Championing stimulus and the economics of 'surprisingly normal'
If you don鈥檛 read the newspapers you run the risk of missing something. Of course, if you do read them, you run the risk of catching something.
Not much in the financial news worthy of comment this morning鈥�
The Dow gained $13. Gold lost $13. Nothing much to say about it鈥�
So we will comment on something beneath comment鈥omething so low we have to dig down to find it鈥omething so unworthy we hardly imagine we are mentioning it鈥omething in the newspapers鈥�
We鈥檙e talking, of course, about politics鈥�
The love-fest with politics is heating up. The drugs have been passed around. Now, the clothes are coming off鈥�
鈥�France keeps steady course in economic upheaval,鈥� says a headline at the International Herald Tribune. Steady course? You bet. It kept subsidizing, bailing out, protecting, coddling and otherwise meddling in its economy 鈥� just like it did before the crisis began. Had it not done so, the story continues, France might not have been the first major economy out of the worldwide recession.
On the other hand, the French never went deeply into debt鈥� So maybe they just didn鈥檛 have so much exposure to the worldwide debt crisis in the first place.
Never mind. The papers don鈥檛 know what the problem is, but they鈥檙e convinced that government interference is the solution.
Over at The Financial Times, Clive Crook is breathing hard, too. He reckons that the 鈥渄ownturn called for a big stimulus,鈥� and that the US stimulus effort headed off a worse recession. He then explains that the feds鈥� stimulus really didn鈥檛 stimulate at all, it merely offset a decline in spending at the state level. State tax revenues fell; states spent less. State tax revenues declined $87 billion in the last 12 months, the biggest drop on record. The feds made up for it by spending big.
Meanwhile, The New York Times tells us that the whole downturn is now behind us. The economy is 鈥渟urprisingly normal,鈥� it says.
The US economy is some 11 million jobs short of full employment. Nothing very normal about that. But February saw an unexpected upturn in consumer credit, reports the Times. And unemployment seems to have bottomed out, adds The Wall Street Journal.
Surprisingly normal?
Well, there鈥檚 a big difference from something that looks surprisingly, reassuringly normal鈥nd something that is actually working normally.
Which is it?
The New York Times is right; it is an economy that looks surprisingly normal鈥�
Zombies can look surprisingly normal too. If you clean them up.
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