The "No Problem" Mentality

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castlewp's picture
castlewp
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The "No Problem" Mentality

By Gary North

http://www.lewrockwell.com/north/north718.html

NO PROBLEM!

Look back at the economy in October 2007. The Dow was at 14,000. The banks were booming. Real estate was down a little, but the experts gave no warning. They were wrong. All of them.

The U.S. government is running a $1.8 trillion deficit this year. Federal tax receipts are down 34%, which means that the deficit will go above $2 trillion. No one cares. No one says, "This is the end. The American economy will never again be what it was."

Think "2007." Would you have believed that Chrysler and GM were both headed for bankruptcy? In October 2007 GM shares were at $43. Now they are at $1. There was an industry called investment banking. Bear Stearns, Lehman Brothers, and Goldman Sachs were not part of the commercial banking system. To survive, a few made the transition in September 2008. Some did not make the cut.

Merrill Lynch is gone. Bank of America and Citigroup were bailed out by the government. They would have gone under. They sell for a fraction of what they did in 2007.

And what do most people say? "No problem."

There is no problem for which their answer is not "no problem."

Medicare will go bust. Social Security will go bust. "No problem."

The unemployment rate keeps rising. "No problem."

When people refuse to face reality, because reality is going to be more painful than anything they have experienced, they look for signs that the problems they cannot avoid without changing are really not that bad. They look for offsetting good news.

They think the status quo ante will return. The U.S. government is about to spend another $30 billion to buy a dead carcass of a company. It has already spent $20 billion. "No problem."

The government will let the company stiff bondholders for $27 billion in exchange for 10% of the company, 72% owned by the government and 17% by the United Auto Workers medical insurance fund. "No problem."

Bondholders were originally told that it would take a 90% vote to authorize this. The government has changed the rules. It will determine after the May 30 vote by bondholders what percentage must approve. "No problem.

The company will never return to what it was. "No problem." People will not buy as many cars as before from a company run by the government and the United Auto Workers. "No problem."

The Dow rose 100 points on the rumor that the largest bondholders will accept the deal. The deal is a disaster, but investors are in "No problem" mode. Somehow, the wipeout is less of a wipeout.

Who is going to buy a GM car instead of a Japanese car? Here is a company that is about to break its contracts with thousands of its dealers. "No problem." Yet buyers are expected to trust a GM warranty.

Oldsmobile is gone. "No problem." Pontiac is going. "No problem." Cadillac sells its cars with an ad of a flash model putting the pedal to the medal. Hot stuff! The company thinks people with money will not see through this ad. The Cadillac division has lost its way. "No problem."

The price/earnings ratio for the S&P 500 is over 120. Traditionally, 20 was regarded a sell. The investor pays $120 on the hope that the stock will retain a dollar of earnings, and pay investors some minimal percentage of these earnings as dividends. "No problem."

We are watching the investment world adopting a lemming mentality that has always produced losses. "This time it's different. No problem."

CONSUMER CONFIDENCE

The Conference Board announced that consumer confidence is up to 55. The 50 figure is neutral. Yet consumer confidence is a lagging indicator historically. When it rises, the stock market usually falls.

The indicator is a reflection on what the stock market has done recently. To use consumer confidence as a justification for buying stocks is nonsense. This is like saying, "I will buy stocks because the public is confident, which based on the fact that stocks have risen." If that strategy worked, stocks would never stop rising.

Even hard-money newsletter readers are beginning to doubt that the recent good news is in fact "less worse than expected" bad news. This is the stuff of dreams that do not come true.

Readers look at the reports, and the reports look awful: falling home prices, rising unemployment, an astronomical Federal deficit. But the media say we are close to a bottom – the bottom of a crash that none of them forecasted.

Readers think, "by the standards of late 2007, what we are seeing daily was inconceivable." Optimists speak of a slow, weak recovery. Pessimists speak of hyperinflation and depression simultaneously. But as the chorus proclaims "No problem," the public mindlessly picks up this refrain.

"We have nothing to fear but . . . fear itself!" Yet as FDR delivered those words, Hitler was consolidating power in Germany. Stalin was beginning the purges. A quarter of the U.S. work force was unemployed. But Roosevelt began the refrain: "No problem." Four years later, unemployment was still 20%. The Federal deficit had ballooned. Happy days were not here again.

Your friends don't want to hear your pessimism anymore. They don't want to change. They will refuse to change.

In 1934, Ludwig von Mises realized that Hitler, an Austrian, would seek to bring Austria under German hegemony. He warned Jewish economists to leave. They had been his students at his famous seminar in Vienna. Fritz Machlup believed him, and came to the U.S. So did Gottfried Haberler. Mises went to Switzerland as a professor, leaving his great personal library behind. He fled to the U.S. in 1940, after France had fallen. He never got a full-time teaching job again.

A few listened. Most did not. "No problem."

HEARING, THEY WILL NOT HEAR

People count the costs of making a change. This is wise. Jesus taught:

For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it begin to mock him, Saying, This man began to build, and was not able to finish. Or what king, going to make war against another king, sitteth not down first, and consulteth whether he be able with ten thousand to meet him that cometh against him with twenty thousand? Or else, while the other is yet a great way off, he sendeth an ambassage [ambassador], and desireth conditions of peace (Luke 14:28–32).

In short, count the costs. This is what people have refused to do. They have counted the cost of doing something radical. It's high. They have counted the immediate cost of doing nothing new. It seems low. They prefer doing nothing.

But what about the long term? What about:

1. Retirement (no Social Security or Medicare)
2. The Federal Deficit ($1.8 trillion this year)
3. Federal Reserve's monetary base (doubled)
4. Falling house prices
5. Rising unemployment
6. The war in Afghanistan (forever, until our defeat)

"No problem!"

How do you reason with these people? Answer: you don't, if you value your time and your privacy. If you turn out to be wrong, you will be ridiculed or at least treated as a child. If you are correct, you will be hated. You will also be hit up for money. If you are a Christian, you will be told you are heartless. You will become a line of credit for those whose mantra was "No problem!"

They don't want to change. They will not change. They will not listen to you.

And when things turn out much worse than even most newsletter writers are forecasting, you will be hated. Are you prepared for this?

Do you have a real plan to deal with what is obviously an unfolding disaster: rising government ownership, massive deficits, rising unemployment, falling house prices, busted retirement pensions, rising interest rates (falling corporate bonds), and Federal Reserve inflation on a scale never seen in American history?

Or do you think you can delay. "No problem!"

CONCLUSION

We live in today's world. It's bad, but it's not a catastrophe. We must keep our heads above water.

A Tsunami is coming. In such a scenario, you have got to get out of the water and off the beach. But few people ever do, unless they have seen a tsunami. Few have.

Allocate some percent of your wealth to tsunami-avoidance. Do it quietly. Do not discuss this with your big-mouth brother-in-law.

What do you really think is likely to happen? Not what you would prefer will happen.

Think, "General Motors in October 2007"

Think Chrysler, Merrill Lynch, and Lehman Brothers.

No one saw it coming. It came.

Problems. Big, big problems.

SamLinder's picture
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Re: The "No Problem" Mentality

Excellent Post!

ckessel's picture
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Re: The "No Problem" Mentality

I'll second that. Thanks Castlewp!

Coop

Vanityfox451's picture
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Re: The "No Problem" Mentality

castlewp,

" How do you reason with these people? Answer: you don't, if you value your time and your privacy. If you turn out to be wrong, you will be ridiculed or at least treated as a child. If you are correct, you will be hated. "

Therein lies the rub ...

Best,

Paul

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Re: The "No Problem" Mentality

Dead on, great post!!

I have talked to typical people about this situation and have found that most people have a very strong opinion of what happened ((or is happening)) and generally it is very one dimensional with little fact to back it up.  Most of all, typical people will fight there position tooth and nail.  I will keep discussing what I have learned, but I will take a much more laid back and lighter side approach and only talk economy to those that bring it up and only add some facts in the conversation here and there.  Maybe, I can get some people thinking about what is going on after a conversation, lord knows they do not want to listen during one.

However, I have a strong belief that if things get really bad, the typical people are the ones that will be more than happy to partake ((or take)) what you have worked hard preparing.

Ever heard of the fable about the ants and the grasshopper.  We have a lot more grasshoppers than ants right now.

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Re: The "No Problem" Mentality

It was a good article. The only problem is that I have trouble seriously reading anything that Gary North writes. If this is the same Gary North, he was all over the Web during Y2K, screaming that people will die in operating rooms, planes will fall out of the air and the economy will coom to a screeching halt as every computer in the world crashes.

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Re: The "No Problem" Mentality

That was a very interesting post.It is true that people just don't care or they can't deal with reality.I try to give some insight or help prepare family and friends with the use of this and other good websites that show facts and tell it like it really is.I understand that most people will not except the insight and understanding that has been given from God to some but I thought for sure they would except facts and figures that are put right in front of their face but nope "everything will get back to normal soon" or "there is nothing I can do so why worry about it".It is strange but true!Denial runs wild through all of mankind.Man's ways are always right in his own eyes. Putting faith in money,gold,possesions, or anything is putting your faith in something that can be stripped away in a blink of an eye anyway! The U.S. empire is crumbling just like the great roman empire did, even back then no sane person would have believed that empire would fall but it did! Great book to read Gods final witness 2008 by ronald wienland. Written in 2006 he prohecied this global finacial crisis GLOBAL not just the U.S. but GLOBAL, check it out at  the-end.com to recieve a free copy!

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Re: The "No Problem" Mentality
jerrydon10 wrote:

It was a good article. The only problem is that I have trouble seriously reading anything that Gary North writes. If this is the same Gary North, he was all over the Web during Y2K, screaming that people will die in operating rooms, planes will fall out of the air and the economy will coom to a screeching halt as every computer in the world crashes.

Isn't he also kind of a religious lunatic?

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Re: The "No Problem" Mentality

castlewp - nice dig, I enjoyed the article and see much of what North is talking about almost everyday.  It is very disturbing.

And, there is something disturbing in North's opinion of how to deal with the "no problem" people.

How do you reason with these people? Answer: you don't, if you value your time and your privacy. If you turn out to be wrong, you will be ridiculed or at least treated as a child. If you are correct, you will be hated. You will also be hit up for money. If you are a Christian, you will be told you are heartless. You will become a line of credit for those whose mantra was "No problem!"

They don't want to change. They will not change. They will not listen to you.  Gary North

This is just nutz. 

We need one another more than ever before and in ways never needed before.  I try to alert people whenever possible, especially friends and family members.  Sure, I'm often called negative and there is a common, comfortable acquiescence "I can't do anything anyways." 

Regardless, we have an obligation to help others not because they will like or hate us but because it's the right thing to do.

Larry

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Vanityfox451
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In Name Alone Only ...

jerrydon10, agitating prop,

... there are two Gary Norths :-

The one who wrote the article that castlewp created this thread for, also wrote this article :-

*snippet* :-

" Greetings. I'm Gary B. North of garynorth.org -- NOT garynorth.com, which is run by a person of the same first and last names but who is a conservative Christian economist/writer and who raised alarms about Y2K. In fact, about the only things we two GNs have in common are our names and that we're both writers and editors. "

*link* :-

http://www.garynorth.org/

... hope this clarifies things for you both ...

Best,

Paul

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jerrydon10
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Re: The "No Problem" Mentality

Ahh........Thanks, Paul. That did it. It seems he wanted a disclaimer on that..lol

Vanityfox451's picture
Vanityfox451
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Re: The "No Problem" Mentality

Hey Jerry,

... or change his name by deed poll ... ...!!!

My Best,

Paul

castlewp's picture
castlewp
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Re: The "No Problem" Mentality

Larry,

I totally agree, I ended up reading this entire article to my girlfriend and she listened.  I am trying any way I can to wake people up to the reality.  It is hard but important fwiw 

Vanityfox451's picture
Vanityfox451
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Re: The "No Problem" Mentality

DrKrbyLuv, castlewp,

... every single day I do my best to alert people from all walks of life to the reality that we face with the Three E's. Every day, I meet people that choose not to participate. Slowly now, and recently, the number of people that are facing up to fact rather than believing in mainstream garb are rising. I hope you gain some comfort in that. The more that are facing fact, the more chance that your families won't only hear your continual 'real' fears, but others, along similar lines, will hopefully finally drive your message home to them ...

Best,

Paul

castlewp's picture
castlewp
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Re: The "No Problem" Mentality

Paul,

Check this video out.  I sent this to a friend who lives in Vegas and it certainly slapped him in the face.  The economy has really hit Vegas very hard and here is a look of what is going on there.  Which by the way will happen everywhere soon.

http://current.com/items/90026412_lost-vegas.htm

Bill

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Re: The "No Problem" Mentality

I had a short but interesting conversation with a  total stranger the other night who has a small business with a fleet of 20 cars...  I broached the subjects close to our hearts and was told, "I don't stress out about these things, I'm a Christian".

So there you go you bunch of whingers, what's to worry about, the rapture will get you all....!!  No problem.

Mike

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jerrydon10
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Re: The "No Problem" Mentality

Mike, please don't start discriminating against Christians in here. We are leaving you alone. *wink*

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Re: The "No Problem" Mentality




I think a lot of people have the No Problem mentality out of fear.  The current crisis facing our nation is similar to an individual being told they have an incurable life-threatening disease.  One of the first stages of death is denial.  I know I was like that when I first started stumbling across all the truths concerning our economy, environment and society.  Denial is totally understandable.  Like the shocking news of having an incurable disease, many individuals have blindly lived with beliefs and expectations that life was going to be a certain way.  When individuals like us come along and start to shine some light onto the truth, we have the capability to shatter a person’s reality. 

 

It’s much more comforting for individuals to live in denial than to awake to the truth and be in a total state of anger and shock about what is really taking place in the world.  I know the first few months I started uncovering the truths about our world and society, I was deeply hurt, angry, and at times depressed.  My reality totally shifted and everything I had been working for and had expected in the future came crashing down in a matter of weeks.

 

But I think a lot of us realize that there is hope once you have uncovered the truth and learned to live a life centered on the truth.  I think more than telling a person about the truths concerning our society, is to show a person that it is possible to find joy in spite of challenging times.  I’ve met people who were dying from cancer, yet had a positive outlook on life.  Their strength encouraged me for when I will one day face my death. 

 

I think the truths concerning our world are similar.  It’s much easier to take the hidden truths about our society from a person who lives life with zest and joy in spite of uncontrollable and external circumstances, than to take the news from someone who is always angry and complaining about how bad things are.

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