The Enid News and Eagle, Enid, OK


April 6, 2013

Why are we always surprised?

ENID, Okla. — That lion-in/lamb-out thing about March didn’t offer much lamb this year but it did deliver several platters of snow. Oh, spring arrived on time; winter just didn’t leave on time.

The struggle between seasons finally sorted out Holy Week. Palm Sunday brought eight inches of snow, winds and drifted roads to nowhere. Easter Sunday delivered sunshine, 70 degrees and an open road to eternity.

The news that week was equally stark.

On March 30 the New York Times published an essay on the global economy by David Stockman, the goggle-eyed boy wonder of the Reagan White House and Reagan woodshed.

The bleak article ends with this warning: “When the latest bubble pops, there will be nothing to stop the collapse. If this sounds like advice to get out of the markets and hide out in cash, it is.”

Get out of the markets? Hide out “in cash”?

Farmers and ranchers are in the “markets” every day; the feed market, fuel market, corn market, fat cattle market, machinery market. Show me a market and I’ll show you the farmers and ranchers who, more than likely, are making it, not leaving it for neither love nor “cash.”

Still, the economic and political numbers Stockman uses to reach his conclusion should cause everyone to at least think about coming trouble. They include:

• “Over the last 13 years… American households lost $5 trillion in the dot-com (stock market) bust and more than $7 trillion in the 2007 housing crash.”

• “Since … March 2000 … economic output has grown by an average 1.7 percent per year (the slowest since the Civil War); payroll job count has crept up at a negligible 0.1 percent … real median family income growth has dropped 8 percent ...”

• Meanwhile, “The real net worth of the “bottom” 90 percent has dropped by one-fourth (and) the number of food stamp and disability aid recipients has more than doubled, to 59 million, about one in five Americans.”

While all this economic debris was piling up, he notes, “The Dow Jones and Standard and Poor’s 500 indexes reached record highs on Thursday,” March 28.

The money underwriting it all, he claims, is not coming from a healthy, stable economy but from the Federal Reserve’s “egregious flood of phony money” that has “expanded (the Fed’s) balance sheet six-fold, to $3.2 trillion from $500 billion,” since the year 2000.

Stockman may not be an economist (he’s a history graduate from Michigan State University) but he is a keen observer. The Fed’s flood not only kept interest rates low for borrowers, it kept them even lower — as in barely above zero — for savers.

As such, “Soon Americans stopped saving and consumed everything they earned and all they could borrow.”

That may be the most honest assessment of what today’s money-grubbing global economy is all about: We want it, we want it now and we want someone else — the federal government, export markets, the neighbor’s failure — to make it happen.

Stockman’s view may be too gloomy for many but his larger point is largely correct.

In fact, it’s always been correct: When we place stupidly large bets in markets that swing on completely stupid, logic-defying elements — like Cypriot banks laundering ill-gotten Russian rubles in Greek government bonds — why are we surprised when the crack-up comes?

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