Asshat Quote of the Day

The current crisis is not a demand crisis, it is a trust crisis. Bad corporate governance coupled with bad government policies has destroyed the financial sector, scaring investors and freezing lending. It is as if a nuclear bomb had destroyed all roads in America and we claimed that to alleviate the economic impact of such an event we should invest in banks. It is possible that eventually the effect will trickle down. But if the problem is the roads, you want to rebuild roads, not subsidise the financial sector. And if the problem is the financial sector, you want to fix this and not build roads... - a dumb economist that Brad DeLong embarrasses

I try not to get too deep into the lingo of economics because it's a field that is very complex in it's language. It's the same is if somebody without a background in software engineering tried to understand a conversation I might have with a peer. You can't draw a parallel to a concept you do understand if you don't know the basic definitions.

I tend to understand writers like DeLong and professor K, when they explain complex issues in terminology I understand. What seems stupid to me is drawing analogies that treat the audience like 5 year olds.

So.. we're not have a problem with demand? Really? With unemployment up near 10%, people losing their homes, panicking over high credit card debt.. these jackasses actually think the problem isn't demand?

Most people I know are not spending money beyond the essentials. Even John and I cut back a bit.. well.. until he decided he needed a Mercedes.. but still, we're not spending like we used to. It's not a "confidence" thing.. the vast majority of the problem is the lack of money in the largest segments of the population that buy shit.

How do you fix that? Jobs! How do you create more jobs? Demand. How do you create more demand? People have fucking money to spend on shit besides their credit card bills.. which was the whole point of the "stimulus plan", which was way under funded.

The fed could print money, load it up on helicopters, and drop it over all the major cities and we'd start seeing some serious rebounding of the economy. Economics, after all, is not about a balance sheet where wealth is something that is accounted for. Economics is about trading goods and services, and having the fed conjure money out of thin air would not affect inflation unless economics conditions were such that demand was already high.

The fact is, the fed did create money from nothing - and gave it to the banks.. by the billions and billions. It wasn't used for increasing demand by consumers, or putting people back to work.