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That Nice Mrs. Romer Is . . . Dangerous

Econophile's picture




 

From The Daily Capitalist

As my readers know, every so often I really get fed up with what comes out of Washington (Our Nation's Capital) and feel the need to vent. My recent irritation is a letter Christina Romer, the president of Obama's Council of Economic Advisers, published in the Wall Street Journal.

The letter is an apologia for the economic policies she and Summers and Geithner have been recommending to the president. She seems like such a nice lady, and she's the wife of economist David Romer. Both were econ professors at Berkeley and both studied economics at MIT. But ...

Here are some excerpts from her letter, with my comments:

Within a month of taking office, the administration had announced its Financial Stability Plan and signed the American Recovery and Reinvestment Act. The Recovery Act helped stem the decline in spending caused by consumers and businesses reeling from the fall in asset prices and the drying up of credit. Real GDP, which had fallen at a 6.4% annual rate in the first quarter of 2009, began to grow again just two quarters later. ...

She seriously believes this. But she has a slight problem with the cause and effect, post hoc ergo propter hoc*, thingie. That is, there is no evidence, theoretical or empirical, that the Recovery Act did anything positive or lasting. Even assuming Keynesian stimulus works, the government hadn't spent enough money to make it work according to the Keynesian formula. At least that's what Paul Krugman said. Whatever, no one has ever offered any proof that such stimulus works.

And, as far as I know, PCE (consumer spending) is still very low, asset prices are still declining, and credit is worse.

We've already seen from the Recovery Act that spending on infrastructure—everything from roads and bridges to schools and municipal buildings—is an effective way to put people back to work while creating lasting investments that raise future productivity. ...

Yadda, yadda, yadda. Again more spending on things the government wants, not the things that the market wants. The jobs are already fizzling. See this excellent article in the WSJ, ironically published on the same day as Mrs. Romer's piece. The gist is that when the government money ends, the jobs dry up.

Subsequently the president pushed for the Cash for Clunkers program that was successful in boosting demand and job creation. ...

All this did was to junk a bunch of good cars, fill the pockets of auto dealers, and appease the UAW. Auto sales are already declining again. It just accelerated future sales of people who would have bought cars anyway.

[A]bout a month ago the president announced the latest in a series of measures to encourage banks to lend to small businesses. ...

As we all know credit is still shrinking, not growing. They have tried every trick in the Keynesian book to loosen credit but to no avail. I'm sure this new legislation will be different.

[I]n early November the president signed into law a measure that would provide relief and spur job creation by adding additional weeks of unemployment insurance, cutting taxes for businesses, and expanding and extending the home-buyer tax credit. ...

That must have worked really fast, because unemployment, according to the Bureau of Labor Statistics, dropped from 10.2% to 10% in November. Wow, that's great legislation. But, as we all know, Things Are Not What They Seem. As David Rosenberg pointed out in one of his reports, the government stats look funny because they are so different from what ADP reported. 

Despite these positive developments, the job market remains very weak. ... American businesses appear hesitant to hire, and are producing more with fewer workers. ...

Didn't she just say that things are getting better?

Tomorrow [the President] will convene a meeting of business and labor leaders, small-business owners, economists and community representatives to discuss our ideas and solicit others for accelerating hiring. ... [W]e need to harness the private sector, bringing large and small firms in off the sidelines to boost job creation. ...

This is the part that really upset me. First, this is a typical political move. "Let's all get together and come up with some great ideas!" No offense to the community organizers out there, but getting a bunch of people in a room like this gets nowhere. The best thing they could do is cancel all meetings, and get the hell out of the way.

But what really got me was the "harness the private sector" comment. I hope she didn't mean it in the way I'm thinking, but if she didn't then it's even worse because she doesn't realize the implications of her policies. When government gets together with business and labor to create policies for political benefit, it is called fascism, or national socialism. The words she used were rather telling: a "harness" is not something I would want to be in. You know who has the whip.

While the words seem innocent, it is all about losing our freedoms. Here's the conclusion from a piece I wrote about the takeover of GM (in homage to Ayn Rand):

Sometimes it’s hard to see what is happening in front of your eyes. It seems rather benign and logical when you read about it, but it’s not. Nationalizing GM is just good old fashioned fascism–just like what happened in Italy in the 1920s and ‘30s ... And now us. If you think I’m exaggerating, it’s probably because you think everything the government does is OK because we’re having a crisis. As Wesley Mouch said in Atlas Shrugged, “We’ve got to act!” That’s how we are losing our freedom, by a thousand cuts.


*Since that event followed this one, that event must have been caused by this one.

 

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Sat, 12/12/2009 - 00:22 | 158724 Problem Is
Problem Is's picture

Who is the real Dunce, Bush or Obama?

For 8 years I called Bush Junior, George "The Dunce" Bush to differentiate him from George "Amerikan Caligula" Bush the old man.

At least George The Dunce knew if you are going to bribe the rabble with a $600 tax cut, you print out the check for $600 put your Dunce signature on it and mail it out. You get a 2 quarter bump in consumer spending before the election and the rabble hate you just a little bit less with cash in hand.

This Mr. Change who is supposed to be so bright? I am going to give you rabble that tax cut I been promising for the last two years while I was campaigning by reducing your withholding $7 a week on average. Yeah that is some serious multiplier there...

That is stimulus you can believe in. George... give that new fucker your Dunce cap.

Wed, 12/09/2009 - 23:22 | 158583 Anonymous
Anonymous's picture

well said and thank you for calling crap on crap.....

this administration is not about keynesianism but its child fascism.....

barry's theme is that the economy is rocking and rolling but we need to extend tarp, stimulus, and host of other fascist solutions to fix the economy which by the way is really rocking and rolling and on the cusp of gargantuan gains to justify p/e ratios on current earnings of over 100.....

barry lied about his citizenship, he lied about the economy, and he lied about his change....this is bush's 3d term.....obama is a piece of dogshit....

Wed, 12/09/2009 - 22:58 | 158560 Anonymous
Anonymous's picture

An administration of followers, not leaders.

Wed, 12/09/2009 - 22:56 | 158558 Anonymous
Anonymous's picture

Isn't it obvious, Chris-tina Romer is actually Chris Farley in a dress.

must've met Obama in Chicago, and set something up before he pulled a KenLay.

Wed, 12/09/2009 - 22:51 | 158553 Silver-Is-Better
Silver-Is-Better's picture

It is hard to believe that people with such little intelligence have a favored place in this administration. Does anyone feel her confidence? Anyone, Buhler, Anyone????

Wed, 12/09/2009 - 22:29 | 158530 Careless Whisper
Careless Whisper's picture

Mizz Romer seems like an idiot. Send her back to Berkeley. Summers. Idiot. Back to Harvard. Bernanke. Idiot. Back to Princeton. Geithner. Patsy. Let him stay and twist in the wind.

Rahm should call his brother Ari and beg him to go to Washington to straighten things out.

http://www.youtube.com/watch?v=qKNV5foRiL4

 

Thu, 12/10/2009 - 02:10 | 158689 msorense
msorense's picture

Have you ever seen how her arms wave up and down when she's spewing all her green shoots.  Looks like that stupid robot in Lost in Space.

 

 

Wed, 12/09/2009 - 22:04 | 158504 loup garou
loup garou's picture

...the guiding philosophy of liberalism is this: if there’s a problem, the government should spend money on it; if the problem persists, it is because not enough money was spent.

~Tom Bethell

 

12/08/2009, Washington (AP) – “President Barack Obama said staggering job losses mean the country must continue to ‘spend our way out of this recession‘…”

 

I have little doubt that the recent economic “happy numbers” have been concocted primarily for the purpose of advancing the nationalized healthcare scheme, the vehicle by which the government can exercise control over virtually every aspect of our lives.

 

“Liberals in Washington don't create big government, absurd rights, self- serving laws, endless taxes and perpetual welfare to improve the lives of the people they claim to serve. They create big government, absurd rights, self-serving laws, endless taxes and perpetual welfare to justify the leash… Many people today are waking up to the fact that so-called "liberal leaders" are in reality global socialists, who view the common man as a mere animal, without any value outside their exclusive control.”
~Paul Proctor, 2/1/2000

 

Unfortunately, almost 10 years later, The Big Snooze continues…

Wed, 12/09/2009 - 21:02 | 158452 Anonymous
Anonymous's picture

When that dude Christina is smiling, which seems to be always, I know he is shinin' me on.

Wed, 12/09/2009 - 20:06 | 158406 Kevekev
Kevekev's picture

Now I know who she reminds me of!!!  Remember the cheech and chong movie called next movie?  There was a part played by Edie Mcclurg of a ditzy housewife and in the movie they go to a comedy club and Ms. Romer, sorry Edie Mcclurg, could not stop her crazy hysterical laughter.  Yes, that is her I am sure.  To bad for us though.

Wed, 12/09/2009 - 19:51 | 158400 digalert
digalert's picture

Reading about frying bacon and pork rinds it all came clear. Lipstick on a pig Romer was brainwasher at Berkely. A left coast institute which breeds only top whack lunatic nutjobs. This further strengthens my resolve, we have a lot of work to do.

Thu, 12/10/2009 - 04:15 | 158727 babbs
babbs's picture

"Reading about frying bacon and pork rinds it all came clear."  Egads!  Ms. Romer's degrees are in Home Economics.

(Think Paula Deen and her recipe for Gooey Butter Cake http://www.pauladeen.com/)

Wed, 12/09/2009 - 19:43 | 158395 gookempucky
gookempucky's picture

Continuing saga----after xmas the doors will be closed--maybe we should invest in plywood and nails????? All boarded up-good to go.....

Rail freight is down big.

 

 

http://www.reuters.com/article/idAFWEQ00364820091209?rpc=44

Wed, 12/09/2009 - 23:33 | 158594 Anonymous
Anonymous's picture

Or unused shipping containers.

Wed, 12/09/2009 - 19:38 | 158390 Anonymous
Anonymous's picture

Ms. Sunshine & Lollipops with the stupid all the time smile needs to retire into something less dangerous to us all. Incompetent's like Romer give absolute credence to the veracity of the Peter Principle.

Really this is all you need to know about where we're heading here on out.

Wed, 12/09/2009 - 19:31 | 158388 tonytiger
tonytiger's picture

Whatever happened to the idea of cutting payroll taxes for a year?  The idea is simple and the result goes right to the people who count, small business and the newly hired folks.  None of this bailout BS to the favored crowd.  I understand that this idea will "cost" the government about $800 billion in lost revenue, but Stimulus II will probably cost twice as much and have half the effect, if we are lucky.  Do you feel lucky?

Wed, 12/09/2009 - 19:20 | 158379 ChanceIs
ChanceIs's picture

I have come to understand.  There is nothing at all wrong.  I have just been living in  a J.K. Rowling nightmare:

Christina Romer is Dolores Umbridge,

and....

the Obama Admin is the Ministry of Magic.

(Give me credit.  The analogy is flawless.)

I shall wake up presently to find myself back in Eisehhower's happy daze.  Did you all know that the last time the total federal budget was balanced was 1957??  I am not talking about playing games with social security in the Clinton years.  The last year that the total public debt didn't grow was 1957.

 

Thu, 12/10/2009 - 14:15 | 159152 ATG
ATG's picture

"harness the private sector"

a la Boxer the draft horse in Animal Farm who

supported the pigs, worked himself to death

and ended up at the glue factory knackers

for chemical value?...

 

Wed, 12/09/2009 - 23:29 | 158590 Anonymous
Anonymous's picture

Authors often vehemently deny allegory of any kind, but whether intentional or accidental, fiction can't seem to help itself as the authors spin their perception of the battle between some oppressor and the oppressed.

Wed, 12/09/2009 - 22:21 | 158519 Vulgus Porkulus
Vulgus Porkulus's picture

Perfect analogy which just itched a scratch I've had since I first saw her on B-Berg, could NOT figure out who she reminded me of, never bothered to venture into the fictional character side of my brain...Thank you sir. 

Wed, 12/09/2009 - 21:12 | 158463 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

Ministry of Magic - that is friggin' PERFECT.

http://blogs.thisismoney.co.uk/.a/6a00d8341c565553ef01156fbe3391970b-800wi

 

Wed, 12/09/2009 - 19:58 | 158404 Anonymous
Anonymous's picture

+100

Great analogy.

Romer, the fat pig, is a fucking dipshit, lying piece of crap who will get what she deserves in the end.

Wed, 12/09/2009 - 19:14 | 158374 spekulatn
spekulatn's picture

Dipshits are in charge now.

Sit back smoke 'em if you got 'em and enjoy the show.

 

Thu, 12/10/2009 - 09:16 | 158791 Anonymous
Anonymous's picture

Anarchists are absolutely giddy here; Obama and his administration are doing their work for them.

Wed, 12/09/2009 - 18:21 | 158324 Anonymous
Anonymous's picture

Check out this visualization of the cash for clunkers program:
http://computationallegalstudies.com/2009/12/09/cash-for-clunkers-visual...

Do NOT follow this link or you will be banned from the site!