I must say that I agree with much of what Amity Shlaes suggests and predicts for President Obama’s State of the Union speech on Wednesday (9pm EST).
She explains how Obama will announce his plans to turn us into Japan of the last 20 years. This is not a compliment folks. Japan has “lost” two straight decades as the markets have retreated in both of them, the debt to GDP ratio is at 200% and not improving, and the country shows little signs of growth.
Expect the President to support special interest groups, talk about teachers and the middle class, and creation of green construction or technology related jobs. (Let’s think about that for a second…government sponsored technology related jobs…can you think of anything more horrible? Last I checked, the DMV was still using scan-trons.)
“All this is highly Japanese — the idea that the country, and also the economy, is made up of groups, not individuals, and the idea that the nation as a whole benefits most from a harmony of such groups.”
She also discusses the too big to fail banks and the fact that we should let some fail and let the market clear.
I continue to read about how government is postponing dealing with our economic problems. Interestingly enough, John Mauldin’s newsletter this week points out a study of hundreds of financial crisis’ over the past 800 years. A clear trend and argument from the study states that the longer the government postpones dealing with the debt problems, the more pain the countries economy goes through over a longer period of time.
This, is highly Japanese. The government supported the economy for far too long and thus ended up with two decades of nothing.
Prepare yourself for a couple decades of a waste of time.
No related posts.
