Stagflation awaits aside a revolution extinguishing the political class.
We're awash in economic statistics that seem to conflict and depend on where they're derived from and who is reporting them. What the general public should know is that government statistics are constantly adjusted and the criteria for what is being measured changes not just year to year but often quarterly. For instance the unemployment rate may include one group one year and the following year that group is changed or adjusted.
Another statistical tool to be cautious of is opinion polls. They differ in who is asking the question and how the question is asked. Therefore the statistics Gallup reports on a topic may vary from what Rasmussen reports when they publish a standard question such as "Who would you vote for in the next general election?"
The cohorts in both government and opinion poll statistics is the media, particularly the mainstream media. If you were to believe the Wall Street Journal, New York Times, USA Today, Associated Press and any of the television "news" outlets you could believe the economy is improving, it is getting worse or easily be confused. The average person, who doesn't have the time nor inclination to investigate the nitty gritty details, confused by this reportage is understandably baffled.
It also helps to understand that the situation and beliefs of the reader sway which part of news coverage they're going to believe. We live in confusing times where clarity is obscured by the opaque, deliberately clouded by the political class and their media for it's own interests, especially in terms of the economy and how it is doing. This sounds conspiratorial but I am not alone in believing this.
The saying about the Great Depression of the 1930s, "always recovering but never recovered" also applies during this economic recession I think. In the 1970s we had "stagflation," the condition where high inflation accompanies low production and high unemployment along with short supply of a necessary commodity, followed by a contraction. In the seventies, it was oil, a condition that is being replayed. In the case of our current economic condition, the oil shock just now beginning, is occurring during an economic crisis triggered by real estate, high debt and other factors. We are tumbling into an inflationary spiral coupled with the twin evils of our current economic crisis, unemployment with low production and a high debt ratio. It appears we're heading into an era much like the seventies but worse, since when oil prices gush higher then deflation results in one of two ways. One is a financial collapse, the first part we've already experienced in 2008 with a second dip on the way. The other is a prolonged economic funk that is arduous and harrowing, which we are enduring now. Generally these two conditions cause a compression lowering prices causing deflation. In other words we can experience inflation and deflation simultaneously creating epic stagflation.
We are at an interesting crossroads. Elements of the fundamentals of our economy have been slowly improving. In other areas they are stagnant or going backwards. In a sense, oxymoronic as this seems, all the political class chattering and media reporting is correct in one sense or another. Herein lies the rub. We are at a crossroads that no matter which route we take, we are traveling with baggage that requires a no-room-for-error balancing act. One slip and everything else is affected. My belief is that we are beginning to lose our balance and the primary tipping point is oil.
Since we are Americans a significant majority of us still hold the ingenuity, grit, entrepreneurial spirit and work ethic that has brought us through hard times in the past, I believe this will bring out the best in the country through the long haul. We are always recovering and will continue until we have fully recovered. It won't occur without hard work, sacrifice, effort and long term commitment. It will also take time and patience but we will eventually rise above and succeed. The political class and their minions are unwittingly making themselves moot, proving that in it's inimitable revolutionary way, the United States is still the America of dreams.