November 5, 2006 –
First, a new note. Every Monday, I’ll try to provide a new “What’s on Tap?” note at the end of the Monday blog entry that will inform you what topics I plan to cover the rest of the week, just as a FYI feature. You’ll find a “What’s on Tap?” at the end of this entry. OK. Now on today’s blog.
With mid-term elections this Tuesday in the U.S., the Republican party has expressed enormous frustration with how voters seem to be ignoring the “wonderful” economy in the U.S. and focusing on the administration’s failures in the War in Iraq. In fact, U.S. Vice President Dick Cheney complained that the media is not giving the current U.S. administration enough credit for a booming U.S. economy. “If in fact, the Democrats were to take control of the Congress, Charlie Rangel takes over tax policy, I think, in fact, you would see a major tax increase,” Cheney said.
Cheney’s comments are ironic because they are truthful in many ways but not from a surface interpretation. They are truthful only if you dig below the surface. As I have repeated many times, when I have dug below the surface I haven’t seen anything – not a single shred of evidence – that indicates that this current boom in the U.S. stock market is in fact, sustainable. However, even if the media isn’t giving the current administration credit for the recent stock market boom, they certainly have more than adequately covered a boom that isn’t (just refer to this blog entry to understand why it isn’t). All I’ve seen for the past couple weeks are headlines that scream “Dow hits new high!”, “Dow hits record high”, “Asian indexes hit record highs”, “Australian index hits record high!” and so on.
Remember my comment from a couple weeks ago that firm analysts and economists are paid to keep their mouths shut and tow the party line? Don’t think that this phenomenon doesn’t pervade the media as well. After all, look at who controls the mass media? It’s big corporations. Newspapers get paid to tow the party line and keep their mouths shut about reality as well.
Ten weeks ago, however, I stated here that the U.S. government would manufacture a boost in the U.S. stock markets before the mid-term elections in hopes that the voting public would focus on this and re-elect the politicians currently in power. I stated this would provide a boost to markets worldwide as confidence in the U.S. economy seems to bleed into the world economies. This has happened. So in this aspect, Cheney is right. The U.S. administration is not given enough credit for a booming U.S. economy. They manufactured it, so they should be given credit for manufacturing it.
However, since it has been artificially manufactured, it is unsustainable. When the façade crumbles, the U.S. will drag down the world markets with it as well. In fact this current administration has been so fiscally irresponsible that they should have been raising taxes instead of cutting them. To that extent, Cheney is correct again. If the Democrats seize control of Congress, they may very well enact tax increases. But that will not be the fault of the new power structure. The impetus for new taxes will be the incredible fiscal mess created by this current administration as well as administrations before them. And that’s what again many people will fail to see.
It’s analogous to technical fouls in the NBA. Often the instigator’s actions go unnoticed by the referee. When the mark retaliates, it is often the retaliatory act that the refs notice. Therefore, the refs often hit the reactionary party with a technical foul while the instigator escapes scott free. Or if you are a fan of the player that instigated the whole incident, often you rationalize that the “your” player did nothing wrong while the other player deserved to be punished. You see what you want to see instead of what is reality.
What’s on tap?: Gold bottomed yet? Peak oil, Japanese REITs
In martial arts, just as the media and governments feint with deceptive initial jabs, so do we. Often we set up a kick by feinting a punch or set up a punch by feinting a kick. Sometimes all it takes is a simple look. We look to the upper body but parry to the lower body or vice versa. The whole point of this practice is to get your attacker off balance. The initial feint will cause the attacker to assume a defensive posture and most likely a slight retreat.
Have you ever tried to throw someone down that is firmly rooted to the earth? It’s very difficult right? But try doing the same when they are off-balance or stumbling around and you can literally do so with a push of two fingers. Currently, people need to be very careful of the deception flowing through the media and governments regarding the strength of certain local economies. Due to this deception, certain economies teeter off-balance, and all it will take is a slight knock to start a precipitous tumble.
Maholo,
Kaeho
