Tuesday, November 24, 2009



* Oops, that reported 3.5% real GDP growth in the 3q is more like 2.8%. (So they exaggerated it by 25%, big deal.) I liked this line: "That was a touch below market expectations for a growth pace of 2.9 percent." Does that mean investors were forecasting that the government had exaggerating the initial reading by that much? Did some new data come in? I don't really know the mechanics of how they issue the different estimates.

* Guess how much FDIC has left in its coffers to bail out depositors whose banks fail? Go ahead, guess. If you said negative $8.2 billion, you'd be right. But don't worry, the FDIC is fine, it will insist that the big banks prepay three years' worth of insurance. I think I will do the same with my consulting services. Honey, we're having steak again tonight!

* Bob Roddis sends this elitist article on the dumb Americans. Because they have the audacity to think that the deficit needs to shrink, it is evidence of their "illiteracy." Seriously, just skim this thing. It's incredible how condescending the Keynesians are. The guy thinks Americans must not even understand what a deficit is, since that's the only possible explanation of their worry over trillion-dollar plus deficits.

After spending the last seven months on my anthropological expedition into the dark heart of the Keynesians, I would say that the Steve Benen article comes the closest to showing how, what and why they think what they do. Benen, Yglesias, DeLong and Krugman et al. firmly believe in the magic and mystical powers of debt and monetary dilution. If you disagree with either of their “solutions”, you are clearly an economic illiterate. Or worse.

Somehow, we need to get the public to understand who these people are because the public seems to have quite sound instincts on these policies which are, to say the least, convoluted and counter-intuitive. Not to mention bogus.
Regarding the "elitist" article...whatever you do, DON'T read the comments. Just brutal.
I couldn't stop reading, but kept trying to scratch out my eyes.
By all means, check out the Benen article comments. This is my favorite:

GDP = C + Inv + G
If C (consumption) is negative and
I (Investment) is negative
Please do tell me what MUST be positive in order for GNP to grow?

Simple answers to simple questions...

You'd be surprised how many people stop railing about deficits when given this simple formulation.

An accounting identity becomes an algebraic function. Pure 100% cause and effect resulting invariably in vast new unlimited universal wealth prosperity, eh? How about the government spending $5 trillion on free lap dances and shots? GNP would shoot up to the sky.

And we're the illiterates?
Bob, this CRU thing is hitting the fan. We heard it here first :) It's huge, and it may be a doorway to raising questions about other initiatives such as healthcare and stimulus packages. (What's going to happen to your current job, btw?)

That elitist article is interesting. With all these horrible numbers on the economy coming out, I believe people (with the help of the internet and an MSM that actively drives them away) are searching for truth as opposed to simply running to the opposing political party. The CRU scandal could not have come at a better time, casting general doubts on the motivations of 'experts'.
While this article is quite condescending, let's be fair here. The "average" American is innumerate and doesn't seem to have problems with rising deficits & debts when that money is spent on "keeping us safe against terrorists" or other military excursions. It seems what matters most is not that the debt is rising, but for what reasons.
OK - these guys are truly obnoxious and stunningly ignorant about basic economics (I'd hate to see their household account).

However, I do agree that we should ignore the deficits. I feel under no obligation to repay debt incurred by politicians but will insist on tax cuts until the rate drops to zero.
The commenter that Roddis quoted even got his own equation wrong: GDP = C + I + G + (X-M)
Where X-M is net exports!

So even on its own grounds you don't have to raise G, just raise X!
re the elitist article: Keynesians can be annoyingly arrogant and condescending at the best of time. Try going on a few forums when the prevalent view is Keynesian. Its not nice. IMHO.
I wish I didn't read that, the comments were depressing.
Cotterdan, I posted this (below) over there for you. Hope it's not too over the top, or worse yet, dumb... but I just spoke off the top of my head without reading most of the article or previous comments which is generally not cool but I think it was ok in this case?

"You guys are getting into the nuts & bolts of it, but I'd like to add that it's important to comprehend the big picture too, which is that, eventually, the parasites (government/government supporters) kill the host (productive people). Keynesianism is a fantastic tool for parasites that don't respect individual self-ownership.
Posted by: klonopin on November 26, 2009 at 7:40 PM"
Without Keynsianism, the creation of the Federal Reserve and legal tender law would be pointless, if I understand what Keynsianism is.

I think we ought not forget that this isn't all just a very unfortunate set of circumstances that government is challenged with. They're just milking us for all we're worth.
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