Financial Crackheads on Parade
Today I came across two of the most insane takes on economic policy that I've heard in 2009. The first one came from Ken Fisher, who said we'll see HIGHER debt levels in the future, our country has been "under-indebted" in the past, and the US is and will be "less under-indebted" in the future.
Excuse me, but wasn't this massive orgy of credit, debt and spending what got our country INTO this financial mess in the first place?!
Fisher predicts that US debt will increase to 500% of national GDP in the future. Then he has the audacity to say: "People have a hard time believing that we actually could be under-indebted."
Yes, Ken, include me in that crazy crowd who believe that you never have been, and never will be able to borrow yourself to prosperity. Did GM and Chrysler file bankruptcy because they were "under-indebted?" No, they were OVER-indebted with borrowing costs, and legacy costs because they kowtowed to outrageous union demands, and were poorly managed. Not to mention not keeping up with current trends, and what Americans wanted in cars and trucks.
I can't believe that someone who manages money for clients in today's market actually believes this. My hunch is that he's been compensated to encourage Americans to borrow and spend some more to try and keep the economic good times rolling.
The second example of economic stupidity is Larry Kudlow - the supposed self-proclaimed capitalist - who supports the Cash For Clunkers program. How come?
"But unlike most of the rest of the fiscal-stimulus plan, this program actually works because the federal cash rebate actually contributes to a consumer purchase. It's not just another welfare-type transfer program."
Didn't excessive consumer borrowing, spending and PURCHASING lead to the economic pain we find ourselves in today? I'll grant the fact that consumer purchases in a totally un-manipulated free market are better than transfer payments of any sort by the government.
However, the stock market and residential real estate bubbles were CAUSED by government involvement, and the Federal Reserve printing money like there was no tomorrow... plus lowering interest rates to the floor. Not to mention the virtual elimination of lending standards, which allowed almost everyone to buy a home.
Americans became over-leveraged, sub-prime mortgages blew up, and when the economy and job market turned down over the past few years, it even affected some people who had great credit (but were still overextended), with no financial room for any hiccups in their incomes.
"...the price tag of the program is a mere $2 billion compared with the trillions of dollars Washington has been wasting. So, for once in our lives, Washington spending is giving us a good bang for the buck."
Sorry, Larry, I can't buy that logic even for a dollar.
A true free-market capitalist wouldn't encourage ANY government involvement in ANY market - whether its cars, cows, or computers.
Larry, I know you want to the see the stock market rise in value forever through your perma-bull rose-colored glasses. However, the mistakes our leaders and most consumers have made over the past decade or so is finally catching up with us.
The financial piper is being paid, and it'll take a long time to pay this debt off in full.
Excuse me, but wasn't this massive orgy of credit, debt and spending what got our country INTO this financial mess in the first place?!
Fisher predicts that US debt will increase to 500% of national GDP in the future. Then he has the audacity to say: "People have a hard time believing that we actually could be under-indebted."
Yes, Ken, include me in that crazy crowd who believe that you never have been, and never will be able to borrow yourself to prosperity. Did GM and Chrysler file bankruptcy because they were "under-indebted?" No, they were OVER-indebted with borrowing costs, and legacy costs because they kowtowed to outrageous union demands, and were poorly managed. Not to mention not keeping up with current trends, and what Americans wanted in cars and trucks.
I can't believe that someone who manages money for clients in today's market actually believes this. My hunch is that he's been compensated to encourage Americans to borrow and spend some more to try and keep the economic good times rolling.
The second example of economic stupidity is Larry Kudlow - the supposed self-proclaimed capitalist - who supports the Cash For Clunkers program. How come?
"But unlike most of the rest of the fiscal-stimulus plan, this program actually works because the federal cash rebate actually contributes to a consumer purchase. It's not just another welfare-type transfer program."
Didn't excessive consumer borrowing, spending and PURCHASING lead to the economic pain we find ourselves in today? I'll grant the fact that consumer purchases in a totally un-manipulated free market are better than transfer payments of any sort by the government.
However, the stock market and residential real estate bubbles were CAUSED by government involvement, and the Federal Reserve printing money like there was no tomorrow... plus lowering interest rates to the floor. Not to mention the virtual elimination of lending standards, which allowed almost everyone to buy a home.
Americans became over-leveraged, sub-prime mortgages blew up, and when the economy and job market turned down over the past few years, it even affected some people who had great credit (but were still overextended), with no financial room for any hiccups in their incomes.
"...the price tag of the program is a mere $2 billion compared with the trillions of dollars Washington has been wasting. So, for once in our lives, Washington spending is giving us a good bang for the buck."
Sorry, Larry, I can't buy that logic even for a dollar.
A true free-market capitalist wouldn't encourage ANY government involvement in ANY market - whether its cars, cows, or computers.
Larry, I know you want to the see the stock market rise in value forever through your perma-bull rose-colored glasses. However, the mistakes our leaders and most consumers have made over the past decade or so is finally catching up with us.
The financial piper is being paid, and it'll take a long time to pay this debt off in full.
Labels: Ken Fisher, Larry Kudlow
posted by Brian Ochsner | 8:18 PM
0 Comments:
Post a Comment
<< Home