If Ya Don’t Know Economics
Friday, August 21, 2009Don’t write about it. That’s a pretty good rule for anything. ‘Tis why my archive on quantum theory is non-existent. Somebody get this airhead off the air, please. She even writes with terms like “wow” and “but hey.” Like, you know? Her simpleton approach to a complex, far-reaching issue almost left me in tears – laughing tears or crying tears, I’m still not sure, but perhaps both. She called Cash for Clunkers “an astounding success,” and here’s how she arrives at that. Have patience for my large quotation below.
Before the Senate delays the program indefinitely, I would encourage each member to apply what is often their Ivy-league sense of macroeconomics, and answer what is ultimately the most important question at stake here: How has the US economy benefitted from the Cash for Clunkers program? Even more, how will the economy benefit in the future if we pass additional funding today?
The answer in simple terms? A boost in consumer confidence.
Most economists will agree that what reverses recessions is plain and simple- it is people spending money. Time and time again, it is the restored confidence of the consumer that puts an economy back in drive. When people feel okay about buying, they demand more goods and services. Orders for more goods increases factory production. Increased factory production and an increase in services means that business managers start to feel good again, too. So do investors. Stock prices rise, unemployment falls, and businesses begin purchasing capital equipment again, which means even greater increases in production and a boost in real GDP. When GDP rises, inflation usually accompanies it. However, it also means that the wealth in an economy is rising, too, and higher inflation equates economically to lower unemployment. Workers acquire higher wages, and use part of their increased income to spend more on goods and services. The circle of economic prosperity continues, until, of course, consumer confidence falls. At which point, the economy will again falter.
Right now, our economy has enjoyed a week-long window of collective restored consumer confidence, thanks to the Cash for Clunkers program. When Ford Motor Company and other companies sell more vehicles, they demand more goods from suppliers. Not just auto part suppliers, but paper suppliers and ink suppliers and cafeteria-food suppliers and hand-soap suppliers and transportation providers, and the goods and services from thousands of other suppliers. In turn, those companies demand more from their suppliers. The economy heats up.
Cash for Clunkers has done in one week what ten months, handfuls of ‘czars’, hundreds of lawmakers, thousands of experts and billions of dollars have not yet been able to pull off – it got the economy rolling again.
Her first paragraph (that I didn’t quote; read the whole piece) is overloaded with weak puns on weather and wheels, and at the end of that one she must have thought she produced a work of art. Notice her use of “when people feel okay” and “feeling good again.” This is her sign that consumer confidence is up, and of course, as our rocket scientist consumer economist ‘splains, the economy is driven by consumer confidence, and confidence is steered by government programs that make people feel good. (Puns intended.) I won’t even comment on her analysis of inflation or her “circle of economic prosperity” theory.
Unfortunately, people like this think that their ability to collect mainstream claptrap from 6th-grade-level news sources ’round the web makes them informed. Then they summarize it, like this Clunker Groupie has, and publish it, and they think that they have done something marevelous and productive. In reality, all they have done is prove, once again, that as bad as the mainstream media is on reciting and recycling Keynesian blather, when uninformed people get ahold of it, they turn bad media analysis into unintelligible rubbish.
Some readers don’t like when I impugn and ridicule people like this, and that’s fine. But don’t write me and tell me I’m being “too harsh.” This kind of disinformation is exactly what should be called out and attacked, and stupid should always be called stupid whenever the opportunity arises. Besides, I find this type of thing to be so humorous that it deserves to be read by everyone who wants to know what they are up against, and have a good laugh at the same time.
Dan Davis says:
August 21st, 2009 at 12:36 pm
Karen, did you read her bio? Vague as it is, it speaks volumes. Now that GM, like NBC, is a government ministry do you think anyone from there is going to criticize Obamanomics? Not likely. Don’t be too hard on her, though. These poor Detroit folks are on the cusp of losing the sweetest private welfare deals this side of the beltway.
John says:
August 21st, 2009 at 7:51 pm
You’re not being too harsh. This person has about as much analytic ability as a potted plant.
Karen De Coster says:
August 21st, 2009 at 8:03 pm
I just read her bio. An enthusiastic supporter of the “Detroit Big 3.” What is so funny is that she has no clue how stupid she is.
clark says:
August 21st, 2009 at 8:26 pm
Like, totally right-on, I loved your awesome perspective Karen. This lame-ass chick’s bodacious macroeconomic explanation is, like, so out of wack – ‘er I mean recklessly bold, yet sooo incorrect. She may feel so good after writing that she may think she lifted the economy a bit, all by herself. To somewhat counter that, I was pleasantly surprised to learn of some twenty-something’s texting their same aged girlfriend, who got in on the cash for clunkers this weekend, and told her she was stealing the money from them and she shouldn’t do it. She didn’t listen, and was happy to have a five year loan – ugh.
Jeannie Queenie says:
August 22nd, 2009 at 12:43 am
“Cash for Clunkers has done in one week what ten months, handfuls of ‘czars’, hundreds of lawmakers, thousands of experts and billions of dollars have not yet been able to pull off”– that is for sure……it has pissed off untold numbers of car dealerships stuck with crap cars and no one coming across with the promised money for these guys, let alone guaranteeing that they will be reimbursed. Perhaps Amy sees great things in Detroit with the cash for clunkers program, but tisn’t that way across the country. All these folks eager to get that $4,500 should save that money for the day they lose their jobs, while crap and trade raises the price of gasoline to $4 a gallon and the heating oil this winter goes through the roof….that 4,500 might just come in handy. Between mortgage payments, car payments, gas and heating oil, that four grand might last two or possibly three months….that is, if one gets a pink slip…then what will the White house offer then?
Bruce says:
August 22nd, 2009 at 1:08 am
Yeh, she is no rocket scientist, thats for sure.
If she would invest a few hours on YouTube watching some of Milton Friedman’s videos, to borrow an expression Amy used in her own piece, “She would learn more about economics in a few hours, than she’s learned in all her adult life”…
To follow her absurd thinking to its logical conclusion, if this “cash for clunkers” is so great for the economy, then we should be setting up these programs for every product produced.
We should have programs where the federal government provides huge cash awards for trading in your old harvest gold refrigerator, your curved screen tv, your heavy, slow laptop, your ratty shag carpet, your old fashioned furniture, your rusted above ground pool, etc, etc.
These are all industries that deserve help. They all have laid off workers, shuttered factories, so they are entitled as well….in fact, why should anyone buy something without trading in the old item and getting a giant government cash award? Amy Airhead, can I count on your support?
Bruce says:
August 22nd, 2009 at 1:27 am
Right after I posted the above comments, I just happened to check out BusinessWeeks site…and what did I see? Cash For Clunker Refrigerators are coming soon! I kid you not. here’ the link:
http://www.businessweek.com/bwdaily/dnflash/content/aug2009/db20090821_304909.htm
Angrywhiteman says:
August 23rd, 2009 at 9:57 am
The gal is an artist, a white washer of pigs, a fool disguised by her own mind. Sadly, there are a great many more out there exactly like her, unpolarized thinkers, unable to see below the surface.
disinter says:
August 23rd, 2009 at 10:09 pm
Bruce – that is disturbing.
disinter says:
August 23rd, 2009 at 10:10 pm
Good lord, this supposed “libertarian” site censors comments?
Barf.
Amy Broglin-Peterson says:
September 17th, 2009 at 10:11 pm
Hey guys, it’s Amy. Yes, the airheaded white washer of pigs you so eloquently spoke of above. First of all, I am not a supporter of ‘Obamanomics’. You can thank many of your own Libertarian party for voting that clown into office. I would have waived my constitutional right to vote before I would have checked Obama’s name on my ballot. That aside, I appreciate your time and consideration in reading my column, and would like to thank you for stopping in. I am gratified that such an esteemed writer (blogger?) as Karen DeCoster would critique my writing using such big and important words and am touched indeed to have evoked such emotion as to be repetitively called ‘stupid’. Charming. Karen, I have a suggestion for you: find a new hobby. Surfing the web all day looking for people to bash because of their differing opinions from yours is likely a very unhealthy habit. Difference of opinion is what makes America a great country, and is what our society was built upon. Whether you agree with a person or not, getting personal based on a person’s biography is a pretty nasty thing to do. So I am a fan of the Big 3…why do you care? Here’s a suggestion for you from this inexperienced writer who uses words like ‘wow’ and ‘hey’ in her sentences – use your opponents’ arguments to strengthen your own side of the debate. Bashing me by quoting my article and saying how stupid it is makes you sound equally unintelligent. If you are macroeconomically superior, why not actually counter what I am saying with factual points that would perhaps explain just why I am so stupid? Finally, there is more to life than politics. Maybe you should step away from your computer once in awhile and find something in the world to smile about. Life is a little more pleasant when you allow yourself to be an airhead once in awhile. Oh, and I have seen Milton Friedman videos, several of them in fact. Not on YouTube. Great site…