Juggling Dynamite

Bill Clinton speaks to the Daily Ticker’s Aaron Task at the Clinton Global Initiative’s annual meeting in New York. Clinton has some good ideas on how America can now retool itself for greater energy efficiency, rebuilding infrastructure and self-sustaining farming and how all of this will help create the desperately needed intelligent ‘made in America” jobs for the 21st century.

“While the development of a global economy and the information technology revolution caused upheaval for many workers, Mister Clinton says these trends were accelerated by “the adoption of two bad ideas”:

Turning Stakeholders into Shareholders: About 35 years ago, the notion of what a corporation is changed, Clinton notes. Previously, corporations were “more or less” equally responsible to shareholders, employees, customers and the communities where they operated. “Now, shareholders are up here and everybody else is way down there.”

Government as the Enemy: Clinton cites a “30-year anti-government rant,” which is a uniquely American phenomenon, as another root cause of joblessness. “Instead of figuring out how the government and the private sector can work together, saying that ‘government is the source of all problems and if we just choked it off, never another regulation, never another tax, never had another program all will be well.’ There is not a single, solitary example on the planet where that’s worked, including in America.”

A good amount of people today express hopelessness about our present challenges. Many insist that our political and financial systems cannot be reinvigorated and that most people cannot learn new habits and retrain for a better future. I do not believe this. As I have said many times, today we are dealing with the aftermath of the bad choices we have made over the last 30 years. Our leaders have made some classic errors and the populace has too willingly allowed ourselves to blindly follow to our detriment. But this is not a global pandemic. This is the plight of too many zeros in debt. We can and will knock off the zeros over time and reset. Yes it is a lot of work. No it is not quick or painless. Nothing truly valuable ever is.

The central bankers keep trying to force consumer consumption through lower and lower rates. Consumers are not buying for good reason: they have learned the hard way that debt is death and they do not want more credit. This revelation is an important building block for a stronger future. People are focusing less on things and more on self-preservation, re-training, reinventing themselves to turn their life for the better. As the world awaits the next round of bad leadership and even cheaper credit from the Federal Reserve over the next two days, I think this quote and video clip (thanks Matt) are worth consideration.

“There is no chance, no destiny, no fate, that can hinder or control the firm resolve of a determined soul.”  –Ella Wheeler Wilcox, 1850-1919, Author and Poet

Lakshman Achuthan, co-founder and chief operations officer of the Economic Cycle Research Institute, says all of his economic indicators point to more sputtering ahead.

“The risk of a new recession is quite high,” he says, “the data should tell us the story by Thanksgiving.”

“Some economists argue that right now we are just in a period of slow growth, not unlike that of the early 1980s. They say there are signs of a turnaround in the near future. Achuthan argues there is no evidence to support that point of view.

“This is very different than the early 1980s. The issues that ail the U.S. economy and the jobs market today are not things that result from nearby events. What we’re living through and dealing with now has been building for decades,” he says. “If you look at the data, you see that the pace of expansion has been stair-stepping down ever since the 1970s, on all counts — on production, how much can we produce, how many jobs can we create, how much money do we make, how much do we sell. These are all trending down.”

So, Achuthan says, “those who were expecting we should have a vigorous recovery had no right to do so.”

In fact, he says, it is likely that the U.S. will see more frequent recessions than it’s used to for the next five or 10 years.

“The best news I can give you is that cycles do turn, but there is going to be a lot of pain in between,” he says.”