Obama: All Americans to Live on Debt

Barack Obama has announced that he aims to prohibit natural resource extraction from a large part of the southwest. At the same time, he boasts that after seventy years of deficit spending the January unemployment rate of 9.7% proves that "stimulus" has stopped unemployment.

In a phone interview today, Mr. Obama announced that he aims to illegalize productive jobs and improve the economy through government spending and printing more money. "Jobs need not produce anything of value," Nancy Pelosi says. "Only reactionaries believe that work needs to produce something." Rather, according to Mr. Obama, "if we double the money supply, wealth will be doubled. With twice the number of dollars, we can afford to reduce output. The nation will become richer as we spend and go further into debt."

Tim Kaine, chair of the Democratic National Committee, agrees. "Progressives know that by borrowing, in the long term more money means greater wealth." Kaine said that he supports the Obama plan of mandating indebtedness of all Americans.

To implement the non-productive work policy, Mr. Obama is releasing an executive order. All productive work will be curtailed or eliminated. Future generations of Americans can choose from seven careers:

Mortgage lender
Real estate developer
School teacher
Investment banker
Trial attorney
Government bureaucrat
Drug and guidance counselor

All other forms of work will be eliminated. Americans will be required to borrow an unspecified sum each year. "Through the expansion of borrowing, all will become wealthy," according to Mr. Obama. "Anyone who tries to produce something will be subjected to IRS enforcement," he added.

Fed and Financial Community Cause Global Food Shortage

Gaius of Blue Crab Boulevard has posted a blog about a New York Sun article concerning food riots. The current global food shortages are a symptom of Alan Greenspan's and Ben Bernanke's excessive liquidity policies. As Howard S. Katz has pointed out in his blog, the banking system in the United States and globally has lent counterfeit Fed money (or excess liquidity) about which the financial community has been ecstatic for the past three decades (calling it stabilization of the credit markets, priming the pump, reducing unemployment, ending recession, stopping depression) to build homes that no one could pay for. At the same time, too little investment was made in commodities. Thus, the sub-prime crisis and the current global shortage of food are direct products of the banking system's lending practices and the Fed's expansion of the money supply since 1981. Ludwig von Mises, the Austrian economist, called this process malinvestment. For the past 25 years the Fed printed money and stimulated home building. Too many homes were built and sold to people who could not pay for them. Too little investment went into expansion of food and commodity production. The sub-prime crisis of today results from the mistakes that the banking community made in response to the hot Fed money that Greenspan and Bernanke have been creating under four presidents, Reagan, Bush, Clinton and Bush II.

The Bush administration's solution to the malinvestment of the past three decades has been...more malinvestment. The Bear Stearns bailout, the current loose monetary policies of the Bernanake Fed and further government transfers to banks to prevent defaults from incompetently made loans keep real estate prices high and continue the massive malinvestment that has occurred in the housing sector.

From an investment standpoint, it is clear that commodities will be hot for the next few years as rising interest rates freeze out new investment in commodities (see Howard S. Katz's blog for more on what he calls the "commodity pendulum"). From a moral standpoint, the American public should be ashamed of itself for allowing this orgy of self indulgence among the various players in the financial community; for allowing transfer of wealth from people who need to eat to wealthy stock investors and hedge fund managers; and for allowing the incompetence and mismanagement that the economics establishment and the Fed have demonstrated.

To quote Gaius:

"The New York Sun reports on a trend that is not at all pretty. In some areas of the country, rice, flour and cooking oil are in such short supply that retailers are limiting the amount people can purchase. This is happening right here in the United States.
The curbs and shortages are being tracked with concern by survivalists who view the phenomenon as a harbinger of more serious trouble to come. "