Wednesday, September 22, 2010

Summers Out

Larry Summers is out.

Is Dick Parsons' really going to be BHO pick?

How can a man fail at every job he has ever had and keep getting hired and promoted? WTF is so special about Dick Parsons?

We lurch from the weird to the surreal.


bureaucrat said...

Since I'm not a big-time Christian, I keep having the same thought play in my head ...

What if you were a minister, or a priest, or the pope, and had studied God and religion all your life, only to find out, in the end, that you were wrong the entire time, and there really WAS no God.

So what if you had studied economics all your life, and studied and taught it for 50-60 years, only to find out that you were wrong the entire time?

The economists, like Summers, and 90% of all economist who are just like him, believe in Keynesian economics, where in bad economic times, the government is supposed to step in, and borrow and stimulate to get the economy back on track.

But what if Keynesian economics is wrong?

The Keynesians (90%+ of economists) didn't predict the financial times we are now in, and have no idea on how to fix it.

Maybe the Austrian economists (which, by the way, has NOTHING to do with Austria), who believe a lot more in debt and credit and long-term trends .. what if they are right?

Krugman (New York Times), Whitney (a writer), and hundreds of other famous economists, are all Keynesians. Maybe they are all wrong.

Bye, bye, Summers. You helped no one.

Anonymous said...

"Keynesian economics, where in bad economic times, the government is supposed to step in, and borrow and stimulate to get the economy back on track."

It is funny that many big decisions in our world boil down to the acceptance or denial of a few key assumptions- ie "US housing prices always go up" etc.

In the case of Keynesian economics the most basic requrement for this to work is that the govt must run surpluses during good times. And then use those surpluses during bad times to ramp up demand in the economy ie when individuals or businesses won't spend due to extreme pessimism, the govt can spend previously saved surpluses to fast-track infrastructure rebuilding of roads, rails, bridges, renewable energy projects etc. during the bust or deflationary spiral. Not a bad idea.

However it is a bad idea to be borrowing extensive funds from foreign creditors to fund that infrastructure buildout.

Note the recent Fed chart "Diminishing Marginal Productivity of Debt in the US Economy" which shows that each additional dollar of new debt now actually causes a drop in GDP.

Cheers, Marshall

Anonymous said...

Bur, To bad we don't have the luxury of being wrong. What's the saying around hear " if your wrong your gone"?


Anonymous said...

Bureaucrat is an eternal cyber-entity. He monitors this blog continuously from his government cubicle.

Cheers, Marshall

bureaucrat said...

I suppose I could have been born brilliant, rich, handsome and up on all current events. But I need to read everything just like any decent investor would do. :)