Dangerous Talk Blog

Monday, February 16, 2009

The Problem with William Norman Grigg

By writing "the problem with William Norman Grigg," I'm really talking about the problem with the American voting public. Because there's absolutely nothing wrong with my friend Will Grigg.

He's got a problem, though. You can read his phenomenal blog Pro Libertate and get the wrong idea if you don't understand the world and the way he goes about describing the problems in it.

Will Grigg's problem can be likened to an old high school gym class where everyone in the class is ordered by the phys-ed teacher to make three laps around the school track. After the second lap, the fastest runners are approaching the slowest, overweight runners (the latter was me in junior high, but not by high school).

A person just taking a first look at the track might mistake those fast athletes as being behind the fat, slow runners, and maybe even running slower.

That fast runner is Will Grigg. His blog is so far ahead of other blogs he sometimes looks like he's behind the times, or perhaps not even aware of the times.

What I mean by that is that he's writing about issues right now such as a possible draft, Republican fascism, and the increasing militarization and federalization of police. And most people have no idea what they have to do with their lives right now.

Most people are instead interested in reading about the current economic crisis, and how much worse it's going to get. That's what is impacting their lives right now.

But that's not the way Will Grigg's blog works. He was writing about the housing bubble back in 2004 (and his book America's Engineered Decline covered this subject back in 2004). And he called the shots right five years before anyone else did. In truth, he'd be the fast kid on the track that had already lapped the slow runners a couple of times.

So why, he reasons, should he cover this material again? After all, if the reader wasn't paying attention when they could have acted to prevent this calamity, what reason would he have to repeat what he had written five years earlier?

Right now, he's writing about other preventable calamities. Maybe we should all listen now, even if he's writing about subjects nobody else is concerned about.


Tuesday, February 03, 2009

My Economic Predictions for 2009

With the economy in a spiral downward, here are a few of my predictions about what the financial picture will be like on February 1, 2010. That's about a year from this post.

Here are the basic economic indicators I predict for February 2009:

Unemployment: 11 percent or more
Budget deficit estimate for fiscal 2010: $1.5 trillion (less than 2009)
Inflation: 5 percent
Interest rates: Rising quickly
GDP growth: -2 percent or more (most of it in the first half of year)

Here's the Cliff's Notes' version of what's going to happen over the next year:

President Obama and his compliant Congress will skate along until about September/October with a "spend and deficit our way to prosperity" philosophy as the economy continues to spiral downward. It will actually prevent a recovery. The deficit for 2009 will top out at $1.8 trillion or so when all the final numbers are tabulated. The Federal Reserve will continue to keep the discount interest rates artificially low, but it won't stop the recession because the deficit will suck all of the financing out of the economy.

Unemployment will rise quickly the first half of the year and then trickle upward for the rest of the year. That'll be all the "recovery" we see, because we already prevented a recovery with deficit spending.

Just as the leaves start to fall next autumn, so will the international credit markets on the U.S. dollar. The Chinese will decide they've had enough of our bad debt. The Japanese will publicly step forward and declare they'll fill in the gap, but that'll only last a couple of weeks. Definitely not more than a month. Then, at about Thanksgiving (but after the elections) we'll have a financial meltdown and Congress will start to talk seriously about cutting spending. But only because there's no one is left to borrow from, and only after they rumble about increasing taxes. (But because it's an election year, it'll only be a rumbling rather than a serious attempt to raise taxes.)

By February next year the panic will be over and we'll have hit bottom. The economy's going to really suck. Some of the big spenders will have been thrown out in the November elections, though not enough of them. Nevertheless, we'll see some real budget cuts being made, including entitlement cuts.

And genuine growth, however small and gradual, will begin again.

... or I could just be all wrong.