It’s Too Late, Baby: The Inevitability of Economic Contraction

In watching the current enfeebled stock correction from an oversold condition, coinciding beautifully with the week that the big bears and the trading house dynamos started their extended summer vacations, we Silverwolves can almost smell the coming wind of economic contraction. Americans are spent out, they cannot cope with the inflation that the Liberal Democrats and Republicans have vomited onto the public, and they cannot get jobs thanks to the minimum wage laws, and all the bureaucracy surrounding starting a business and just hiring someone. In England, and old New York, people could just get a pushcart and sell off that, or set up a stall in certain market areas, (or rent one reasonably from a private property owner). Men could set up a labor contract with a handshake, or write it out if they were paranoid. There was little unemployment; in fact, most would say there was too much employment, as even children were enlisted to keep the family’s belly full. But most everybody was busy, and managed to scratch out a living thanks to vending, also known as Free Market Capitalism.

But now we have minimum wage laws, business licenses, and a tax code so complex that a business owner must hire an accountant, which in many cases in America would cost more than the entire month’s profit from a small business, and which, of course, means that the business is not even attempted, and the would-be entrepreneur stays unemployed.

Likewise for unemployment, which would be eliminated overnight with the abolition of minimum wage laws. Then, any person who really wanted to work could find some kind of work at some sort of wage. They could accept it or reject the offer, but there would be no shortage of employment offers, just as there is no shortage of used cars in a free market. The excuse of “I couldn’t find a job”, meaning, in modern America, “I couldn’t find a job in my narrow field of specialization, nor at the exorbitant rate I was being paid before, so, therefore, I can stay unemployed and continue to pick up these nice fat government checks every two weeks”, would be gone, and the person would have to face the fact that as a former construction salesman they would now have to cut wood or bag groceries for an income, or admit that they just didn’t really want to work, or need the money that desperately.

But, instead, the slow-witted American public has just let Obama, with the aid of some turncoat Republicans from Maine, release a whole slew of additional bank regulations, whose cost will quickly be passed along to the individual saver in terms of lower interest rates, and higher bank fees, and which will further insure that no maverick banker can afford the onerous new legal demands, added to the onerous old legal requirements, for setting up a bank. Ergo, the big banks will maintain their uncompetitive position thanks to the government, whether the legislation passes or not. And all done under the watch of that so-called “Liberal”, Barack Obama.

Foreclosures are surging across America, and the next down wave in the stock market, which theory says should be a rather violent and drastic one, will leave American’s balance sheets so enfeebled that it may well sicken their whole estates. The money for the mortgage will suddenly not be there, or the only alternative will be to sell those so-called “securities”, that wonderfully perverse euphemism for stocks, to meet the mortgage demands.

And American’s net worth will be plunging just as the new higher tax rates kick in next year, meaning that anyone who continues to have a middle-class paying job, will have another chunk torn out of their gluteus maximus by the Obama tax pitbulls.

Nor to be forgotten is the coming end to the 15% tax on capital gains, set now to jump up to 20%. This, of course, will lead to a flood of selling of everything from stocks to land as we near the end of the year, and a vast drying up of business after the first of the New Year. Just another gift to you from the Liberal Democrat economic theorists, whom Mises and Rothbard dismantled about 40 years ago, if anyone in the mainstream had bothered to read their works.

So, really, all it will take is a renewed downdraft in the stock market, and America will be set for that great Depression that was set up by Bill Clinton when he initiated the Nasdaq bubble with artificially low credit, and which was continued by Bush, and is being brought to its mephitic conclusion under Obama, Pelosi, Reid, and the whole gang of them. The Great Contraction, if we smell the wind right, is only months away.

It’s too late, baby.

Hoooooooooooooooooooooooooowwwwwwww! — Silverwolf

Tags: Barack Obama, business licenses, Capitalism, economic contraction, economic depression, Liberal Democrats, Ludwig von Mises, minimum-wage laws, Murray Rothbard, recession, unemployment, vending