Please, Not Another Stimulus

In the wake of this morning's disappointing June numbers on job losses and unemployment, the White House sent out CEA Chairwoman Dr. Christina Romer to face the media. In the clip below, Romer is her usual self--an overly-optimistic Pollyanna as she attempts to make the case that the economy will rebound soon, blah, blah, blah.

CNBC's Mark Haines sees through her bullshit and asks about a second stimulus to which Romer replies: "we are committed to doing whatever it takes to help the economy, including a second stimulus..."

Has anyone else had enough of this clueless, Keynesian claptrap. Wake up Washington. Belief in Keynes is belief in utter self-delusion. Keynes to economics is a witch doctor to medicine. It's bogus, P.T. Barnum, boonschwaggle.

Bush tried a stimulus of $150 billion--fail. Obama is trying a stimulus of $800 billion--and it will fail. Small tax cuts and inefficient spending programs (where 10% is lost through corruption, graft and waste) will not help an economy hell-bent on debt de-leveraging after a 2-decade sloth through easy money and credit.

The party is over. Turn in your hats. And stop destroying our children's futures with wasteful giveaways that serve no useful economic purpose. Keynes is and was a failure. We are broke and indebted to the tune of $12 trillion. We are in a deserved period of contraction. Allow the deleveraging to take place, encourage massive cuts by states and municipalities. Adopt the New Zealand mindset (make sure to read this one) that we should use the global downturn to restructure our governments and spending so that we are ready to compete strongly again when the dark days are done. For heaven's sake stop trying to keep the party going with cheap booze and even cheaper hookers.

The economic cycle has an innate beauty--growth and recess...allow it to flourish. Recessions are necessary and unavoidable. Look at nature. When Fall comes, we shed our old leaves, prune back, and prepare for Winter and eventually a new Spring where growth flourishes again. The Bush-Obama administration seems hell-bent on making sure our tree stays (Soylent) green through an ice age. It won't work and it's not smart.

Comments

[whidbey:]

Yes, the plan is to "buy" prosperity for the little people by taking from the earners and borrowing more. We are being mislead and abused by an administration of people who were barely competent in the classroom or the neighborhood. We made a mistake and its time to plan the next steps to attempt a recovery, if one is feasible.

Jul 02 03:46 PM

[Pink Panther:]

Keynesianism always appeals to those politicians in charge, since it's not them prescribing the bad medicine of shrinking the GDP but the next generation.
With so much keynesian talk from politicians and the mainstream media, this school of thought unfortunately is hard to eradicate...

Jul 02 04:04 PM

[datadave:]

bogus, gutless propaganda. Relying on the 'private sector', the oligarchs who got us in this mess with their over-Financialization of the economy ala Reaganomics, Laufferism, is surely a Talibanish way to go. Yupp, just return to Coolidge's anti regulation is a really stupid way to go.

Jul 02 06:26 PM

[ken3602:]

I saw that clip. It is either one of these..

She thinks ordinary Americans are so dumb, if she says the government will keep throwing stimulus people will be relieved and happy like a child again. Or, she doesn't really tell the difference between doing things right and doing things that make things worse again and again.

Hoping for a quick recovery while avoiding a surgery will end up with a dead body. Sugar cookies will make the patient happy for two minutes. she's practically talking about additional packages of cookies and candies here. So sad. Now is not the time to make the patience feel happy, it is time to go through a surgery.

Jul 02 07:24 PM

[constab:]

What you are describing is exactly what the Kondratiev-cycle is predicting. We are now in the Kondratiev-Winter, the time of Cleaning.

hans.wyrdweb.eu/why-re...

Jul 03 09:55 AM

[Esol Esek:]

so whidbey, what is it that the 'earners' really do? live off the rents of their inherited apt buildings? or are they at the govt trough of military waste like your entire island? Cut the military 50%, invest 20% of that money into energy independence and education, and this country will flourish and the oil markets will collapse down to $20 a barrel again.

Laissez-faire and libertarianism is as dead as Keynes, and dont forget it. public salaries pale in comparison to the trillions stolen by business school frat boys. But dont worry, shotguns will come out on the left as well as the right, and then the people will say why are we shooting at each other, lets got for the elites in their enclaves...

Jul 03 12:39 PM

[PainfullyAware:]

"Laissez-faire and libertarianism is as dead as Keynes, and dont forget it". - Esol Esek

So is it Serfdom, Feudalism, Fascism, Or Socialism that is alive and well?

I feel that you take a minority position and hastily generalize. You would hold "Earners" as evil people that inherited their wealth and are thus not worthy of it implying they must be assuaged of their money.

Do Not Be So Naive To Think That The Lines Are Drawn So Clearly When It Comes To The Force Of Government. Laws Written For One Apply To Many; Detail And Nuance Is Never Considered In Enforcement.

The World Is Not "Black And White".

The opposite of Liberty Is Slavery. You had better hope that Libertarianism is not dead because the consequences are grave. (From what I have seen it is being reborn and is flourishing)

It is never good to hold oneself to rigid "Labels" - Interpretation is subjective and malleable over time.

Tyranny Has Many Forms And Slavery Does Not Always Involve Shackles.


On Jul 03 12:39 PM Esol Esek wrote:

> so whidbey, what is it that the 'earners' really do? live off the
> rents of their inherited apt buildings? or are they at the govt trough
> of military waste like your entire island? Cut the military 50%,
> invest 20% of that money into energy independence and education,
> and this country will flourish and the oil markets will collapse
> down to $20 a barrel again.
>
> Laissez-faire and libertarianism is as dead as Keynes, and dont forget
> it. public salaries pale in comparison to the trillions stolen by
> business school frat boys. But dont worry, shotguns will come out
> on the left as well as the right, and then the people will say why
> are we shooting at each other, lets got for the elites in their enclaves...

Jul 03 04:03 PM

[swaps:]

I combined our two stimulus checks and bought a HP computer for about $640.

I thank the rest of you for your generosity.
I had to spend it, or be forced to report it as income.

My purchase should generate about $3,000 in extra economic activity, based on the usual multiplier effect cited by economists I have interviewed years ago.

Jul 03 04:45 PM

[a. palmer jr.:]

I think they can stimulate the economy as many times as they want to and it will not help us. Our spending may help China or Mexico but since we do very little manufacturning for the general publics use we won't ever get jump started. We have many small specialty shops that sell items to the government and big business, like machine shops do, but they don't sell to people like you and me. But if we want to go buy a new shirt or something like that we generally are looking to China, if you buy at Wal-Mart. A word of warning: we had better not let China get a foothold in auto sales in America and there is only one way to do it....If people like you and I refuse to buy their products. If we succumb to the cheapest product, like in the past, you won't be able to buy an American car (or possibly European or Japanese) for years because the Chinese will take over like they did in other areas.

Jul 04 12:11 AM

[ed233:]

Did you notice the inner feeling of confidence that every thing will be a okay after you listen to Ms C Romer. She reminds you of the time you came home from school all bloody after being beaten up by a bunch of thugs and mom says, "Don't worry everything will be just fine." Sure it will!!!!! We'll just let on the unemployment figures don't really exist, okay. Just close your eyes. LOL Looking after your money.

Jul 04 01:47 AM

[W.E. Heasley:]

Good article.

Romer needs to go back to the classroom where everything works out in her fairyland -chalkboard-universe. Goolsbee and Jared “The King of Spin” Bernstein need to go back to The Center for American Progress and continue their research on Thug-o-momics: the theory of being a Union Lackey.

The current stimulus plan deployed needs recalled. The current stimulus plan is basically akin to a really bad Disney Ride. The Ride includes taking your money, guaranteeing you lots of fun, yet you go home broke and disappointed.

Basing Economic Policy on a Social Engineering Agenda is a Train Wreck. The failure of the plan is inevitable on so many levels that it begs to be recalled. The most basic failure of the plan is Deploying Keynesian Deficit Government Spending that by definition creates short term employment while simultaneously making no plans for Private Capital Formation which leads to Private Sector job creation.

If you are going to deploy Keynesian Spending, at the very least understand Keynes went on to say that the jobs created would be temporary until the Private Sector recovered. The Private Sector will never recover without Private Capital Formation incentives. Matter-of-fact, beyond no incentive for Private Capital Formation add in the following: rising taxes, over regulation, Cap and Trade, Socialized Medicine, unfunded entitlements, and huge deficits.

Brilliant Economic Policy!

Jul 04 08:50 AM