What Hath The FERAL Reserve Wrought?

The FERAL Reserve needs to answer the Clue Phone, as it is ringing louder than ever.  The stock market is crashing, and the Sahm Rule recession indicator is currently flashing red.  The broader economy itself is not crashing--yet--but at least a mild recession seems to be already baked into the cake at this point.  

The Fed's overzealous crusade against inflation has ultimately jumped the proverbial shark a while ago.  They hiked interest rates too high and stubbornly kept them too high for too long, creating a stagflationary quagmire as a result.  Inflation began to fall on its own once the pandemic-induced global supply chain crisis was resolved, and also the geopolitical issues abroad (war, sanctions, etc.) were less intense for the USA than initially thought, no thanks to the interest rate hikes, which only deepened the quagmire in the long run. 

We have been saying for a while now, and will say it again:  the Fed absolutely MUST cut interest rates yesterday, full stop.  An emergency rate cut of 100 basis points (aka one full percentage point) is clearly indicated for this situation to prevent the worst case scenario from unfolding.   

Don't say we didn't warn you!

UPDATE:  Looks like the stock market has recovered from the correction for now.  But our point still stands regardless.  And inflation is basically defeated for the time being.  Cut interest rates NOW!

It's NOT Just The Economy, Stupid!

Along with the false choice between "lives versus livelihoods", lockdown enthusiasts seem to have this idea that "just" the economy is a mere appendage of society that can be casually hacked off at will with no long-term consequences.  While clearly nothing is further from the truth.  As we have learned the very hard way, lockdowns are always a lose-lose proposition, at least in the long run.  And their proponents thus have a LOT of blood on their hands.

Given how it has been clearly shown time and again over the past year that lockdowns, closures, and related restrictions don't really save lives or materially stop the spread of the virus (at best they slow it down a bit, thus ironically prolonging the pandemic, and at worst they are gasoline on the dumpster fire), it would be bad enough if all they did was "merely" wreck the economy.  But the damage goes far deeper than that.  A recent article in fact details the massive damage that these restrictions do to the mental health of young people.  All that loneliness, isolation, depression, anxiety, and existential dread in our unprecedentedly contactless and touchless society is highly toxic, and in fact more young Americans under 25 died from suicide than died from COVID in 2020.  All-cause mortality among people under 25, especially ages 15-25, was indeed significantly higher in 2020 than in 2018 or 2019.  But that is likely the tip of a very large iceberg of damage that will be felt for a very long time to come.

Quarantine in general is inherently traumatizing to most people, and thus never good for mental health.  And it is a truism that the longer it is, the worse it is.  Alas, we can thus expect the incidence and prevalence of PTSD to rise dramatically as a result.

To say that this very sad state of affairs stunts the development of children and young people would have to be the understatement of the century!

An entire generation has now also suffered educationally as well due to school closures.  Virtual "learning" has generally been a joke (albeit not a very funny one), and the unprecedented level of learning loss (which disproportionately affects poorer students and students of color, by the way) will leave lasting scars on them.  And the dystopian masked, distanced, and hyper-germaphobic environment they must endure when they actually are being educated in-person in most schools truly cannot be good for their mental health or even physical health.  Seriously.

Not like all that loneliness and isolation is actually good for anyone of any age, particularly including the very same elderly and vulnerable members of society that the lockdowners claim to have done all of these dystopian things in the name of "protecting".  Which was a spectacular and and epic failure to say the least.

And for women?  Well, let's see.  Between disproportionately losing their jobs or working in risky essential jobs, having to stay home with their kids with no respite while schools and daycares are closed, and/or caring for sick and vulnerable adults ad well, women have been taking on a triple burden throughout this pandemic.  And with primarily male violence against women and children (domestic violence and child abuse) skyrocketing during lockdown as well, with victims being trapped with their abusers, we can conclude that lockdown has basically been patriarchy on crack.  And women's hard-won progress has thus been set back decades.

(And one can also thus conclude that Governor Kristi Noem of South Dakota, who eschewed lockdowns, has in practice been more of a feminist than lockdown-loving Governor Gretchen Whitmer of Michigan, despite the former ironically being a conservative Republican and the latter being a liberal Democrat.)

And again, the best evidence shows that these toxic and authoritarian restrictions did nothing to save lives or otherwise benefit public health at all on balance.  We unfortunately cannot change the past, but we can decide what sort of future we can have and try to repair the damage as best we can.  Thus, as we have already advocated, it is best to go "cold turkey" from these restrictions, go back to normal 100%, and vow to NEVER repeat these mistakes again.  And yesterday is not soon enough!

To paraphrase a song from R.E.M. "Don't go back to Lockdown, and waste another year."

Ruh Roh. The Yield Curve Just Inverted

Yesterday, on March 22, 2019, the yield curve inverted for the first time since 2007.  Specifically, the spread between the 3-month Treasury and the 10-year Treasury has flattened and then flipped:  short-term yields are now higher than long-term yields, the reverse of what is normally the case.  It is a leading indicator of a coming recession, since it basically means that investors are becoming so bearish that they would rather lock in current interest rates as they expect rates to drop significantly in the near future rather than continue rising further.  And since it typically precedes the onset of a recession by 6 to 18 months on average, it means that the odds of a 2019 or 2020 recession are looking very, very likely.

And while the stock market seemed to be rebounding from the December mini-crash of 2018, it now seems to be once again teetering on the edge of the Big One, the coming Crash of 2019.  And with Trump's tariffs and resulting trade war really starting to bite hard recently, leading to GM and Ford both announcing layoffs, and American soybean farmers getting creamed, things really don't look so hot right now.

In Bernie we TRUST, in Trump we RUST.  Tired of "winning" yet?  Hey, American Brexit, now do you finally Regrexit?

The Root of All Evil: Unmasking the Wetikonomy

The TSAP has recently discovered a parasite lurking in our midst.  This parasite is not one that you can see, but its evil works are apparent just about everywhere you look.  It is a mind-virus that digs deep into our subconscious and subverts our thinking in a manner that causes us to act against our best interests.  And its name is wetiko--essentially the root of all evil.

The concept of wetiko was discovered a few years back by Paul Levy, author of Dispelling Wetiko:  Breaking the Curse of Evil.  The word itself comes from Native Americans, who apparently coined it to describe the sort of destructive collective psychosis that they had observed and were too often on the receiving end of when the white settlers came and wreaked havoc upon them.  Levy apparently had a spiritual awakening and realized exactly what the root of all evil was, and describes it well in his book.  It explains evil far better than the Western concept of evil ever could.  Basically, this disease hides in the dark recesses and blind spots of our psyches, and causes us to behave in utterly destructive ways without really understanding why.  And just like a vampire, sunlight is the best disinfectant.  So let's expose it and defeat it!

What does this have to do with our economy?  Apparently just about everything, since the lion's share of it consists of what Levy calls the wetikonomy.  Basically, our economy (especially the bloated financial sector) is one big Ponzi scheme and shell game designed to benefit the very few at the top at the expense of the rest of us.  It is designed to rob from the poor (and what's left of the shrinking middle class) and give to the already ludicrously rich.  And it is based on lies and illusion, essentially wetiko writ very, very large.  The few financial players that run this toxic and corrupt system are known as Big Wetikos, most notably the debt pushers and financiers that are conning the rest of us.  And it perverts the whole economy, as it is dependent on the debt-based funny money created by the Big Wetikos.  As the Verve so eloquently noted in their song Bitter Sweet Symphony, you're a slave to money then you die.  Clearly it doesn't have to be this way.  But there is so much coercion (subtle and not-so-subtle) in the system that most people just go along with it while sleepwalking to their own doom and unwittingly perpetuating the wetikonomy, while the plutocrats laugh all the way to the bank.

We all need to wake up to the truth, and finally defeat this parasite for good before the shadowy elites succeed in scuttling this once-great nation.  And the TSAP will work very hard to wake up as many people as possible in order to achieve this goal.

The Phony Recovery

A recent study, by the Wall Street Journal of all places, confirms what the bottom 99% of Americans have long suspected for years: the so-called economic "recovery" of the past five years was essentially a joke all along.  In a nutshell, corporate earnings are at a record high, while revenues have been flat for the past five years.  In other words, consumer demand is low because customers are broke, and companies have mainly been "growing" their earnings by cutting cannibalizing their workforce and buying back (i.e. manipulating) their own stock to paper over their flat or declining sales.  All while they sit on trillions of dollars.  It's a zero-sum game, and a vicious cycle.  Thank you, Captain Obvious! 

So how can we break this vicious cycle before the resulting bubble bursts leading to the next big crash?  The answer is really quite clear:  adopt the TSAP party platform ASAP.   But since it is unrealistic to expect either corporate party in Washington to take up an entire platform that threatens their own interests, we have devised a list of the highest-priority measures to take before the inequality-fueled crash of 2016 happens:

1. Raise the top marginal tax rate to at least 50% (if not 70%) for incomes above $1 million, and simplify the tax code by removing loopholes geared towards the wealthy.
2. Reduce the corporate tax rate to 20-25%, remove all loopholes, and tax only retained earnings.
3. Reduce tax rates for the bottom 80% of Americans, and un-tax small businesses with earnings less than $100,000 per year.
4. Raise the minimum wage to at least $10/hour if not higher, and index it to inflation from now on.
5. Remove the "sequester" cuts ASAP, and sharply increase funding for infrastructure, education, green energy, and other crucial goals to put Americans back to work.

Of course, it would even better if the entire TSAP platform were adopted, but doing just these five things alone would probably be enough to, in the words of Paul Krugman, "end this depression now".  Because that's what this "recession" really is.  And ending it is long overdue--five years overdue to be precise.

How Bad is Our Economy? Just Ask a Mexican

Take off your rose-colored glasses and sit down.  Ready?  OK, here's the truth, warts and all:

You know the American economy is doing bad if even Mexican (and other) immigrants won't come here anymore.  Just a few years ago, the nation was flooded with a seemingly unstoppable flow of immigration, both legal and illegal, thanks to NAFTA wrecking both countries (while simultaneously enriching the elites in both countries) and Bush being too busy invading and looting other countries to protect our own borders.  But once our economy's bubble burst, millions of jobs disappeared--as did the much of the flow of desperate job-seekers from other countries.  Of course, there are other factors at work here, such as the declining birth rates in Mexico and other Latin American countries, the non-passage of the amnesty bill, as well as Obama getting marginally tougher (but not nearly tough enough) on rogue employers who would rather exploit illegal immigrants for cheap labor than hire native-born Americans at a decent living wage.  But the biggest factor, at least in the short term, has been the lack of jobs on this side of the border.  Now that's just sad.

Our nation's unemployment rate is still hovering above 9%, over 3 1/2 years after the recession began and fully two years after the recession was supposedly over.  Our jobless pseudo-recovery since June 2009 has consistently had an unemployment rate at least double what it was during the "prosperity" of 2005-2007.  And for the first time in decades, our unemployment has been higher than Canada's since 2009.  Meanwhile, the Dow Jones has made tremendous gains since its low in March 2009, nearly doubling since then and returning essentially to pre-crash levels.  And the largest corporations have boasted record profits in 2010 and early 2011, while simultaneously outsourcing more and more jobs to other countries.  In other words, it was the best of times (for the filthy rich, mega-corporations, and Wall Street) and the worst of times (for everyone else).

So when does a recession officially become a depression?  The old joke is that a recession is when your neighbor loses his job, and a depression is when you lose your job.  Using that definition, the majority of Americans were in their own personal recession even before the crash of 2008, and now many people are in their own personal depression, all while the elites mock their suffering and do everything they can to avoid (heaven forbid) paying their fair share of taxes.  And at least as far as jobs go, while still not quite as bad as the Great Depression, we unfortunately appear to be in an L-shaped recession similar to Japan in the 1990s.  And up until the Great Depression, the term "depression" was routinely applied to less severe economic contractions (it was actually a euphemism back then to call it such).  Either way, it really seems to be all about semantics as far as the politicians are concerned.