Championing stimulus and the economics of 'surprisingly normal'
(Read article summary)The New York Times says the economy is "surprisingly normal."
If you don’t read the newspapers you run the risk of missing something. Of course, if you do read them, you run the risk of catching something.
Not much in the financial news worthy of comment this morning…
The Dow gained $13. Gold lost $13. Nothing much to say about it…
So we will comment on something beneath comment…something so low we have to dig down to find it…something so unworthy we hardly imagine we are mentioning it…something in the newspapers…
We’re talking, of course, about politics…
The love-fest with politics is heating up. The drugs have been passed around. Now, the clothes are coming off…
“France keeps steady course in economic upheaval,” says a headline at the International Herald Tribune. Steady course? You bet. It kept subsidizing, bailing out, protecting, coddling and otherwise meddling in its economy – just like it did before the crisis began. Had it not done so, the story continues, France might not have been the first major economy out of the worldwide recession.
On the other hand, the French never went deeply into debt… So maybe they just didn’t have so much exposure to the worldwide debt crisis in the first place.
Never mind. The papers don’t know what the problem is, but they’re convinced that government interference is the solution.
Over at The Financial Times, Clive Crook is breathing hard, too. He reckons that the “downturn called for a big stimulus,” and that the US stimulus effort headed off a worse recession. He then explains that the feds’ stimulus really didn’t stimulate at all, it merely offset a decline in spending at the state level. State tax revenues fell; states spent less. State tax revenues declined $87 billion in the last 12 months, the biggest drop on record. The feds made up for it by spending big.
