Who's working, our recovery and what people fail to see....

(Please read the article at Zero Hedge here ( link to Zero Hedge ))
 
Today, I had a conversation with another engineer. We were discussing the potential to work on a new project. His comment was that he felt that things were finally picking up.....I smiled and said, that was doubtful.



While I expressed my doubt, he indicated that, not including the project I had mentioned, he had two other inquries about doing some engineering. My retort was to look at the funding, I bet it is government funding or speculation funding. First he said no, but then he paused.....then he remembered, one was a rescue squad bulding, one a hotel, and the third one a governement building renovation.........Nailed it......two of three are money from government sources and the other is a private company who I bet is speculating at best. I did not ask him where the hotel is, but if it is near DC, Richmond, or some large metro area....it is living off a government sponsored bubble....still a false economy.

Until I pointed it out, he did not think about it, in the daily shuffle of family, work, and church it was lost. He lives in an area propped up by government money, an area with a large state university that gets millions in grants and funds for research from both state and federal sources. Even the private funds they get often has its origination back in one of the alphabet agencies. He is part of the city population within a bubble.

But with people falling out of the labor participation rate, how can there be any money to invest. People with no income can not spend or save, by definition. Without spending from the results of true production there is no short term recovery and without saving to create investment capital there can be no long term recovery. Without demand, there is no reason to have supply. No production...no work. No work....no recovery. So what money there is, is mostly being taxed from the productive class, mixed with printed money and then spent by the government. The local, state and federal governments fund wars, government functionaries, regulations, wasted programs, entitlements, little or nothing that creates long term or lasting wealth.

Often Karl Denniger will ask his readers when are going to step out of our slumber, when are we going to demand an end to militarism, cronyism, to graft, to legalized fraud. Based on what I see and hear around me, very few people see the economic, political, or legal facts in front of them. Few stand on the walls seeing the signs of failure of an epic proportion, and they are too often considered radical or  paranoid. We fail to teach history and demonstrate that nations and empires do fail....in fact that is the norm from Greece (ancient) to the Soviet Union, they have all failed. Many think things are bad, but all will be better....one day soon. Many feel powerless to make any impact and have elected to try to "ride it out". Most of those seem to be ranchers, farmers, and my neighbors in the country! Will Virginians begin to look deeper and be motivated to action, either personal or public......only time will tell.

And that time will be sooner than later.....the curve above does not predict a healthy outcome.....