Grand Delusions

There is a scene in one of the Mad Max movie where one of the characters says “easy now, I know what I’m doing” only moments before he roars off to his fiery, early demise.

Apparently he didn’t. And it seems the Council of Economic Advisers are entering that same field of irony with startling aplomb. Perhaps like the character from the Mad Max film we will see irony brought to life, right before our very eyes.

It is an election year, and we here at PROFIT CONFIDENTIAL pointed out earlier that it was going to be an interesting year. So far we have not been disappointed! And undoubtedly we will have our serving of irony, no matter who wins the election.

The 2004 Economic Report presented to congress last Monday is 412 pages long and considered to be up beat, as opposed to last year’s lackluster report. A peculiar voice in my head says, “Hey, isn’t the deficit close to 521 billion?” That’s like 1.2 billion in the hole for each page. No matter. We must move on.

This hot-off-the-press report, produced by the President’s Council of Economic Advisers touts all kinds of recovery evidence and even the President himself is on a three-city tour to let us all in on it. Its kind of a secret. Not easily detected by mere mortals and those who are long gold stocks and short the dollar.

You have to hand it to the people behind the PR machine. It’s like they have been reading Churchill’s biography or something. “We shall not fail or falter; we shall not weaken or tire…Give us the tools and we will finish the job…”

As the President attempts to perform the “miracle of the fishes and loaves” (like his favorite philosopher) before November, and the Democrats go on about the 2.2 million plus jobs that have disappeared since George W. Bush took office, nobody seems to want to talk about issues that really matter.

Let us begin that sordid conversation: Those 2.2 million jobs are gone for good. They are on “permanent vacation” (to quote the economist Max Webster) overseas. They will not be returning, and it is more than likely the exodus will continue, as long as we Americans insist on being paid ten times more than our global neighbors for completing the same task.

Real economic change is underfoot in America. No President dares address it; no incumbent will speak its horrible name.

This nation raised itself to the top because of our agrarian might. We toiled and the land provided a bounty which we sold abroad. We prospered. Then America became an industrial powerhouse, making and mining more than we needed. We grew rich and, perhaps, complacent. But now we are on a new road… a road with an uncertain destination.

The greatest resource Americans have left is the ability to innovate, think, and solve problems – to invent and create. We have shown the world that we can do this like no other. And now we will have to structure an economy around those proponents. We will have to invent a new economy, with very well educated elements, using a very well educated work force. We will have to discard the blue-collar mentality of years gone by.

Meanwhile, the longer those who control our daily economy remain deluded about the great change we are going through, the higher the price of gold will go and the lower the U.S. dollar will drop.

The old guard has fallen back on old tricks. They won’t work and they will only delay the inevitable.