The Republicans pray to God and invoke evidence that the “free market” no longer can sustain historic “normal” economic growth in the US
In his sweat drenched response to the president’s State of Union address, Marco Rubio, extolled the virtues of the free market. His hero is Adam Smith, the amazing economical contemporary of our own founding fathers. I do not think Adam and Marco would find a lot to agree on.
The tea thrown into Boston Harbor was the property of a British corporation. While the American revolutionaries valued farms and individual businesses, Smith wrote of the great power of the same individuals to become more productive by using resources to increase shared capital rather than each individual working individually to accumulate gold. Smith saw how Spain, despite having access to nearly unlimited amount of gold stolen from the Americas, was a failing economy. England, under government not obsessed with gold,supported investment in increased means of production .. including those chests of Tea.
Modern investment in increased means of production is underwritten by the stock market. The theory, of course, is that Apple rises in value because people believe that Apple will continue to increase its ability to sell stuff. The problem with this concept is that the popularity of Apple has ultimate limits. The popularity of tulips showed that a “free” stock is not a wise way to evaluate a country’s productivity. People invest in stocks, not so much because of an expected return on their investment in the form of dividends, but because of an often unrealistic belief in the ability of one company or another to grow indefinitely.
That belief, like the Republican belief that climate chnage is not affected by man, is false. Our word does not have the resources for infinite growth in productivity. Even maintaining America’s life style seems unlikley if thew world is also to support the growing middle classes of India, China and Brazil. I n practical terms, the historic ability of the stock market to reflect gains in American productivity by a 6 to 7% gain in the stock market is no longer valid.
Chris Martenson, a former VP of a Fortune 300 company, says that the historical growth rates investors have come to expect are no longer mathematically possible.
But even bonds – both government-backed and corporate – can’t escape the realities of a no-growth economy.
According to global economic trend forecaster Chris Martenson, a former VP of a Fortune 300 company, the historical growth rates investors have come to expect – in every asset class – are no longer mathematically possible. His comments are in a recent article in Money Morning:
“Right now, there are dangerous economic constraints,” he said, “mainly created by failed government policies, which show exponential growth in our markets is impossible.”
Martenson’s analysis is gaining widespread attention this month, after appearing in a newly released documentary that went viral in July. (“Conquer the Pyramid,” produced by an Emmy Award-winning director, premiered online July 14, 2012.)
Martenson and a team of scientists, economists, and geopolitical analysts recently conducted a thorough investigation into the sustainability of exponential growth. They’re findings revealed a startling pattern.
This pattern, Martenson says, shows that not only is market growth unsustainable – but a crash is imminent.
“It’s a catastrophic pattern in the markets,” Martenson said, “one we believe could soon hasten an economic collapse – a chain of events that could lead to massive inflation, the swift fall of the dollar, and a total halt to the way we currently live our lives.”