And The Band Played On
Shooting rockets to the moon,
Kids growing up too soon
Politicians say more taxes will solve everything
And the band played on
Norm Whitfield and Barrett Strong are among the best songwriters in history, and "Ball of Confusion," which was made into a classic by the Temptations, is just one of their timeless creations. The thing is at this stage of the game, the song should be a classic because of the talent and lyrics, not because it's so appropriate for this day and age. Written in 1970, it paints a picture of a world out of control, but where the powers that be dig into the same playbook (and the band played on).
The fact is that the current situation is probably worse than in 1970, a period so worrisome that hoards of Americans dropped out (real world) and dropped in (drug world) and fretted about the future. Now, we have all of the above, except rockets flying to the moon, unless they're launching from Moscow or Beijing.
Inflation then 6.5% now 2.2%
This is mostly a bogus number because of the basket of goods approach used with the CPI report, and there is more inflation misery than policymakers and money printers admit.
Unemployment rate then 3.5% now 7.9%
The real unemployment rate is north of 10%... and 3.5% can never happen under the current war on success, unless 15 million people drop out of jobs market.
Life expectancy then 70.8 now 78.5
From the turn of century, every ten year period saw an increase of four to five years in life expectancy that slowed to about a year for each decade. Life expectancy trend has slowed considerably since 1970.
While a few may take solace that new homes are running ahead of inflation, the inflation adjusted price from 1970 and household income both are down dramatically in the last few years.
* New home prices peaked in April 2006 at $257,000
* Median household income reached $54,932 in 1999 and has come down faster in last four years
Take into account soaring prices for milk, eggs, and bread, in addition to the cost to get to work, and Americans today would tell the Mighty Temps to stop singing the blues. However, one thing hasn't changed, politicians think more taxes will solve everything... and the band plays on.
Ben Bernanke Dodges Blame
Maybe watching the shenanigans in Washington DC from the sidelines for so long has conditioned Ben Bernanke to utilize a pivotal character trait from our leaders and major decision-makers... dodge the finger pointing. The two most interesting things for me were:
1) Forget all those tables and models of America owing gazillion dollars in debt from recurring trillion dollar deficits, at some point lenders will stop lending. Really? Does that include the Federal Reserve, which buys gobs of treasuries, takes the interest and pays it back to the Treasury Department?
If so, I would love to know the cutoff point, because it's a shell game that empowers the Fed and encourages reckless lawmakers.
2) The Fed can't help the nation if it goes off the Fiscal Cliff. Yes, the Fed has a bag of tricks that would make Houdini envious, but the magic printing machine is no match for Washington incompetence.
Despite Bernanke's preemptive move to cover his own backside, I'm not confident a deal will be cobbled together in time. His pressure helps, but goes along with pressure from so many angles. I also remain concerned a "deal" could be so convoluted that the Street kicks it to the curb via a sell off.
That being said, a palatable deal sends the market soaring. This is the near term predicament for investors. At some point, a deal is going to happen in this era of mediocrity, and if it gets a pass, then those that are selling out of sheer panic and frustration may regret it.
People moving out, people moving in
Why? Because of the color of their skin
Run, run, run but you sure can't hide
An eye for an eye, a tooth for a tooth
Vote for me and I'll set you free
Rap on brother
An eye for an eye would make more sense than the war on success where it's a pound of flesh in response to jobs created and wealth already generated in the economy. Lots of people bought into the idea of a vote setting them free while putting job creators on the run. We're all going to be on the run at some point from these foolish, revenge-driven policies. But it's not going to happen overnight (see sidebar).
Rap on brother, rap on!
Coming into New York today was a breeze as many have already taken off for Thanksgiving and the rest of the week. That should be reflected in the action or in-action today. Already, there is a certain lackluster feel to the market. Initial jobless claims came in above 400,000 and last week was revised to the worst week of the year; both are excused because of Sandy. In Greece, the second round of payoffs ... um ... bailout has stalled, but the market doesn't seem too concerned. Heck, even the Fiscal Cliff might take a holiday as we all get in the mood to express thanks.
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