Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World Read Online Free PDF Page A

statistically valid basis for his claims that prosperity was soon to return than Obama had for his. Hoover not only spoke in more intelligible prose, he did a better job of combating depression than Obama.
    Of course, unless you are a connoisseur of economic footnotes you may not realize that economic recovery after 1929 was arguably more robust under Herbert Hoover than it was under Obama’s rule following the 2008 credit collapse.
    Contrary to what you may suppose, the depression of the 1930s was not marked by uninterrupted declining quarterly GDP data every single quarter. In fact, the officially recorded downturn in the initial period of depression associated with the stock market crash stretched from the third quarter of 1929 to the third quarter of 1933, almost overlapping Hoover’s term. In that initial four-year downturn, from 1929 to 1933, there were no fewer than six— six —quarterly bounces in the GDP data. The average rate of economic growth in these up-quarters was 8 percent at an annual rate.
    In case you’re one of the Green Shoots bulls who imagine that politicians and their advisors have learned ever so much more than Hoover and his colleagues knew in 1929, pause and consider. With his trillions in stimulus spending, Obama engineered his quarterly bounces in real GDP, recording an average rate of economic growth of less than 3 percent at an annualized rate. In other words, while Hoover’s economic performance has taken on mythic status as the worst in American history, the bounces off the bottom during the Hoover presidency were more than twice as vigorous as those under Obama.
    If you care to read through old Wall Street Journal editions or trader’s journals from the Hoover era, you see that most people were slow to get it. They did not see that trying to cushion, postpone, or turn back a credit cycle contraction, as Hoover did then and Obama has tried to do more recently, only protracts the inevitable period of adjustment.
    A depression , unlike a recession of the kind seen 11 times previously since World War II, is not an inventory correction, but a wealth obliterating credit contraction that reduces leverage in the economy and compresses demand. Credit corrections don’t yield to sustainable recovery until excess credit is unwound, bad debts are liquidated, and economic demand can be recalibrated on the basis of solvency.
    You don’t need to wonder whether genuine prosperity will be met around any corner toward which Obama is stepping, or on any nearby patch of pavement he is pouring. It is not likely for many years, perhaps decades to come. This is not a crowd-pleasing realization. Far from it. Denial is a common theme of life at all times in all places. Sometimes, as is the case now, a paradigm shift in conditions leads to a cluster of miscalculations that tend to compound errors of judgment informed by the natural human tendency toward optimism. I am all for optimism as a life strategy, but my prejudice is to believe that optimism is more constructive within a context of a realistic grasp of the facts.
    Eighty years ago, when Herbert Hoover was a young president trying to turn back the tide of depression, investors repeatedly misread bounces off the bottom and random fluctuations as evidence that a return to prosperity was indeed imminent. Then as now, too many people thought that every green shoot was evidence that the economy was about to turn around. Not so.
    The most extreme misreading was evidenced in the famous Sucker’s Rally of 1930 when the market gained 50 percent on the widespread hallucination that the downturn was poised to end. It wasn’t.
    More lately, under Obama, infatuated investors bought the market on any flimsy hint of underlying economic strength, or just to ride along with the Federal Reserve’s POMO operations wherein money is created out of thin air to monetize stock indices. Instead of reflecting genuine improvements in economic