Macro Outlook: We Are, Once Again, Defeated...It is amazing that American voters have elected "leaders" who are intent on keeping the country in a rut with trillions of potential economic output lost, tens of millions unnecessarily unemployed, and with millions losing their homes because of fraud and crime on Wall Street. You would think that people would rise up and toss out these deceivers and "traitors". Nope. They are avidly listening to and following right wing idiot Rick Perry who lambasts Ben Bernanke as a "traitor" while offering up anti-reality Kool-Aid as the panacea for America's problems. Incredible!
When the S&P collapsed and bond yields headed way down over the past two month I read it as a financial market misreading Washington and panicking. I thought: the financial markets have noticed that Washington is dysfunctional; thus they now fear that nobody in Washington is going to do anything to restore nominal spending to its appropriate track.
And I thought: they are probably wrong; in response to this people will react, and then we will find the S&P 500 bouncing a good chunk of the way back to 1350.
After Bernanke's speech, it is clear that I was wrong. The S&P is not going to bounce back. Nobody is offering anything for the economy.
The Lesser Depression drags on...
Friday, August 26, 2011
DeLong Throws in the Towel: Washington is Run by Idiots
Here is UC Berkeley economist admitting that his worst nightmare has come true. He was wrong in thinking that Washington had some integrity and some interest in ruling America in the interest of the bottom 90%. He now admits he was wrong: