Tuesday, June 20, 2017

When History Is Rewritten The Truth Is Lost

Somewhere between fake news and the passing of time, we have arrived at a place where being politically correct trumps honesty. This is also a place where we are slowly rewriting history. The fascinating chart below shows how beliefs morph or shift over time. It seems that when speaking of who defeated Hitler the answer depends not on whom you ask but rather on when you ask. This change of view reflects how over the years and decades a subtle campaign to convince people America was largely responsible for defeating Hitler in World War II  has been effective in overshadowing the role Russia played.

Views and Opinions Morph Over Time as History Is Bent And Rewritten
The vivid example above shows that following the war a storing majority of the people of France credited Russia for defeating Hitler and the German war machine. Russia was indeed a key factor even though the Soviets didn’t play much of a role in France’s liberation, relative to the US and Britain. By 1995 and 2004, however, the French had changed their minds and were crediting the US as the biggest contributor to victory in Europe according to survey data from the French Institute of Public Opinion. The reason for this is probably due to Russia having a diminished role in the world compared to the influence America wields.

The Truth Can Be Both Ugly And Harsh
The removal of Civil War statues across the nation is in a way a reflection and symbol of the movement to rewrite history. A favorite example of mine concerns the economy and whether the policies of President Franklin Roosevelt brought the Great Depression to an end or if the onset of war was really the catalyst for growth. Another issue is how history views individuals such as Edward Snowden and whether they are labeled as a hero or goat. How we look back and catalog the past is a most curious thing. Often it is a case of the truth be damned, let us not look too closely to facts but redefine the images to fit our liking. Thanksgiving in America gives the impression the Indians welcomed the white man to his land.

How we remember the past is not carved in stone. Betamax was a technology that was superior to the VHS that resulted in its demise, VHS has since been sent to its grave by DVDs. The reason I bring up the often forgotten Betamax technology is that most people now assume VHS was the best viewing system and that is what won the consumer over and as time goes by this idea will solidify. This is another example where history as  George Orwell reminds us, is written by those who claim victory and truth is often cast aside in an effort to give the impression of righteousness. This is a popular skeptical viewpoint about history that has been expressed several different ways:
       What is history but a fable agreed upon?
 History is a set of lies agreed upon.
     History is a set of lies that people have agreed upon.
These cynical adages have been linked to several major figures but more important is we try to remember the message they convey. The gap between reality and perception can at times be very large. The fact people see and hear what they want to only adds to this problem, and it is a problem that seems to be occurring with greater frequency. That is the logic behind the saying, "be careful or reality will bite you in the ass." When we ignore reality we create a situation where we can be blindsided and caught totally off guard.

This leads us to the question of motives and whether someone lurks behind the curtain pulling our strings. To paraphrase the comment of a reader on another blog; There are, of course, good conspiracy analysts and bad conspiracy analysts, just as there are good and bad historians or practitioners of any discipline. The bad conspiracy analyst tends to make two kinds of mistakes, which indeed leave him open to the Establishment charge of "paranoia." Secondly, the bad conspiracy analyst seems to have a compulsion to wrap up all the conspiracies, all the bad guy power blocs, into one giant conspiracy.

While attitudes and views change over time the idea "truth is fungible" can be disturbing and bends the definition of truth beyond recognition but in a world of fake news truth often is placed behind perception. It would be wise to question everything assuming there are several power blocs trying to gain control and influence both government and society. The efforts of those struggling for our hearts and minds may sometimes be in conflict with other such groups and sometimes working in alliance. Whether the intent is sinister or not when history is rewritten something important is lost and that is the truth. When future generations reflect upon the economics and politics of today it will be interesting to see their take on events.

Sunday, June 18, 2017

No Tents Put Up For Fathers Day, Says It All!

Crystal, crystal, crystal-ball who's the fairest of them all? No tent for Fathers Day says it all! While children old and young will go about throwing out accolades and praising their fathers the day pales when placed up against its rival which is mothers day. Sure fathers everywhere will get calls from children who they may seldom see, some will call out of love, some out of respect, some out of guilt, and a slew of other reasons and others will not call at all. Others will gather with family and enjoy the day but in general the day will not get anywhere near the attention dished out upon mothers.

Mothers Day Even Includes Special Breakfast Outings 
Mothers Day is an occasion that by far garners much more attention than the tribute to fathers. More money is spent on gifts and flowers for mothers. Extra attention tends to be showered on those who generally were more responsible for raising us during our early years. The fact is in many ways this is the way it should be and the way many men prefer. In truth, a child is fortunate to have either parent or someone to care for them and very very lucky if they have both.

The role of being a parent is not an easy one and often is cast upon people without much notice or at a time they do not choose. Society does little to prepare the children that are having children for the task before them and it is a shame. Without a doubt as both fathers and mothers mature and look back most harbor regrets because they had not made a greater effort in raising and preparing their young during the important formative years. This extends to issues such as being far too strict or just as bad being far too lenient, in some cases, it simply comes down to not spending more time with a child.

Tent or no tent relationships between parents and children can be difficult, however, if you have anything positive to say today is the chance to do so and know if not taken that life being unpredictable we never know when that opportunity might be lost. As a footnote, like many kids when young my siblings and I wondered why there was no special day designated as "Kids Day." As an adult I now understand what I was told when I was busy failing to appreciate my good fortune of few responsibilities, every day is kids day.

Tuesday, June 13, 2017

Polarized America Taking Course Of Least Resistance

brucewilds.blogspot.hk / By: Bruce Wilds

Washington DC Is Where Deadlines Go To Die
A recent article pointing out little is getting done in Washington already needs an update. It honed in on the fact that while the doors are open it seems Washington remains "closed for business" and nobody has seemed to notice or care. It is surprising the lack of moving forward on a positive agenda to address some of the nation's ills has not had a negative impact on markets. Our stock markets have continually made new highs as the economy struggles with multiple issues and faces an uncertain future. Even escalating tensions throughout the world and the threat of war has proven not to matter to markets as much as the flow of newly printed money and the expansion of credit from central banks across the globe.

The gridlock evident in government has done little to slow the advances of stocks on Wall Street because in the eyes of those buying stocks the promise of solutions is proving as good as the real thing. Investors seem oblivious to the reality no intelligent plans has been written or are moving through the halls of Congress. The fact is little progress has been made on healthcare reform and we cannot cut taxes while increasing spending at the same time without exploding an already massive national deficit. Just as remote as a "fix all for healthcare" is the likelihood of a tax plan being signed into law anytime soon that will simplify or solve our budget woes. The odds of getting a complicated tax reform bill through a polarized and divided Congress are nil. 

Expect Congressional Hearings To Produce Diddly-squat
Ironically the one thing both Democrats and Republicans can agree upon is the importance of avoiding the real work of addressing the problems plaguing America. It is difficult to argue with the fact America's capital is locked in a dysfunctional mindset. Anyone who thinks the nightmare known as Obamacare is well on its way to being repealed or replaced by a "better plan" is delusional. Other than a celebration and photo-op when legislation passed the House little of substance is in the works. Sadly, the House bill was declared dead on arrival when handed off to the Senate and it is probably just as well because it did little to halt or resolve the misery caused by the soaring cost of healthcare.

It could be argued a polarized America has joined a polarized world in taking the course of least resistance and that is to do nothing. It appears most of the developed countries across the world are in exactly the same boat. Recently completed and upcoming elections hold little promise that things will be sorted out soon. For all the babbling commentaries of what the elections in France and Britain mean going forward, they simply reflect the fact that much of the world remains polarized. Populations seem split between the struggle to change course or move forward on autopilot. This situation is not new, this is not the first time in history we have faced polarization, however, with events occurring at an increasingly faster rate things seem a bit more pressing and even dire.

Trump Has Rolled-back The Obama Agenda
Thank goodness for the distractions that allow us to take our eyes and minds off the business of making the necessary structural reforms to move forward. The recent testimony of FBI Director James Comey following his being fired by President Trump can be considered one of those distractions. While few Americans were love struck over Comey this has stirred up a hornet's nest and energized Trump's critics. Throw in a bit of outrage over Russia logically wanting to sway our election and you have a real brouhaha. Only so many hours exist in a day and when they are spent or wasted in speculation the bottom-line is if nothing is getting done, Washington might just as well be closed for business. This means events will unfold with little real guidance.

It is difficult to believe the productivity of Washington could drop any lower than it has, however, as our elected officials busy themselves with calling for further investigations and making promises of getting to the bottom of  "this" America moves forward on autopilot. The flavor of the day is same as it was yesterday and the year before, nothing has changed. The politicians and Washington elite continue dithering away their time as well as the money of the American taxpayer and even that of future generations. With matters under control and having completed his strenuous first 100 days in office President Trump continues with his agenda which should result in more of the same. So far President Trump's big accomplishment has been to rollback many of the decisions made by the previous administration and too many voters this is hardly a reason for celebration.

With the days of "Hope and Change" firmly behind us and we are firmly on the path towards making America great again, unfortunately, the message has fallen on deaf ears when it comes to our elected officials in Washington. Tonight I will raise my glass and toast the cynical and skeptical Americans scattered across this great land for again they are well on their way to being right about how nothing really gets done until the last minute and secure in knowing that any time or thing that offers Washington the option of delay will be exercised. A final though as I get ready to post this article, I think many Americans are beginning to realize this may be as good as it gets.

Wednesday, June 7, 2017

America Is Still Trapped In The Box Bernanke Built

 brucewilds.blogspot.hk / By: Bruce Wilds

The Economy Is Hooked On Cheap Money
As Fed Chairman, Ben Bernanke painted both himself and the Federal Reserve in a corner with a policy of loose and cheap money. Today Yellen and the Federal Reserve with an inflation target of 2% continue to please those gambling that not fighting the Fed guarantees profits. As many Americans are forced to pay higher prices I wish someone would let the Fed Chairman know we are already there. Any thought that inflation is not higher has to be from the false illusion created by lower payments due to low interest rates, this is a one off and will not continue. Today America and the world are boxed in by a policy that is increasingly hard to escape.

Loose Monetary Policies Lead To Poor Decisions
America continues to import around five hundred billion dollars worth of goods from other countries every year than it exports and those who export to us are dependent on America continuing to buy these goods. We have a giant trade deficit, add to that our massive government deficit and it is easy to see that we are living far beyond our means. This means that Janet Yellen and the Fed at some point will have to begin pondering an exit strategy and how they can remove the massive stimulus that the economy has come to expect. Sadly, little has been done to address our structural problems and make America more competitive, growth will be thwarted unless these and other issues are dealt with.

Both Bernanke and Yellen failed to make any serious efforts in pushing the government to take the necessary reforms needed to move the economy forward. What started as a program to support and prop up the economy has morphed into the main driver of economic data. Between the low-interest rates that continue to force investors into high-risk assets in search of a positive return on their money, and money being pumped into the system, the markets have become distorted and disconnected from the economy. The idea that the money will continue to be forced into the sky high equity market is flawed. What was seen as a short term and temporary measure to prop up and boost the economy has become the new normal.

National Debt Exploded Under Obama
The Fed remains trapped in a corner, with higher interest, mortgage rates will rise. The low-interest rates that have discouraged savings and encouraged people to take high risks have also caused people to take on more debt for things such as automobiles. In the end, this does not lead to a healthy economy, but rather a story that will end in tears and regrets. When interest rates rise, as they will have to do at some point, the economy will slow, the value of these risky investments will decline, and these investors will be hurt. Also as a double whammy, interest payments on the public debt will rise, increasing the budget deficit, which exploded during the Obama years. 

If all the money dumped into the economy would suddenly change direction and rush into hard assets, the shift would be devastating to our struggling economy because inflation would soar. This thought also raises other questions, what can we define as a hard asset, what is really available, and in what quantities? This may be where inflation raises its ugly head. An unknown and surprising fact about inflation is how fast it can take root. With such a shift, interest rates would move higher and investors would flee government bonds. The crash of the bond market and what many have called a Bond Bubble will become a reality. Coming up with a plausible exit strategy and making it work are two different things.

Almost a decade ago when Ben Bernanke started us down the path of quantitative easing and artificially low-interest rates a great deal was made of his having studied the great depression era. His claims he had the answers as to how we could avoid a large amount of financial pain and dodge creating a situation such as has played out in Japan and been described as the "lost decades" garnered much support. Central banks across the world have made deflation the bogeyman that allows them to rationally embraced the easy money policy and continued it even though it has not resulted in the economic growth that was promised. It should be noted that cross-border money flows and other such investment vehicles have made this all a bit dicey and forced us to ask if speculative bubbles are being created, keep in mind if you have to ask if it is a bubble it probably is.

Footnote; Allan H. Meltzer, a distinguished monetary economist and historian and a longtime professor of economics at Carnegie-Mellon Institute, died in early May at the age of 89. Meltzer was born in 1928 is viewed by many economists as America’s foremost expert in monetary policy. In recent years his mood has been troubled, he has been quoted as saying “We’re in the biggest mess we’ve been in since the 1930s,” and “We’ve never had a more problematic future.” Below is an article in tribute to Meltzer that presents some of the reasoning behind his concern over current economic policy.