Recently by Simon Black: The Fools of April
General Tommy Franks, the rather straight-talking former commander of the war in Afghanistan way back in 2001, once described US defense policy wonk Doug Feith as the dumbest fucking guy on the planet.
Feith, a bumbling architect of the failed Bush Doctrine, now has an intellectual match in Christina Romer, the former Chairwoman of Barack Obamas Council of Economic Advisors.
Romer appeared Thursday on the Daily Ticker, leaving no doubt that she should be the undisputed frontrunner for the Nobel Committees much anticipated Doublethink Prize. Warning, do not watch this video while eating: food projectile WILL permanently damage your computer.
Romer begins her remarks to the interviewer Aaron Task: There are tools that we can use, and I think its shameful that were not using them. Trillions of dollars of government spending, debt monetization, and money creation isnt enough. Romer wants us digging ditches with teaspoons.
If I have a complaint about policy, its that were not doing enough. Clearly, from the bank bailouts, to the systematic dismantling of GM in favor of the union, to programs that incentivize home and auto purchases, to stamping out all means of financial privacy, to trillion dollar deficit spending, the government isnt involved enough.
Romer goes on to say that the Federal Reserves plans to end the second round of quantitative easing (QE2) in June is a mistake. The evidence is that its been very effective, and certainly QE1 was very effective. I dont understand why wed be dialing back that tool because I think it is certainly very helpful.
$1.5 trillion dollars later and what do we have to show? 50,000 minimum wage workers flipping Big Macs. Im lovin it.
Next, Romer explains that [quantitative easing] tends to lower long-term interest rates, it tends to lower the price of the dollar both of those things are good for ordinary families.
So, completely screwing the people who have worked hard and are trying to save their money with sub-par interest rates that dont keep up with inflation is good for America. Paying more for food, fuel, healthcare, insurance, state and local taxes, airfare, rent, building materials, household chemicals, etc. is good for America.
(Yes Mr. William Dudley, the iPad 2 is as cheap as its predecessor but bear in mind that the iTunes music store is slowly, surreptitiously raising its prices from 99 cents to $1.29 so the Apple deflation argument is lost on me.)
Romer continues. [Low interest rates] mean that its easier for consumers to afford borrowing.
Precisely, thats what American households need more debt. I cant seem to recall a single instance in US history when consumers taking on increasing levels of debt posed any danger to the economy.
Romer continues. A lower price of the dollar tends to make our goods more competitive in foreign markets.
This is one of the biggest logical fallacies in politics that a weak currency is good for an economy because it promotes exports. Right, because so much of the US economy is based on manufacturing. Nevermind that a weak currency imports higher input costs in the form of higher energy prices, raw materials, and component parts from overseas.