Sunday, June 5, 2011
Who are these guys?
Is everyone who gets into the government plied with alcohol and given a lobotomy before they get to speak on Television?
And that goes double for economic and political pundits. (not to mention reality show, game show, entertainment show hosts and contestants.)
Right now it seems that for these sodden idiots there are only two phrases that can be parroted when discussing the economy: Tax Cuts for the wealthy (for republicans). More spending (for Democrats).
You'd think this was a joke. It's not. Tom Kean's show on Bloomberg aside - (because people discuss ideas there) - both sides - and what a terrible shame it is that there are only 2 sides when discussing complex multifaceted issues where there are, in fact, dozens of sides - both sides have a single idea that they shout at each other like reality show morons.
Let's look at these "ideas":
Tax cuts work in a surplus economy with very high tax rates. Reagan's cuts worked to a point because tax rates at 90% were draconian, and we had a surplus which nobody much cared at the time if we squandered.
Now top tax rates are closer to 37% and we have the biggest deficit of any country in the history of the world. Can you see that the two cases are different - and may require different more nuanced solutions?
Spending: The Federal reserve bank/Us government made a terrible error in the early 1930's by tightening heavily in the face of a massive contraction. Since then Republicans and Democrats alike have advocated massive easing in the face of any contraction. It has worked to ease contractions - meanwhile building the debt steadily and relentlessly to the point where it is so massive that any more easing (spending) simply adds to the debt and no longer has any positive effect on the economy.
You see, past performance is not a guarantee of future results. Why? BECAUSE CONDITIONS CHANGE.
Nobody in government is discussing the conditions we have now, because it seems nobody can think well enough to analyze them.
The problem we have now is an insolvent world banking system because of a quadrillion dollar debt-derivative complex that's sucked all the productive capital out of the world economy. It's not easy to fix. But if we're not even talking about it in the political arena chances are it won't get fixed.
Instead they're all acting like a bunch of drunken clowns competing for television exposure.
It's not funny. Because one small policy mistake right now and we will have a depression.
What are the chances of a policy mistake occurring under the watch of any one at all who might become president this next election? Or before that?
Yeah. I agree. So does the market apparently: Buy some gold. Now.