Tuesday, January 26, 2010

Overcoming Roadblocks

Richard W. Fisher, president of the Federal Reserve Bank of Dallas, writes in an op-ed piece in the Wall Street Journal yesterday, in part,

There are many roadblocks we must overcome to get our economy running again. Businesses must develop sufficient confidence in the future to begin expanding their order books and payrolls. Banks must be willing and able to lend again. And consumers must regain the wherewithal to open their pocketbooks.

That is a deeply delusional statement.

“Business must begin buying things and hiring people.” That, pinhead, is the result of an improving economy, not what must be done to restart it.

“Banks must be willing and able to lend.” How about having creditworthy people and businesses with greater than zero inclination to borrow any money? How about having borrowers who have a better than zero chance of repaying loans?

“Consumers must regain the wherewithal…” Oh, I can’t go on. With the economy not only not creating jobs, but still shedding them, where would you suggest they regain that wherewithal?

There is precisely one “roadblock” that we need to “overcome to get our economy running again.” We need to provide approximately 10 million people with a means of earning a living wage. How we do that is, of course, a very difficult question, and I do not have an answer for it. But until we do that all of this economic blather is nothing more than the sound of jackasses braying at an empty hayrick.

1 comment:

Arthur said...

We have a problem, our economy is over-productive. Prior to the collapse, we made way more stuff than we needed. We could afford to produce it anyway because people had money to buy it. The had money because they, too, made unnecessary stuff that they could sell, because others had money because... Since most money is CREDIT (bank deposits), not hard cash, once it stopped flowing, it disappeared.
I am not sure we CAN get the economy "running again" at a pace anything like we have seen in the last two to four decades. And we sure as gosh can't when 10,000-100,000 times as much compensation (i.e., money) is going to one person as is going to another who is working just as hard. The latter - e.g., those who scrub toilets and empty trash cans - are certainly doing something critically necessary, I am not so sure about investment bankers. Bankers who LOSE billions of dollars for their employers and clients are doing something worthy of punishment, not reward. I recognize that fewer people can do the job of lawyers, doctors, engineers, and business managers; and that that means they will get paid more. But 50, much less 500, times as much is both immoral and incompatible with a balanced and stable society.

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