophes that could basically destroy the world we have all too long taken for granted. When you get right down to the basics, in the context of human history, for virtually all of our lifetimes, we have had it pretty squishy.

Tags: normalcy of deviance, economics, capitalism, Eurozone, USA, Entrepreneurial Pioneer Area, Grizzly USA