Public Fears of a Gangster Government

By Alan Caruba

Even though it has changed ownership over the years, I still go to the bank branch where I have conducted my affairs since I was in my teens and that is a long time ago. Bank of America runs it now and, by all reports, it is financially sound. Even so, these days, people tend to worry about such things.

A check on the number of banks that have failed thus far in 2011 reveals that it is in excess of a hundred and the year is not over yet. The process is overseen by the FDIC or Federal Deposit Insurance Corporation.

The U.S. government has layers of agencies responsible for the regulation and oversight of the financial community, but it doesn’t look like they’re doing a good job of it.

There’s the Treasury Department and the Federal Reserve. The latter regulates the U.S. monetary system along with monitoring the operations of holding companies that include traditional banks and banking groups.

Most famously, the Securities Exchange Commission which, despite having serious concerns called to its attention, totally missed identifying Bernard Madoff’s $50 billion Ponzi scheme. That is called lax enforcement and it appears to be the case across the spectrum of government's financial regulatory entities.

The Commodities Futures Trading Commission has regulatory responsibilities over the market for futures contracts. The traders it regulates formerly dealt primarily with commodities, but now they speculate on government securities like Treasury bonds and those of other nations. It is called sovereign debt.

The recent collapse of MF Global would have fallen under their purview. Reportedly there are major questions regarding about $633 million that is missing from MF Global’s customer accounts. A subpoena seeking information from its auditor, PricewaterhouseCoopers LLP. has been issued.

What makes MF Global stand out is the fact that the firm was one of a handful of prime dealers with the Federal Reserve, purchasing and selling U.S. treasury bonds in addition to speculating on foreign ones. Reports indicate that the firm had bet big on the soundness of Europe’s financial state. Some of the European Union’s nations have been in serious trouble for many years.

As I noted in an earlier commentary, the European Union may well come apart as a result of the monetary problems of Greece along with Spain, Italy, and others. In financial terms, what sank MF Global was that it was over-leveraged and unable to meet obligations to its investors. It was reportedly “worth” $41 billion when it closed its doors.

Here’s where it really gets scary. At one time Jon Corzine, the chairman and chief executive officer of MF Global, was under serious consideration to be Obama’s Secretary of the Treasury. That job went to Timothy Geithner who had managed to “accidentally” underpay his income taxes despite an impressive resume. Between Obama, Geithner, and Congress the national debt and deficit has skyrocketed.

The Obama administration and the Congress in which both branches were controlled by Democrats until 2010 is now famous for excessive spending of the national treasury, crony-capitalism, massive unemployment. The business community is understandably reluctant to expand or invest until Obama is long gone and Republicans control the Senate as well as the House.

For example, instead of allowing General Motors to go through bankruptcy and restructuring, the Obama administration intervened with a huge bailout, leaving its creditors unprotected against the loss of their investment. The Chevy Volt, an electric car whose production was foisted on GM continues to go begging for buyers.

Solyndra investors, for the most part, were similarly shafted when it declared bankruptcy, sticking taxpayers with the cost of a half billion dollar loan guarantee. At the end of October, Beacon Power which received a $43 million loan guarantee declared bankruptcy. This looks to repeat itself with other “renewable energy” companies that advanced claims for wind and solar energy, but cannot compete with traditional energy providers without various government mandates for the use of the pitiably small amount of electricity they generate.

Meanwhile, according to the U.S. Bureau of Labor Statistics, one in five jobs created since 2003 have come in the energy sector, specifically oil and gas drilling!

The Constitution does say the federal government should “promote the general welfare” that that has been so twisted beyond its original meaning and intent that we now have a federal government that is literally out of control; one that has become a speculative investor with our money.

Social Security, Medicare and Medicaid are either broke or soon will be. Was this ever truly a function of government?

Meanwhile, under Obamacare, the federal government has asserted the right to require Americans to purchase health insurance or face a stiff fine for failing to do so. That issue has been challenged by 26 states and is making its way to the Supreme Court. If it agrees that it is constitutional, look for massive state-by-state nullification efforts. It would be a major crisis.

The collapse of the housing market predates the Obama administration and was the most predicable crash of the modern era. By 2008, Fannie Mae and Freddie Mac, two “government entities”—meaning their credit was backed by taxpayers even though they acted as private financial entities—owns about 50% of all the mortgages in the nation. After 2008, the federal government seized control of both.

As Bill O’Reilly recently noted, “Now we learn that the mortgage agencies Freddie Mac and Fannie Mae, in business with the federal government, paid almost $13 million in bonuses to their top executives in 2010. That is an outrage because those agencies currently owe the American taxpayer $141 billion.”

Why wasn’t this function left solely to banking institutions? Why did the federal government intervene in the housing market? The answer is the progressive belief in “social justice” as a function of the federal government. The programs instituted in its name are now broke and a huge burden on states and citizens alike. Blame has been assigned to the banks, a favorite whipping boy, but it is misplaced.

Like everyone with savings accounts, living off their pension funds and watching their 401K plans decline in value many are beginning to worry about an Obama administration that would happily seize those personal assets by declaring some kind of national emergency.

How bad is it? The liberal New York Times recently published an article, “New Poll Finds a Deep Distrust of Government”, noting that “Not only do 89 percent of Americans say they distrust government to do the right thing, but 74 percent say the country is on the wrong track and 84 percent disapprove of Congress—warnings for Democrats and Republicans alike.”

The Republicans, however, unanimously opposed the passage of Stimulus I and the latest “jobs bill” otherwise known as Stimulus II. Indeed, even the Democrats have opposed Stimulus II despite an absurd joint session of Congress in which Obama demanded “pass this bill now.” In the House, Republicans have led the effort to repeal Obamacare. Harry Reid, the Democrat Majority Leader in the Senate has thwarted consideration of the bill there.

As conservatives are known to opine, the government has to become much smaller and that taxes, particularly in a time of recession, be lowered. Meanwhile, the Obama administration has already redefined “millionaires” to include your local dry cleaner.

© Alan Caruba, 2011

A Bad Future for Everyone

By Alan Caruba

Every so often it’s a good idea to take stock of the threats facing the modern world. Any student of history will know that this analysis is going to be grim. Take a deep breath and read this for a few minutes. After that, you may need a stiff drink!

I have this theory that the world goes mad every twenty to fifty years, forgets what the devastation of war does to nations and the lives of those who want nothing to do with war.

It has been sixty-five years since the end of the last world war, fought in Europe, Russia, and in the Far East, China, the Philippines, Pacific islands, and against Japan. Much of the world lay in wreckage, millions were dead.

After that the U.S. spent a total of twenty years, from 1955 to 1975, in Vietnam, followed now by nine years in Afghanistan, and seven years in Iraq, not counting an earlier invasion to drive Saddam out of Kuwait.

Though the scale was small, war came to the American homeland with the destruction of the Twin Towers in New York at a cost of nearly 3,000 lives along with the attack on the Pentagon. There have been smaller terrorist attacks since.

In the combined military services, the U.S. has over 1.4 million men and women under arms. The United States of America maintains some 700 bases around the world. We are the sole guarantor of any measure of peace, of any resistance to tyranny.

The single greatest threat to freedom worldwide is the resurgence of militant Islam. More than a billion people are Muslims, but the locus of the attack on industrialized, modern nations has been the Middle East, a region of the world that remains trapped in this seventh century retrograde religion. If successful, it could drag the world back to a new version of the Dark Ages when humanity will be oppressed by a faith based on the hatred of all other faiths.

Trying to accommodate Islam is an invitation for conquest. It has a history of building mosques over or near the holiest sites of older faiths.

The environmental movement took shape in the late 1960s and, from around the late 1980s, the greatest “scientific” fraud ever perpetrated, global warming, was launched by the United Nations and maintained through a huge propaganda program and, as often as not, by various national leaders, including our own.

Billions were allocated to research and other responses to this non-event. The planet was not in the throes of a sudden and dramatic warming, nor is there any need to reduce carbon dioxide emissions. For the past decade, the planet has been steadily cooling.

The rise of the United Nations following World War Two has been a ceaseless quest for control over the world’s population. The UN has never successfully deterred any war, large or small. It seeks to undermine the individual sovereignty of nations. It is a cesspool of corruption and deception.

The other major threat has been the specter of communism that gained momentum at the beginning of the last century, primarily in the former Soviet Union, thereafter spreading to China and other nations. It takes the form of socialism in many nations, including our own. As an economic system, it is a total failure. It engenders huge governmental apparatus, centralized planning, and attacks on the ownership of private property. It destroys innovation, entrepreneurship, and economic growth.

There is, too, the prospect of the growth of the Earth’s population to eight billion by 2050. It will be coupled with the demand for more sources of energy, oil, natural gas, coal, and nuclear. The Earth’s resources may or may not be finite, but the stresses this will put on nations as they compete for what does exist are seen in the bizarre refusal of successive U.S. administrations to open its own huge reserves of coal and oil for extraction and use.

Yet another factor is the stress on the global banking community. The potential failure of nations like Greece, Spain, Italy and others have put huge strains on other nations that are, in one way or another, invested in them. These troubled nations have two things in common, aggressive unions and socialism. The huge debt of the United States, now at $13 trillion, surpassing our annual gross domestic product, poses a threat to the entire world’s financial stability.

Population, financial stability, a militant religion, and energy all will place stress on the nations of the world in ways that have historically erupted in warfare.

Finally, there is something called the Grand Solar Minimum, a diminution of radiation from the Sun that is likely to precede a new ice age. Since the period between ice ages is generally 11,500 years we are at the very end of the current interglacial period.

To put that in context, we and the rest of humanity are living in the period in which the human race created what we call civilizations.

Dennis Avery. a scientist with the Hudson Institute, notes that “Humans have known for 400 years—since Galileo—that sunspots correlate with climate changes on earth. A startling lack of sunspots predicted both the coldest periods of the Little Ice Age, the Sporer Minimum that begin in 1460, and the Maunder Minimum which began in 1645. More recently the Dalton Minimum predicted the severe cold of the early 1800s.”

These factors all portend a very bad future for the whole of the Earth’s population no matter where they live, what they believe, or how they behave.

© Alan Caruba, 2010

A Man-Made Financial Disaster

By Alan Caruba

You will recall that, shortly before the end of the 2008 political campaign, the White House announced a threat to the entire financial system and called on Congress to enact emergency spending powers. The Emergency Economic Stabilization Act of 2008 was enacted on October 3, 2008.

Just eighteen days earlier an event occurred that slid under the radar screen of virtually the entire mainstream media. On Thursday, September 15, 2008, at approximately 11 A.M., the Federal Reserve noticed a tremendous draw down of money market accounts in the nation, amounting to $550 billion dollars. It occurred within an hour or two. The money was removed electronically.

It has never been made public which accounts were affected, nor where the withdrawn funds were sent. If we knew those facts, we would know who launched an attack on the United States that has been more devastating than any in our history.

Had the Federal Reserve not closed down the accounts involved it is estimated that by 2 P.M. $5.5 trillion would have been withdrawn and the entire economy of the nation would have collapsed. It would have been followed within a day with the collapse of the world’s economy.

What followed was the sub-prime mortgage loan debacle that can be traced to the government’s intervention into the housing loan marketplace via Fannie Mae and Freddie Mac. They ended up owning fifty percent of all the loans.

Americans were using home ownership as a credit card and government policies were mandating the issuance of bad loans in the name of “social justice.” Home ownership became “a right”, not an aspiration.

Throughout the 1990s, as communities revalued homes, increasing their alleged worth in order to impose higher property taxes, it was only a matter of time before a financial collapse became a reality. Virtually every State was spending beyond its means and increasing property taxes was the preferred choice to make up the difference.

That collapse, however, was initiated by unknown persons at precisely the time Americans were preparing to select a new president. That was not a coincidence.

In the October edition of “Budget & Tax News”, a publication of The Heartland Institute, a non-profit, free market think tank, there was an article by Sandra Fabry, the government affairs manager for Americans for Tax Reform and executive director of the Center for Fiscal accountability, a project of the organization.

The article was titled “61% of National Income Goes to Government.”

“Americans this year had to toil until August 12 to pay for federal, state, and local governments, according to the annual Cost of Government Day report by the Americans for Tax Reform Foundation and Center for Fiscal Accountability.”

“In 2009, the government will consume a whopping 61.34 percent of national income.”

The redistribution of income has reached a point in which 30.36 percent of the money Americans earn is consumed by federal spending. State governments take their percentage as well in income, sales, and other forms of taxation.

It means that Americans worked for 111 days of the year just to pay for the costs of the federal government and federal spending has reached a record 28.5 percent of GDP.

With the passage by the House of the government’s attempted takeover of the nation’s healthcare system and the up-coming cap-and-trade bill, a massive tax on energy use, there is no telling how many more government spending programs, huge redistribution schemes, Americans will be obliged to pay for.

The Obama administration swiftly embarked on an unprecedented spending spree, “bailing out” General Motors and Chrysler, in effect owning AIG, the insurance giant, and giving funds to various banks to “stimulate” loans, i.e. credit, that Americans and their business enterprises depend upon to function.

Peter Schiff, CEO of Euro-Pacific Capital, has long argued that the problems of the American economy were created by excess credit and debt, and that a massive infusion of credit and debt into the economy only exacerbates the problem. He is right.

The “stimulus” has not worked and the billions still unspent by the program should be returned to the American treasury. Taxes should be cut in order to allow Americans to save or spend their own money. Contracts with civil service and teacher’s union should be renegotiated. A vast regulatory revision to remove obstacles to economic growth should be implemented.

Meanwhile the government’s “official” figures say 10.2% of Americans are out of work, but the actual figure is estimated to be closer to 17%. Nothing is being done to facilitate hiring with tax credits and reduced taxation of small businesses, nor are the highest corporate taxes in the world being reduced to encourage domestic investment and growth.

And our present difficulties began on September 15, 2008 in what gives the appearance of a calculated attack that got Barack Obama elected and was immediately followed by all the subsequent efforts to grow the federal government ever larger to make more Americans dependent upon it. The Obama administration has increased the national debt more than all previous presidencies combined.

There is a determined effort under way to undermine the free market capitalist system that made America the greatest economic and military power in the world. Both the White House and the Democrat-controlled Congress are parties to it, but the identities of those who launched that September attack remain hidden.

Editor's Note: To read about the electronic attack, click on
http://www.capitalismgonewild.com/2009/02/electronic-run-on-banks-550-billion.html

A Run on the Banks...by Robbers

By Alan Caruba

There’s been a run on the banks in New Jersey. By robbers!

Yes, while others may make fun of New Jersey, I am proud to say that we have some of the most industrious and hard-working robbers to be found anywhere. Just 53 days into the new year, there were 32 bank robberies, a significant improvement over the 23 recorded in the first two months of last year.

Law enforcement officials say it has nothing to do with the recession. Indeed, quite a few of the robbers actually had a job at the time. Then they quit and began to devote themselves to robbing; none of that 9-to-5 drudgery anymore. Bank robbing has the distinct advantage of being able to sleep late, select the bank of your choice, go to the Halloween store, get a mask, a wig or false beard, and then it’s off to make a permanent withdrawal.

In the 1930s when we had bank robbers with real personalities. Top of the bunch was John Herbert Dillinger, a Midwestern boy who saw opportunity and seized it with the one hand that wasn’t holding a gun. The man had style, unlike those country bumpkins, Bonnie and Clyde. Their deaths in a hail of bullets were, however, the proper way for such lowlifes to depart this world. In both cases, they were betrayed by informers, but that’s what happens when you hang out with people of low moral character. And, truly, crime does not pay.

Last year, New Jersey had 193 bank robberies or an average of about 16 per month. Thus far this year, there were 17 during the first three weeks of February. All but two occurred on work days, two were on weekends and one of those weekends was a holiday when banks were closed. Why wait in line, right?

Then, too, robbing banks is an equal opportunity kind of occupation, nor does it require any special training.

People who know about such things say that one of the reasons for the rise in bank robberies in New Jersey is because there are more banks to rob. There are, for example, 504 more branches in New Jersey now than there were in 1997. Naturally, the real boom in bank robbing has been in the suburbs where the number of robberies has doubled since 2006.

To my knowledge and recollection, there have been no fatalities in any of the bank robberies. Perhaps because tellers are taught to comply and perhaps because the robbers, surely knowing they are on several video surveillance cameras do not want to draw any more attention to themselves than necessary though the tapes will, of course, put them in jail for a very long time.

One recent serial New Jersey robber became known as the “Hat Bandit” because he always wore a different hat each time. He eventually pled guilty to six robberies over a ten month period. I guess that robbing banks is like eating potato chips; you can’t just rob just one once you get started.

The “Hat Bandit” lived in my former hometown where I resided for six decades until a few years ago. James G. Madison never used a gun and told the judge he remained a “college-educated man who still envisions the American Dream—raising a family in my own home in the suburbs.” That’s what we need; a better class of bank robber. He got ten years and, with good behavior, will be out in three.

I, myself, would never rob a bank. No guts.

Too Many Coincidenses

By Alan Caruba

My mind keeps circling back to the recent campaign and focusing on two coincidences. I am the last person to subscribe to conspiracies, but it is entirely likely that two events during the campaigns were something less than just coincidence.

At a point in the campaign when John McCain looked like he had a decent chance to aggregate enough votes to win, Secretary of the Treasury Henry Paulson held a sudden press briefing in which he put forth a three-page proposal that would put him in sole control of the distribution of billions of dollars.

Let us grant that the prospect of major investment houses collapsing and taking Wall Street with them would have been enough to scare the daylights out of anyone in his position, but let us also grant the crisis had been in the making since at least 2006. Let it also be said that the announcement could not have come at a worse time for the McCain campaign. His response, going off-schedule, rushing to Washington, D.C., didn’t help. By contrast, Obama remained preternaturally calm.

History hinges on such events, but try to imagine how the campaign might have gone without that dramatic event? It wasn’t as if the “bundling” of those worthless mortgage loans hadn’t been going on for a very long time and at the time McCain was tied neck-and-neck with Obama for much of the campaign.

The second coincidence was the way the price of oil dropped precipitously during the last months of the campaign. Indeed, exactly four months before Election Day. A friend and veteran oil industry insider suggests that this was “a deliberate move by OPEC to get the American public to forget about high gasoline prices before the presidential election,” adding, “I would say that OPEC’s plan worked perfectly.”

Recall now that in June “the main issue in America was high fuel prices.” When John McCain said he favored lifting the ban on offshore oil drilling, the prices began to fall. Currently, President-elect Obama who previously signaled that he agreed with McCain now says he favors continuing the ban on offshore drilling.

The likelihood is that oil prices will begin to rise again. OPEC wants the price of a barrel of oil to hover around $70.00.

To this day, I have neither heard nor read any of the usual pundits make a connection between the skyrocketing cost of oil that made it impossible for any business to accurately plan for the future. It kicked off the cascade of business failures, lay-offs, defaulting mortgages, and foreclosures that led to the financial meltdown.

Over the weekend the leaders of various nations will meet to try to find ways to restructure the international banking system. There is one way to deal with the financial crisis and that is to let the “market”, the millions of individual decisions people make regarding what to purchase and where to invest, correct itself.

After all, banks are in the business of making loans and a nation with sufficient energy reserves is in control of its own fate.

It has always been government intervention in the “market”; interfering in some way or other that triggers these financial crises. And now the federal government has purchased ownership in banks, insurance companies, and is contemplating a multi-billion bailout of some automobile manufacturers who fell victim to both predatory unions and bad management decisions. The “market” would let them fail.

There are those who do not believe anything that happens is “accidental.” Those who believe that everything that happens is part of a “conspiracy.” And those who believe that whatever happens could have an element of both involved.

If one draws no other lesson from this financial crisis, it is that the world runs on oil.

The failure and the refusal of America’s leaders to permit our own vast reserves of oil to be tapped will keep us all at the mercy of OPEC and other foreign suppliers. The minute America’s energy potential, its reserves of oil, natural gas, coal, and of nuclear power, is unleashed is the minute America becomes a powerhouse once again.

It’s like Pogo said, “We have found the enemy and they are us.”

Tell me again. What is this Election About?

By Alan Caruba

This was supposed to be a campaign decided by the issue of bringing troops home from Iraq. That had been Barack Obama’s theme over months of campaigning in the primaries.

The troops are coming home, but only because we are close to saying “Mission accomplished” and this time it’s true. The first time, as best as I can remember, President Bush was referring to the initial success of the Iraq invasion that routed Saddam Hussein’s army.

After that, well, the “liberated” Iraqis went nuts with a lot of help from al Qaeda and the Iranians stirring up sectarian discord. It didn’t take much effort. Eventually, though, even the Iraqis tired of the senseless killing.

As the U.S. draws down most of its troops, leaving enough to provide back up to the Iraqi military, Iraq will return to business-as-usual which means a high level of corruption, all focusing around the distribution of oil wealth. Meanwhile, countless al Qaeda martyrs have been hunted down and granted their wish for 72 virgins. So, yes, “Mission accomplished.”

The election is no longer about Iraq. Or even Afghanistan. I suspect that most Americans couldn’t find either on a map.

Then the election was supposed to be about energy. The advent of $4.00-a-gallon gasoline put issues of senseless ethanol mandates and the fact that Congress has forbidden oil and natural gas drilling for 85% of our nation’s coastlines right at the top of voter’s concerns. As oil prices began to fall, however, so did the urgency of energy as a compelling issue.

Now the election is about the economy. In a way, all elections are about the economy. What is nothing less than astonishing, however, is the public’s rather blase attitude to problems that would in previous times have people panicking in the streets and trying to pull their money out the bank.

A lot of this has to do with the view that the federal government has an endless supply of money and can make good the mortgage loans made to people who could not really afford a home and, if normal lending judgments were exercised, would have been denied a loan. You don’t have to exercise such judgment, however, if you know the federal government is good for every dollar you lend.

The result is that Fannie Mae and Freddie Mac were literally “seized” by the federal government in order to keep the entire banking system from going belly up. This is certainly a better response than the bad old days of President Herbert Hoover who did nothing and gave us the Great Depression.

The legacy of the Great Depression of the 1930s was Franklin D. Roosevelt’s efforts to try anything that would restore confidence in the banks and put some dollars into people’s pockets because money was not circulating or being invested as behooves a market economy.

What remains from those desperate days are entitlement programs like Social Security, Medicare and Medicaid that did not anticipate people living much beyond age 65. They do now and where is the money going to come from to send them their monthly check or pick up their hospital bills?

The fact is government has intruded into the marketplace to a point where normal banking and investing judgments were suspended and the inevitable “bail out” came due. One of the most essential functions of government is to protect the value of the U.S. dollar. Anything government does that undermines that should be subject to criminal charges. That means, of course, that everyone serving in Congress since the 1940s has been derelict.

Generations born during and since the 1950s have been educated to blithely believe that government is the answer to all their needs from cradle to grave. The result is a lot of people who have few savings and a lot of debt.

The reality is that government is so intrusive with its high taxation of both corporations and individuals, with its massive regulation of all commercial and agricultural activity, with its entitlement programs that distort the budget, and with its mind-boggling wastefulness, that if Sen. McCain could make good on just a small part of the change he promises, it would be a very good thing for America.

Obama will give you higher taxes, but the money will just be plowed into more entitlement programs for the “poor.” We have had generations of poor people because government has not demanded they stay in school, learn a trade, qualify for higher education, or get a job. We didn’t get any real welfare reform until the Clinton years and that was because of the famed 1994 Republican Congress.

And through it all, despite the headlines, the public is just merrily going along. Will they spend a bit less this Christmas? Probably. Will they put off any big purchases? Probably. Will they finally figure out that America needs to tap its vast natural resources even if it means disturbing some caribou? Probably.

If this election season is any indication, Americans have the attention span of fungus.

They haven’t quite figured out that the government will have to get the bailout money from somewhere and that “somewhere” is them, their children, and their grandchildren.

Not as Dumb as They Think

By Alan Caruba

One thing that both journalists and politicians hold in common is their belief that the American public is really dumb. This is why politicians keep telling us that there’s only enough oil in Alaska for six month’s use, that puddles left over from a rain storm should be regarded as “navigable waters” and every species known to man and God is “endangered.”

It is written that the fear of God is the beginning of wisdom, but I would add that contempt for some politicians and journalists is also a sign of maturity and insight.

Rasmussen Reports conducted two telephone surveys and posted news of them today (7/21/08). In one it revealed that most Americans are confident about the U.S. banking system. “Nearly seven out of ten Americans (69%) are confident in the stability of the U.S. banking system…” Will some banks fail? Probably. Are deposits secure? Yes. In fact, 65% of those surveyed expressed little or no worry of losing their money.

I thought it was interesting that Rasmussen noted that, “Democrats are twice as likely (39%) as Republicans (19%) to be worried about the money they have in the bank. Once, long ago, I was a Democrat, but as St. Paul says in Corinthians, when I became a man I put aside childish fears.

It was also reported today that the results of another Rasmussen survey revealed a whopping 50% of Americans believe “the media makes economic conditions appear worse than they are.”

No one is suggesting that the economy is not having a difficult time navigating through $4-a-gallon gasoline or that some have seen the value of their homes decline, but overall the economy is remarkably resilient and people know that. This is the filter they apply when they read or hear dire reports and predictions served up by journalists.

“Only a quarter (25%) think reporters and media outlets present an accurate picture of the economy and 18% believe they actually portray it as better than it is. Just 34% trust reporters more when it comes to news on the economy, and 32% see stockbrokers as more reliable.”

That’s an impressive 75% who are wary of what reporters have to say about the economy, though it would be well to keep in mind that stockbrokers often have no better idea than the rest of us. Their job is to sell stocks and any reason to do so is sufficient. Stock market going down. Great bargains to be had. Time to buy. Stock market going up. Don’t miss out on great opportunities. Time to buy.

In truth, given the volatility of the stock market, one can see the role that emotion plays in the whole buying and selling equation. A wafting rumor is sufficient to create a wave of buying and selling.

This is also why the siren call of “change” and “the future” is likely to lose a lot of momentum by next November.

Part of the reason for the present volatility is the gradual expansion of economic power in Asia, but recall too that Japan, South Korea, China and India will be subject to the same limits on energy resources, an educated workforce, the introduction of new technologies, and other factors that affect the entire global marketplace.

Proceed at your own risk, but risk is what Capitalism is all about!

The good news is that the majority of Americans who actually take time to pay attention to the many sources of information about events, issues and personalities are capable of sorting through it to conclude that the U.S. economy is essentially sound, that will we get passed this mortgage loan bubble and debacle, and barring something horrid like another 9/11, we shall get on with our lives with relatively little discomfort.