Your Lying Eyes

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05 March 2009

How Will It Play Out?

A year from now, how will things look? Here's some ideas:

  • The Obama stimulus package has revitalized the nation's economy, leading to a surge in consumer spending. China and Japan are so impressed with this performance, and now look so favorably on America's plans to invest in wind and solar energy and education they eagerly buy up all new Treasury issues rather than pump money into their own domestic economies. America is clearly on the rebound, and Americans are optimistic about the future.
  • Due to widespread civil unrest, including some high-profile self-defense shootings re-labeled as hate crimes, President Obama has declared Martial Law across most of the country, deploying National Guard and even regular armed services personnel in most large cities to quell rioting.
  • Unemployment has reached 15%; many of the most familiar and venerable companies have ceased to exist; most retail stores and restaurants are shuttered; pension funds are largely liquidated; several states and a number of cities have defaulted on their bonds; meanwhile, in Washington, President Obama has convened an "Education Summit" to look for "common ground" on ideas for reforming our education system.
  • Citing a national emergency like no other in our nation's history, a group of military officers have taken control of the government and instituted emergency measures in order to halt the hyperinflation that has decimated the dollar in the wake of China and Japan's dumping of U.S. Treasuries to fund their own stimulus measures.
  • Barack Obama is still president, but his position is largely ceremonial as a small group of senators and congressmen have formed, with the implicit backing of most of their colleagues, a de facto executive council governing the country via a novel use of the appropriations process, rendering Obama's vetoes useless and ensuring cooperation of departmental executives.
  • Due to a string of failures in the banking and insurance sectors, forced consolidation has resulted in only two or three banks and two or three insurers remaining. The Obama administration exercises tight control over their operations, and they effectively act as arms of the executive branch. In fact, most of the economy is now running under the authority of federally-mandated "councils" consisting of coalitions of financial, labor, and community organizations who direct employment, location, supply and pricing decisions for firms. Shortages are common and unemployment remains high, but otherwise conditions are stable and no widespread panic or hunger is in evidence. Health care is effectively nationalized. The Ways and Means committee passes a new tax bill raising rates on wealthy taxpayers earning over $80,000 a year.
  • Due to a dramatic policy reversal about 8 months ago, when President Obama, under intense congressional pressure, announced an end to bailouts, forced a complete reckoning of the financial health of all troubled firms, instituted tough financial regulatory reform, and proposed a revised, austere budget with a small deficit, unemployment has been in reverse, business activity has grown and investors have returned to the markets with fresh new vigor. The recovery appears to be in full swing with no sign of retrenchment in the foreseeable future.

Any thoughts on which of the above is the least likely?

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Blogger Michael Carr - Veritas Literary said...

Ask me again in a year. Right now, I don't think any of those things are likely. I think a year from now, the most likely scenario is that the economy still stinks, but that we've clearly passed the worst of it and we've started to grow again in a modest way.

I don't think this is a garden variety recession, but I'm doubting it will be another depression, either.

March 06, 2009 8:48 AM  
Anonymous Anonymous said...

The last scenario Zeil highlighted is the least likely. It would be the best one however.

Obama is clearly using the crisis to implement some very partisan stuff politically. Its dissapointing, I thought he'd be a little more honest than this.

It follows the same old formula though: allow something to become (or create) a crisis, and then institute the changes YOU wanted all along on the unsuspecting. Its dishonest, but it has been done over and over and over again.

Unrelated: Those Merril Lynch execs who gave themselves 3.6 billion right before she merged with another company or whatever really ought to be in prison for the rest of their lives folks. That was pure theft and nothing else.

March 06, 2009 10:30 AM  
Blogger ziel said...

King M - "I think a year from now, the most likely scenario is that the economy still stinks, but that we've clearly passed the worst of it and we've started to grow again in a modest way."

Sounds like your endorsing my third option:)

March 06, 2009 8:00 PM  
Anonymous Anonymous said...

Hmm...You didn't mention the FEMA camps in bullet 2 or bullet 4.

March 06, 2009 8:29 PM  
Blogger Black Sea said...

Scenarios one through four all seem highly unlikely, with scenario three (unemployment at 15% and the economy in semi-shutdown mode) the most probable of the four, but still not very probable.

Scenario five seems the most likely; Obama's stimulus measures have been widely discredited, his adminstration's honeymoon with the electorate has soured, and Congress is running the show.

Scenario six also seems pretty plausible, though "only two or three banks and two or three insurers remaining" is perhaps a bit extreme. But a much consolidated and semi-nationalized financial services sector, along with increased government involvement and oversight throughout the economy could certainly happen, and to some degree is already happening.

I'm guessing that the final scenario is your preferred outcome . . . . uh, sorry, no chance.

March 07, 2009 6:45 AM  
Blogger Dan Kurt said...

re: "How Will It Play Out?"

Tip to lurkers:
read the following book "Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression (Hardcover w/ Updates for 2009) (Hardcover)
by Robert R. Prechter Jr."

Better yet, check out this web site and subscribe to some of its services:

March 07, 2009 5:44 PM  
Blogger ziel said...

I'm guessing that the final scenario is your preferred outcome . . . . uh, sorry, no chance.

Good guess...and I agree.

March 08, 2009 1:01 AM  
Blogger Darayvus said...

Dan Kurt can quit spamming now that we've embarked on our INflationary depression.

Anyway, I think that hate-crime lockdowns are likely. Obama's just received an award from the NNPA, which is an association of far-Left black nationalist papers. Farrakhan's "Final Call" are on the NNPA roster among others. Obama is making sure these journalists rile up urban crowds to demand "their" pensions and paychecks - particularly against state governments, because the cities can be expected to cave and spur white-flight.

There are any number of scenarioes, given such federally-blessed polarisation, which could spur a racial incident.

March 20, 2009 9:48 PM  

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