Dear Friends,
It seems to me there are only a few jobs where you can always be wrong and never have to defend it. One is weather man and the other is economist. Although, of the two, weathermen are far more accurate in their predictions.
Economists are always astounded that they are wrong. No matter what the numbers come out. Like the latest unemployment figures. The “consensus” among economists was that the American economy would add around 4,000 jobs. In fact the economy shed over 80,000 jobs.
More to the point, during the Bush years and after the attacks on America on 911, economists under estimated the real economic numbers over and over. In hindsight we can see that real economic output as measured in GDP never actually declined during the Bush years. The US only saw real GDP growth go down in the year 2009. The year Obama took office and three years after the democrats took control of the House of Representatives. Since the new administration took office economists have over expected economic growth, over and over.
In this chart compiled from Bea.gov data we can see that even in the “recession” of 2001 real GDP grew.
Note; 2010 figures are projected by economists.
We also have the ability to go back and see what economists were saying in the 2001 to 2008 period. Some stories can be read here and here and here.
Everyone wants to make a difference. Economists are no different. Under a command and control economy economists are gods. They have great say in people‘s lives, what we do for a living, where we live, how we live and even if we live (eugenics and population control). Economists have a vested interest in creating a command and control economy. This doesn’t necessarily mean they cannot be trusted… but it does mean that anything an economist says must be considered carefully.
The United States is well down the road to reestablishing a 1930’s style command and control economy. The progressive playbook rules the day as it did in the 1930’s. With such ideas as price controls the Roosevelt administration effectively castrated any economic growth before it could get started. The Obama administration seems to believe the same theories. They have nationalized the inefficient US car industry in all but name. They have effectively taken over CITI Corp. The government has nationalized (according to Barney Frank) Fanny Mae and Freddy Mac.
This trend is very concerning because it portends much lower annual GDP growth for years to come. Lower GDP growth lowers the standard of living of everyone. But that is the price the Elite are willing, for us, to pay. They couldn’t care less about the standard of living in the US. Only if it threatens their power. Then the Elite will care. But not until.
Command and control is on the ascendancy in the US. Read and listen to the words of prominent Obama appointees. Of course the Elite like the ideas of John Maynard Keynes. He told them government spending is good. One thing the Elite love to do is tax and spend. If revenues are low it is a matter of too low a tax rate. If a temporary surplus should appear, it would be irresponsible to cut taxes, instead we should spend the money on ongoing programs that have no future funding and will make people dependant on government… (programs that will still have to be funded when the surplus runs out). The Elite can out argue Gorgias (The Sophist) till he is blue in the face. (And ashamed of his legacy).
The Elite like to echo the new catch phrase “capitalism is dead.” More a wish than reality. That is like saying gravity is dead or fire has ceased burning. Capitalism is a force of nature. It can be harnessed for good or it can be toyed with at one’s peril. Fire has been harnessed to improve the lives of everyone on the planet. But fire is dangerous. We safely use fire because we know it’s nature and we work within the framework of it’s attributes. We don’t try to enclose fire in paper because we know paper is ineffective at stopping fire. We use wings when we want to fly because we know it is futile to jump from a cliff expecting to fly. But we still think we can control the economy like electrons in a IC. Economists can be empirically proven wrong at every turn, yet they still love the idea, of a command and control economy.
Before I start a fire in my home I make sure the fire will be contained in a device capable of it. My couch is not sufficient to contain a warming fire.
An economist might disagree however… Fire extinguishers can be used quite effectively to keep a fire under control and using extinguishers in this way creates a demand for them… and sofas.
