Yesterday was the ECB’s big day in the sun. As our ECB experts Mr De Groot and Van Geffen note, Draghi both revised down growth and inflation expectations a tad, allowed for yet more TLTROs, flagged that rate hike that was expected last December now isn’t happening, re-opened the door to a possible rate cut, hinted at more QE to come, and even appeared to accept that there is an argument that at this stage Europe needs fiscal policy not monetary policy in order to escape. (For more granular analysis, please see here.)
For such a conservative institution that kind of volte-face, or just six months after proudly saying the opposite I would argue a volte-farce, should have been major news to the markets. However, while Draghi might have thought he had wheeled out “Whatever it takes” again to show off in public, judging by both Bund yields and the inflation gauge of the EUR 5-Y-5Y forward swap, the market reaction was “Whatever”. True, EUR jumped vs. USD, but given USD is having a great year vs. most EM FX, that just makes Europe even more expensive as exporters and holiday destinations.
After all, it isn’t as if we haven’t seen other central banks–just look at the BOJ!–talk big and then endlessly fail to deliver on inflation promises alongside far more impressive monetary and fiscal policy combinations than the thin-gruel-at-some-point-down-the-road being offered by the ECB in a Europe where Germany appears determined not to have any public debt at all. (In conjunction with no functioning infrastructure or NATO and an impending existential clash with Italy: how do you say “So much winning!” in German?)
By contrast, the press is discussing the Fed discussing a rate cut as soon as this month. Again, that would be a volte-farce, but at least it’s rapid. However, as our Fed watcher Philip Marey–who was correctly calling Fed cuts back in December, thank you very much!–argues, even an insurance cut will prove to be insufficient, especially if the threat of trade wars escalates. And it is escalating, with US Vice President Pence saying tariffs on Mexico start at 5% on Monday, while Huawei is apparently working 10,000 engineers three shifts a day to work out how to strip all US components out of their phones. (Does it really take that many engineers to drop the phone in the toilet?) Indeed, the threat of a recession will most likely force the Fed to start a full-blown cutting cycle in 2020, says Philip, as Rabo’s recession probability model, based on the yield curve, now indicates an 83% probability of that happening by October 2020. (See here for more.)
At which point, of course, the ECB will be waaay behind the curve; and let’s pray that the German response to a US recession isn’t more fiscal tightening to ensure that its precious deficit doesn’t get out of control. That would be the final mad feather in the European cap after yesterday’s warning in the Daily about what happened when Chancellor Brüning tried the same pro-cyclical policy back in the 1930s. (On which note, some observant readers might have noticed that my partial list of historical US political scandals yesterday inadvertently attributed some of the Bush I administration’s to Bush II and Bush I to Reagan: apologies for the editorial slip, but I think the pattern of “things weren’t any different pre-November 2016 except in terms of free trade” still holds.)
via ZeroHedge News http://bit.ly/2K1SiVz Tyler Durden
One month after an unexpectedly poor March consumer credit print, when just $10.3 billion (since revised to $11 billion) in revolving and non-revolving debt was created to fund another month of US purchases on credit, moments ago the Fed reported that in April, things went back to normal, as total consumer credit jumped by $17.5 billion, more than the $13 billion expected and the most since November’s $21.7 billion…
… thanks to a surge in credit card debt as the latest revolving credit print was a whopping $7 billion injection, up from a draw of $2 billion in March, and not only more than all the credit card debt issued in the first three months of the year but the highest since last November.
Meanwhile, as credit card debt soared, nonrevolving credit – auto and student loans – posted a surprisingly soft print, with only $10.5 billion in new debt created. This was $2.5 billion below last month’s print, and the lowest since June 2018.
And while April’s sharp rebound in credit card use may ease concerns about the financial stability and propensity of the US consumer to spend, one place where there were no surprises, was in the total amount of student and auto loans: here as expected, both numbers hit fresh all time highs with a record $1.6 trillion in student loans outstanding, a whopping increase of $30 billion in the quarter, while auto debt also hit a new all time high of $1.16 trillion, an increase of $8.3 billion in the quarter.
In short, whether they want to or not, Americans continue to drown even deeper in debt, and enjoying every minute of it.
via ZeroHedge News http://bit.ly/2ZiVyzD Tyler Durden
Considering how much attention has been paid to Washington’s lobbying efforts to keep Huawei’s technology out of the 5G networks of America’s European allies, the Chinese telecoms giant’s increasingly successful efforts to colonize the ocean floor – still one of the most vital conduits for digital information – has gone almost unheeded.
But that’s about to change. Nikkei Asian Review published a story on Friday detailing Huawei’s progress in building out its fiber-optic infrastructure, even as the major players mostly based in the US and Japan have yet to take notice of the Chinese upstart, slowly wresting away the west’s dominance of such a critical market.
There are nearly 400 known submarine cables snaking across the world’s seabeds. Whenever emails or digital files are sent from one continent to another, the signals pass through these wires. Countries also operate an untold number of secret underwater cables for military purposes.
The leader in the global undersea cable market is SubCom of the U.S. Japan’s NEC and Europe’s Alcatel Submarine Networks rank second and third. Taken together, these three companies have laid over 90% of the world’s total known cable length.
But Huawei, which has been blacklisted by the Trump administration and has become the poster child for the U.S.-China trade war, is chipping away at the West’s control of the market.
Huawei entered the business about a decade ago by setting up a joint venture with the British company Global Marine Systems. And since then, it has been chipping away at the West’s control of the market.
About a decade ago, Huawei entered the business by setting up a joint venture with British company Global Marine Systems. It expanded its presence by laying short links in regions like Southeast Asia and the Russian Far East. But last September, Huawei surprised industry executives in Japan, the U.S. and Europe by completing a 6,000 km trans-Atlantic cable linking Brazil with Cameroon.
By 2020, Huawei will have completed 20 new cables, mostly short-term in length. But over the long term, it could emerge as something to be reckoned with.
During the 2015-2020 period, Huawei is expected to complete 20 new cables – mostly short ones of less than 1,000 km. Even when these are finished, Huawei’s market share will be less than 10%. Over the long term, however, the company could emerge as a player to be reckoned with.
The company is involved in 30 more undersea cable projects, and also has a hand in about 60 others. And even if the US succeeds in thwarting Huawei’s plans to become a leader in 5G, little can be done to stop Huawei from becoming a leader in the handling of global web traffic.
In just a decade, Huawei has managed to challenge western players in terms of distance. And as Beijing pushes BRI-related initiatives, Huawei could see its advantage widen.
First, in only a decade, Huawei has been able to challenge Western players on distance. In addition to the Brazil-Cameroon cable, the Chinese giant is building links between Pakistan and Kenya and between Djibouti and France.
Second, Huawei already has highly competitive technologies for land-based telecommunications infrastructure. It can capitalize on this know-how to supply submarine repeaters, or devices that restore the waning strength of light signals en route, and transmission equipment at landing stations.
Whatever happens, it will be difficult for the West to stop to curb Huawei’s ambitions, seeing as the demand for new underwater cables is soaring more quickly than could possibly be met by the established players.
It is virtually impossible to completely exclude Chinese companies from international infrastructure development, and it would be unwise to try to do so. With data traffic soaring, there is huge demand for new underwater cables in the Asia-Pacific region, and it would be difficult for the big industry powers to meet this demand alone.
So forget 5G: The next battle for telecommunications supremacy won’t be fought in the air. It’ll be fought on the ocean floor.
via ZeroHedge News http://bit.ly/2QV5wEn Tyler Durden
Google and YouTube’s war on free speech has just escalated again. And it won’t stop, folks. The latest incident involving hard-left Vox writer Carlos Maza whining to YouTube about Steven Crowder making fun of him is not only chilling but pathetic.
Carlos Maza is an activist who makes a living in the public forum. He is openly gay. Uses the twitter handle @gaywonk and regularly spews nothing but thinly-veiled violent rhetoric at anyone slightly to the right of Berthold Brecht.
Crowder’s crime is describing Maza in terms that Maza uses himself but does so derisively. And for that Maza believes Crowder shouldn’t have a platform on which to make a living.
This is now considered harrassment by emotionally-stunted man-babies.
And I’m not talking about Maza, here.
I’m talking about YouTube.
Because after YouTube refused to punish Crowder on behalf of Maza, YouTube then changed its Terms of Service to allow them to… guess what? Punish Crowder.
And it was done in the most under-handed and sniveling way possible. No phone calls. No official letters or emails. Just a text to Crowder’s Merchandise phone number and a public tweet to Crowder’s Half-Asian Lawyer informing him of what was coming.
And not only Crowder.
This latest bit of manufactured outrage was used as an excuse to go on an algorithmic orgy of demonetizations and deletions of independent voices on YouTube of all shapes and sizes.
None of this is about what Crowder said. This is about Maza being the useful idiot for NBC, David Brock — Maza’s former employer at Media Matters — and George Soros who are in league with all the big tech companies to silence the opposition to ensure a Democratic victory in next year’s elections.
I remind you that Soros and Brock have spent millions in pursuit of taking down voices in the U.S. critical of their plans to control not only what we watch but what we think. They want back the control over information that the oligarchy had in the era of the Big Three TV networks and print newspapers.
The Wire is the main conduit through which we communicate with each other. Money? Really? Yes, really. What are prices if not information about what we are willing to part with our money in exchange for?
… But identifying The Wire isn’t the important thing. What’s important is knowing who controls The Wire and what they are willing to do to maintain that control.
If you look at all of the things listed above {The Internet, Media, Money, Roads, Electricity} you will see massive government intervention into these markets. They need control of them to maintain the illusion they have control over you.
This is far beyond the stopping the re-election of Trump at this point. This is a systemic and on-going digital “Night of the Long Knives” intended to stifle and rein in speech to limits acceptable to them. The goal is rolling a greater percentage of Google’s vast ad revenue back into the coffers of the dying Main Stream Media outlets.
Google, YouTube and the rest of the Media are making their case very clearly. They are in control of information. You are the product and they sell you to the highest bidder.
Vox is owned by NBC. All of the major media companies are feeling the loss of market share to people who provide real commentary on world events and counter the lies and narratives created by these Informational Oligarchs.
These are the most evil people you will ever have the displeasure of interacting with. And they won’t stop trying to marginalize all of us until those who disagree with them are pariah, outcast and un-personed.
Google’s delusions of grandeur at this point also reveal its greatest weakness. Without ad revenue they are a shell. They don’t want to share it with you. So don’t whine like @gaywonk. Change your habits and go on the offensive.
It’s one thing to shore up one’s business like Crowder has with his Mug Club. That’s smart.
It’s quite another for him, Alex Jones, Gab and all the others who have been harmed to band together and form a class-action lawsuit against these companies for breach of contract on the grounds of ‘reasonable expectation of service.’
Pushing for government regulation is exactly what Brock and Soros want. It will then ensure that Google, Facebook and the rest are even more bound down under the rubric of government controls.
It furthers Marxian conceit that the free market can’t solve these problems. That this is what happens when capitalism is allowed to go unchecked. Google and Facebook go hog wild and are then able to use their ‘monopolies’ to abuse their customers.
And what better way to control The Wire again than to have all the social media and Internet on-ramp companies subject to even more government regulation.
But that cannot be further from the truth. These people wrote Terms of Service which are fundamentally unenforceable and provide no ‘reasonable expectation of service.’ And their policy of wiping out some user’s busines over night by the click of a mouse on an ad hoc basis has to raise that to a level of material harm high enough to start the legal challenge.
You start a business on YouTube with a reasonable expectation of being able to attract an audience. No audience no business. Then once you attract said audience under one set of conditions, YouTube changing the rules to define your content as unacceptable and unilaterally taking away your revenue is fraud.
Moreover, they are protected by exemptions from said prosecution because they are supposedly acting without editorial bias, which is patently untrue and provable with just a cursory glance at the content they still host.
That said, it’s clear they are coming for our livelihoods here in their quest to maintain control. And so it is well past time to look at other ways for producers to connect with their audience. Donations and crowd-funding are fine but there has to be a better model, a sustainable one.
One where they can’t take your revenue by leaning on a single point of failure.
Brave is a browser designed to support an ad network that doesn’t require Google or anyone else. Just users willing to opt-in. Keep your demonetized YouTube channel, get a website hosted by a trusted service.
Get signed up with Brave, link your account (it takes 30 minutes) and let their ad network pay your fans in BAT for viewing only the ads they wish to. They can then only spend those BAT tipping you and other producers directly.
Now the audience has an incentive to defray their costs of support by earning BAT paid for by advertisers and the producers get paid in an Ethereum-based token so they can pay their bills and make their livings.
And the best part is Brave was built to block the trackers, cookies, super-cookies and the rest. Google gets nothing from you for it. Facebook can get stuffed.
They stop vacuuming up your data for free.
You get your time and a modicum of your privacy back. You stop paying for bandwidth they use to track and categorize you on and off their platforms.
You’re their product, stop acting like you’re their slave.
It means both producers and consumers need to alter their habits and stick a finger in Google’s eye. If they want YouTube ad revenue to go only to the big boys, fine. We’ll keep using it as a bandwidth mule for our businesses until they kick us off and Brave integrates more services into its offering pool.
The only way to beat these people is to stop playing their game and see them for what they are: tools for our betterment, not theirs.
FedEx has elected not to renew one of its contracts with Amazon for their Express overnight and two-day service.
“FedEx has made the strategic decision to not renew the FedEx Express US domestic contract with Amazon.com, Inc. as we focus on serving the broader e-commerce market,” the company said in a Friday statement.
Of note, the decision “does not impact any existing contracts between Amazon.com and other FedEx business units or relating to international services,” according to the release.
— Carl Quintanilla (@carlquintanilla) June 7, 2019
Amazon constituted less than 1.3% of FedEx’s revenue for the 12-month period ended December 31, 2018.
In February, shares of UPS and FedEx took a hit after Amazon announced the launch of a “Shipping with Amazon” service that will entail picking up packages from businesses and shipping them to consumers, according to the Wall Street Journal, which cited unnamed sources familiar with the matter (ie AMZN’s comms department).
In the last two years, Amazon has expanded into ocean freight while building a network of its own drivers who can now deliver inside homes and leased up to 40 aircraft while establishing an air cargo hub. Meanwhile, the company has been delivering orders from its own warehouses in 37 US cities.
Amazon also announced this week that they will begin delivering packages to customers using drones within months, according to the Financial Times.
Unveiled at a presentation during the robotics and space conference in Las Vegas (Re:Mars), Amazon’s electric delivery drone has a range of 15 miles and can deliver packagesweighing up to five pounds to customers in under 30 minutes – which accounts for 75-90% of Amazon’s consumer deliveries, according to Jeff Wilke, head of Amazon’s consumer business.
via ZeroHedge News http://bit.ly/2WurKD2 Tyler Durden
MCAM International of Charlottesville has devised a new exchange-traded fund that allows investors to protect their monies from an escalating trade war,reported Financial Times.
MCAM launched the new exchange-traded fund on Wednesday under the symbol “TWAR.” The new product tracks an index of 120 large and mid-cap companies that are expected to outpreform during a full-blown trade war due to their government contracts.
“There is reason to think that [these companies] will benefit from . . . government protection of some sort,” said David Martin, founder and chief executive of MCAM. “It would be a gross misrepresentation to say they will be insulated, but the expectation is that they will suffer less.”
TWAR also tracks companies that have strong intellectual property portfolios like contracts and licenses.
Martin says companies that have government support are the best defensive plays amid deepening trade tensions.
Top holdings of the fund include General Electric, Cisco, IBM, Edwards Lifesciences, Xerox, AMD, Micron, Dover, Mastercard, and Amazon.
The Times notes that there are 7,774 ETFs and other exchange-traded products in the world. So it might be difficult for TWAR to gain a footing in the exchange-traded products space.
Martin said, in the event of a full-blown trade war, TWAR’s performance should do well.
Not everyone is convinced. One ETF industry expert told the times that he is “a little skeptical given everything that is going on,” adding, “I don’t know how a company that has patents or business with the government will necessarily benefit. It is very difficult to know what president Trump will actually do in the end.”
“It’s extremely difficult to break through the clutter in the ETF space and I do not think this is the way to do it,” said Dave Nadig, managing director at ETF.com.
Rejoice, it’s Friday. Here is our weekly roll-up of bizarre and disturbing stories from around the world.
1. Local government seized countless children based on falsified drug test results
For years, the county of Ozark, Alabama hired a private laboratory to analyze paternity and drug tests.
These were pretty critical tests… because the county would rely on those test results to determine whether or not to take someone’s children away from them.
It turns out that lab’s owner, Brandy Murrah, was FALSIFYING those results.
Instead of running a legitimate operation, Murrah pocketed the money, and faked the test results.
Then she forged a doctor’s signature to certify the results.
The only reason Murrah was ever caught is because an innocent woman who failed a drug test tracked down the doctor to ask him about the results.
The doctor was bewildered and said that he never saw any such test results… and the trail of fraud led right back to Brandy Murrah.
That woman says her custody battle for her children was negatively affected because of this fraudulent drug test. And she’s likely not alone.
The Department of Human Services says they believe there may have been a “tidal wave” of cases where children were taken away from their parents based on falsified test results.
Pretty extraordinary… especially given that Murrah had a criminal history of fraud. And yet she was still put in this important role that has such an enormous impact on people’s lives.
2. Australian federal police retaliate against journalists
Last week the Australian Federal Police raided the home of a journalist for unauthorized disclosure of national security information.
In April 2018, the journalist published an article in the Daily Telegraph about Australia’s surveillance state.
She described the plans of the Australian Signals Directorate (ASD)– basically the Aussie version of the NSA– to begin spying on Australian citizens, without warrants.
The intelligence agency currently only deals with international threats. But the plan was to allow the ASD to access citizens’ communications, and grant them the power to force private organizations to turn over data on customers.
The article included photographs of top secret documents outlining the plans.
Just a few days later, the Federal Police raided ABC’s Sydney headquarters over 2017 stories alleging murder and misconduct by Australian Special Forces in Afghanistan.
No arrests have been made. But both news organizations have said openly that these government actions threaten freedom of the press. They vowed to protect their sources.
3. US federal Court tells the DEA to reassess marijuana harmfulness
Parents of children with severe diseases have had enough of the government’s health advice.
They teamed up to challenge federal government’s placement of Marijuana as a Schedule 1 drug. Schedule 1 means the Drug Enforcement Agency (DEA) considers marijuana to have “no currently accepted medical use and a high potential for abuse.”
But the parents disagree. They see the marijuana extracts help their children with severe epilepsy and neurological disorders. And they say the DEA’s scheduling of marijuana is a risk to the health of their children, and everyone else who uses medicinal marijuana products.
At first the lawsuit was dismissed. But now a federal court revived the challenge. The court ordered the DEA to act on the plaintiff’s descheduling petition “with all deliberate speed.”
This is the farthest a challenge to the DEA scheduling of a drug has ever gone.
Nancy Pelosi may have gone a step too far trying to appease her Democratic colleagues frothing at the mouth for a Trump impeachment, after the House Speaker told senior Democrats that she’d like to see Trump “in prison.”
Pelosi made the statements while clashing with House Judiciary Chairman Jerrold Nadler (D-NY) over whether to launch impeachment proceedings, according to Politico.
In response, Trump hammered Pelosi – tweeting on Thursday “Nervous Nancy Pelosi is a disgrace to herself and her family for having made such a disgusting statement, especially since I was with foreign leaders overseas,” adding “There is no evidence for such a thing to have been said. Nervous Nancy & Dems are getting Zero work done in Congress and have no intention of doing anything other than going on a fishing expedition to see if they can find anything on me – both illegal & unprecedented in U.S. history.”
…and have no intention of doing anything other than going on a fishing expedition to see if they can find anything on me – both illegal & unprecedented in U.S. history. There was no Collusion – Investigate the Investigators! Go to work on Drug Price Reductions & Infrastructure!
Pelosi’s comment comes two weeksafter she claimed without evidence that Trump was engaged in a ‘cover-up’ in regards to the administration’s efforts to prevent former White House Counsel Don McGahn from testifying before the House Judiciary Committee.
Democrats have been sharply divided over whether to launch impeachment proceedings against Trump over allegations that he obstructed the Mueller probe.
At least 55 House Democrats are on record endorsing an impeachment inquiry, according to The Hill, however Pelosi has been joined by several prominent Democrats in opposing the move because the Senate would never follow suit, which would ‘exonerate’ Trump just in time for the 2020 election.
Last week, House Intelligence Committee Chairman Adam Schiff – who swore up and down that he had evidence of Trump-Russia collusion that was “more than circumstantial” – effectively threw cold water on impeachment, telling The Hill last week “Where it ends I don’t know,” adding “I presume it ends with Donald Trump being voted out of office.”
Meanwhile, former Senate Majority Leader Tom Daschle penned an Op-Ed in the Washington Post titled: “Listen to Pelosi, Democrats. Now’s not the time to impeach Trump.“
via ZeroHedge News http://bit.ly/2I3ydfr Tyler Durden
Exactly three weeks ago, as stocks were sliding, “world-renowned commodity guru” Dennis Gartman provided a glimmer of hope to bulls when he made an “official recommendation to sell stocks short this morning.” Why was this important? Well, Ramp Capital (with whom we need to have a trademark conversation one of these days) put it best:
Fast forward to today when, following today’s massive rate cut-hope driven rally on the back of an absolutely abysmal job report, it is the bulls’ turn to cower. Why? Because Gartman’s “official recommendation” to short is no more. From his latest Gartman report.
… as we wrote here yesterday, we have had a most unusual series of technical trading circumstances take place recently as late last week we had a rare “unanimous” day lower for stock prices globally, followed two trading sessions later by an equally rare unanimous day higher! Truly we cannot remember when we’ve seen this unanimity to the downside followed by unanimity to the upside in such inordinately short order. We have been left to wonder if that unanimous “up” day marked the end of a short bull run or did it add to the unanimous nature of the end to the bear run of much larger proportion? All we know is that we’ve not seen this sort of violence down and then up ever before and one or two wise readers of TGL suggested that the violence of the recent past two weeks warns of continued such violent random noise and argues then for us to take to the sidelines.
* * *
We’ve continued to maintain a net short position in the equity market in the US put into place five weeks ago… although we’ve cut the size down a bit these past two days… Yesterday was a much better day for us than was the day previous but we face today’s trading environment with a sense of trepidation and confusion…
Finally this:
Friday, May 17th, having already sold equities vs. commodities and as the markets had risen into “The Box” marking the 50-62% retracement of the break that began on the 1st of this month, we sold a single unit of the US stock market short of the July S&P futures trading then 2870. We sold a 2nd unit Thursday, May 23rd to add to the position as the July futures traded 2840, which then gave us an average of 2855. We wished to risk no more than break even on a closing basis but we are breaking even as we write and we want out… immediately.
The bounce is finally over.
via ZeroHedge News http://bit.ly/2Wqgu5z Tyler Durden
The run-up to the presidential primaries offers a funhouse reflection of American life. Presidential hopefuls, hacks, and has-beens turn to focus groups to discover what they think the American electorate wants. Then they distill it down to hollow bumper stickers. After that, they pump their fists and reflect it back with mindless repetition.
Change We Can Believe In. Feel the Bern. Make America Great Again. Sí Se Puede. Fighting for Us. Compassionate Conservatism. A Stronger America. Ross for Boss. Morning in America. Not Just Peanuts. Nixon’s the One. Dean Scream. And much, much, more…
The mantras are both idiotic and comical. They provide political lemmings with something to believe in. They also provide incisive observers with a unique prism into the menaces of tomorrow.
For example, presidential candidate Elizabeth Warren’s slogan is: “Warren Has a Plan for That.” An official t-shirt, adorned with this slogan, will set you back just $30 bucks. And you can pick up a slogan emblazoned tote bag for $35. What a bargain!
To any onlooker with their wits about them this mantra is utterly absurd. But to Warren, it’s as serious as a heart attack. She does, indeed, have a plan for everything – even if it means instant death. In fact, her official website includes the following sales copy:
“Child care unaffordable? Big corporations and billionaires not paying their fair share? Want more economic and political power in the hands of the people? Don’t worry, Warren has a plan for that.”
Pulling the Patriotism Card
Warren, if you recall, owes her career to scheming and conniving. She pulled the race card for nearly three decades…claiming to be Native American even though her ancestral connection is slim to none. In doing so, she was rewarded for helping the University of Pennsylvania and Harvard University embellish their diversity metrics.
Now Warren’s at it again. This time her scheme is to bamboozle the American voter by pulling the patriotism card. Remember, in America today, it’s forbidden to be against any and all things patriotism. You’re either for it, or you’re un-American.
This week, while most of us were busy going balls to the wall, Warren burped out her plan to save the economy from itself. It’s called Economic Patriotism. And it involves extreme government intervention into all aspects of economic life…with the intent of, somehow, making the American worker rich.
Warren’s shameless grab for votes – what she calls Economic Patriotism – includes:
Dollar debasement to boost U.S. exports. The creation of a new government agency to cook up four-year jobs plans like McDonald’s Big Macs. A 10X increase to annual investments in apprenticeship programs. And, among other things, $2 trillion over 10 years to eradicate climate change.
Warren, like many en vogue American socialists, wants to extract tribute from producers so she can dole it back out from Washington to her liking. She doesn’t care that her plan hasn’t a snowball’s chance in hell of delivering economic nirvana for the American worker. She’s counting on American voters to buy the sizzle…
Elizabeth Warren’s Plan to Bamboozle American Voters
For anyone who’s bothered to consider it, if but just for a moment, it’s readily apparent that the economy’s a complex living organism. It evolves. It changes. And it often moves in ways that are only obvious in hindsight.
One relationship at one moment can be completely different at another moment. Prices rise. Prices fall. All the while, supply and demand are incessantly adjusting and readjusting to meet the conditions of the market. These continuous interactions provide a natural and efficient response to supply shortages and gluts.
Centrally planned economies, as advocated by Warren, are inclined to frequent, intensive and chronic shortages. Bureaucrats, armed with spiral bound planning reports and pie graphs, are incapable of fixing the proper prices for gumballs and gasoline by diktat. There’s simply too much going on and too many moving parts for them to consider.
What’s more, these enlightened ones, filled with visions of utopia, are blinded to their own conceit. They believe they know what’s best – whether that involves ending climate change or ending poverty. And their efforts to redeploy resources in ways that the decisions and interactions of billions of people don’t demand, invariably cause things to go haywire.
Instead of less poverty, they get more poverty. Instead of real jobs, they get fake jobs. Instead of greater fairness, they get greater corruption. Instead of new innovation and new wealth, they get cronyism and stagnation. Instead of more freedom, they get more coercion.
Over time, centrally planned economies rot from the inside out until they cease to function all together. This was effectively proven by the experiences of the centrally planned economies of the old communist Eastern Bloc countries during the second half of the 20th century. Still, some people never learn.
Do ice cubes stem the flow of volcanic lava? Does adhesive tape control diarrhea? Does a sports car make a middle-aged man younger? Does central planning uplift slackers and shirkers?
Warren may have a plan for that – and everything else. But it’s not a plan anyone should want. It has nothing to do with sound economics. And it has nothing to do with patriotism.
But, alas, if Warren gets her way, it’s just the sort of plan the American voter will fall for come 2020.
via ZeroHedge News http://bit.ly/2WTAimq Tyler Durden
