The Economy—Busted Boon.

President Bust the elder , in a recent Dallas speech, lauded the success of the American economy. His justification? A raising stock market and lower unemployment.  John Glen recently made the same points in an interview on one of the nightly network news programs. And Republicans are planning to end the current campaign using the same numbers. Unfortunately, most Americans do not share their glee.

How a person measures something is a measure of his/her intellectual honesty. Presenting measurements of dubious value is a sign of a sinister mind.

Of course, many taut the market and unemployment numbers as measures of the economy’s health. Most of those who do it, however, have a pecuniary connection to the investment community. But neither market figures nor unemployment numbers measure anything objective. Market figures merely measure the guesses of investors, many of whom are professionals who have a huge stake in how the market goes. These people are much too involved to be objective.

On the other hand, unemployment numbers are calculated after an assumption is made of how many people in the workforce are no longer looking for employment. They may not be looking, but they certainly are unemployed; yet they are never counted.

No matter what these numbers claim to show, most people have a different measure—the amount of money in their pay envelopes and how much they can buy with it. In these terms, the American economy is clearly sinking into the pits. This coupled to the nation’s huge national debt, huge deficit, and  inbalance of payments paint a picture of an economy in serious trouble, so serious, in fact, recovery may be impossible.

Although many Americans have not yet taken notice of this decline, the financiers in other nations have. Today the Hong Kong Standard, Asia’s premier business newspaper, claims that the U.S. dollar is losing is preeminence as the world’s reserve currency and justifies its claim with numbers showing how various national bankers throughout the world have reduced their dollar holdings. It is a must read; it can be found at http://www.thestandard.com.hk/news_detail.asp?we_cat=9&art_id=30114&sid=10499881&con_type=3&d_str=20061025.

©2006 John Kozy, Jr.