The US Industrial economy eased off just a bit last week in the wake of US elections (if pipeline scheduling is correct), as both industrial production and recently-strong consumption gave a little bit back.
The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of five consecutive weekly advances, slipping slightly to 118.5 (from last weeks 118.7). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index started the week very soft, bottomed-out just before election-day, then rose with the markets as perhaps investors and business interests were satisfied by gains from their champions (the Republicans), who picked up control of the US House of Representatives as well as several senate seats and a host of governorships.
The recently red-hot paperboard-based Consumption Index also slipped (2nd off-week in a row) to 140.8 (from last weeks 142.5). Interestingly, the measure (opposite the Production Index) sharpened up quite nicely once the week began and actually peaked on election day, then weakened steadily into the close of the week and especially into the very-preliminary weekend data, as perhaps consumers looked to losses by their champions (the Democrats).
The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern steep decline.
Overall, its a big "nothing changed"... The US industrial economy continues to remain firmly supported by that ongoing excess of consumption over production.
With the US midterm elections giving Republicans a much larger say in what the Government does over the next two years, the Democrats chances to undermine and ruin the US economy alone are coming to an end, and the Republicans now get their chance to join them in keeping the ball bouncing downhill.
So, with tongue planted firmly in cheek, and a healthy warped sense of humor... Ten suggestions follow to help newly-elected Republicans join with Democrats to kill the economy...
1. MAKE LOTS OF TALK ABOUT SHUTTING DOWN GOVERNMENT! As millions of folks work for the government and therefore rely upon it for their salaries (and resultant spending for their families needs)... Scare the pants off of them by threatening to shut down government (and suspend their paychecks) in hopes that they cut their spending way back (just in case)... slowing their spending. It hopefully will produce a snow-ball effect as store-owners also cut back in reaction and anticipation. Better yet, start the negative talk right away so that you can scuttle the quickly-developing Christmas-rush. Time is of the essence!
2. MAKE LOTS OF TALK ABOUT ENDING EXTENDED UNEMPLOYMENT BENEFITS and add several million additional consumers into that pool from suggestion #1 above. The more folks you scare, the more folks will cut back spending, and the faster store and business owners will react, curtail hiring, and join in the layoff-party. You might even be able to ignite a downward spiral that could take unemployment to 15 or 20 percent!
3. GIVE EVERY CONGRESSMAN, SENATOR, AND THE PRESIDENT A 1-800 NUMBER, connected to a cell-phone that he/she must keep on his/her person at all times (switched on), but that may be only used by entities with "Corporation", "Association", "Mutual", "Pack", "Brotherhood", or "Union" in their names. All other folks should be connected by a $5.00 pay-per-minute phone service, connected by a voice-mail system that takes at a minimum 30 minutes to reach an active, working, answering machine, whose contents are to be sealed in the national archives (except by court order) for the next two years until the next election cycle (To prevent situations where conflicts of interests might arise).
4. ELIMINATE THE TERM "TORT REFORM" FROM YOUR VOCABULARY! A dirty little secret... open up your local "Yellow Pages" directory and count the number of pages listed in the "Physicians and MD's" section. Then count the number of pages in the "Attorneys" section. (If you are like me, you will probably find many more "attorneys" pages than doctors pages. Then consider the fact that attorneys earnings come from less than 50% of their take (the litigants get a larger portion). It is vital that litigation keep medical insurance costs in the $15,000+ range a year for consumers, and tort-reform threatens to free up thousands of that which consumers could potentially spend elsewhere, disastrously threatening to expand the economy via consumer spending.
5. MOVE IMMEDIATELY TO PROPOSE A "GOLD STANDARD"! Foreign central banks hold trillions of dollars worth of US debt, and allowing convertibility would quickly allow them to stock up on all the hard assets left in the US, relieving them of their burdens of risky US paper. And while you are at it, throw in silver, the SPR, the national parks, the US military, ANWR, and the like. With all their trillions, foreigners are going to need more stuff than just our gold stocks to convert into. If that is not enough, throw in farm-land, commercial property, and eventually US residences. You could call away peoples homes through some random means such as a negative lottery... Your number comes up, you loose your house! Folks could then protect themselves by buying "Lottery Insurance" (so they could purchase something and not be homeless), which would then add a revenue stream to the insurance companies to replace what is lost when you implement single-payer (oops, forgot that suggestion above) so thy wouldn't go out of business (remember Insurance companies are covered under suggestion #3 above)..
6. CONSIDER THE POSSIBILITY OF NEW CONSUMER TAXES including energy, gas, value-added, anything that could relieve consumers of income that would otherwise be spent by them in the general economy. The more spent by them on taxes, the more they will cut back on other purchases, slowing business and generating layoffs.
7. TALK UP THE NEED TO RAISE THE MINIMUM WAGE TO $10 AN HOUR... but absolutely, under all circumstances DO NOT ACTUALLY DO IT! The point here is to scare the business end of US society, so that they will do all they can to avoid new hiring to keep the economy depressed. But if you go through with it, it would actually stimulate consumer spending as low-income folk are much more likely to spend the extra income (as opposed to high-end business/investment folk, who would more likely just add it to their savings as they already would have more income than they know what to do with). Point here is to talk up the minimum wage hike on business shows and within business publications (Wall Street Journal, Investors Business Daily, etc) and not on the nightly news or other media outlets that consumers watch, lest they get excited and raise their spending in anticipation (stimulating the US economy).
8. PROSECUTE MICROSOFT AGAIN... Remember that Anti-Trust lawsuit against Microsoft years ago regarding Internet Explorer... it didn't go far enough. There's Defrag, Backup, Disk Cleanup, Wordpad, Notepad, Calculator, Windows Update, Outlook Express, all those freebie games, and hundreds of other Microsoft handouts that are bundled for free within Windows as well. Make consumers pay for 'em all. that way consumers will have less to spend elsewhere in support of the economy. And don't stop with Microsoft. Prosecute anyone that offers consumers anything for free.
9. IT IS HYDROCARBON JAWBONE TIME AGAIN... It's fall-time, when E&P's are drawing up their drilling plans & budgets for 2011. Always, always, demonize heavily anyone that drills for resources during the November/December time-frame when they are budgeting. The rest of the year you need not worry, but always demonize in November/December. Especially in oil. Everyone wants to play the hero, few the villain. You don't need to actually do anything, just use your rhetoric. Remember, less drilling means more imports, which means more foreign outflows of US capital, which means higher foreign holdings of US dollars. This suggestion goes hand-in-hand with suggestion #5 above.
10. ALWAYS REMEMBER, IT IS NOT THE OTHER PARTY THAT IS RUINING THE COUNTRY... IT IS THE PUBLIC THAT SUPPORTS THEM. Never criticize another in government, they are your partners. It is the public that is the problem. Isn't it?
-Robry825
