Economics

Whatever It Is, They're Against It

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Lest you think that the entire country is baying for a massive economic "stimulus," Politico's Eamon Javers and Jim Vandehei report on the growing ranks of economists and investment professionals opposed to a $900 billion "shock to the economy." (Where are you now, Naomi Klein?)

Instead of fighting over what should go in the economic stimulus bill, pitting infrastructure spending against tax cuts and contractors against contraceptives, they say lawmakers should be fighting against the very idea of any economic stimulus at all. Call them the Do-Nothing Crowd.

"The economy was too big. It was all phantom wealth borrowed from abroad," says Andrew Schiff, an investment consultant at Euro Pacific Capital and a card-carrying member of the stand-tall-against-the-stimulus lobby. "All this stimulus money is geared toward getting consumers spending and borrowing again. But spending and borrowing were the problem in the first place."

How quickly we forget, Javers and Vandehei remind readers, that "stimulus spending" has a long history of failure: "Remember last February's $168 billion economic stimulus package? President Bush called it "a booster shot for our economy" and promised that it was large enough to have an effect. It wasn't, and it didn't work."

Johan Norberg quickly disposes of Naomi Klein's attack on "free market shocks" here.

Reason on the "stimulus" here.

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NEXT: Stimulus Now, Stimulus Tomorrow, Stimulus Forever

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  1. Where are you now, Naomi Klein?

    Masturbating to nude lithographs of Lenin.

  2. “All this stimulus money is geared toward getting consumers spending and borrowing again. But spending and borrowing were the problem in the first place.”

    HELLOOOOOO!
    Thank you! I’m glad somebody was able to figure this out. How long will it take to shitcan Paulson and give Schiff his job? While we’re at it, let’s give Bernanke his pink slip too. We can replace him with a chimpanzee and a handful of darts.

  3. As long as it’s the right chimpanzee.

  4. “Thank you! I’m glad somebody was able to figure this out. How long will it take to shitcan Paulson and give Schiff his job? While we’re at it, let’s give Bernanke his pink slip too. We can replace him with a chimpanzee and a handful of darts.”

    Paulson’s out, dude. Geitner’s Secretary of the Treasury now. Phew. Thank God. Crisis averted!

  5. If Obama makes Krugman Chairman of the Fed, I am moving to outer mongolia.

  6. President Bush called it “a booster shot for our economy” and promised that it was large enough to have an effect. It wasn’t, and it didn’t work.”

    Perhaps it would have been worse without the first stimulus.

  7. The Republicans need to come up with an alternative plan, otherwise this thing is getting passed over their heads anyway regardless of what they say.

  8. Where are you now, Naomi Klein?

    I can see her right now in the kitchen, bending over a hot stove. But I can’t see the stove.*

    (*Yeah, I know that’s Duck Soup and the title of the post comes from Horse Feathers, but it’s still the Marx Brothers so I figure it’s okay.)

  9. I would prefer if commentators at this point would interchange “stimulus plan” with “pyramid scheme” I know technically not the same but getting damn near indistinguishable, particularly when coupled with “tax cuts”.

  10. I am moving to outer mongolia.

    I hear Ulan Bator just got a stop light in the center of town. It’s a little chilly this time of year, but I hear they throw great parties!

  11. Ulan Bator just got a stop light in the center of town

    That’s how this shit starts.

    Is there an Outer-er Mongolia?

  12. “Shock the Economy”

    Shock the economy to life.
    Shock the economy to life.

    Bail out me, when I run.
    Bail out me, through the fire.
    Something knocked me out’ the economy,
    Now I’m on my knees.
    Bail out me, Obama please.
    Economy, economy, economy.
    Don’t you know when you’re going to shock the economy?

    Fox the fox,
    Rat the rat.
    You can ape the ape,
    I know about that.
    There is one thing you must be sure of,
    I can’t take any more.
    Obama, won’t you monkey with the economy?
    Economy, economy, economy.
    Don’t you know you’re going to shock the economy?

    Wheels keep turning,
    Something’s burning.
    Don’t like it, but I guess I’m learning.

    Shock! – watch the economy get hurt, economy.

    Bail out me, when I sleep.
    Bail out me, when I breathe.
    You throw your pearls before the swine,
    Make the economy dive.
    Bail out me, Obama please.
    Economy, economy, economy.
    Don’t you know you’re going to shock the economy?

    Too much at stake,
    Ground beneath me shake.
    And the news is breaking.

    Shock! – watch the economy get hurt, economy.

    Shock the economy,
    Shock the economy,
    Shock the economy to life.

  13. Maybe I should’ve used Congress instead of Obama. Oh, well, use either. Or both.

  14. It’s a little chilly this time of year, but I hear they throw great parties!

    I hear they do great barbecue

  15. I saw on the news this morning that $83 billion the stimulus consists of tax “refund” checks that will be going to people who pay no federal income taxes.

  16. “I saw on the news this morning that $83 billion the stimulus consists of tax “refund” checks that will be going to people who pay no federal income taxes.”

    Hey, it should offset the cigarette tax increase to pay for SCHIP, at least!

  17. It seems so long ago that people were bitching about Americans and massive credit card debt, with people buying all sorts of high priced, unnecessary shit. But really it was what, 5 years ago?

    Hey everyone, go buy more useless shit. Fuck it, we’ll do it for you.

  18. I saw on the news this morning that $83 billion the stimulus consists of tax “refund” checks that will be going to people who pay no federal income taxes.

    That must really eat you up.

  19. Well, can Democrats finally admit FICA are taxes now, then? Not “contributions”?

  20. It was all phantom wealth borrowed from abroad

    This is an underappreciated point; everybody runs around, clutching their heads, shrieking “Wealth destructioooooon!” when the stock market tanks. But (and I’m thinking of the dotcom boom, in particular)- maybe those assets weren’t really worth *that much* to begin with. When everybody decides to sell at the same time, it becomes obvious.

  21. I wish we could come up with a more publicity-friendly term than “Do-Nothings”.

  22. I hear they do great barbecue

    By the time they get done playing tug-of-war (on horseback) with that goat, it must be plenty tenderized.

  23. I wish we could come up with a more publicity-friendly term than “Do-Nothings”.

    Stalwarts.

  24. Well, can Democrats finally admit FICA are taxes now, then? Not “contributions”?

    According to joe, no one ever labored under the misconception that FICA was a tax; everyone knew or should have known that “contribution” is a bunch of bullshit.

    Of course, joe must not know very many old people.

  25. Euro Pacific Capital sure is in the news a lot recently(and are about to get a beatdown from the WSJ).Let’s hope they don’t do for Austrian economics what the GOP has done to small-government conservatism.

  26. That must really eat you up.

    It eats me up inside. It’s bad enough they are free-riders, there’s no need to tip them for their “service.”

  27. I wish we could come up with a more publicity-friendly term than “Do-Nothings”.

    The Primum non noceres? That’s a little hard to say, though.

  28. “The Rebellion.”

  29. Hey! I’ve got an idea! How about the heads-out-of-our-asses coalition!?

  30. Where are you now, Naomi Klein?

    Masturbating to nude lithographs of Lenin.

    Lithographs of Lenin? I suspect she took part of her latest book advance and bought one of those Obama dildos.

  31. “Whatever It Is, I’m Against It”

    http://www.youtube.com/watch?v=DtMV44yoXZ0

    I don’t know what they have to say,
    it makes no difference anyway –
    whatever it is, I’m against it!
    No matter what it is or who commenced it,
    I’m against it!

    Your proposition may be good,
    but let’s have one thing understood –
    whatever it is, I’m against it!
    And even when you’ve changed it or condensed it,
    I’m against it!

    I’m opposed to it.
    On general principles I’m opposed to it.

    For months before my son was born,
    I used to yell from night to morn –
    Whatever it is, I’m against it!
    And I’ve kept yelling since I first commenced it,
    I’m against it!

  32. Charleston Heston runs out of the capital building, and screams loudly for everyone on the mall to hear,

    “The Multiplier Effect is fiction!”

  33. Looks like the end game appoacheth for this kind of thing. I don’t know how long Uncle Mao is willing to finance these rather speculative investments, I guess for how long depends on how long its in Uncle Mao’s strategic interests. But this Geitner fellow looks like a real Establishment-lets-screw-this-up kind of guy. Taking the Chinese to task for “manipulating” their currency to keep it cheap while not acknowledging how they do it (buying our increasingly speculative sovereign debt, weighing their currency down) is a good start. Then turning around and essentially begging them for what, $2.5 trillion or so this year? After they buy the debt, is that when we accuse them of currency manipulation? That’s an even better start. Has anyone noticed the yield on Treasuries has gone up about 30% in the past three months? Wow, not good.

    More and more it seems to me PrezBama is going to be poor Jimmy Carter in a way, in the sense he will be presiding over economic forces that are outside of his control, with a Fed chairman and political backers who want to exacerbate these problems. When the US has Treasury auctions a year from now with yields in the ~7-8% yield rate while looking at the first wave of inflation come ashore at the same time, ugh. This while the Fed tries to keep rates at zero and all that printed money just disappearing down a black hole of bank balance sheets and infalted asset prices. These are things PrezBama might be exacerbating, but really he’s inheriting a lot of this stuff and walking right into the buzzsaw. Default/devaluation is on the way, and the rest of the world is going to take a bath on American debt insturments. Financial chaos ensues.

    In a way I kind of look forward to this. Debtplosion was always something in my mind as a given, but something farther down the road with the defined benefit schemes of Medicare and Social Insecurity being the culprits, like in 2020 or so. But now I see the ground coming up, no more clouds in the way – not so high from hitting the ground anymore – and welcome the splat. It will seem bad, but the financial realities will effectively kill the defined benefit schemes, and destroy the credit-card that has empowered politicians for so long. Libertarians should save their energies for that time, because the choice will then more or less be a nationalized Statist entity with no credibility, or a discrediting and neutering of state power Americans were never willing to pay for, but something they were only willing to finance.

  34. “When the US has Treasury auctions a year from now with yields in the ~7-8% yield rate while looking at the first wave of inflation come ashore at the same time, ugh.”

    Hmmm.

    Sounds like a field day for those Short -U.S. Treasury ETF’s.

  35. The Angry Optimist | January 28, 2009, 11:43am | #
    Well, can Democrats finally admit FICA are taxes now, then? Not “contributions”?

    According to joe, no one ever labored under the misconception that FICA was a tax; everyone knew or should have known that “contribution” is a bunch of bullshit.

    Of course, joe must not know very many old people.

    Commandment XI. Thou shall not evoke Joe until his annoying ass is already present. Suffer not the feeding of over extended egos less ye suffer us all.

  36. Well, can Democrats finally admit FICA are taxes now, then? Not “contributions”?

    According to joe, no one ever labored under the misconception that FICA was a tax; everyone knew or should have known that “contribution” is a bunch of bullshit.

    Maybe it’s me, but a nod to Commandment XI, I think you’re meaning to say “…that FICA was not a tax”. Otherwise, it’s rather nonsensical. Appropriate to use nonsensical logic when dealing with he who must not yet be named, but I don’t think that’s what you actually meant to say.

    Or I could need lunch with my blood sugar being down. Will eat and see if it makes more sense later.

  37. “Sounds like a field day for those Short -U.S. Treasury ETF’s”

    I would assume so. I haven’t checked contract spreads, but the “specter” of deflation was on everyone’s lips a couple months ago. I’m sure more than a few geniuses loaded up at 3~5% for Q3-ish issues, thinking it would be quite a bargain. Oops.

  38. I wish we could come up with a more publicity-friendly term than “Do-Nothings”.

    Howsabout “DIY”?

  39. It will seem bad, but the financial realities will effectively kill the defined benefit schemes, and destroy the credit-card that has empowered politicians for so long.

    It won’t just seem bad, it will be bad. Very, very bad.

    Libertarians should save their energies for that time, because the choice will then more or less be a nationalized Statist entity with no credibility, or a discrediting and neutering of state power Americans were never willing to pay for, but something they were only willing to finance.

    I dunno about saving our energies. We should be building our credibility, which takes energy, by continuing to point out the fraudulence of the stimulus and its likely outcomes.

  40. @RC Dean

    “I dunno about saving our energies. We should be building our credibility, which takes energy, by continuing to point out the fraudulence of the stimulus and its likely outcomes.”

    I agree with you completely from an ethical POV etc. But political realities dictate there will be no fix via rational choice to emerge from our debt-crack addiction. The metaphor of credit-and-debt fiat banking via political meddling as a drug addiction, with predictable end-games is really quite compelling I think.

    We’re hooked as a society, and politicians are all too happy to keep throwing rocks in this pipe. We “need” it to feel better. Really, really huge rocks have to go in the pipe just to get the mildest of fleeting highs at this point of the addiction. Even the excuses we tell oursevles as the pipe hits the lips are the same: “I’ll just do it one more time, then I’ll get clean, because I know this is really pain disguised as joy, but I need it, just…ONE MORE TIME!” We’ve been telling ourselves that since the Great Society.

    Eventually, there is overdose and you wake up in the worst of situations, realizing your broke, sober (which is somehow bad at this point) and covered in your own puke. Then the life-review process begins – is forced on us really – when we have nothing to trade for more crack, at least nothing the dealer wants in exchange for more crack. Its tough, and it will be bad. But as a libertarian leaning fellow I feel myself and my kind are the fleeting conscience of an addict telling them what they know, even as they hit the pipe. Any drug addict knows what I’m talking about here.

    What I was alluding to above in my previous post was its just better for your conscience to take a break and enjoy the high, because you’re conscience will be the only thing left when we wake up in morning with ring-around-the-mouth and nowhere to go, and no more crack ’cause the dealer cut us off. Its either listen to your conscience or something dangerous, like robbing your neighbor so you can go get more crack…or suicide.

    Have a nice day!

  41. Being right on the facts of the stimulus…awesome.

    Incidental skewering of Noami Klein…priceless.

  42. “Shock the economy,
    Shock the economy,
    Shock the economy to life.”

    Like tazing a corpse.

  43. Since the banks won’t loan the money to the people that they got for the sole purpose of loaning money to the people they now want to keep broke and send them instead to cheap criminal rip-off loan offices in the private sector who would be out of business if they were required to follow the laws. Have I got that about right? Is there something wrong with criminal brains that they refuse to see the truth or is it all a part of the conspiracy to bring our nation down to our knees? Because frankly, I STILL remember that threat being made a few years ago by our rich criminals.

  44. I’d like to take this moment to make my annual comment. Can we stop calling it do-nothing-ism? We propose doing plenty, stop all the panicking folks from throwing virgins into the volcano. Can we frame the debate around that image instead?

  45. Can we stop calling it do-nothing-ism?

    Sure. Call it what it is: do-it-yourself-ism. Worried about your economic situation? Start living within your means. Afraid you might get fired? Start your own business. The one area of self-help that is off-limits is reaching into my pocket.

  46. They already spent 700 billion dollars bailing out the banks. That’s going to serve as their all-purpose excuse for any other bailout madness they happen to conceive. And by the time someone points out that it was all a really bad idea, people will be used to it and those programs will run on inertia.

    Excuse me while I drink.

  47. But RC, living within their means is what got us all into this mess in the first place! The only way for the economy to prosper is to get consumption so sayeth the great Keynes, ruler of Be’ethos!

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