MasterPo says: This blog is about topics and issues that are of importance to me. I am not one of the countless blogging lemmings that are tripping over each other scurrying down the hill and off the cliff of blogging oblivion trying to write the greatest blog on the latest topic de'jour. Your comments are welcome.

May 1, 2010

Was Rush Right?

For much of this year (and the latter part of last year) MasterPo has discussed the possibility of a major American economic collapse. Not a bump or a burp or a stumble but a full on collapse that would make the Great Depression look like the morning after some wild fraternity party.

MasterPo is not alone in this concern.

A recent Foxnews/Opinion Dynamics poll shows a whopping 75% of a Americans believe the U.S. economy could collapse! Although it does need to be kept in mind the definition of "collapse" may mean different things to different people. Nevertheless, by any definition, that many people thinking the nation is near falling off the proverbial cliff should alarm anyone, if for no other reason than often peoples' beliefs can make an idea into a reality.

On this blog MasterPo has frequently discussed this possibility and pontificated over possible measures individuals can do to try to make some kind of preparation for it. MasterPo is not expecting a collapse into "Road Warrior" living (though anything is possible, wouldn't be the first time in human history a major civilization fell apart like that).

But in the interests of fairness and rational thinking it has to be explored the real likelihood of something horrific happening. Anything is possible but just how likely is it? You can't find any decent consensus opinion from the supposed 'financial experts' (like that's anything new!). Depending on the day they will say the market is set for new record highs, or, the bottom has fallen out. And usually these comments are made when the reality is apparent even to a blind man. Thank you Mr. Obvious for nothing.

So what does all this have to do with Rush Limbaugh?

MasterPo has long been a listener (and watcher when on TV) of Rush Limbaugh. Never hid that.

Why should MasterPo?

Rush says he is "proven" to be correct 99.6% of the time. While MasterPo has not done the statistical calculations to confirm that claim, MasterPo does agree with ol' Rush at least 99% of the time.

Rush (along with Beck, Hannity, Levin and some others) have been sounding the alarm for months about a coming economic Armageddon. With a national debt about to pass $13 TRILLION (as of writing this) and still climbing, unemployment hovering at 10% for months, interest rates set to rise, and Washington seemingly obliviously happy to heap more and more taxes on an already crippled economy it isn't hard to make such a case.

Rush and the others don't hold themselves out of financial gurus or tea leaf readers, rarely giving any specific financial advise. But all have been saying to "prepare" for the coming collapse (though they don't say exactly how they recommend to go about this preparation).

But, while the evidence as listed above is pretty damming to the idea that happy days are here again, there is that .4% error factor to contend with.

Specifically, MasterPo listened to Rush pretty steadily all throughout the 90's and the Clinton Presidency years. MasterPo recalls how Rush railed against Clinton almost daily for what Rush termed quote "The two biggest peace-time tax increased in American history!" Many people also don't remember that President Clinton passed a sweeping EPA legislation package that included many mandates for cleaner air and pollution controls, yet like President Obama claimed it would create thousands upon thousands of new jobs in the pollution control industry.

Rush too railed against that for heaping yet more burdens on American business, hurting not helping jobs and American industrial competitiveness around the world. After all, how many people do you know started their career in the "pollution control" industry in the 90's?

And here is where that .4% error margin might be coming into play.

While MasterPo has no doubts whatsoever that these taxes and regulations did cost Americans a lot of money (directly and indirectly) and did little to help promote American industry, goods and services world wide, from MasterPo's perspective in MasterPo's little corner of the world life wasn't so bad in the 90's. In fact, it was pretty darn good!

In the 90's MasterPo always had a job at good pay.
MasterPo always was able to find a new job when necessary and usually at higher pay.
MasterPo's investments did well along with the stock market overall (up until the tech/dot com bubble at least).

MasterPo does not doubt for a moment Clinton's taxes and regulation did have some negative impacts on the country (MasterPo's personal taxes went up too!). But it's impossible to say what would have happened without those taxes and regulations.

Overall however it seemed MasterPo and the rest of America did quite well in the 90's in spite (not because!) of the Clinton tax increases, regulation increases, etc.

And now President Obama is also enacting huge taxes, regulations etc. and Rush is again railing against those. Not a surprise. And truth be told, Rush et al do make some extremely good arguments as to why these things will seriously hurt America.

So the question now is:

How can Rush and we the listeners be so sure that President Obama's taxes, regulations etc will be all that destructive to the nation when he (and probably others at the time) said pretty much the same things about President Clinton's taxes and policies yet the 90's turned out to be pretty good?
MasterPo is not questioning the data (the evidence of the state of the nation and economic is clear for anyone willing to listen more than 10 seconds). And there are no historical precedence's for the success of enacting such taxation and sweeping social legislation at a time of weak economic status and highly unstable outlooks nationally and internationally (but there is ample evidence of the failure of such approaches!).

The issue at hand is: Is the conclusion of Rush Limbaugh et al now correct when he doesn't seem to have been before in the 90's under similar political circumstances? To put it another way, why should Rush be taken at face value this time when his prediction of doom and gloom in the 90's and Clinton era didn't pan out that way?

Predictions of great change are rarely as extreme as proponents always portray them as being (either bad or good changes). At the risk of sounding wishy-washy, the reality of events is usually in between the two extremes, though a clear tilt towards one side or the other is usually (rarely right in the middle).

This article is not about criticizing Rush Limbaugh or other conservative commentators. As MasterPo has discussed in prior articles, the quest is to find a clearer picture of what the future holds without using a crystal ball. Perhaps there is no clear picture of the future until you're standing on it. But by then preparation is too late.

The quest continues…

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