Morning Commentary
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.
These nations have progressed through this sequence: From bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to apathy; from apathy to dependence; from dependence back into bondage.”
¯ Alexander Fraser Tytler
Just when investors were getting Fed-watch fatigue, along comes the Greece crisis, which has been anything but a gift. The illogical moves from the nation that brought the world the concept of logic is using a convoluted strategy based on a game theory; this simply boils down to making promises you can’t keep or borrowing money you can’t repay.
It’s a familiar story in the history of organized governments and the idea of democracy. How does a politician sell the idea of honest “shared sacrifices” rather than an organized looting of public coffers and private wealth? Certainly, in this era of massive promises and massive loathing, the best way to be elected is to promise goodies and revenge.
However, it worked for the socialists in Greece for a long time until the public coffers ran bare and the private wealth was shipped to safer locales. Ironically, even with all the wise words of past philosophers and economists, it is proven once again, Americans are being told the best way to run an economy is to implement policies that not only redistribute wealth, but it also exacts some form of social justice.
The Clock is Ticking
Look at this: the U.S. National Debt clock never stops moving. It’s a machine perpetually in motion because the government continues to spend more money and continues to make promises it can’t afford.
For all the talk of how irresponsible Greece has been, our debt load as a percentage of the Gross Domestic Product (GDP) is above 100%. And that’s a red flag, even for the richest nation in the world.
Japan |
230.00 |
Greece |
177.10 |
Lebanon |
145.90 |
Jamaica |
132.72 |
Italy |
132.10 |
Portugal |
130.20 |
Cape Verde |
114.22 |
Ireland |
109.70 |
Cyprus |
107.50 |
Belgium |
106.50 |
United States |
101.53 |
Human Angle
Along with Greece & Puerto Rico, the humanitarian angle and obligations of the West, especially when America comes to the rescue is a part of the story that’s not really discussed. According to Bank of America, if Greece votes “yes” and takes their lumps, fresh funding will not happen until September. Between now and then, it could result in a “humanitarian disaster” marked by shortages in medication and food.
According to the observers, there would likely be riots, violence, and blood in the streets, but Greece brought this potential scenario on themselves and they have to deal with the consequences. As for the guilt factor as a nation, America has its own issues to deal with. It is unlikely we will offer much beyond typical aid.
That being said, there is a lot of sympathy out there for Greece.
Check out this Crowdfunding effort established by a 29-year-old Londoner, Thom Feeney, who believes that the Greeks should determine their own future.
So far, 9,000 people have donated more than $250,000. It’s a rebuke against bankers and capitalism, and it makes a slight statement. In the end, it’s going to take a lot more money to solve this situation, which is the kind that can only be generated through the private sector.
Moreover, this is an ugly drama and there will be no ghost in the machine with last-second heroics. It is just old-fashioned comeuppance and tough love for a people that lived on love, laughter, and fun for far too long. Nevertheless, if they want to go back to the Drachma, it will be no laughing matter and the smallest denomination might look like this:
Today’s Session
With July 4th being around the corner, this is a shortened week. Today is jam packed with economic data releases and auto makers releasing monthly sales results throughout the day. The major indices seem to have had enough with Greece and are indicating higher, especially with the positive employment report released by ADP. In its June employment report, ADP found that approximately 237,000 payrolls were added to the private sector; that’s over 7% higher than the consensus estimate.
Once again, small business carried the bulk of the weight, introducing 120,000 new jobs. Large businesses provided 32,000 jobs. Demand for workers is apparent in the service-providing sector which was responsible for 225,000 jobs total during the month of June.
Goods Producing (Preliminary Figures) |
||||
Employer Size |
Small (less than 50) |
Medium (50-499) |
Large (500+) |
|
Month Change (Jobs Added) |
3,923 |
4,566 |
3,510 |
|
Service Producing (Preliminary Figures) |
||||
Employer Size |
Small (less than 50) |
Medium (50-499) |
Large (500+) |
|
Month Change (Jobs Added) |
98,456 |
79,957 |
46,586 |
|
Comments |
It is very unnerving that while the USA is burning under this huge ever increasing debt Nero still dreams up ways to divide the citizens of this country and dreams up even more ways to extract dollars form those that pay way more than there fair share in this country Jack Alspaugh on 7/1/2015 10:21:09 AM |
Excellent piece on The Slippery Slope..."let the truth be told" RLB on 7/1/2015 10:23:40 AM |
I often ask friends if they know the amount of National Debt we have. Most do not have an answer; and seem not to care when informed of the debt number. APATHY seems rampant in the US. Congress never accomplishes anything, and if they do it hurts America. It seems like we [the USA] are already a "Greek-Club" member. What disturbs me is I believe more and more people are liking the "membership." I hope with a new President in 2017, we regain our dignity, re-grow the economy, lower taxes, shrink our government [including ridding the country of the fed], and regain our Super-Power standing in the world. My biggest fear is our national apathy may remain engaged. Pass the word "Apathy is dangerous. Socialism/Communism often result of Apathy." Please VOTE - and not for Progressive Liberalism. I would add, contact your Representatives and Senators; however, I have found that to be a large waste of my time...and my congressional reps are Republicans. We also need NEW blood representing us. FMT on 7/1/2015 10:36:50 AM |
The simple solution to this menacing (NOT Greek, but rapidly forming AMERICAN problem) is "Vote The Rascals Out!" Seems to ME this was a theme song in politics MANY MOONS AGO...but it would be BESTY APPLIED.....TODAY.....before it's too late! James Allen on 7/2/2015 6:03:16 PM |
What a great quote that is from Alexander Fraser Tytler. It should be framed and put on every wall. Meanwhile, Dennis Miller thinks America has passed the point of no return. That doesn't mean we still can't make it, but we better be prepared for anything that lies ahead. Dennis Howard on 7/4/2015 2:50:04 PM |
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