Peter Schiff is president of Euro Pacific Capital and author of The Little Book of Bull Moves in Bear Markets and Crash Proof: How to Profit from the Coming Economic Collapse.

For those market boosters who are prattling on about the possibility of a “jobless recovery,” I offer an invitation to join me for a breakfast of “fat-free bacon,” “eggless omelets,” and “no-carb bread.” As unappetizing as such a meal may sound, it would nevertheless offer more substance than the oxymoronic concept of an economic resurgence without job creation.

Those who do cling to the absurd belief that, absent exponential productivity gains, the economy can expand while workers are being laid off will undergo a massive test of their convictions now that it’s clear the employment picture is bleak. Today’s weaker-than-expected report on non-farm payrolls revealed that employers shed 263,000 jobs in September. The losses propelled the headline unemployment rate to a 26-year high of 9.8%. U6, the Bureau of Labor Statistics’ most complete measure of unemployment, has risen to a dismal 17%. This figure includes those people who want to work full time, but have simply given up looking, or who have accepted part-time work in the interim. As it is similar to the methodology used during the Great Depression, U6 offers better historical perspective on the severity of our current crisis.

Taken together with yesterday’s larger-than-expected pickup in unemployment claims (first time claims rose by 17,000 to 551,000), today’s report makes it certain that the job market is still contracting, even while some indicators like GDP and consumer confidence are moving in the opposite direction.

There is no question that the sense of panic has temporarily subsided. In recent interviews, Treasury Secretary Geithner has been almost giddy in his descriptions of the recovery — all the while crediting his own policies for averting disaster. Americans are once again taking the government’s bait by spending money they don’t have to buy things they can’t afford. Evidence of this trend was contained in data released earlier this week which showed that even while income growth was largely stagnant, U.S. consumers showed the biggest month-over-month increase in personal spending in ten years! With the same report showing a 25% drop in the savings rate, the source of the spending money is clear. But depleting savings and increasing borrowing does not a recovery make.

To really recuperate, the government must allow market forces to restructure our economy. The government and individuals must rein in their spending; we must replenish our stock of savings, allow interest rates to rise, asset prices to adjust to economic reality, insolvent businesses to fail, and wages to reflect productivity. To accomplish these goals, subsidies that distort market forces must be removed and regulations that undermine our competitiveness must be repealed.

None of this can be accomplished without a degree of short-term economic pain. However, if we endure it, the payback will be a real recovery with plenty of new jobs that don’t rely on government stimulus money. If we refuse to allow the economy to experience a real recession, we will never have the benefit of a real recovery. Instead, we get the “jobless recovery,” a veneer of apparently positive indicators that merely obscures the underlying rot.

Over the last few decades, our industrial job market has atrophied while service- and public-sector jobs have grown unsustainably. We must restore balance. New jobs will have to come from areas that produce goods; bloated service and government sectors must be allowed to shrink. By propping up the sectors that need to contract, and running staggering budget deficits, the government cuts off the capital necessary to fund sectors that need to expand.

In truth, many of the service-sector jobs that exist today, such as real estate sales, mortgage finance, home improvement, and auto sales, were created in an environment of ever-increasing home equity, rising stock prices, and almost unlimited access to cheap consumer credit. With home equity gone, stock markets flat, and credit depleted, Americans find themselves needing to save rather than spend. But Washington has put through policies that have counteracted our good instincts.

While we were focusing our economy on consumer spending, much of the rest of the world was saving for the future. As such, we must begin to produce more for export, so that we can sell goods to those who have the savings to pay for them. That is the only way we can repay our debts, replenish our savings, repair our infrastructure, and rebuild our industrial base.

Another prerequisite to any real economic expansion is the potential for business owners to earn profits. With increased regulation and higher taxes on the way, these incentives are being diminished. In fact, via a phenomenon called ‘regime uncertainty,’ our current policy path is actually encouraging businesses to contract in order to prepare for a more hostile business environment.

Robust economies utilize all spare capacity, or restructure it for better use. Having 17% of our able-bodied population sitting at home or working part-time at Cinnabon indicates that our present policies are weakening the economy — even if GDP is growing. There is no “jobless recovery,” only senseless cheerleading. 

Now Liberty Tree Lantern analysis and comment about Peter Schiff’s article and thoughts in the above article:

 Capt. Karl would note that Mr. Schiff’s basic economic theory and concepts, enabling such forecasts are very closely aligned with that of The Liberty Tree Lantern.  However, due to the intense desire of the members of the U.S. Government and The Federal Reserve “System” not wanting to lose their almost absolute power over not only our money but our daily behaviors and decisions and to whom our earnings from our labor goes, the “Powers That Be” are not going to let “The Matrix” like economy collapse as Mr. Schiff RIGHTLY prescribes because it is that very MATRIX that gives them their power over us and our earnings. 

Without The MATRIX, the economy that only exists in our minds believing that Monopoly money printed on glorified computer printers at the office of “The Fed” are worth 100 cents when in reality they are only pieces of paper with ink on them called “NOTES”  Federal Reserve “Notes” as printed thereon, which is an I.O.U. promising to pay with ‘real’ money in the future, in this case a future that will never arrive, our freedom, liberty, unalienable rights and individual wealth for the vast number of our average common working Americans, being able to keep their own earnings and choose for themselves what they want to do with their money, would be restored.  This, to the “Powers That Be”, is a horror that is far too alarming to behold.  Therefore, The Liberty Tree Lantern submits to our dear knowledgeable and noble Mr. Schiff, that the economy over the next 8 – 12 months will boom as the result of pumping an ever increasing level of TRILLIONS of dollars in Monopoly money/Federal Reserve “NOTES” into the economy resulting in cash seeping into our economy, created out of thin air demand for goods and services and millions of people being re-employed and some making more money than ever before.

And that, my intellectual friend (who I hope to meet someday), is when we will KNOW that the total and nightmarish collapse of The MATRIX, our economy, is close at hand.  When almost everybody is lulled into thinking that everything is on the mend, but behind the scenes there will be all sorts of disruptions in the economic forces because an economy based on paper and ink alone is not sustainable due to Natural Laws of economics.  We are well on our way to a BLACK FRIDAY that makes 1929 look like a cake walk.  And the ONLY WAY to tell when it is close at hand is when most everybody is back to work and everything seems, for the most part, honky-dory.  But, in the background, economic analysts will be scratching their heads knowing something isn’t right.  More and more banks will fail to the point that the FDIC will need infusions over and over again.  Taxes on the average common blue collar worker will go up substantially to pay for all sorts of TARP, stimulus, BAILOUTS, untold numbers of Socialist spending  programs and last but DEFINATELY not least Social Security and Medicare, which is a $99 TRILLION Dollar hand to mouth Ponzi scheme that makes Bernie Madoff look like a rank amateur.  Only this ponzi scheme is about to financially cripple 306 MILLION Americans and our entire nation.

And THIS IS A GOOD THING!  THIS IS A BLESSING!  Because IF we then have become motivated enough to learn about the value of freedom, liberty and capitalism, in addition to the 28 Freedom Principles in which The Constitution was drafted, we will become free and after about five years of hardship, turmoil and a possible Re-Revolutionary War, we will restore our INDIVIDUAL freedom, liberty and prosperity.  You see folks as long as ANY PART or hint of The MATRIX exists, we will never have our INDIVIDUAL freedom, liberty, unalienable rights or prosperity that can only be created by them as blessed by God and not the economic and personal slavery by and resultant from Constitutionally contemptuous Socialist, Communist, and/or Fascist “progressive” members in all three branches of the U.S. Government and their  cartel of twelve private banks that make up The Federal Reserve “System”.

Peter Schiff is exactly right.  The Matrix (our current economy based on Monopoly money and Constitutional contempt) has got to comprehensively be shutdown, so that we can rebuild our freedom, liberty and economy, even though it is going to hurt like hell for a few years.

Last night from our Americans for Prosperity “Hands Off My Health Care” town hall meeting at the Raleigh fairgrounds, I watched along with 1,100 activists as the President declared he has basically saved our economy since coming into office in January.

By “saved,” the President means passing the $1-trillion “stimulus” bill in the spring that drove our debt through the roof while wasting money on boondoggles across the nation.

The President’s self-congratulatory rhetoric was stunning when our unemployment is creeping toward 10%, budget deficits are the biggest in American history and our national debt is through the roof.

Sadly, the President then went on to repeat many of the same falsehoods that he has used for months in the health care debate. First, he declared that the Washington health care takeover will not change in any way the health care coverage of the 85% of Americans who currently like their health care. Most Americans know better.

Then, he once again attacked the millions of Americans like you and me who have attended town hall meetings, rallies, and tea parties to defend their health care and oppose the Washington takeover.

AFP activists telling President Obama Hands Off My Health Care

Next, the President stated – with a straight face – that his health care takeover will not increase the budget deficit a single penny! The crowd in Raleigh literally roared with laughter at this line, and I suspect most Americans know the truth – that’s one reason we’re winning.

President Obama said businesses would be required to “chip in to help cover the cost of their workers,” a clever way of saying he supports a punitive payroll tax for health care.  Does that mean he supports the 8 percent payroll tax included in H.R. 3200?  That’s a huge job-killer at a time our economy can least afford it.

The President stated that his “public option” – aka the government-run insurance plan – will not harm the private insurance that literally tens of millions of Americans enjoy. But we have seen him on video giving speeches where he details his vision of everyone relying on government health insurance. Click HERE for video.

The President did acknowledge the need for tort reform to get rid of frivolous lawsuits. However instead of putting this reform in the health care bill President Obama placed Health and Human Services Secretary Kathleen Sebelius – a former lobbyist for trial lawyers – in charge of such reforms.

There’s so much more, but you get the idea.

I’ve got a request for you. The President and his friends are counting on this speech being a game changer. It’s not. But TODAY, you need to tell your member of Congress that the President’s speech has not changed your mind. Act now.

The bottom line is this: despite a rousing summer when your grassroots activism captured the imagination of the American people and slowed the momentum for the Washington health care takeover, we face a September, October and potentially November where the future of our health care is in doubt.

President Obama, Speaker Pelosi and the entire big government side is counting on you and me losing interest or growing weary of the fight.

We can’t let that happen. This Saturday’s 9/12 “Taxpayer March on Washington” is crucial and I hope to see you there. We’ll have both our Patients First “Hands Off My Health Care” buses cruising the streets around the Capitol.

Then, we’ve got to keep the pressure on these Senators and Representatives throughout the fall.

At our rally in Goldsboro yesterday afternoon (just before the big town hall in Raleigh), a lady named Janet walked up to me. Her son is a special needs child and she told me their family’s story of struggle and achievement – it was inspiring. But, Janet knows what is at stake for her precious child if we lose this battle over health care, and that’s why she took time from a busy day to attend the rally and fight the good fight.

In the decisive weeks and months to come, let’s make the same commitment.

Sincerely,

Tim Phillips

PS: Please let your Senator or member of Congress know that President Obama’s speech has not changed your position one bit. Today please call or e-mail because it’s important for Washington to get the message–the President’s speech changes nothing.

God created all sorts of energy resources, only a few of which have been developed and utilized to drive our economy.  Energy is the life blood of freedom and it is what allows our economy to produce individual wealth for all Americans.  And, this is why energy, in all forms, is so very important to the average working American.  Cheap inexpensive oil is what results in the costs of everything to go down to reasonable affordable levels for us all.  When energy is inexpensive it is also an incentive for Americans to start new small businesses, because then it is easier to make a good profit, and therefore lower energy costs results in hundreds of thousands of new jobs and allows for significant increases in money available for wages on the shop floor or out in the field.

Energy prices, like prices for everything, are determined by the principles of supply and demand.  The more supply of energy the United States has available to meet the demand of our large and small businesses and individual needs and desires the less it costs.  That is why we the American people have so much power to lower the cost of our energy and make ourselves individually more wealthy.

The fact is that there are HUNDREDS of BILLIONS of barrels of oil and vast volumes of natural gas available DOMESTICALLY right here in and around America.  In addition America has vast resources in coal energy.  Combining the unfathomable quantities of these resources with new developing energy sources would immensely improve all of our families’ economic conditions.  The Liberty Tree Lantern is astonished at how little the mainstream media is reporting all of the new and existing volumes of domestic energy available for us.  We also find it interesting how little it is reported that the Obama Administration is standing in the way of releasing the leases necessary to drill and harvest these vast resources that would so greatly improve our economy and restore the prosperity of individual citizens.

What we need to do as Americans is to get together and with one Tea Party like voice demand that Obama and his Secretary of The Interior release the leases that our Oil companies need to drill for oil out west on federal lands and offshore all around our country and Alaska so that we can build up America and strengthen our freedom through massive infusions of domestic energy.

The Liberty Tree Lantern is happy to provide just one story, of dozens of available, regarding domestic American energy just waiting for the Obama Administration to let us produce the energy we so desperately need to lower our costs of everything.   Please send a personal message to Congress via, paper, e-mail and phone that you want Obama to release the drilling leases immediately.  Tell them to DRILL  HERE AND DRILL NOW!  (Do you know that Obama is stealing American taxpayer money to “give” to Brazil for ‘them’ to drill for oil offshore?  See:  U.S. Taxpayers to Provide Financing To Brazil for “Their” Offshore Drilling)

When you write or talk to your Congressman, make sure that you mention that the LAST thing we need are taxes on energy that will increase costs on every single thing the American family needs to live and businesses need to create well paying jobs.  Reject Cap-n-TAX in any form, folks, because such taxes will set our entire country back by decades destroy jobs, wealth, savings and create poverty.

The Liberty Tree Lantern has a few questions for our readers to ponder: 

1. Why, after the people of America demanded that the ban on offshore and western Federal Lands expire, which it did some months ago now, has the Obama Administration withheld exploration leases and not allowed oil companies to go where they know the domestic oil likely is for exploration and harvest? 
2. Why is the Obama Administration keeping America from our own domestic energy instead of depending on and importing energy from other countries?
3. Why doesn’t the majority of mainstream media report on the Billions of Barrels of crude oil available in Western Federal Lands and offshore when this energy would obviously improve the lives of so many Americans?
4. America is in a horrible recession RIGHT NOW that could OBVIOUSLY be greatly remedied by dramatically increasing that availability of our own massive volumes of domestic energy, doesn’t the Obama Administration care about the average individual American who is out of work and quickly running out of money due to job loss and increased prices on utility bills, gasoline, food and just about everything else?

But when cigarette and telephone taxes went up yesterday by $415 million, you could have heard a pin drop in Madison. All totaled, Doyle’s budget raised taxes and fees by $2.1 billion including:

• $310 million from a 75-cent per pack cigarette tax increase
• $287 million by creating a new 7.75% income tax bracket for state taxpayers
• $242 million by cutting in half the tax exemption for capital-gains investments
• $105 million from a 75-cent monthly fee on all telephone lines

Would the last person or small business to leave the State of Wisconsin, please turn out the lights.  Thank you.

The story by now is familiar: employees of Mercury Marine in Fond du Lac voted down an offer to keep 800 jobs from moving to Stillwater, Oklahoma. Realizing that they had just voted themselves out of jobs, union members began calling for another vote – but IAM headquarters in Chicago immediately shut them down.

A day late and a dollar short, Governor Jim Doyle issued a statement claiming he had done all he could to keep Mercury Marine in Fond du Lac. Doyle outlined demands that Mercury Marine create and retain 2,700 jobs and maintain a significant presence in Fond du Lac for 12 years. In exchange the state would provide unspecified financial incentives.

Doyle said he couldn’t release details of the offer because “doing so would likely put Wisconsin at a competitive disadvantage with other states.” This from the same governor who recently signed a $186 million business tax hike, driving long term employers like Harley Davidson and Briggs & Stratton out of Wisconsin.

FOXNews.com

Monday, August 03, 2009

Health and Human Services Secretary Kathleen Sebelius and Sen. Arlen Specter got a preview Sunday of the tough sell lawmakers will face over health care as audience members booed and jeered them during a town hall meeting in Philadelphia.

Among those at odds with the officials touting the $1 trillion, 10-year plan was a woman who earned loud applause when she said she doesn’t want Washington interfering with her health care choices.

Sunday: Health and Human Services Secretary Kathleen Sebelius and Sen. Arlen Specter take questions from a boisterous audience in Philadelphia (FNC).

“I look at this health care plan and I see nothing that is about health or about care. What I see is a bureaucratic nightmare, senator. Medicaid is broke, Medicare is broke, Social Security is broke and you want us to believe that a government that can’t even run a cash for clunkers program is going to run one-seventh of our U.S. economy? No sir, no,” she said. 

Click here to see the video of the town hall meeting.

While supporters offered courteous applause to the officials, Sebelius didn’t earn any fans when she said that if lawmakers say they don’t understand the legislation voters should urge them to go back and read it. 

Specter was shouted down when he said that lawmakers divide up the bills into sections and have their staffs read portions because, “We have to make judgments very fast.” 

He then said he will have read the Senate bill before he votes on it, which Sebelius pointed out hasn’t been written yet.

“The Senate bill isn’t written so don’t boo the senator for not reading a bill that isn’t written,” she said.

That explanation, which undermined an earlier failed argument that the legislation should be passed quickly, didn’t satisfy many of the more than 400 people estimated in attendance. 

Dozens in the back shouted at Sebelius when she said the bill would stop the system of rationing that insurance companies use. Sebelius then scolded the audience who jeered her, saying she would take questions if people could stop shouting at each other.

The anger is just a sample of the reaction lawmakers are bracing for as they try to sell the massive plan wending its way through Congress. The House Energy and Commerce Committee passed its version — one of five in Congress – late Friday before the House broke for the August recess.

They are using that month’s time to sell the plan to voters. For those Democrats who haven’t read the 1,000 pages of legislation, House Speaker Nancy Pelosi has handed out cards with talking points to address constituents’ concerns.

The card, labeled “health insurance reform to hold insurance companies accountable” drives home two points — one, that the health care bill is good for consumers, and two, that Congress will hold the insurance industry accountable. 

But while insurance companies are low on voter opinion polls, Congress is viewed even less favorably. And Republicans are seeking to capitalize on the intense scrutiny President Obama is facing over his top priority, issuing a new ad out Monday that tries to make light of the situation.

“Like the old joke goes, President Obama isn’t a doctor, but he plays one on TV,” said House Minority Leader John Boehner, calling the ad lighthearted but pinpointing a serious issue.

“Americans want lower health care costs — not a trillion-dollar government takeover of health care that increases costs and lets Washington bureaucrats make decisions that should be made by doctors and patients.”

President Barack Obama says that his health care program will cut costs and give Americans better coverage and more choices. Obviously, these are concepts which should sell extremely well in a country where we place a premium on savings and selection. Of course, the actual substance of Obama’s $1.5 trillion socialized medicine plan stands in stark contrast to the capitalist-sounding, fiscally-responsible rhetoric that’s being used to promote it – which is probably why Obama is encountering such serious resistance in selling even members of his own party on the plan.

Far from expanding individual choices, Obama’s proposal is designed specifically to eliminate competition and put one provider in charge of health care – the government. And instead of cutting costs, Obama’s plan would force millions of Americans to use the same low-quality government health care options that have spawned the unsustainable growth rates that we’re now supposed to be “reducing.”

In other words, if “Obamacare” passes, costs would go up, choice would be eliminated and coverage would diminish – which is ironically the opposite of everything Obama claims his plan would accomplish.

Sadly, Obama and his supporters are ignoring literally dozens of common sense reforms in their effort to impose government’s flawed, demonstrably ineffective philosophy on the rest of the health care industry.

Rather than pushing for private, portable health savings accounts (while simultaneously combating fraud, cutting administrative costs and reforming eligibility in Medicaid), Obama instead wants to put the failed government model of high costs, zero accountability and rampant administrative inefficiency in control of everything.

Of course, Obama is much too politically astute to simply hand over the nation’s health care system to government bureaucrats, which is why his plan creates an intermediate step – a so-called “exchange” system where consumers are driven to lower-quality government care by artificially-established premiums at both ends of the spectrum.

All this does, however, is delay the inevitable, as government simply manipulates the market to create artificially-high premiums for private plans and artificially-low premiums for its own offerings.

The end result of all this so-called “choice?” According to a recent study by the Cato Institute, Obama’s plan would “reduce competition by driving lower-cost private health plans out of business.”

“President Obama’s vision of a health insurance exchange is not a market, but a prelude to a government takeover of the health care sector,” the report continues. “In the process, millions of Americans would be ousted from their existing health plans.”

Additionally, the tax hike that is supposed to pay for $540 billion of Obama’s “cost-saving” plan will itself cost an estimated 4.7 million jobs, according to a recent report by the National Federation of Independent Businesses (NFIB). How, exactly, would these massive layoffs reduce the cost of coverage, to say nothing of assisting in our nation’s “economic recovery?”

Ask yourself honestly – when was the last time a monopoly wound up cutting costs? Or producing a better product or service? And when was the last time you can remember government running a business better or more efficiently than the private sector?

Given these concerns, the “socialized medicine” stigma is one that Obamacare backers are desperately seeking to avoid. In fact, just last week a Texas Congressman was prohibited from using the term “government-run health care” as he attempted to advise his constituents of a telephone town hall meeting on the proposal.

Congressional leaders informed him that “public option health plan” was the term he must use.

Far from creating options, though, “Obamacare” is truly socialized medicine at its worst – a manipulative effort to get rid of choice in the marketplace and exert government control over yet another facet of our daily lives.

Passing it will only make our nation’s health care problems exponentially worse.