- Description
Update on Wall St. with Floyd Norris of "The New York Times" and Dennis Berman of "The Wall Street Journal"
- Keywords:
- Obama
- economy
- Wall St
- Economics
- fiscal deficit
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REMant 07/20/2009 03:06 PM Report
Yeah, I agree with this and have been a little peeved that these earnings reports have brought the true believers out of the woodwork again, positive that happy days are just around the corner. Some even tout reflation as necessary to productivity, as if they still believed in the Phillips Curve. You can only get real productivity in the absence of inflation. Many of them are "technical" analysts with no experience outside of the kind of inflationary environment we've had for the past 40 yrs - the same sort that promoted real estate, etc. I don't know if there is anything that can be done short of burning them at the stake. The latest news is that Bernanke and co are about to embark on another charm offensive. This seems to me to be plain ordinary stock-boosting. But I have heard that this kind of profit will be a one time thing for these institutions.
The thing most ppl still need to come to grips with is that the "stimulus" cannot be said to be stimulating unless it results in new, unrelated private sector activity, not government programs, and that regardless of that, the present debts, both public and private, need to be either paid or absorbed before anyone can expect an increase in investment and consumption, while, at the same time, it is likely that the spending is, itself, holding up that process by preventing the liquidation of unsustainable positions. Either you assume that the pre-recession economy was fine and just needed to be refinanced, or you assume that the debts were really bad and have to be liquidated in some fashion. Even if you take the position that all that is needed is refinance you have to ask where the money can, or may, come from, which the big spenders seem reluctant to do. If the debt is really bad, and I think sensible ppl must come to that conclusion, there has to be some pain involved, which, can be mitigated a great deal by trying to see to it that the most deserving bear it in just proportion, which reflation certainly will not do, but not much else. It is ironic that one of the biggest promoters of fiscal policy, Galbraith, himself, wrote long and hard about enthusiasm.