Saturday, August 14, 2010
The Same Old Tired Song
But, not to be outdone, ole’ Larry’s finest moment came in a subsequent “op-ed” for Chip Hanlon’s mouth piece Greenfaucet, called, “The Fed Can Print More Money, But It Can’t Print More Jobs.” And guess who his prime culprit is in this piece? Yep, you guessed it, The Fed. Seems the only thing more vilified than liberals these days in the eyes of staunch conservatives is the Federal Reserve. When they’re not on their high horse advising investors to buy, buy, buy gold, then they’re railing against the Fed and calling for its abolishment.
Kudlow’s main beef? There’s plenty of money already in the system, so why did the Fed, in its monthly FOMC statement, abandon its money tightening policy by reinvesting the proceeds of mortgage bonds into treasuries? Unless, of course, it plans on “monetizing more Treasury debt and expanding the balance sheet to print money.” So why is that a problem? Because in that event, “the dollar will depreciate more and gold will rise more. A lot more.”
Funny, I would’ve thought that a supply-side, gold standard guru like Kudlow would welcome a depreciating dollar and a rise in gold prices. But seriously, this is just another example of Kudlow and his ilk missing the point. The issue isn’t how much money is “in the system.” The issue is how to get it moving. While I agree that merely printing more money isn’t in and of itself going to get the gears moving, tightening the supply of money sure isn’t going to do it either.
The trick is to get the money from A to B to C. To hear Kudlow tell it, the recovery is being held up by the “tax-and-regulatory threats and anti-business attitude coming out of Washington.” Oh, I see. It isn’t the actual tax policy, but the threat of one, along with that poor anti-business attitude, that is preventing all those entrepreneurs from jump-starting the greatest economic engine in the history of mankind. All you had to do was explain it to us. Now we understand. You see it’s really quite simple. Corporations won’t invest if they feel that all those bureaucrats in Washington don’t like them. And we all know from experience how sensitive they are to public opinion.
Come on Larry, give it a rest. This old “The stimulus was a bust and all we have to do is tighten our belts and get our financial house in order” line is getting a little long in the tooth, even for you. The real reason for your angst is that you and your Wall Street cronies don’t want the Bush tax cuts to expire. Well you can’t have your cake and eat it too. You want fiscal discipline in Washington? Fine, eliminate the greatest contribution to the deficit in over a decade and practice what you preach. Don’t whine about deficit spending out of one side of your mouth, while defending the single most fiscally irresponsible act out the other.
For once in your life stop being an ass and admit the obvious. Supply economics has never worked. And not because rich people don’t invest the extra money they get from the government, but because the Treasury never recoups in receipts what it loses on the damn tax reductions. Any child with a calculator can figure that out. But then a child would have enough sense not to tell its parents to drive full speed ahead towards a cliff.