Joined: Dec. 2008
[Graffiti moved to Bathroom Wall. - Lou FCD]
|Quote (olegt @ Mar. 10 2009,00:34)|
|Ben Stein applies the Poof! theory in economics: |
|Notice that recently Ben Bernanke said the recession might end this year, and the stock market rocketed up that day. |
What we need, as Bill Clinton aptly pointed out recently, is more cheerleading and less fear-mongering. We elected Mr. Obama to be National Spirit Leader, not National Scary Storyteller.
If Mr. Obama and Mr. Geithner, his Treasury Secretary, and Mr. Volcker, his well-respected advisor, and some real superstars like Warren Buffett and Jack Welch all came out and said, "The recession will end within 12 months. We are sure of it," the recession WOULD end within 12 months.
I hate to say this but I agree with Stein on this. Economics is pretty much based on confidence. In Australia for example, there are job losses but the majority of people are paying much less for fuel and have much lower mortgage repayments. So they are hundreds of dollars better off a month than they were a few months ago. Except they are actually spending less than they were a few months ago.
On the other side Banks are not lending money that businesses need to keep going.
So once people think that the economy has reached bottom and they wont lose their jobs, they will open their wallets. Once banks think that a business is not going to go broke they will start lending again.
That's not to say that Stein is not an idiot. If Obama started singing "happy days are here again" people would think he was a nut.