When the ‘fake news’ is the real news
I have been talking about this economic “recovery” for a while now. There were plenty of indicators showing that inflation is higher than reported; unemployment is not at record lows; and the economy is not making it back. But there wasn’t one source that summed it all up in a neat package.
There is now.
Bob Livingston sent — under the subject line Fake News — a link to a report that was jointly compiled by the U.S. Council on Competitiveness and Gallup Research. The title of the report: No Recovery: An Analysis of Long-term U.S. Productivity Decline.
Long term decline… I couldn’t have said it better myself.
This isn’t a report from some sketchy agency with an agenda. The Council was started during the Reagan era to bring business, labor, academics and government together to find a way to make better jobs for the U.S. economy.
The report states that the U.S. is at a 50-year productivity low. That kind of information is going to be shocking to many people because it is a far cry from the upbeat headlines about the economy during this election year.
“As this report makes clear,” wrote Council President Deborah Wince-Smith, “productivity growth is in a serious multi-decade-long slump that is dangerously close to stalling completely.”
Even bringing back jobs and protecting American trade, as Trump promised on the campaign trail, may not be a big enough fix. The Brookings think-tank, an establishment-right institute that has no reason to want to oppose a Republican president or optimism from the right, reported that a steady stream of new technology has been replacing labor at a furious pace. It’s been responsible for 85 percent of the contraction in employment in U.S. manufacturing since 1980, while foreign trade influences account for only 15 percent.
The stock market is at record highs due to stock buybacks and not growth, the Federal Reserve is going to raise interest rates to “cool” an already cool economy and oil prices are soaring while the Saudis are pumping more oil than ever even after agreeing to a “cut.”
After reading the report I just mentioned and thinking about these “news” stories, I understood Bob’s comments on “fake news.”
The fake news here is the continued deception and misinformation about what is really happening in the economy. And the lies have been told for so long that even the liars start to believe them.
But the American people outside of Washington, D.C. and New York City know exactly what’s going on and they’re tired of waiting for these two “industry towns” to do something about it.
The mainstream’s “news” was supposed to help Hillary Clinton ride Barack Obama’s coattails into the presidency. The supposedly “fake news” of skepticism about an economic recovery is what killed her bid instead.
But that news is real. It wasn’t the “Russians.” Hillary simply couldn’t sell the message of recovery because no one outside the major cities felt anything close to a recovery.
Among other things the report above discussed, these three give you taste of the larger document:
- Deterioration in the quality-to-cost ratio for healthcare, housing and education is dragging down economic growth. After spiraling price increases, these sectors accounted for 36 percent of total national spending in 2015, up from 25 percent in 1980.
- The U.S. population’s health has stagnated or even declined on several measures since 1980, especially for the working-age population.
- Educational quality is weak and stagnant at all levels, despite massive spending increases.
Basically, Americans are not getting what their taxes supposedly pay for — and they continue to pay more for less and less.
Something else to bear in mind: recent data from a Centers for Disease Control report shows that life expectancy for the U.S. has dropped for the first time ever. Ever.
How could that have happened in the midst of a glorious “recovery” over the last eight years?
Another chilling tidbit I recently saw was an interview Republican pollster/magician/strategist Frank Luntz. Not only did he state that the current political fighting in Washington is destroying the economy, but he thinks a collapse will happen in the next few decades. “Like Rome, like the Ottomans, like the Greeks,” he said ominously.
He’s moving to New Zealand in the coming months because he sees no way out of the U.S.’s current trajectory.
Bob Livingston will certainly keep writing to you about the need for all types of preparedness in future letters. But in case you missed it, follow this link for his complete guide. Remember, it’s crucial to make sure you have assets beyond stocks and bonds and dollars. There’s a good chance that the U.S. economy will swoon in coming months and the Trump transition will be less than smooth.
Avoid variable rate mortgages and loans. Cut your debt. And keep your assets as far away from the reach of the banks and politicians as possible. I and others like Bob always recommend gold, silver and bitcoin.
Gold has slumped in recent days, but remember that precious metals tend to do best when inflation is greater than interest rate increases, which could very well be the case as the Fed and Trump implement their economic policies.