Wednesday, July 20, 2011

2012: The End of the World As We Know It

By Peter Ferrara on 7.20.11 @ 6:08AM

Like a replicating amoeba, America is pulling apart into two separate cultures. One is strongly committed to the birth of an even more robust, pro-growth, entrepreneurial capitalism. The other thinks Che Guevara and Karl Marx had important social insights relevant to America today, and wants to follow the path of Juan Peron's Argentina, if not Hugo Chavez's Venezuela. This is the stark choice facing the American people in 2012.

This is also why the vast majority of the American heartland feels more cultural affinity with the people of New Zealand and Australia than with the people of San Francisco and Seattle, at least as reflected by the majority of those two benighted cities. But the replicating amoeba analogy is not apt, because amoebas split into two equal new entities. What the American people are about to demonstrate in 2012 is that the heartland's vision of a booming economy restoring America's traditional world-leading prosperity and superpower might is shared by far more citizens than you might think, and that the long outdated socialist vision of the "progressive" American Left, for whom that traditional American prosperity and superpower status is a moral embarrassment, is fading into oblivion.

A House Divided

These separating cultures are reflected in the American media. Committed "progressives" can remain safely untouched by reality in the party-controlled cocoon of the New York Times, the Washington Post, CNN, and the three copycat networks. There America faces no debt crisis, taxes are lower than they have been in decades, the "rich" pay no taxes, life on the planet faces extinction due to global warming unless we repent for the industrial revolution, and there are no foreign threats to our national security.

To the heartland, those media institutions seem like a foreign press without even the cultural competence to report on America accurately. That is why these media institutions are all veering into bankruptcy. These media can shelter their audiences from knowledge of reality, but not the consequences of it.

But the heartland majority has already gravitated to the rising, robust American media, which prospers even in the Obama depression -- the Wall Street Journal, Fox News, talk radio, and the newly rising national media reflected in the New York Post, Investor's Business Daily, The American Spectator, and National Review. Unlike the party-controlled press, this media reflects the full spectrum of opinion. Through the crucible of debate, reality breaks through -- government spending, deficits and debt are rocketing through historical records, with taxes slated to follow, the top couple of percent of income earners pay most of the taxes (especially income taxes), global warming is an orchestrated fairy tale, and on its current course America is headed towards catastrophic, history-shattering, military defeat.

This cultural separation is why America can't even maintain a reasoned discussion of the issues. While even before Obama was elected, the top 1% of income earners paid more in federal income taxes than the bottom 95% combined, President Obama and his Democrats tell the party-controlled media that still more tax increases are necessary so that "the rich" (crass Marxist pirate terminology) can "pay their fair share." While even Communist China maintains a 25% corporate tax rate (with the socialist EU lower than 25% on average), and liberal Canada heading to a 15% rate, President Obama's Amerika maintains a nearly 40% rate with no end in sight. Proven, liberating, pro-growth entitlement reform is adopted even in Latin America and Sweden. Yet if entitlement reforms are even raised in America, the infantile Che Guevara Left runs ads showing responsible political leaders throwing grandmas in wheelchairs off cliffs.

A Failed Presidency

In 2012, the American people will decisively resolve the clash of these two increasingly separated cultures by fully replacing America's hopelessly stubborn, outdated and backward-looking establishment elite (reminiscent of the French Bourbon aristocracy) with a new generation of leaders. The American people will not tolerate the decline, and ultimately the fall, of America.

Freedom of speech, and of the press, and of peaceable assembly remains in America. The party-controlled media cannot prevent us from recognizing the harsh reality of Obama's failed Presidency. Even the Communist Party-controlled media in totalitarian states could not prevent the people from seeing the truth and rising up to force an historic change of course.

Based on the historical record, the American economy should be in the second year of a booming economic recovery by now. Yet 3 ½ years after the latest recession started, unemployment is still rising. With the specter of another downturn, discussed further below, this extended stagnation is playing out into a depression scenario.

Millions of Americans are already suffering a depression, with African-American unemployment at 16.2% persisting for two years, and Hispanic unemployment nearly the same. Teenager unemployment persists at nearly 25%, with black teenagers at 40%. With 25 million Americans unemployed or underemployed, real wages for American workers keep falling, in the third year of the Obama regime. The Census Bureau reports the number of Americans in poverty at its highest level in the 51 years it has been keeping records. A record 44 million Americans are on food stamps.

This economic disaster cannot be blamed on Bush, if for no other reason than that, historically, the deeper the downturn the stronger the recovery. Under President Obama, that recovery is now two years overdue. As former Senator Phil Gramm explained in the Wall Street Journal on April 15, "Had the U.S. economy recovered from the current recession the way it bounced back from the other 10 recessions since World War II, our per capita gross domestic product (GDP) would be $3,553 higher than it is today, and 11.9 million more Americans would be employed." For progressive "intellects," that means $3,553 per person.

Gramm further explained, "On average, three years after the four deepest previous recessions started, real GDP was 7.6% higher than the pre-recession level. During the Obama recovery, real GDP is up only 0.1%. Forty months after the start of the 1953, 1957, 1973 and 1981 recessions, total employment was on average 4.7% higher than the pre-recession peaks, while total employment today is still down 4.7% -- that's a total employment gap of 13.9 million jobs."

The contrast with the Reagan recovery is stark. During the first seven quarters of the Reagan recovery, real economic growth soared an average of 7.1%. During the first seven quarters of the Obama recovery, real growth was less than half that at 2.8%, with the last quarter at a pitiful 1.8% real growth. Gramm adds, "In 1982, unemployment reached 10.8% as the Federal Reserve tightened monetary policy in order to put the brakes on inflation...If we had matched the 1982 recovery rate, today annual per-capita income would be $4,154 higher than before the recession -- that's an extra $16,600 for a family of four -- and some 15.7 million more Americans would have jobs."

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