OutFront tonight: America's drug addiction.
It's not cocaine, not heroin, not even bath salts. It's stimulus.
Federal Reserve Chairman Ben Bernanke held a news conference today, but instead of giving the market the stimulus it's been craving, he announced that growth is indeed sluggish but not slow enough to trigger a monetary intervention. One stimulus program will be extended, but no more.
What America (and the world) needs, Bernanke said, is for Congress to step up and create a long-term economic policy that will stabilize our fragile recovery. But will that ever happen? Erin Burnett breaks it down.
We need JOBS! You can lower the interest rates down to 0%, but with out good paying jobs this economy will not recover. How can a man and his wife purchase a house, buy a car and feed and educate their children with out a good paying job? In 1948 my father did just that with only one good paying factory job. What happened to this country? The only way to recover this economy and correct this sad situation is to limit imports with tarrifs and strong trade laws. That would force industry to begin producing products in "this" country again. It is just that simple. Why can not the , Economist and well educated leaders of this country figure that out? Why have leaders that cannot or will not lead us?
Your understanding of macro-economics seems to be a bit lacking. The numbers you highlight are not great ways to measure the impact of the stimulus (which, incidentally isn't so much about "spending $1.7T" – with an unstated implication that taxpayer dollars are being spent). The Fed "bought" treasury securities as a means of increasing the amount of dollars in circulation. The idea was to keep the capital markets liquid, and although it's had mixed results, we haven't seen consequent liquidity issues or bank runs. It's not been as successful as planners hoped, but it wasn't a bad thing to do.
As for $800K + for job creation, that doesn't include any analysis of the jobs "not lost" due to what likely would have been an even worse economic melt-down.
These things are inherently complex and hard to measure, and I applaud your efforts to keep the public engaged about them. However, it would be more refreshing still to see our leading news organizations putting more effort into understanding the realities, rather than doing strange calculus on big scary numbers.
Great analysis Scott, I agree with some of your arguments here. However, you also forgot to factor in the "S-Curve". It is practcally impossible to analyze "jobs not lost". The fact of the matter is that job loss would have to slow down at some point anyway, and that is what happened. It is NOT the stimulus that halted or slowed down job loss. We would have been better off letting the entire building collapse and then, rebuild. These artificial fixes to a faulty braking system will get us killed. Furthermore, have you asked yourself if fundamental analyses hold true anymore? Does micro or macro economics mean anything to you anymore? Does increasing debt really lead to a favorable GDP/Debt ratio if you cannot force GDP to increase by the same or greater percentage? The reality is that we can only rebuild after we have humbly allowed the imminent and inevitable collapse.
@Tola While most people would agree with your version of how the system and for that matter how pure free market economics should work, modern economies don't work that way. Just like we don't a flu kill 50million people anymore, it is impractical to expect the Fed to stand-by and watch while the entire economy collapses instead to doing what it has been originally created to do. The down side of this has been the irresponsible behavior of the elected officials (congress) and the corporate officers. They all know too well that there will only be namesake consequences for their actions. Hence they are only focused on short term mostly personal goals instead of putting the country first. Bernankie did the right thing by highlighting where the action is really warranted.
Why don't the "economists" of the world come right out and tell the public that "what you think is capitalism, isn't really capitalism, people......and hasn't been for quite some time"........it's not capitalism it's corporate feudalism with a logo of pure capitalism. This system is not going to work like the textbooks said 'cause the system aint what the textbooks said it was. You cannot even start a new business in this country unless it's some high-tech energy business. That's not capitalism, that's control.
The system has never been "pure capitalism." Pure capitalism has never existed, and it never will exist, because of that nasty thing called infrastructure.
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Erin Burnett OutFront airs weeknights at 7 p.m. ET. Designed to showcase Erin's unique style--casual, smart, and confident--OutFront stays ahead of the headlines, delivering a show that's in-depth and informative.
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