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The greatest mistake made by the United States in the last generation was the false belief that material prosperity was a renewable resource. If you just attempted to keep interest rates low and the money supply increasing at just a few basis points less than inflation — economic growth would continue forever.

How wrong that turned out to be. In the process we changed the American culture from one where it was the greatest producer of new wealth in the history of mankind, unto a nation of debt consumers. This was based upon the presupposition that instead of being a country of entrepreneurs and small business people, we could shift the country to where the American Dream would consist of a job where you could make payments on a house and you could borrow for your consumption against an ever increasing home value appreciation.

Needless to say, a balance sheet readjustment was and is the overriding cause of this mess that goes back to when Barak Obama was a kid and George W. Bush was a partying Ivy League frat brat. This systemic problem, so twentieth century in scope, is still the basis of the midterm election just a week away. If you believe that those results will truly bring some change you can believe in, this reality check will shortly resume again, after a bit of gloom or euphoria, depending upon your politics.

What is totally missing from our discussion is the inalienable right of human creativity. You can’t buy creativity; you really can’t manage it either, especially in the traditional sense. The main reason is that creativity is the fruit of failure. If you are afraid to lose, it is a natural law reality that you can never really win, but you still can’t quit the game.

In 2001 Barack Obama spoke about the U S Constitution being a charter of negative liberties that equates to restrictions on governments at all levels, to be restrained from essentially messing with the folks. From the context of that interview and subsequent events, it seems a self-evident truth that the president believes that the founders of the American Republic got it wrong. That foundational American error also seems to find substance in the dream that Barak received from his vision quest trek to find identity in his father’s drunken stupor. Read More...

Tags: USA, Barack Obama, creativity, money, American Monetary Institute, Moola, Adam Smith, U S Constitution, Keynes, Deep Woods Moola, PREFER Ltd, statistics

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“Show me the money!” Rod Tidwell said to Jerry again and again, in the 1996 movie Jerry Maguire. Since Jerry was about a professional football player’s agent, it fits well within our Cult Football series.

After I posted last week’s “Bobos in Babylon,” I took a few minutes to check the news both on the Internet and on the news channels. Amidst all the babel, I was amazed of something that suddenly seemed so obvious, which I had never noticed before; virtually all the strategic commotion dealt in some way with money.

Essentially everyone wanted more of it (the money) for them and their issues, and less of it (the filthy lucre) for those people and their issues. In the abstract there was talk about how Ben Bernanke of the FED was about to create QE2 (Quantitative Easing #2 — by basically creating money ex nihilo) to in someway boost the American Economy.

As I neared the end of this monetary quest I ran across and article from the Time’s Curious Capitalist blog carrying the title, “Will the Federal Reserve Cause a Civil War?” The interesting thing about the article is that in order to have a shooting war, somebody needs to have some bullets, even if you define the ammunition in limited economic terms. It seems that the FED is out of ammo, the Democrats have exhausted their munitions, and the Republicans are either going to be shooting blanks, or may blow a hole in the boat. None of which point to favorable conditions for peace talks.

This past week, financial ministers of the G20 met to show “we will work together so there is nothing we can’t achieve.” This ancient babel, of course, contingent with the fact that our national interests are far superior to your national interests, especially as it relates to money.

The TEA Party and the Republicans are essentially hoping to control the debt and the growth of government through cutting the monetary purse strings. Democrats and progressives are all about continuing the changes, to create government jobs because the private sector; sees no reason to do anything in this environment. The exception being large crony corporations with access to acquisition capital that are looking for deals, so they can say they are growing, when in reality they are attempting to continue an allusion of wealth creation when there is none to be had. Read More...

Tags: Jerry Maguire, cult football, American Monetary Institute, Deep Woods Moola, God, money, Ben Bernanke, FED