Wednesday, September 9, 2009

Auguries of Economic Apocalypse

Last week was an excellent week for gloom and doom, not least because idiots were optimistic, a topic addressed in my latest American Spectator column:
Six months into a stock-market rally, Wall Street apparently saw more good news last week when a Labor Department report showed employment had jumped to 9.7 percent in August. Exactly why Friday's news -- joblessness at a 26-year high -- produced a 97-point gain in the Dow Jones Industrial Average is a good question, but if the stock market were perfectly predictable, we'd all be rich. . . .
First the Bush administration and now the Obama administration have pumped hundreds of billions of borrowed dollars into the system, justifying the stimulus-and-bailout policy as necessary to avert a financial cataclysm. Yet the augurs who study the entrails of the economy are muttering darkly about the inauspicious omens.
Last week, Vice President Joe Biden gave a happy-talk presentation -- "Rainbows! Unicorns! Recovery!" -- about the miraculous effects of the $787 billion stimulus package that President Obama rammed through Congress in February. Once more trotting out the administration's rhetoric about jobs "saved or created" (pick a number, any number), Biden declared, "In 200 days, the president's Recovery and Reinvestment Act isn't just working . . . it's working toward something: It's working toward a more resilient, more transformative economy."
Surely, many economists greeted this declaration with arched eyebrows. What, exactly, is a "transformative economy," and in what sense is it "more resilient"? Never mind. Being liberal means never having to define one's terms.
Biden showed himself adept at the art of ambiguity when he proclaimed to his Brookings Institution audience: "The Recovery Act has played a significant role in changing the trajectory of our economy, in changing the conversation about the economy in this country. Instead of talking about the beginning of a depression, we're talking about the end of a recession eight months after taking office."
Well, who is "we"? It is by no means universally agreed that the U.S. economy is now bound for the sunlit uplands of prosperity, and many of the financial augurs perceive that we may be approaching an economic abyss. . . .
Read the whole gloomy thing. And expect further omens of catastrophic Obamanomics at The revolution will not be televised, but the apocalypse will be blogged.

UPDATE: Doug Ross anticipates Zimbabwe USA.

UPDATE II: Taxpayers get screwed:
The federal government is unlikely to recoup all of the billions of dollars that it has invested in General Motors and Chrysler, according to a new congressional oversight report assessing the automakers' rescue.
The report said that a $5.4 billion portion of the $10.5 billion owed by Chrysler is "highly unlikely" to be repaid, while full recovery of the $50 billion sunk into GM would require the company's stock to reach unprecedented heights.
"Although taxpayers may recover some portion of their investment in Chrysler and GM, it is unlikely they will recover the entire amount," according to the report . . .
In other words, the auto bailout was a taxpayer-funded swindle, cheating the legitimate stakeholders on behalf of the UAW bosses. Oh, and here's some more cheerful news: Inflation's back!

UPDATE III: Read Max Baucus's lips: More New Taxes!
What the Baucus proposal means in real terms is that a family of four with a household income above $66,150 would face a tax of $3,800 if they do not obtain health care, while an individual with income above $32,490 would face a tax of $950.
Meanwhile, Cato's Andrew J. Coulson explains how Obama's stimulus spending on public schools is actually hurting the economy. Man, this is turning out to be a great day for gloom and doom!

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