Federal Reserve apologizes, promises to consult with Bookworm Room in future!
Danny Lemieux on Jul 01 2011 at 8:08 am | Filed under: Uncategorized
Obama Stimulus? Fail! QE-1? Fail! QE-2? Fail! Keynesian economics? Fail!
http://www.cnbc.com/id/43598606
The economy is still mired in depression, joblessness rates are unmoved, housing starts are moribund, the dollar continues its decline, food and fuel inflation encroach, consumer pessimism mounts and, as Nancy Pelosi promised, we are still discovering new ways that ObamaCare will bankrupt us all. Paul Krugman? Still grumpy and wrong as ever.
But then, we at Bookworm Room predicted this outcome way back before 2008. Well, at least 97% of us did…a consensus! So, once again, a round of favorite beverages for everyone…even for the one or two grumpy reactionaries in our midst.
Ah well, I guess we shall have to roll-up our sleeves once again and book our schedules accordingly as the Fed prepares to consult our pages in order to rectify this awful mess that Democrats have made of our economy and country.
Happy Fourth of July weekend, everyone! I for one shall be attending my neighborhood parade, watching brand new young conservatives being commissioned into serve while marching down the street waving American flags.
Related posts:
- The Bookworm Turns — an e-book with collected posts from the Bookworm Room
- Madame Bookworm reads the future
- The Bookworm Room list of recommended reading
Email This Post To A Friend
14 Responses to “Federal Reserve apologizes, promises to consult with Bookworm Room in future!”
Leave a Reply
You must be logged in to post a comment.
So how do we wipe Keynsian economics from the Earth? Or is it the liberal version of creation science. It will always be lurking in the hearts of poor adherents of the dismal science?
I agree, take a kid to the Independence Day Parade. The 4th of July is the gateway holiday to becoming a Republican. The fireworks seem to spark some primal sense of American exceptionalism.
Weren’t fireworks invented in China? Isn’t China the perfect model of economic prosperity?
If the Fed ever consulted me on what they should do, my number 1 priority topping the list would be.
1. Commit Hara Kiri
Danny Lemieux: But then, we at Bookworm Room predicted this outcome way back before 2008.
So did Krugman.
http://www.cbsnews.com/stories/2008/12/28/ftn/main4688594.shtml
The fatal flaw in Krugman’s “thinking” is that although he knows we need to keep spending more and more nonexistent money, he can’t be sure how much is enough. Another $2 trillion? $5 trillion?
Krugman reminds me of that wonderful scene in “The Simpsons” where Homer goes to Hell and the devils decide the perfect punishment is to stuff him with a never-ending stream of donuts. To their dismay, as an infernal machine crams donut after donut into his mouth, Homer keeps saying, “More! More!” Eventually the machinery begins breaking down because it is obvious that there there will never be enough donuts in the whole universe for Homer.
Substitute my son’s, and my grandson’s, and my great grandson’s money, and not enough money in the whole universe, and you’ve got Krugman’s addiction.
Donuts. Is there anything they can’t do?
-Homer Simpson
So, if Krugman was right and we should have doubled the stimulus, then the current stimulus should have provided at least a commensurate amount of recovery (50%), right? Or is a Keynesian stimulus an all or nothing proposition: you either hit the right stimulus and get an economic miracle or…nothing!
Nice try, Zach. No cigar.
Sorry, Zach. I meant “no doobie”.
No war in Libya for kicks and giggles. No UN mandated killing of people you don’t like.
Zach approved this message:
Danny, the analogy you’re looking for is the proper dose of an antibiotic. Too little and the bug becomes resistant. What you have to do is keep upping the dosage until there’s a drop in the bacterial count—or in this case, a resurgent General Motors and housing market, borne on the tidal wave of your grandkids’ taxable income.
Once the surge—ooops! that’s right-wing talk!—stimulus has this effect, the newly robust economy will generate so much revenue that we will be able to bail ourselves out of $19 trillion or $20 trillion of debt in only three or four generations.
Zach posts the important point, beating me to the punch. Thanks for that.
What is remarkable is that if you look bad at that analysis, if is remarkably prescient. Only about 40-50% of the stimulus was classic stimulative spending, since there were tax cuts and other things in there as well. Over the 2-3 year period this has translated into roughly $200B per year and has brought the unemployment rate to 9.1% versus the 10% that Krugman estimated we’d see without any stimulus (and that’s different from the 25%+ we’d have seen had the Fed not bailed out the banks and thrown tons of liquidity into the market by massively increasing its balance sheet). His numbers are really, really close to reality, as they have been on numerous occasions in the past. Anyone who maligns Krugman really doesn’t read Krugman, nor check to see how his predictions hold up. This is the other reason I love Krugman: not only is he willing to break the expert’s silence and go after the know-nothings who spout nonsense (e.g., George Will on that sunday morning ABC show), but he presents facts that are incredibly accurate when he does so. Those that attack Keynes and Krugman really are living in a fantasy world…or they better start producing some hard and numerical evidence in support of their alternate reality. While it is hard to run a political campaign arguing that it would have been worse without me and with the other side’s dismal policies, especially when it is still bad out there, but this is the reality. And Krugman’s numbers, predictively given, highlight this.
Wait a minute: 9.1% unemployment is the new 8% unemployment Obama’s Keynesians promised? Does Eurasia know that we’re no longer at war with it and that we’ve been at war with East Asia forever?
abc,
Please produce some hard, incontrovertible numerical evidence that Keynsian economics, absent significant external stimuli (such as World War II and the distorted global market that followed), have reversed a recession and accelerated growth in real GDP. Economists (even St. Krugman) seem to agree that the recession was over in mid-2009 – mere months after President Obama took office and before even a small percentage of the stimulus funds had been injected into the economy. But then, recessions in the United States have usually been succeeded by rapid grown in GDP. Not so much in the last two years, even given the “Recovery Summer” of 2010.
Also, are you arguing that TARP was stimulus spending? I believe all TARP loans to financial institutions (passed and signed into law during the Bush Administration) have been repaid, with interest. TARP should not be conflated with the massive spending of the stimulus package, which was touted as the Keynsian magic bullet that was going to hold unemployment below 8%.
Talk about fantasy worlds… it is to laugh.
The mirror games begin once more…