Yesterday, we estimated that it would take 19 years for the economy to complete its de-leveraging . It was not a very scientific estimate. But total debt has gone down about $2 trillion over the last 24 months. So, if it continued at that rate, it would take about 19 years to erase the extraordinary amount of debt built up in the bubble years.

Now, along comes the Comstock crowd with roughly the same guess – two decades. They figure that the savings rate will go up to 10% and that the effect of taking that money out of the consumer economy will be to put the US into a long, soft slump – just as we predicted in our first book.

And there’s another reason to expect a very long period of downsizing: that’s just the way economies work. Market cycles are very long. Interest rates went up from the Great Depression all the way to the Reagan Administration. Then, they went down… and may still be going down. Stocks go up and down in cycles that last 30-40 years, peak to peak. The peak in ’29 was followed by another peak in ’66 which was followed by another peak in ’99.

Economic cycles are long too. Consumer debt, compared to disposable income, hit a low in 1945. It went up for the next 62 years. It only peaked out in 2007. If the chart were symmetrical, the process of de-leveraging (getting rid of debt) would show a downtrend until 2069!

And maybe it will.

But there’s no point in looking that far ahead. What we have in front of us is the opening stage of a depression… a market crash followed by a major economic re-adjustment. The new reality is that consumer demand is down… and will stay down for a very long time, at least until debt has reached more manageable proportions. Ken Rogoff says that will take 6-8 years. We say it could take 19 years. There’s about $20 trillion in excess private sector debt to be eliminated. It will take time to get rid of it.

And it will take time to re-jig the world’s economies to the new economic realities.

John Hussman explains…

“The U.S. economy lost a quarter of a million jobs in July. Meanwhile, over 400,000 workers abandoned the labor force (and are therefore no longer counted among the unemployed), which prompted a slight decline in the unemployment rate despite the job losses . In the context of an economy still strained by high levels of consumer debt and still record delinquency and foreclosure rates, labor market conditions are still troublesome. Still, the pace of job losses and new unemployment claims has clearly softened from the pace we observed early in the year.

“If we knew that this was a standard economic downturn, we might conclude that the recent improvements are durable. However, nothing convinces us that this is a standard economic downturn.

“Call me skeptical. But if you look carefully at the economic data that shows improvement, and correct for the impact of government outlays, it is difficult to find anything but continued deterioration in private demand and investment. What we do see is a government that has run what is now a trillion dollar deficit year-to-date, representing some 7% of GDP.

“That sort of tab will undoubtedly buy some amount of Cool-Aid, but it has been something of a disappointment to watch how eagerly investors have guzzled it down. It is not at all clear that short-term, deficit-financed improvement necessarily implies sustained growth in the context of a deleveraging cycle. This is like somebody borrowing money from their Uncle and then celebrating that their income has gone up.

“When market crashes are coupled with changes in the fundamentals that supported the preceding bubble – as we observed in the post-1929 market, the gold market of the 1980’s, and the post-1990 Japanese market, and currently observe in the deflation of the recent debt bubble – they typically do not recover quickly. Indeed, the hallmark of these post-crash markets is the very extended sideways adjustment that they experience, generally for many years. “

*** It’s a real Ouzilly summer… bright sun… long evenings on the veranda… cool nights.

Yesterday, while we were painting in the sun room, we noticed a group of people wandering around the yard. They were taking photos… pointing at things. It was as if a group of tourists had walked in and decided to have a tour. But with them was an old man, bent over … and wearing the blue outfit of a French working man. This was no tourist.

“Mr. Bonner?” a middle-aged woman began the conversation.

She then introduced the group. It turned out that the old man – Mr. Brillaud – had been born on the property 90 years ago. Now, here he was… with his children and grandchildren. She asked if they could have a look around the place.

“Of course,” we replied.

“I was born right up there,” said the old man – pointing to the top floor of the house. “Oh, Mr. Bonner… you’d like to hear the stories this house could tell. I was born in 1919. My father came back from the war in 1920. He worked on the farm until he had a heart attack when he was 55 years old. My grandfather lived here too. He had gone over to the nearby village with a wagonload of gravel… the horse reared up and turned the wagon over. My grandfather was killed.

“My mother was a cook here.” He pointed to the kitchen.

“But it was very different then. There was a whole community around the farm. There were the Cornettes, who lived in the house across the road. And the Desportes, who lived in the house down the lane. Oh… and a few other families too. It took so many people to make the place work.

“And is the old bread oven still there? You know, in that building at the end of the courtyard?”

“Yes… it’s still there,” we told him.

“We used to love that place. It was where we made bread for the whole village. It was always warm. And it smelled so good.

“We had to do everything ourselves. We grew the wheat. Then, we milled it. And then we made bread. And we had chickens for eggs. And cows for milk. And, of course, the vegetable garden. I don’t think we had any money. But it wasn’t a bad life.

“Then, they changed the whole thing in the ‘60s. They put in place a law that said you had to pay the people on a farm… and contribute to their social security. Then, there were too many people on the farm for it to support. So, they all moved away. The only ones left when you got here were the Debonnet family, weren’t they? Francois was still here. And now he’s retired too.

“Oh, and what have you done to the octagon?” he motioned to the building that we transformed into a library/office. We walked over to have a look.

“It used to be for ironing,” he continued. “There was a big brick fireplace in the center. We didn’t have electric irons, you know. Instead, there were heavy irons on top the fireplace. It had an iron top, you see. You’d come in here and there would be irons on the fireplace, getting hot… and usually one of the maids ironing sheets. It kept them pretty busy.

“Of course, it kept us all busy. We didn’t have any 35-hour workweek back then. We worked all the time.”

*** Donovan is coming! Donovan… a handsome young Swiss man… a friend of a friend… did the cooking for us a few years ago. He is widely remembered.

“Isn’t he the one who got that girl in the village pregnant?” asked one of the boys at dinner last night.

“No, he’s the one who took the car and wrecked it. He didn’t have a driving license… ” explained another.

“And I remember when he went out in the evening… he went into town… and then, for some reason, he had to walk back. That’s about a two-hour’s walk. And he was so out-of-it he walked by the house and just kept going… until he finally realized he had gone too far… so he had to walk an hour back. He came into the driveway about 6AM… looked like he had been hit by a truck… ”

“ He made quite an impression on all!” said another source.

“I will never forget Donovan — not to mention the most memorable week of my life! What a thrill it was to sit under the spreading linden tree near the garden wall, reading and sipping on a peach royale whilst millions of bees happily kept to their work above my head. Later, I toured the garden below and helped the Dashing Mr. D. gather gooseberries. One of my fave pics is Chef Donovan at the outdoor grille off the veranda, cooking up the evening’s feast: wild boar steaks. Incredible! And incredibly delicious! My first experience of centuries old art work and architecture in Europe was on our impromptu guided tour of churches in and near Montmorillon on a rainy Monday; Donovan, of course, in the lead with all manner of historical information. And I believe Donovan had a hand in the spectacular midnight fiery pyre display that thrilled and awed us all, and celebrated St. John’s Day if memory serves. Is it exaggerating to claim Donovan the sine qua non on our d’Ouzilly experience?”

Source: Prepare for a Long Period of Downsizing

If you’re a regular reader of my columns, that won’t come as a surprise to you. And I’m not alone in that camp either. Analysts, strategists and investment directors all over Wall Street have been hesitant to put new capital into the markets.

For example, one hedge fund manager told me that he just can’t buy stocks at these levels – despite complaints from his partners who expect him to be fully invested.

And a technical analyst friend reports that the vast majority of his institutional clients are bearish.

And why not? We’re still hemorrhaging jobs… housing still stinks… and U.S. retail and food sales plummeted 9% in June, compared with June 2008.

But the market keeps going up.

This is what is known as climbing the wall of worry. Let me explain what this means – and what it means for us when it comes to investing…

Bulls vs. Bears In A “Pistols At Dawn” Showdown

The wall of worry is when stock prices climb, despite investor sentiment being negative and there being more reasons for them to fall than rise.

Sound familiar? It’s what we’ve got at the moment.

For example, the most recent Bull/Bear ratio among advisory services was 1.03. That means for every 1 bear there is 1.03 bulls. The average over the past 39 years is 1.73, so the current reading is rather bearish.

In fact, the American Association of Individual Investors’ (AAII) survey has turned up more bears than bulls for weeks. It was only this week that bulls outnumbered bears for the first time since June.

And the media certainly isn’t in a rush to report any good news…

Who’s Afraid Of The Big, Bad Market?

If there’s one thing the mainstream financial media does perfectly, it’s hyping news to the point where they make you scared. And they’d love to keep it that way, too. After all, if you’re scared, you’ll tune in to get additional information.

Don’t listen to ‘em. The best time to get into stocks is when things are at their worst. Because by the time they get better and the masses pile back into stocks, the majority of the gains have already been realized.

So with all that negative sentiment, does that mean you should chase this rally?

Don’t Try To Run After This Erratic Market

Take off your running shoes – don’t chase this rally.

The investment seas are still rough and we’re likely to see them get rougher.

For example, commercial real estate is a disaster. There are still financial institutions that are teetering. We have industrial overcapacity. We’re still seeing heavy job losses, too. And even many of the folks who manage to find work after layoffs are making significantly less than in their previous jobs.

Remember how bad things seemed just a few short months ago? I don’t know if we’ll get back to those depths of despair. I certainly hope not. But I do expect stocks to fall and investor sentiment to deteriorate.

And just when it seems as if things can’t get worse, another sensational buying opportunity will present itself.

Marc Lichtenfeld

Source: Why You Shouldn’t Chase the Current Stock Market Rally

Good day… And a Wonderful Wednesday to you! We had a very tight range trading day yesterday in the currencies, which have left them trading in about the same clothes they were wearing when I signed off yesterday! We’ve got that to talk about, and… Another $2 Billion for the CARS program has been allocated… What a crock! OK, Chuck, slow down, you don’t need to get your blood boiling this quickly, this morning!

I’m writing from home this morning, as I have a meeting close to our old office, which means its not far from where I live, which is completely different from our current office location, which is, I’ll say… Quite a distance… But, hey! I’m not complaining, just giving you the details…

OK… Well, as I stated in the opening, the currencies have traded in a very tight range for the past 24-hours, with little in the way of data to push them in either direction. That could change this morning when we see the color of the ADP Employment report, and Challenger job cut report. The ADP/Challenger reports are usually a very bad indicator of what the Bureau of Labor Statistics (BLS) print in the Jobs Jamboree (which will print on Friday this week)… But a few months ago, the people at ADP/Challenger decided to change their methodology to mirror that used by the BLS… In other words… They will lie, cheat, and cook their books too! HA! But that hasn’t helped them…

I think it to be a better indicator to use the employment component of the ISM Index that printed the other day… The employment component showed that the job losses will be around 350,000 for July… That’s close enough for government work regarding the forecast of 325,000 jobs lost by the surveyed economists.

However, the ADP/Challenger report will print, and the markets will make an initial reaction to the report. So, watch for that… If the ADP/Challenger report shows a greater number of jobs lost, it could push the risk appetite to the back of the class once more… At least temporarily!

OK… I was all prepared to talk about this in today’s Pfennig, when I saw a note from my friend, John Mauldin, talking about it last night! He beat me to the punch! Oh well, I’m going to continue on with my plans…

What I’m talking about is the GDP report last week… Something smells of yesterday’s fish here folks… I’ll put it out here very simply… The Gov’t tells us that Consumer Spending is only down -2.5%. Which when plugged into the GDP report tells us why GDP was reportedly stronger than expected in the 2nd QTR… Consumer Spending represents about 70% of GDP! But here’s where I have a problem with the report… Corporate Earnings are down 15%… Corporate Earnings are down 15% because there’s no Consumer Spending! -2.5% doesn’t compute when Corporate Earnings are down 15%!

And here’s where the cheese begins to bind folks… I believe the Corporate Earnings numbers are true… They are regulated to be so! While the Consumer Spending data is Gov’t produced… As the robot in the Lost in Space TV program used to say… “This does not compute, Will Robinson”!

But hey! What do we expect from Gov. reports? Look at the games that people play at the BLS for example! Any old way, I just wanted to throw that out there as food for thought about the U.S. economy / recovery data…

Ty Keough and I had a quick conversation yesterday about Bank Earnings that have been reported… I discussed how disgusted I was with all this yesterday, but left it at that. Ty decided to try and get me talking about this… I know I shouldn’t, but I must! These Big Banks that borrowed funds from the Gov’t, got to stop marking to market the securities/bonds that had gone bust, which means they then got to sell them to the Gov’t at inflated prices, then take the money they Gov’t gave them for the inflated securities/bonds and pay back the Gov’t! The funds also allowed the Big Banks to post those earnings that the markets got so wound up about! Now… How’s that for getting your cake and eating it too!

I shake my head in disgust, folks… But hey! We’ve got the cartel folks over at the Fed taking care of all of this for us… Isn’t that nice? NOT! We had all better be careful or before we know it, the Fed Heads will be doing an Oliver North on us!

Ok, enough of that! The British pound sterling was the star performer again yesterday and last night… The U.K. has seen a plethora of better data recently, and it didn’t stop yesterday or this morning… The U.K. manufacturing index unexpectedly rose, and U.K. services expanded the most in 1.5 years in June. Factory output was up .4%, and home values shot up almost double what was forecast for them!

This recent run of better than expected data reports in the U.K. tells me that the Bank of England’s (BOE) Gov., Mervyn King has come to an end of his bond purchases… For now… That means Quantitative Easing in the U.K. has ended… Again, for now… And that news , along with the better than expected data has allowed the pound sterling to rally and rally it has!

In the Eurozone, things aren’t looking so rosy… Eurozone Manufacturing and services contracted at the slowest pace in the past year, and Retail Sales for June showed a 2.4% drop, year-on-year. However, these things only place a drag on the euro temporarily, as the euro will shine, with every mark down of the dollar…

And then there was this… A long time reader sent me a note yesterday, and said that it just didn’t make sense that U.S. Manufacturing was healing while Capacity Utilization was wallowing in the mud (OK she didn’t put it like that, I did!)… So… I put on my Sherlock Holmes hat, grabbed my pipe and looked into it, because… Now that she said that, it didn’t make any sense to me either!

So, I went to the components of the ISM Index, and found that 9 of the 10 showed improvement… But none so much as the Government Construction Spending component that showed a 3% increase! So… There you have it… Manufacturing, per se, was better, but not as advertised!

So… GDP was not as good as advertised. Manufacturing was not as good as advertised. Jobs data has not been as good as advertised… Do you see a trend here? If not, you might want to go for an eye check up! HA!

OK, I’ve got to get this and me out the door soon, so I had better head to the Big Finish!

Currencies today 8/5/09: .8440, kiwi .6745, C% .9295, euro 1.44, sterling 1.70, Swiss .9420, rand 7.91, krone 6.03, SEK 7.1415, forint 185.49, zloty 2.85, koruna 18.05, yen 95.30, sing 1.4340, HKD 7.75, INR 47.62, China 6.8310, pesos 13.13, BRL 1.8160, dollar index 77.27, Oil $71.70, 10-yr 3.72%, Silver $14.70, and Gold… $966.70

That’s it for today… I hope your Wednesday is Wonderful!

Chuck Butler

Source: GDP Does Not Compute, Will Robinson!

This from Justice Litle:

“You can’t put a percentage figure on the market drop. In fact, there isn’t a market at all.”

“The scary thing is, they’re nowhere close to facing reality… the official listings have only reduced prices by 10-20%, even with no buyers in sight, and builders are hoping to build more…”

Meanwhile, in the United States, the S&P has completed 6 quarters of negative growth and is now registering it first quarter ever of negative earnings. That’s right, dear reader, put all the S&P companies together. Add up their earnings. Subtract their losses. Result: net losses.

MarketWatch reports:

“A sixth quarter of negative growth ties the prior record set when Harry Truman was president, running from the first quarter of 1951 to the second quarter of 1952.

“‘Next quarter, we’re expecting a new record of seven quarters of negative growth,’ said an analyst.

“As of the close of business Thursday, [he] calculates S&P earnings per share, on a reported basis, at a loss of $10.44 for the quarter. If financials were taken out of the equation, that deficit would drop to $2.35 a share.”

We are in a period of price discovery. Many shares, businesses, and credits are on offer. Typically, people are reluctant to make bids until they have a clearer idea of what these things are worth. What are they worth now that we’re in a post-Bubble world? No one knows. And no one seems in a hurry to find out.

Even in Japan, the search for the bottom continues. It hardly seems possible. The Japanese economy was already in a deep hole after 19 years of recession/depression. Now, it’s digging deeper.

The latest figures show the Japanese economy falling at a 12% annual rate – faster than ever. Well, faster than at any time during its 19-year slump. The last time the economy in Japan slumped this hard was 35 years ago.

What to make of it?

Well, the simple answer is this: while Americans consumed too much, the Japanese produced too much. The United States had far too many retail shops and service industries. The Japanese built far too many factories to stock their shelves.

And now, well…you know the story now. No shoppers. No merchandise needed. No orders for Japan. So how much are the shops worth? How about the factories? What about houses? We’d all like to know what they’re worth so we could get on with business. But Mr. Market is playing it cool. We’ll just have to wait until the bids come in.

*** Strategic Short Report’s Dan Amoss offers his two cents on Geithner’s Financial Stability Plan, or ‘TARP 2.0’:

“Part of the new Financial Stability Plan involves an unspecified ‘public/private’ partnership to buy up toxic assets. Apparently, the idea for a public/private partnership was a last-minute development leading up to Tuesday’s announcement. Word is that several prominent hedge fund managers met privately with Larry Summers, one of the administration’s top economic advisers, just days before Tuesday’s announcement.

“Here’s my guess at how this arrangement might develop in the coming weeks: Long-term financing from the Treasury to distressed debt hedge funds is a very creative way to hide a government subsidy. The potential cash-on-cash return for hedge funds interested in cheap toxic assets is probably not enticing enough for them to pay what the banks are asking. But if the Treasury acts as a prime broker by providing, say, 10-year financing at 4%, so hedge funds can lever up their equity by five times, maybe the funds will be willing to pay a bit above the banks’ asking price and still earn a decent five- or 10-year return. This is a backdoor way to recapitalize stressed banks and get toxic assets into stronger hands without exposing taxpayers to too much credit risk. Combined with a major new mortgage refinancing initiative, this might have a shot at success.

“One thing is clear: The authorities are not going to just sit by and do nothing. I’ll be looking closely at the details of the Financial Stability Plan as they are revealed in the coming weeks.”

*** At least the Japanese have an orderly society with plenty of savings to lather over their hurts. The Land of the Rising Sun is also the land of an aging, shrinking population. These old people can just wait out the slump…knowing that it might last longer than they do.

Cross the straits into China. There, same story. Different ending. China has too many factories too – at least, too many set up to produce too much stuff for too many people who can’t pay for them. China has a huge, growing population. The rate of population growth is not at high as it used to be, but the raw numbers of getting larger all the time. If you have a population of 100 million and you grow at 6% per year, you add 6 million new people to the world’s population each year. If you have a population of a billion people, and you grow at half that rate – just 3% per year – you add 30 billion new people each year.

China’s economy needs to grow at nearly 10% per year just to provide jobs for these people, say the experts. Doesn’t seem very likely – not in today’s incredible shrinking world economy.

The New York Times:

“From lawyers in Paris to factory workers in China and bodyguards in Colombia, the ranks of the jobless are swelling rapidly across the globe.

“Worldwide job losses from the recession that started in the United States in December 2007 could hit a staggering 50 million by the end of 2009, according to the International Labor Organization, a United Nations agency. The slowdown has already claimed 3.6 million American jobs.

“High unemployment rates, especially among young workers, have led to protests in countries as varied as Latvia, Chile, Greece, Bulgaria and Iceland and contributed to strikes in Britain and France.

“Last month, the government of Iceland, whose economy is expected to contract 10 percent this year, collapsed and the prime minister moved up national elections after weeks of protests by Icelanders angered by soaring unemployment and rising prices.

“Just last week, the new United States director of national intelligence, Dennis C. Blair, told Congress that instability caused by the global economic crisis had become the biggest security threat facing the United States, outpacing terrorism.”

“Millions of migrant workers in mainland China are searching for jobs but finding that factories are shutting down. Though not as large as the disturbances in Greece or the Baltics, there have been dozens of protests at individual factories in China and Indonesia where workers were laid off with little or no notice.”

The Chinese have built their factories to sell things to foreigners – notably, the most feckless consumers on the planet, Americans. It will take time to re-jig factories and marketing channels to the needs of its own market.

Remember, this is a depression. A depression requires structural changes to an economy. Those take time. The Japanese can wait. But on both ends of the U.S.-China shipping lanes there are big, big problems.

*** On the U.S. end, the pols can’t leave bad enough alone. The voters won’t stand for it. They’re going to ‘do something’ – if it kills us all. What they are trying to do is obvious – inflate away America’s debts. So far, the market has been ahead of them – wiping out more money than the feds can replace. Sooner or later, they’re bound to turn the situation around.

And Obama headed to Denver, Colorado to sign the $787 billion stimulus package.

Our guess is that the next time we come to Nicaragua our dollars will no longer get the admiring glances they bring now.

“You can pay me in dollars,” said the woman from whom we bought a watermelon yesterday.

Next time, she’s likely to want cordobas…

Source: Living in the Post-Bubble World

As we looked out over the absurd hallucinations, delusions and lies of the Bubble Years – oh, those happy days! – we warned that the coming correction “would be a doozy.”

And a doozy it is.

‘Doozy’ is a technical term we feral economists use. “Depression” is what most people call it.

“Slump worst for 50 years,” is the big headline in the Financial Times over the weekend.

“Data reveal recession worst than feared.”

And the full weight of it has yet to fall upon the economy. A correction takes times…especially when it is not merely a cyclical recession, but a structural depression. The whole structure of the world’s economy is being reshaped. The banking system is insolvent. Thousands of businesses are broke. Millions of households are upside down financially. Joblessness is rising into the tens of millions and may reach 100 million worldwide.

“One of the severest downturns in generations,” said U.K. Chancellor Alistair Darling.

The downturn is going to be tough for almost everyone, almost everywhere. The French have to learn to live with fewer tourists at home and fewer bottles of champagne exported abroad. The English have to learn to with less revenue from financial services. The Chinese – and Asians generally – have to figure out what to do with all those TV sets that junk Americans aren’t buying anymore. Arabs wonder what to do with their oil.

Americans, meanwhile, have to figure out how to get by in a world where strangers aren’t so kind. You’ll remember what made the world go round this last quarter century. Those nice strangers made things and shipped them to Americans. The Americans paid for them with I.O.Us. The foreigners were so accommodating, they never asked for payment. Instead, the I.O.U.s just piled up in their vaults.

All that has come to an end. Trade is collapsing. And now it’s every man for himself. Sauve qui peut. Americans aren’t buying. Chinese aren’t selling. So far, the strangers are still being nice about America’s I.O.U.s. They’re politely holding onto their Treasury bonds and not insisting on payment. But they’ve made it clear that they’re not exactly looking for a lot more of them…not when the value of America’s collateral is falling so sharply. And they’ve made it clear that if the United States lets these I.O.U.s go down anymore, they won’t be very happy about it.

But what we’re wondering is whether we should add a corollary to our dictum: Yes, the force of a correction is equal and opposite to the deception that preceded it. And the measures taken to stop the correction will be just as absurd as the crackpot ideas that got the economy into trouble in the first place.

We don’t know what particular good this insight does for us. But it just shows that the show isn’t over. One hallucination may have run its course, but there are plenty more. And they have consequences too.

What the world waits to see is how long it takes these consequences to reveal themselves. No one doubts, broadly, what the consequences will be. Governments are doing their level best to create inflation. Sooner or later, they’ll get the hang of it. But when? How?

That’s the thing…no one knows. The depression is taking the stuffing out of prices. Trillions in nominal purchasing power have disappeared. Workers have been laid off by the millions. There are too many Starbucks…too many malls…too many factories. All these things are dragging down prices…even while the feds inflate the money supply. Where will the turnaround come? When will prices stop going down and begin going up?

No one knows…

*** We have come back to Nicaragua – for the first time in three years. It’s the kids’ winter vacation. But now, we only have one kid with us – Edward, 15 years old. All the others aren’t kids anymore. They’re away at college…or working.

Even Elizabeth is away at college. She is studying at the Sorbonne and can’t join us until next week. Until next week, it is just us…the sea…the sun…the tropics…and all that goes with it.

Right now, we are sitting on the veranda of the Rancho Santana clubhouse. The sun is bright and hot over the ocean…a sea breeze cools the air…the palm trees sway…the waves crash onto the shore, spinning the surfer’s head over heels.

Eat your hearts out, dear readers…

“What’s this?” Edward was pointing at a strange animal that looked like a giant cockroach.

“It’s a bug,” his father, the naturalist, answered.

Darwin seemed to have no natural enemies last week. It was the 200th anniversary of Darwin’s birth. His theory was blessed in every account we saw. Everyone was on his side. As a result his ideas reproduced and multiplied until they were in practically every newspaper.

Commentators saw Darwinism at work everywhere. In the current worldwide financial meltdown, for example, they thought they saw not the beneficent ‘invisible hand’ of Adam Smith, but the bloody claw of natural selection. “It’s the survival of the fittest at work,” said one opinionist.

Ideas, like rats, need predators. Otherwise, they get out of hand. Seeing none to cull the weak parts of Darwin’s pensee, we will do it ourselves.

There are two parts to Darwinism as it is popularly understood. One part is based on observation – at which Darwin was a master. The other is extrapolation – not so much on Darwin’s part, but his followers. The problem is that the part that is probably correct is child-like and obvious. And the part that is more grown up is nothing more than empty guesswork. He notes that some animals are better suited to their environments than others. If a polar bear were suddenly born to a hog here in Nicaragua, it probably wouldn’t last long. On the other hand, if a mutation produced a naked polar bear at the North Pole, it wouldn’t stand much of a chance either. Both would probably perish, leaving no heirs or assigns…and thus removing from the gene pool whatever crazy aberration that created them. Some things survive and reproduce; some don’t. The essence of Darwinism is nothing more than that simple-minded observation, as near as we can tell.

But the application of this notion far and wide is a threat to the intellectual eco-system. Because of it, people think they know a lot more than they actually know. To the question, why is the polar bear white, rather than black, they have a ready answer: because evolution made him white. But this is no answer at all…it just postpones thinking until the next question: why did evolution make him that way?

Then, the guesses begin: because he can blend into the snowy background and sneak up on seals. Oh. They tell us, for example, that he covers his nose – which is black – with his paw, so he can get closer without being spotted.

Smart bear. But you’d think if evolution could turn his whole body black it could whitewash his nose too. And what about the seals? Are they morons? You’d think those that couldn’t tell the difference between a bear with his paw over his nose and an iceberg would have been weeded out by now. Besides, why aren’t seals white?

Of course, the biologists and know-it-alls have their answers, but they are just putting 2 and 2 together in the clumsiest way. They really don’t know why polar bears are white. All they know is that nature hasn’t exterminated the white polar bears – yet.

Many of these deep thinkers also believe that Darwin proved that God didn’t create man. Instead, man arose by the process of evolution, they say, one accidental step at a time. Man is the product of pure chance, they claim. As if God couldn’t make it look like an accident, if He wanted!

Source: A Doozy of a Depression