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Featured Book by John
The Economy This Week: If It Ain’t Broke, Don’t Fix It
February 14, 2008
The Congress passed, and the President signed into law, a massive stimulus package on February 13, 2008. I state that formally to fix the facts firmly and name all the evildoers. There is one word for this stimulus package, and it’s a technical one. That word is “pathetic.” This economy may or may not be moving into recession (like most of the American people, I think it is) but this is the wrong move in the wrong way at the wrong time. If we are in recession, it will be short and mild, like the last two. Fixing it requires creating jobs, not bailing out past errors in judgment. Giving money to households may help them out of their current financial dilemmas, but does nothing to create jobs—at least in the United States. What money consumers spend out of the tax rebate windfall will go to purchase goods made in China, and create jobs there. More importantly, the cumulative effects of both the fiscal stimulus and the Fed’s lowering of short term interest rates will hit the economy anywhere between November 2008 and May 2009. By that time, the economy will be growing again, the real estate sector will be back, and all that stimulus will produce higher rates of inflation and actually slow the economy down. It’s a wonder we pay the people in Washington. They never get it right.
February 14, 2008
The Congress passed, and the President signed into law, a massive stimulus package on February 13, 2008. I state that formally to fix the facts firmly and name all the evildoers. There is one word for this stimulus package, and it’s a technical one. That word is “pathetic.” This economy may or may not be moving into recession (like most of the American people, I think it is) but this is the wrong move in the wrong way at the wrong time. If we are in recession, it will be short and mild, like the last two. Fixing it requires creating jobs, not bailing out past errors in judgment. Giving money to households may help them out of their current financial dilemmas, but does nothing to create jobs—at least in the United States. What money consumers spend out of the tax rebate windfall will go to purchase goods made in China, and create jobs there. More importantly, the cumulative effects of both the fiscal stimulus and the Fed’s lowering of short term interest rates will hit the economy anywhere between November 2008 and May 2009. By that time, the economy will be growing again, the real estate sector will be back, and all that stimulus will produce higher rates of inflation and actually slow the economy down. It’s a wonder we pay the people in Washington. They never get it right.
Weekly Economy Archive
What's John Thinking: Making Sense of the Current Real Estate Market: Slowdowns, Foreclosures and the Future
March, 2008
PDF version
It’s a mess. It’s a complicated, expensive, painful mess. And it’s still got a ways to go before it becomes untangled. “It” in this case is the mortgage, housing, economic slump currently weighing down on all Americans. It’s time to step back, see where it came from, figure out what to do about it and try to predict when it will end. Continue Reading ...
March, 2008
PDF version
It’s a mess. It’s a complicated, expensive, painful mess. And it’s still got a ways to go before it becomes untangled. “It” in this case is the mortgage, housing, economic slump currently weighing down on all Americans. It’s time to step back, see where it came from, figure out what to do about it and try to predict when it will end. Continue Reading ...
What's John Thinking Archive
