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Guest Post: And This Year’s Nobel Prize In Doublethink Goes To…
- Afghanistan
- Apple
- Barack Obama
- Budget Deficit
- Christina Romer
- Council Of Economic Advisors
- Deficit Spending
- ETC
- Federal Reserve
- George Orwell
- Gross Domestic Product
- Guest Post
- Japan
- Krugman
- Monetization
- Nominal GDP
- Paul Krugman
- President Obama
- Purchasing Power
- Quantitative Easing
- Reality
- Unemployment
- William Dudley
Submitted by Simon Black of Sovereign Man
And this year’s Nobel Prize in Doublethink goes to…
General Tommy Franks, the rather straight-talking former commander of
the war in Afghanistan way back in 2001, once described US defense
policy wonk Doug Feith as “the dumbest fucking guy on the planet.”
Feith, a bumbling architect of the failed Bush Doctrine, now has an
intellectual match in Christina Romer, the former Chairwoman of Barack
Obama’s Council of Economic Advisors.
Romer appeared Thursday on the Daily Ticker,
leaving no doubt that she should be the undisputed frontrunner for the
Nobel Committee’s much anticipated Doublethink Prize. Warning, do not
watch this video while eating: food projectile WILL permanently damage
your computer.
Romer begins her remarks to the interviewer Aaron Task: “There are
tools that we can use, and I think it’s shameful that we’re not using
them.” Trillions of dollars of government spending, debt monetization,
and money creation isn’t enough. Romer wants us digging ditches with
teaspoons.
“If I have a complaint about policy, it’s that we’re not doing
enough.” Clearly, from the bank bailouts, to the systematic dismantling
of GM in favor of the union, to programs that incentivize home and auto
purchases, to stamping out all means of financial privacy, to trillion
dollar deficit spending, the government isn’t involved enough.
Romer goes on to say that the Federal Reserve’s plans to end the
second round of quantitative easing (QE2) in June “is a mistake. The
evidence is that it’s been very effective, and certainly QE1 was very
effective. I don’t understand why we’d be dialing back that tool because
I think it is certainly very helpful.”
$1.5 trillion dollars later and what do we have to show? 50,000 minimum wage workers flipping Big Macs. I’m lovin’ it.
Next, Romer explains that “[quantitative easing] tends to lower
long-term interest rates, it tends to lower the price of the dollar…
both of those things are good for ordinary families.”
So, completely screwing the people who have worked hard and are
trying to save their money with sub-par interest rates that don’t keep
up with inflation is good for America. Paying more for food, fuel,
healthcare, insurance, state and local taxes, airfare, rent, building
materials, household chemicals, etc. is good for America.
(Yes Mr. William Dudley, the iPad 2 is as cheap as its predecessor–
but bear in mind that the iTunes music store is slowly, surreptitiously
raising its prices from 99 cents to $1.29… so the Apple deflation
argument is lost on me.)
Romer continues. “[Low interest rates] mean that it’s easier for consumers to afford borrowing.”
Precisely, that’s what American households need– more debt. I can’t
seem to recall a single instance in US history when consumers taking on
increasing levels of debt posed any danger to the economy.
Romer continues. “A lower price of the dollar tends to make our goods more competitive in foreign markets.”
This is one of the biggest logical fallacies in politics– that a weak
currency is good for an economy because it promotes exports. Right,
because so much of the US economy is based on manufacturing. Nevermind
that a weak currency imports higher input costs in the form of higher
energy prices, raw materials, and component parts from overseas.
A bewildered Aaron Task, now looking around for Ashton Kutcher to
appear out of nowhere, asks “… but isn’t it true that long-term rates
have risen since the Fed announced QE2 in August… and also… a lot of
Americans probably feel that a weaker dollar is hurting them, not
helping them…?”
Despite having just claimed that quantitative easing was successful
in keeping long-term interest rates low, Romer now says that “it’s hard
to evaluate what QE has done to long-term interest rates… because there
are lots of announcement effects.”
Apparently fluctuations in long-term interest rates based on
announcements or expectations of quantitative easing in fact have
nothing to do with quantitative easing. They’re due to the weather.
“What I can tell you,” she says, “is the academic studies that have
looked at this absolutely say that QE does what we thought it was going
to do.”
The smoking gun! Academic studies validate QE, brought to you by the
same folks who said that applying modern portfolio theory to a mega-pool
of liar loans would result in superior risk-adjusted returns. The same
folks who measure risk in sigma, who completely missed the boat on the
crisis to begin with… all declare QE a success.
Romer continues. “Everyone agrees that a lower price of the dollar… certainly tends to raise GDP.”
Yes, everyone agrees. Absolutely everyone in that little ivory tower
where Christina Romer lives with her funny mirrors and Paul Krugman.
Breaking windows is also good for GDP, as are natural disasters, nuclear
meltdowns, and civil wars fought by 13-year old soldiers with AK-47s.
Hooray Japan! Hooray Africa!
The truth is that a weak currency debases the standard of living. But that doesn’t seem to matter to Romer:
“And… on the price of the dollar, we’re not talking about what’s happening to your purchasing power here…”
Right, because purchasing power is completely irrelevant. The US
government should continue conjuring money out of thin air, indebting
future generations, and recklessly spending on programs and initiatives
that simply don’t work because it’s good for nominal GDP, irrespective
of the damage it does to household living standards.
“Nothing says that you have to cut spending this year,” Romer
explains. “You can do a fiscal expansion this year but have it be part
of a package that ultimately gets the budget deficit down.” And
continues to kick the can down the road for other generations to deal
with.
Romer typifies the mindset of the people making decisions in
government, and the sort of advisors in President Obama’s circle. The US
government is going on three years of massive, unprecedented fiscal and
monetary expansion. Yet it hasn’t made a dent in unemployment, and
prices are rising.
At this point, even Doug Feith would look at the situation and say,
“maybe we should reconsider our strategy.” Romer, however, delivers her
lines with the demeanor of a concerned grandmother, and I can imagine
the north/south nods of many viewers who unquestionably absorb the
doublethink based solely on her delivery.
It reminds me of one of the best quotes from George Orwell’s 1984:
“In a way, the world-view of the Party imposed itself most
successfully on people incapable of understanding it. They could be made
to accept the most flagrant violations of reality, because they never
fully grasped the enormity of what was demanded of them, and were not
sufficiently interested in public events to notice what was happening.
By lack of understanding they remained sane. They simply swallowed
everything. . .”
Big Brother is watching you.
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Humm where have I heard this before?
Oh yes, Krugmanomics.
Hence: Romer is Krugman, just not as pretty. Or as strident.
Trident times 18.
I know you think she's a big girl but, I stood next to her once on the corner crossing over to the White House, she is really quite small, a bit puffy obviously.
...but whew, what a moron. ''Double Speak'', that's just Texas Two Steppin into sheeeit. Man oh man, gotta detox from Miss Little Washington Scuttle Buttin Double Trouble Romer and hear SRV's ''Testify'' http://www.youtube.com/watch?v=DdQYRY5JhFE ...feel better now.
"Much of the social history of the Western world over the past three decades has involved replacing what worked with what sounded good. In area after area - crime, education, housing, race relations - the situation has gotten worse after the bright new theories were put into operation. The amazing thing is that this history of failure and disaster has neither discouraged the social engineers nor discredited them." ~Thomas Sowell
Moreso what worked with "what they could get away with"... The perfect example is Glass-Steagall. They replaced Glass-Steagall knowing full well that they would be able to pocket more money if Glass-Steagall did not exist... abd who cars if the rest of the world is screwed by it.... the rest of the world does not belong to the "club".
Normalcy Bias Disorder. Remember this paradigm came into being before She opened Her mouth to suck in her first breath. Remember first that any Government is to its survival and connected interest only.
"and the shift to Keynesianism was difficult. Economists who contradicted the law, which inferred that underemployment and underinvestment (coupled with oversaving) were virtually impossible, risked losing their careers."
meanwhile An early form of fiat currency were "bills of credit"
My wife now trades time with other women as currency such as health care checkups ect with our freedom network of Americans.
The war is between the ears...
It is clear that she has never had a real job in company management or anything close to it.
When given the choice of hiring a bunch of people or pocketing more money himself, the normal CEO's response is to cut more jobs and shove double the amount in his own pocket.
I can guarantee that the average (and believe me, most of the ones I know are VERY average) CEO is trying to figure out how to reduce his exposure to the US market rather than worrying about how to fix the US economy.
Reducing taxes on US companies just makes them ask for more and different freebies and loopholes.
Oh my God!!! Sell!!! SELL EVERYTHING!!!
Mendacia the Troll. Nightmare fuel.
Go here for the video
http://finance.yahoo.com/blogs/daily-ticker/bring-qe3-t-afford-not-more-...
the problem with academics is that they don't have a fucking clue about real people's lives. we had one in u.k.( gordon fucking brown ), never had a real job, never created any value, just a typical world improver- he was chancellor of the excequer (failed) and talked just like that silly bitch. why do we put up with there people?
This rhetorical mania is generating petulence.
Ok numb nuts. Glass Stegall (sp) allowed banks and insurance companies to collude. I never liked it and it created a liquidity problem. Lets move on!
Romer has forgotten the original Berkeley mafia, much to our collective sorrow (epic amounts of tragicomedy not withstanding)
http://en.wikipedia.org/wiki/Berkeley_Mafia
Uh. The policy of containment used against the Soviet Union since 1948 failed in the 60s after only 20 years. And then some guy in the very early 80s resurrected it (continued with more effort actually) and the Soviet Union fell.
How is it possible to say that bringing self Government to the Middle East has failed after only 7 years?
Lol these dudes sometimes really need to stop and think for a minute how they sound when they say this sh*t. Do they really think we're that dumb?
www.forecastfortomorrow.com
all i can say is WTF .. someone employed this idiot as an economic advisor???
Comedy Gold
Can Somebody please provide some evidence as to the authenticity of this footage. The fact that the actress playing the professor continuously kept smiling through the whole scene (hardly a laughing matter considering the severity of the topic) tipped me off.
LMAO
Reminds me of a wind-up toy but lacking the intelligence of Aibo. Econspeak at its finest.
She bothered me more when she was in the administration and could be influential on policy than as a professor where she is a talking head and has less direct influence on policy.
Perhaps she should be discussing more important issues for women in finance such as:
http://www.cnbc.com/id/42362512
Beam me up Scotty …..there are no intelligent life forms in this planet.