Sunday, September 20, 2015

A Disappointing Economic Recovery, Or, An Ongoing, 20th Century, Industrial Based, Structural Collapse.

Are We Dead Yet

Some people would say that since the Great Recession supposedly ended in 2009, the recovery from it has been a bit on the slow side. Others would say that the US economy today has recovered and has done so quite well, and, it is simply the rest of the world that is having the problem that America, unfortunately, has no choice other than become involved with.

While neither of these two cultures of US economic managerial thought are of course very rosy, what is really worrisome about these thoughts is that they are completely false and being floated by the very people who should be dealing with the much larger fact that this so called recovery is not a recovery, but still, very much a part of an overall and continuing post 20th century, US industrial structural malfunction that remains monumentally unresolved.

With the Federal Reserve once again sticking its head in the sand by refusing to do anything other than wait and see how the whole global marketplace will find a way out of this mess, with the Reserve simply stating that the timing is still not quite right to raise rates, while they are apparently waiting until a predetermined unemployment rate combined with another predetermined rate of inflation has been met before they do so, what is entirely missing from this scenario is a blueprint for America's 21st century mixed energy economic and industrial growth strategy.

As this 21st century infrastructure blueprint is in fact the only way out of the ancient political morass that keeps us locked into the ghost of America's 20th century industrial past, the economic tools the Fed should be applying to enable a rational industrial bridge to form between two very dynamic but very different American industrial centuries is being entirely ignored by the Fed both in its monetary and fiscal approach to being America's supposedly wise old banker. As the only way to characterize the Feds' perpetual insistence on keeping interest rates near zero is in fact an admonition on the part of the government as a whole that the larger tool in the Feds' tool box, which is indeed fiscal policy, can't at all be utilized without significant tax reform, the notion of tax reform, which of course is the harbinger for long term, high paying job growth, is still only part of the issue that must be resolved very soon.

Whereas there was once a time where a standard notion of Fed monetary policy coupled to fiscal policy assured a relatively smooth upwards and downwards journey of interest rates, and, the fluctuations of those rates corresponded to both the automation of our manufacturing sector and the globalization of markets to which our manufacturing sector sold its product, quite simply, those days are over forever and the sooner we realize this as a nation, the sooner we can establish a tax policy that will enable virtually every manufacturing sector the financial leeway to reinvest from a purely infrastructural level back into the country the Fed is supposed to be watching over to begin with.

As the discussion over a new national tax policy has been actively engaged in for the better part of the last thirty years, and the end result has almost always been hamstrung by a Democratic party insistence upon the constant need to fund what now can only be considered as a colossal collection of purely redundant social programs combined with an equally redundant collection of regulations, the simple fact of the matter is that with the technologies we have at our disposal today in this 21st century mixed energy based industrial America, social programs at large, and, of all scale, can easily be absorbed into a dynamic work force growth strategy that would clearly redefine not only the nature of work, but, the nature of welfare if in fact, there was some foreseeable future situation in which unemployment would be as rampant, demonstrative and repetitive as it has been in the past thirty years.

With the only real reason for this thirty year period of American job loss being American industrial inventiveness, as that inventiveness is in fact inherent in the natural evolution of the healthy American creative mind, that inventiveness simply invented automation which in turn put people out of work. But, again, today in 2015 America, the list of industries that are both needed and readily available to go in and literally rebuild every single home in every neighborhood in America, stand waiting for all aspects of the federal government, including the Federal Reserve to draft a highly substantive fiscal policy that puts, among other things, taxation into the proper and constructive context of enabling existing as well as future corporate entities to simply breathe in precisely the same manner as a healthy 21st century American domestic economy breathes in and out, unhindered by now 20th century fiscal redundancy.

As I repeatedly write on the subject of our collective national need to redress the framework of NAICS, I do so because in fact such redressing is at the core of not only the Federal Reserve's, but the Commerce and Labor Departments collective responsibility to keep constantly refreshed. As the last time such redressing occurred it did so due to the fact that the Department of Labor was able to identify a sizable growth in our nation's service sector workforce, that workforce today being quite international in scope has been identified by both the Labor Department and the Commerce Department as well as the Federal Reserve as a functional element of our current American workforce. Unfortunately, the NAICS redress that occurred way back in 1992 was extraordinarily short sighted in that now in 2015, that global American service sector work force is tied to the very global American corporate entities that are locked into what is clearly today still an ongoing global economy in overall economic decline.

Thus, as the Federal Reserve is hoping to achieve a certain level of national employment that is tied to a certain level of inflation, what the Fed seems entirely incapable of programming out of its monetary policy are the enormous fiscal constraints that will at best be able to maintain a certain rate of either employment or unemployment long enough for the 1992 NAICS redress to sink further into the regulatory decline that ultimately cannot be rectified until both corporate tax realignment and subsequent 2016 or 2017 NAICS redress is firmly tied to our domestic American industrial and economic growth framework.

What is the most fascinating about the overall prospect of this NAICS redress, is the sheer national based industrial excitement that will come about once in fact such a redress has been addressed.

As again such a redress would have substantial impact on virtually every American industrial sector, the greater dynamics of this redress would in fact be the capacity of seemingly separate industrial sectors to industrially co-mingle or co-habit ate forming in the process of such economic interaction, the very new NAICS classifications that will again enable the Fed to function from the constructive basis of both monetary and fiscal symmetry as in fact it was originally intended to do back in 1913.

Whereas I cannot foresee such a redressing taking such a length of time to blueprint, I can and will guarantee that until its is redressed, our nation's economy will continue to bear the brunt of its own failure to do so. And as it will, virtually every aspect of 21st century environmental concern we as a nation have, every aspect of global but domestic based economic competitiveness we as a nation should have as well as every aspect of education reform, community economic revitalization we endeavor to attain, every aspect of transportation infrastructure renewal, public utility renewal, agricultural renewal, shipping via air water, rail or roadway, and on and on and on will remain entirely beyond our collective socioeconomic reach until we do.

As again, fully redefining the federal tax code is at the core of this endeavor, or more precisely, the attainable outcome of such NAICS redressing, so to are state tax codes, county tax codes and municipal tax codes nationwide, which in turn once collectively redressed redress as well all models of municipal bonds which again can be considered as guarantors of government loans associated with the level of economic growth that fills out significant aspects of our 21st century Fed monetary and fiscal protection policy. Being of the somewhat old fashioned belief that limited government produces limitless private sector growth, today, quite unfortunately, the noose that is around our collective national economic neck, is in fact, that government, whose parameters have become quite counter productively over protective in the past thirty years. While I can clearly understand that the scope of our American market economy has within that thirty year period enabled us to expand economically in a clearly significant global manner, and in fact Fed policy has served as somewhat of a protector for us, industrial change on quite the monumental scale is immediately before us now. As it is, in fact, we have to change.

Mike Patrick Dahlke

In a note on Friday morning, Kit Juckes, a strategist at Societe Generale, wrote that the easy money has been made, and things are about to get a lot harder for investors.
"Making healthy investment returns when QE-inspired asset inflation is all but played out, emerging markets are slowing, Europe is stagnant and the Fed is showing a distressing lack of leadership, is going to be really, really difficult,"Juckes wrote.

'Should the Fed raise rates?' is the wrong question — here’s the right one

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