World View: Egypt's Terrorism Escalates with Attack on Tourist Bus

World View: Egypt's Terrorism Escalates with Attack on Tourist Bus

This morning’s key headlines from

  • Egypt’s terrorism escalates with attack on tourist bus
  • The ‘New Frugality’ versus the ‘New Criminality’

Egypt’s terrorism escalates with attack on tourist bus

A terrorist bomb exploded on a bus carrying 33 tourists in Egypt Sunday. The explosion killed the Egyptian bus driver and three SouthKorean tourists. The attack took place in the Red Sea resort town ofTaba, in south Sinai, just before the bus was about to cross over intoIsrael.

No one has yet claimed credit for the attack, but it’s suspected thatthe perpetrators are the al-Qaeda-linked Sinai terrorist group AnsarJerusalem (Ansar Bayt al Maqdis or Champions of Jerusalem), which hasclaimed credit for several major terrorist bombings in the past.

Terrorist attacks have been increasing since the army coup that oustedpresident Mohamed Morsi on July 3 of last year, with Ansar Jerusalemclaiming credit for many of them, but up until now the targets havebeen security targets and personnel. This is the first terroristattack since 2008 on tourists. Tourist visits to Red Sea resorts arean important source of income for Egypt, and it’s feared that Sunday’sattack begins a new escalation designed to destroy Egypt’s economy.Al-Ahram (Cairo) and Reuters

The ‘New Frugality’ versus the ‘New Criminality’

Neil Howe, who along with the late William Strauss foundedgenerational theory in the 1980s, says in Forbes that analysts in thenational media are wrong to blame the decline in labor forceparticipation on the aging population, since the Boomer generation isactually increasing its labor force participation and is the onlygeneration currently to be doing so.

He suggests another explanation: That Generation-X has a new socialmood, an enduring “New Frugality,” of spending less, working less, andbuying cheaper. According to Howe:

Xers also prefer to do things for themselves. Theydon’t trust others to get the job done right and consider payingothers for services they could perform themselves inefficient. Whybuy something new when you could employ crafty DIY tactics forhalf the price? Why pay nannies to look after your kids while youwork to be able to afford their services? And why work law firmhours at today’s high marginal tax rates, when you’ll just have togive more of your money back?

He adds that since mainstream analysts’ assumptions are wrong, their conclusions are wrong as well:

Pundits keep offering theories about when Americawill return to pre-recession spending, GDP growth, and employmentrates. But if Xers continue to work and spend according to a NewFrugality ethos, these milestones will remainelusive.

Howe’s point is that, because of generational factors, the globalfinancial crisis is far from over, and the economic growth thatpoliticians are counting on is not going to happen. This is a pointthat I too have been making for years, and it’s backed up by theVelocity of Money chart that I posted last month:

Velocity of Money, 1959-2013 (St. Louis Fed)
Velocity of Money, 1959-2013 (St. Louis Fed)

The velocity of money has been cratering since the financial crisisbegan in 2007, and it means that people aren’t spending money. Thisis propelling the economy into a deflationary spiral.

However, there’s another side to the “New Frugality,” and that’s the

It’s easy to forget how much criminality there’s been in the lastdecade, since the Gen-Xers came to power. There was the creation andsale of trillions of dollars in fraudulent mortgage-backed securitiesby thousands of bankers – not a single one of which has gone to jail.

Analysts on CNBC lie constantly about stock valuations. There isn’teven a pause any more. The lying is just part of the culture. That’scriminal activity if anyone cared. (See, for example, “14-Apr-12 World View — Wharton School’s Jeremy Siegel is lying about stock valuations” fromearlier this year.)

Then there’s the Gen-Xer-in-chief in Washington. Does anyone, evenhis supporters, believe a word he says any more? Yet it doesn’t matter. As I’ve said, if President Obama picked up a gun and shot andkilled Michelle, then the New York Times and NBC News would blame it on theRepublicans.

Probably nothing is worse right now than Obamacare. Each day, itdestroys another part of the economy, just as Bashar al-Assad’s barrelbombs destroy innocent people’s neighborhoods in Syria. But itdoesn’t matter to Obama.

This is the standard Nomad archetype/Generation-X nihilistic paradigm:Destroy everything so that you can start over with a blank slate, alsosometimes stated as “You have to break a few eggs to make an omelet.”The Gen-Xer-in-chief believes that if enough of the medical insuranceindustry is destroyed, then Obamacare will survive, and his name willgo down in history for government medical insurance.

All of these are examples of massive criminality that’s been going onin the past decade, which would have been completely unthinkable adecade earlier, when the people of the Silent generation were incharge.

The “New Criminality” is the mirror image of Howe’s “New Frugality.”If CNBC analysts lie with impunity about stock valuations, and Obamalies with impunity about Obamacare, then it’s impossible to trustanyone, and you have to do everything for yourself, which is what Howesays about Gen-Xers. I know that’s the way I feel, and I’m not aGen-Xer. Forbes

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