No matter how absurd things get, they can always become more absurd.
Summers: US nears "escape velocity"
That’s the headline on the weekend Financial Times.
Summers is jubilant. He got the latest employment figures on Friday. They tell the story of an economy that he thinks is headed into outer space, with 162,000 new jobs created in March. Hallelujah…all this intervention by the feds is paying off! Thank God Summers was on the job. If he hadn’t been…well, the economy would have had to get along on its own…right here on planet earth…just like it did for all those centuries up until the feds got control of it during the Great Depression (or shortly after).
Heck, you know how terrible it was back then. People would go broke… Speculators. Bankers. Promoters. They would be wiped out. Jobs would be lost. Businesses would go bankrupt. And then, a few months later, they’d have to get back on their feet…begging, borrowing, or stealing enough capital to make a fresh start.
But now things are different. Now, we have a better world, designed in part, by Mr. Summers himself. Now, people don’t go broke. Well, at least, major campaign contributors don’t go broke. They get bailed out. They stay in business. The feds give them money so they can keep doing what they did before. And then, the feds put a booster rocket under the whole economy…
Yes, dear reader…this is a happy day for Summers. But it also marks a giant stoop for mankind. Finally, man is free from the discipline of the market system. Now, Werner von Summers et al. are on the case. So you can forget about anything really bad happening. Now, it’s to the moon and beyond…growth and prosperity from here to kingdom come.
Summers is not crazy. He is merely lost in space. He thinks you can manipulate the economy all you want…like solving an engineering problem…well…like sending a man to the moon. But you could say that about almost all modern economists. At about all those that don’t agree with us.
The other 2 or 3 are muttering to themselves while rummaging through trashcans hoping that someone left a little liquor in the bottle before throwing it away.
At least our president has his feet on the ground. Obama believes the US has “turned the corner” on the jobs issue.
But wait. The private sector added 123,000 jobs last month. According to our sources it needs to create 100,000 just to stay even with population growth.
So, we’re not at all sure that 23,000 jobs is really that great after two years, 8 million job losses and $10 trillion of stimulus.
Let’s see, at that rate, it will take approximately 320 years to get back to full employment…doesn’t sound like "escape velocity" to us. We’ve seen Amtrak trains going faster. Maybe we’re missing something.
Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and Empire of Debt: The Rise Of An Epic Financial Crisis and the co-author with Lila Rajiva of Mobs, Messiahs and Markets (Wiley, 2007).