Murdoch: This Is an L-Shaped Recovery
By Staff News & Analysis - December 01, 2009

News Corp. CEO Rupert Murdoch (pictured left) says the U.S. economy has begun an L-shaped recovery, limited by rising unemployment. "I think that if we can judge it from advertising and the mood, there's a slight revival," Murdoch told The Wall Street Journal. "I don't really think it's a big one. I think it's an L-shaped revival. You've got a huge number of unemployed here in the U.S. today, and we won't get that cured or those people re-employed until we get the formation of small business on a big scale." Unemployment hit 10.2 percent in October, and many experts think it will surpass 11 percent next year. "At the moment, the mood in this country is clearly an anti-business climate, and a real suspicion that we have a president who doesn't believe in the market system," Murdoch says. "It's not an overstatement to say that perception exists. It may be a wrong one, but it's a very damaging one." Given that sentiment and the prospect of higher taxes and healthcare reform, people who are considering starting a new small business will sit on their hands and wait, he maintains. – NewsMax Money

Dominant Social Theme: Murdoch addresses the economy with refreshing candor.

Free-Market Analysis: Well, you can count on ole Rupert (when he isn't too busy slagging Google) to give us the real goods. Here a major business leader – an international star, really – who comes out and tells us what few are willing to say or write … that the US economy (and by inference the West) is headed into the ditch.

"L-Shaped" he calls it. We love such euphemisms. Anyway, readers of the Daily Bell already know we are headed toward this sort of recovery (heck we are in one) and they even understand the reasons for it. Yes, it is central banking itself (in our opinion and perhaps yours), through its incredible monetary stimulation, that causes these horrible worldwide monetary catastrophes. And from almost the very beginning this was obviously going to be one of the worst. Rupert Murdoch likely won't explain that, though, as his funding one way or another comes from central banking.

No, he will blame President Barack Obama instead. That is because Rupert Murdoch, in our opinion, has agreed to play the "free-market" role in a worldwide monetary Hegelian dialectic. It is a way of organizing an argument (in this case an economic one). It is, as always, intended to control libertarian sentiment – and it is more urgent than ever from the monetary elite's standpoint as classical liberalism, like a sturdy plant, is beginning to grow once more throughout the West.

If Murdoch were honest (what, you don't think he understands these issues?) he would say the following:

"The current L-shaped recovery is a direct result of decades of monetary over-stimulation by central banking. By printing so much money, central banks fool investors and savers into thinking the economy is better than it is. When the euphoric projects constructed with all the extra money begin to go belly up, realization sets in and stocks markets begin to price in the failures of these wasted efforts. There is a crash and a recession or depression.

Murdoch would then continue as follows after catching his breath (he is an older gentleman):

"The handful of immensely powerful and wealthy individuals with whom I work regularly – and who have provided many of the billions for my media empire's growth – are not averse to such economic crises on a regular basis because it allows them to consolidate control and generate more wealth as they have the capital to benefit when everyone else is going bankrupt. In fact, the remedy to such crises is inevitably Keynesian monetary stimulation which calls for the dumping of yet more money into the market which further mis-allocates resources, deprives good ventures of additional capital and props up bad ones. This keeps the economic debacle raging for years, allowing for even more easy pickings.

Finally, Murdoch might add the following if he were not panting too hard:

"The problem we (my friends and I) are experiencing here today, ladies and gentlemen, is that the Internet itself is regularly explaining what is going on to the general public. It is very important that I and others who share in the generational monetary dialectic do not cast any aspersions on central banking, which is actually the main source of the problem. Instead, we must blame politics, regulation, taxes and bad governance in general. As I am supposed to represent the "capitalist" argument, I will blame the anti-free-market agenda of the Obama administration for making a bad situation much worse. But I will never blame central banks or the Western economic fiat-system itself.

And this you can see, dear reader, is exactly what he does. Just to make sure we were not being unfair to Rupert Murdoch (a fairly improbable concept) we went to Google and typed in "Murdoch blames central banks." We found about 125,000 cites, but when we examined them, Murdoch was not actually criticizing central banks after all. We then typed in "Ron Paul blames central banks" and found about 14 million cites. When we checked cites at random, Congressman Ron Paul (R-Tex) did indeed seem to blaming central banks. (And we were not surprised!)

Yes, there is an L-shaped recovery underway. It will not likely be reported in any great detail (at least not currently) by the mainstream media for what it really is, a rolling depression in America and parts of Europe. But it will be reported on the Internet.

We think the whole thing may actually get worse before it gets better. The "stimulation" provided by Western governments has merely propped up the main players responsible for the current depression – those involved in the current fiat money system – and probably extended the debacle by a number of years. Many of these outfits yet remain on "life support." There are plenty of potential bankruptcies ahead. And many more may lose the "jobs" that the West's central banking economies have cast up for them in better times.

After Thoughts

This latest crisis, like so many before it, is a direct result of central banking hyper-inflationary policies plus misguided Keynesian political and economic responses. It will end, eventually, when systemic distortions are finally wrung out or when central banks succeed in re-inflating the global bubble economy. Of course it is possible the whole thing could collapse and a private market gold and silver monetary standard could re-emerge. But don't expect to hear Rupert Murdoch talking about that alternative. Or not in this lifetime anyway.

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