So I was listening to National Commie Radio in the car Tuesday morning. I guess I wasn't irate enough, or maybe it was the "know your enemy" thing.
They ran a story in which an economist (Richard Koo) was analyzing our economy. He said that because the economy did not respond to low interest rates, the private sector is sick, so the government needs to borrow and spend the private sector's un-lent money. Let that sink in a little bit.
People who saved their money were unwilling to risk loaning their money at low interest rates (high risk, low reward), so the government should do it for them. Yup. Sick.
The interviewer acknowledges that this policy is necessary (no surprise there), but the neither of them seem to recognize that the government is entirely funded by the private sector! So a sick private sector is supposed to fund the government's "fix".
Then the interviewer brings up the threat of a downgrade in the government's credit rating. The economist responds that the credit rating agencies:
"do not understand this type of recession, where private sector is minimizing debt instead of maximizing profits. All of their models are based on the assumption that private sector is maximizing profits, and if that world is the world we are in now, of course, downgrades are justified. But when we are in this type of recession... government borrowing and spending is actually good, not bad."
And, of course, the interview ends there. The take away is that Moody's and Standard & Poor's don't know what they're talking about. Government borrowing is necessary. If only we had Mr. Koo's knowledge and experience. Did you read his bio? Did you see a real job in there?
6 comments:
the government is entirely funded by the private sector! So a sick private sector is supposed to fund the government's "fix".
I'm always looking for the simplest way to put a complex truth -- and that really nails it, jeffmon.
Leads into what I just logged in to post about, but I'm going to let your post sit on top for a while for higher visibility. Maybe I'll backdate mine a few hours.
I was thinking about the Ruhr (inside info, folks) and his vehement holding to the whole Don Quixote / Drivers' License drama and I thought of this. It's going to be the next "Thing I Know".
"The difference between a wise man and a prideful fool is that both want to be right, but one can never be wrong."
You know, people often get cause and effect backward.
I wonder if it ever occurred to Mr. Koo that the economy is sick, and that is why it hasn't responded to low interest rates.
This means it's really sick. And too fragile for the indulgent exercise of draining blood from one arm to put it in the other.
And to back this all up they pointed to…as an example. I mean, there’s plenty of examples when this didn’t work, even as waaaaay back as 2 years ago but hey, let’s just forget that and continue on slamming our heads against the wall. Gotcha.
BTW, I’m a small business owner, and the last thing I need is a loan. You see, ya’ little Einstein’s, businesses take out loans to buy things - inventory, machinery, equipment…stuff that will improve their business and they can pay the loan back with the revenue they receive. Now here’s the tricky part, pay attention, there are not enough receivables to justify more debt such as loan. Did I go too fast for ya’?
Here, let me put it another way, business sucks, we’re barely holding on, and you clowns keep talking about ways to improve business when you should just get the fuck out of the way and let us get back to what we do best, keeping the engine of this country humming along.
But what do I know, I’m not an economist from some elite, ivy league college. They probably know more than me.
ASSCLOWNS!!!
Interestingly enough they went to an "economist" from Japan who helped manage (maintain) the 10 year recession there. Great source NPR.
Tim I have my own business too. Ditto. I would consider a loan right now equivalent to a cyanide pill.
Here's another example of leftists using their own vocabulary instead of the real one. Somebody really ought to do a series on that -- not just a "Devil's Dictionary" where we make fun of all their stupid words (which has been done to death in any case), but an honest-to-God attempt to spell out the weird, hyper-specific way the left uses commonplace words.
For instance, the left's blather about "money" really only makes sense if "money" means something other than "a medium of exchange for goods and services."
As Tim says above (or at least strongly implies), the point of running a business isn't "to make money." Yes, making money is nice, but it's the stuff money can buy that makes it all worthwhile. You know, what we call "having a life."
The left, by contrast, really does seem to think that conservatives pursue "money" --- cash, bills, coins, sacks of gold bullion with dollar signs on them -- as an end in itself. That we go home at night after a hard days' work exploiting the underclass and just roll around in that shit like Scrooge McDuck.
Which, come to think of it, would also explain why they're so cavalier about living lives of conspicuous excess their own selves. Whatever they paid to get that Volvo SUV and that nice six-bedroom pad in the gated suburb, it's not "money." And the SUV and the house aren't luxuries, either; they probably drive to and from the Fortress of Social Justice in the Sustainable Development-Mobile.
I grow increasingly convinced that modern Leftism is a futile exercise in looking at everything wrong-end on. The contradiction you note regarding the government and private enterprise is a perfect example, and goes right along with the example that actually touched off our current mess... to wit:
Banks were forced to offer bad mortgages at unreasonable terms, and those bad, high-risk loans were packaged together and offered to brokerages and investors as somehow far safer than their constituent parts. A zero's just a zero, but five thousand zeros together and you've got, like, twenty-hundred dollars!!one!
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