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The trajectory of the economy is greatly improved

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February 02, 2010 – Comments (1) | RELATED TICKERS: SPY

Yes, you read the title correctly - GREATLY IMPROVED.  But those aren't my words, they are the words of Christina Romer, (click her name to go to the USA Today article) who chairs the president's Council of Economic Advisers.

I beg to differ with Christina Romer.  The trajectory of the economy is worsening - being propped up by a boom in equities brought on by almost free money being handed out by the FED.  Inflation will soon win the day (less than 24 months) and the economy will go into a free fall of higher prices and higher unemployment.

OK - if I'm so smart, why isn't a genius like Ben Bernanke doing it?  Let me give you an analogy - my Uncle Bill came over for a family dinner and I mentioned how NY State gov't was willfully killing a project that would eliminate 10 jobs and save them money.  To me this is just ludicrous - no private business would pay 10 people to do something a computer can (and BTW, is already paid for).

His shocking response - "During bad times, its good to give people something to do."

This is the mentality of Ben Bernanke, Obama, and yes many Republicans too!  They Keynes formula is clear C + I + G + XM = GD Government (signified by G) is given EQUAL weight to Consumption and Investment.  I don't care how many freakin' degrees you have, that formula is wrong.  Seriously, if there was NO investment, NO consumption, but Government picked up the slack would GDP continue to rise?  Only in a hyperinflationary environment could you get GDP to rise in such a scenario - and that wouldn't be real GDP - based in a commodity like oil or gold the GDP would shrink faster than a cold male private part.

So why doesn't Ben Bernanke, Christina Romer, Obama, the Democrats and quite a few Republicans realize that we are heading off the cliff - because they were taught the wrong economic theory.  And who teaches that theory - government run schools.  Worse yet, we are taught a socialist economic model while being told we live in a free market economy.

And that's not the WORST part.  The worst is that I'm right and the future of the US economy is getting bleaker.

 

1 Comments – Post Your Own

#1) On February 02, 2010 at 4:11 PM, russiangambit (29.27) wrote:

I can't stand Christina Romer, I can't quite place her. She can't be stupid since she taught at Standford, then she must be evil , always lying to us while maintaining a frozen smile opn her face.

However, I disagree that US schools teach socialist economics . They teach a mix of orthodox capitalist economics sprinkled with supply side stuff . taht would be OK but most of  their models like efficient market theory can only work in vacuum. What we need is real life economics.

Of course, I don't know how you define socialist economics? I assume you mean Marx teachings. Actually, it wouldn't hurt to study Marx and Smith side by side and debate them.

The cornerstone of Marx's theory is crisis of overproduction ( all in pursuit of profits). I don't think he is necessarily wrong about that.

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