Mandeville, LA – Exclusive Transcript – In what document, under what rule, under what act of Congress, under what amendment to the Constitution has any president ever acquired the power to “run the economy”? My reading of history, the president doesn’t have the power, shouldn’t have the power, and you shouldn’t want to confer it on him, yet here we are. Check out today’s transcript for the rest…
Begin Mike Church Show Transcript
Mike: When I do turn this on, I’ll wind up screaming at the television because you’ll have one side arguing: Since this president, in his stewardship of the economy, we’ve lost this and this and this and that has happened. Then the other side will go: You’re not reading the statistics right. What’s actually happened is this president has run the economy very well. You have to remember where it was when he started running the economy. Why are you having a debate over a president exercising a power that a president does not have?
That’s the point that I would like to make here. In what document, under what rule, under what act of Congress, under what amendment to the Constitution has any president ever acquired the power to “run the economy”? My reading of history, the president doesn’t have the power, shouldn’t have the power, and you shouldn’t want to confer it on him, yet here we are. [mocking] “Obama’s done a rotten job of running the economy.” Well, if he is running the economy, then yes, he has done a rotten job of running it, but it probably would defy anyone’s tinkering no matter who you put in there. You are talking about $17 trillion dollars’ worth of exchange. Think about that for a moment. It’s difficult to comprehend, I would say almost impossible if not impossible to comprehend $1 trillion in expenditures. How could you then wrap your head around 17 of those trillions? Just think about that for a moment.
Here’s the even greater challenge: How would you purport to “manage” or “run” an endeavor, an enterprise of that size and scale? Wouldn’t that defy any form of management or any attempt to direct those massive forces as you saw fit? Not only do I think the answer to that question is yes, I know the answer to that question is yes. There’s an ample amount of evidence in the historical record to support that. All one must do is look at where there have been attempts to run economies as large as ours over the course of the last 100 years. You don’t even have to go back that far. You can just go back to Mao Zedong’s five-year plans. How’d that work out for the Chinese? It worked out so well that about every 14 or 15 months, they’d have to have a new five-year plan because the first one wasn’t working. Then after about 110 million Chinese people died of starvation, someone finally came up with the bright idea: Maybe this Communist controlling the economy is not all it’s cracked up to be. Mao, I’m not saying, guy, I’m just kind of saying.
The idea here is bogus from the get-go. The idea here that your economic salvation should come from Mordor on the Potomac River and that President Obama ought to be doing X because that would fix it — you people that sit out there and go [mocking] “I know how to fix this. You want a plan? I’ll give you a plan.” Do you really think that if you installed — let me think of some economic genius — Art Laffer — those of you that are big Fox News fans, let’s put Art Laffer in charge of the economy. Wait, wasn’t Laffer kind of in charge of it back in 1981 when Ronald Reagan took office? In any event, I think the premise is a ridiculous one. I think people that are intelligent enough to realize that are already way ahead of the game and probably don’t read these sorts of stories….
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So 71 percent say Obama is offering new on the economy. If you dig a little deeper into this, we have another story from Mish’s Global Economic Trend Analysis blog, Mish Shedlock, our buddy here. Mish posted this. I hadn’t seen this anywhere else. According to Gallup, there is big trouble in little economic China out there. Apparently the American sheeple have not gotten the memo. Here it is, “US Consumer Spending Flat Since March,” according to Gallup. If you dig a little deeper into that, you’ll find that not only is it flat, it’s actually down. Why is that? Why does this continue to happen? We’ve been having this discussion since the spring of 2009 and not much has changed. [mocking] “But Mike, Mike, what about the stock market?” What about it? Where do you think Ben Bernyankme’s money is going? Where do you think the $78 billion a month in what is known as quantitative easing, where do you think that dough is going? It’s got to go somewhere. It’s not deposited into Sam Drucker’s general store, so where’s it going? It’s going into the market, thus the rise in the market. That partially explains it.
Those of you that are in small business, like myself, and have experience with very close, intimate, personal economic or financial affairs, you already knew this before the Gallup organization went out there and measured this. This is very simple to explain. If you want to explain it to someone at work, [mocking] “What do you think is wrong, genius?” I’ll tell you what’s wrong. You have an entity, let’s just call it Big Brother, and Big Brother has decided that he knows best. He has a voracious spending appetite. He can’t control his spending, but since he knows best, he thinks he’s doing the right thing. Since he’s doing the right thing, he continues to spend inconceivable amounts of money. The money comes from two sources. It is either directly taken, stolen, from the American sheeple at the end of the barrel of the IRS’s collection gun, or you could say there are other forms of taxation and that’s how the revenue is shipped to Mordor on the Potomac. If that’s not enough, then the money is then borrowed or printed. In either case, it doesn’t matter whether it’s borrowed or printed — this is what you call the deficit — the dough is still being spent. If you borrow it, that means in a future year you have to pay it back. If you borrow $100 billion this year, next year, even if you spend the same amount of money, you’re not going to be able to spend as much because you have $100 billion you have to pay back. This is simple kitchen table economics. It doesn’t take an economics professor, it doesn’t take someone with a slide rule or one of those ginormous pocket calculators to figure this out. This is very simple, basic stuff here.
The other part of the basic discussion is, if the government is spending X and then it’s borrowing the rest of it and going to have to pay it back in the next year, let’s just call that Y, then in year two, it has to then consume X plus Y. Where does it get that next traunch of money that it has to pay back? Again, it can either borrow it from another source or it can print it. If it prints it, if it manufactures it, it is doing double economic harm because it is then by that value devaluing the currency that was left in the hands of the peasants out here. It then makes what they have worth less because there are more of those in circulation. This is how you get inflation. In a very rudimentary sense I’m trying to explain this. If you’re wondering why there has been no robust recovery, it’s because the federal monster continues to consume. It consumes and consumes and consumes. There is less and less and less to go around for the rest of us to spend.
Until that magical, fateful day when either one state decides it has had enough of this, or ten states or thirteen states or eighteen states, whatever the number decides they’ve had enough of this and they say no more and they leave, or — here’s the double miracle — until such time as someone arrives on the scene that says what I just said and then can get a quorum and majority to say: You peasants out there are correct. We’re going to reform our ways. We’re going do like the Canadians did in the 1990s and we’re going to stop spending what we don’t have, and we’re actually going to start paying the debt back. No matter the course, it’s going to be a painful experience, painful inasmuch as if you are expecting robust boom years in the future, we’re all going to be mightily disappointed because what has transpired in the last decade and a half has made that impossible. It can happen, but there would have to be a major correction and a major course change.
Anyone out there listening, do any of you see a major course change anytime in the near future? If the answer to that question is no, then the follow-up question ought to be: What are you going to do about that? What is your plan to deal with that? [mocking] “We’ve got to elect the right president in 2016.” So you’re willing to continue these God-awful and deteriorating financial conditions for another two and a half, almost three years and then pin your hopes to electing another federal leader to “run the economy” and hope it works out that way? What if it’s not? What if it’s not a Mitt Romney-type? What if it’s Mrs. Clinton? Do you think Mrs. Clinton is going to do a better job of doing this than Barack Obama did?
We’re basically in the midst of a red economy. Because of the mammoth amount of debt that has been put into the federal O column since 2002, the future has to be bleak. You have to service a debt. You have to pay it back. The only way to pay it back is to extract it from the citizens. Whether we like it or not, folks, we’re going to be stuck with these conditions for the foreseeable future. If you were able to say: I don’t think I want to be stuck with those conditions for the foreseeable future. Do you think maybe we can get a divorce? Yeah, you guys that want to stay and call yourselves a union or whatever, if you want to do that, you go ahead and do that. I’m very comfortable with you guys doing that. I’m just going to kind of go my own separate way. Maybe I’ll make a deal with the people of Antigua or something like that. They seem to have their stuff together. I think I’ll try my hand at plying this craft in this great big world of ours on our own. It really is bleak, folks. Many people are going to come to that realization, not just the 71 percent that now say they don’t think Obama has anything new on the economy.
End Mike Church Show Transcript