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« Bill Gross Finally Tells The Truth: The Economy Will Remain Weak For A Generation (CNBC Clip & July PIMCO Investment Letter) | Main | No Bailout For The Governator: Cali Declares A Fiscal Emergency »
Thursday
Jul022009

CEA Chair Christina Romer: We'll Do Whatever It Takes To Help The Economy (Anti-Keynesian Stimulus Rant Included)

In the wake of this morning's disappointing June numbers on job losses and unemployment, the White House sent out CEA Chairwoman Dr. Christina Romer to face the media.  In the clip below, Romer is her usual self--an overly-optimistic Pollyanna as she attempts to make the case that the economy will rebound soon, blah, blah, blah.

CNBC's Mark Haines sees through her bullshit and asks about a second stimulus to which Romer replies: "we are committed to doing whatever it takes to help the economy, including a second stimulus..."

Has anyone else had enough of this clueless, Keynesian claptrap.  Wake up Washington.  Belief in Keynes is belief in utter self-delusion.  Keynes to economics is a witch doctor to medicine.  It's bogus, P.T. Barnum, boonschwaggle. 

Bush tried a stimulus of $150 billion--fail.  Obama is trying a stimulus of $800 billion--and it will fail.  Small tax cuts and inefficient spending programs (where 10% is lost through corruption, graft and waste) will not help an economy hell-bent on debt de-leveraging after a 2-decade sloth through easy money and credit.

The party is over.  Turn in your hats.  And stop destroying our children's futures with wasteful giveaways that serve no useful economic purpose.  Keynes is and was a failure.  We are broke and indebted to the tune of $12 trillion.  We are in a deserved period of contraction.  Allow the deleveraging to take place, encourage massive cuts by bloated states and municipalities.  Adopt the New Zealand mindset (make sure to read this one) that we should use the global downturn to restructure our governments and spending so that we are ready to compete strongly again when the dark days are done.  For heaven's sake stop trying to keep the party going with cheap booze and even cheaper hookers. 

The economic cycle has an innate beauty--growth and recess...allow it to flourish.  Recessions are necessary and unavoidable.   Look at nature.  When Fall comes, we shed our old leaves, prune back, and prepare for Winter and eventually a new Spring where growth flourishes again.  The Bush-Obama administration seems hell-bent on making sure our tree stays (soylent) green through an ice age.  It won't work and it's not smart.

Please Help by emailing our stories to a few friends.  No less than your children's future is at stake.  Oh and the fate of the greatest Democracy in the history of the world also hangs in the balance as we teeter toward bankruptcy.  But honestly, don't worry about it.  Go about your day.  And don't forget to DVR American Idol.  You really don't want to miss that.

 

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Reader Comments (6)

Agree with most all points except the "encourage state cuts" part. They don't need to. States are the solution. Just look at North Dakota. If the states charter banks under that model (developed as a response to a smaller, but similar railroad Baron crisis) and deposit their revenues to capitalize state chartered banks, they can LEND TO THEMSELVES under the fractional reserve system, ten times their revenue base. This will solve every one of the 47 bankrupt states budget shortfalls with plenty left over for infrastructure development and social services. This is a simple process of beating the banks at their own game.
It's hopeless to try and change Washington's thinking--clearly we can see that.
But if you can't solve a problem from the top down, regroup and attack from the bottom up!

You have a great blog and you obviously enjoy excercising that uniquely American freedom--to openly express your desire for political change. In the spirit of our legacy of Independance, I wish you and your readers a happy 4th of July holiday!
Jul 2, 2009 at 2:08 PM | Unregistered CommenterWil Martindale
Thanks for the kind words Wil.

I remember your detailed comment from several stories back about the great things happening in North Dakota. I applaud efforts such as these and thank you for bringing it to my attention. It's now on my ever-expanding list of stories to write...maybe you would want to write about it and then submit it to me for posting on the main page. I honestly do not have time to cover and write about even 1/4 of what I would like.
Jul 2, 2009 at 2:28 PM | Registered CommenterDailyBail
DB you do a GREAT job. You have provided proof, fact, and statistics that back up the overall general opinion that Washington is the meeting place for "Asshats Anonymous"
Jul 2, 2009 at 3:44 PM | Unregistered CommenterAin't Bullshittin'
Definition

2. Ass-Hat:
A general term for someone who carries out actions with such stupidity that they might as well wear their ass as a hat.
Jul 2, 2009 at 3:46 PM | Unregistered CommenterAin't Bullshittin'
we need to put americans first, american jobs first, and let these foreign car companies go away,quickly if not sooner, as they are our downfall. cheap cars putting americans out of work far, far, too long the american factory workers have taken it on the chin.. the backbone of our economy.. these people that bought and own these foreign cars should have a foreclosed house in their neigborhood. maybe that will get the idea close to home. theirs would be a good place to start.we loved the american automobile till something like cheap autos came along.then we started nit picking the american auto maufacturing and the workers. stupidity in government for 25+ years got us where we are at. the start was reagan getting rid of the air traffic controllers the it went downhill from then on.when south korea can export 600,000 autos a year into the us and they take 5,000 how long do you think that can go on before it effects the american auto manufacturing sector?and that's just one country.
Jul 2, 2009 at 5:42 PM | Unregistered Commenterdes
Imagine having to sit through one of her classes. An economic historian from U of C Berkeley? I have heard it all now.

This is from a paper she wrote with her husband in 2007…

THE MACROECONOMIC EFFECTS OF TAX CHANGES:
ESTIMATES BASED ON A NEW MEASURE OF FISCAL SHOCKS

This paper investigates the impact of changes in the level of taxation on economic activity. The paper uses the narrative record, presidential speeches, executive-branch documents, and Congressional reports to identify the size, timing, and principal motivation for all major postwar tax policy actions.

Conclusions…First, despite the complexity of the legislative process, most significant tax changes have a dominant motivation that fits fairly clearly into one of four categories: counteracting other influences on the economy, paying for increases in government spending (or lowering taxes in conjunction with reductions in spending), addressing an inherited budget deficit, and promoting long-run growth.

In terms of consequences, there are six main findings. First, tax changes have very large effects on output. Our baseline specification suggests that an exogenous tax increase of one percent of GDP lowers real GDP by roughly three percent.

Third, investment falls sharply in response to exogenous tax increases. Indeed, the strong response of investment helps to explain why the output consequences of tax changes are so large.

MY QUESTION…If she believes her conclusions, why is she working for Obama?
Oct 27, 2009 at 6:43 PM | Unregistered Commentergobias

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