Fed to Prop Up Economy

I guess propping up is better than no help at all. The Fed says it will prop up the economy, and things should be better in 2011:

JACKSON HOLE, Wyo. — The Federal Reserve chairman, Ben S. Bernanke, said Friday that the central bank was determined to prevent the economy from slipping into a cycle of falling prices, even as he emphasized that he believed growth would continue in the second half of the year, “albeit at a relatively modest pace.”

So things are looking up, unless you listen to people like James Howard Kunstler who say that we’ve peaked and the new normal is going to be scaled way back from the kind of luxuries we enjoy now.

KUNSTLER: The peak-oil problem means that we can no longer expect to run an economy based on never-ending growth, which means ultimately that we can’t service our debts at any level — personal, corporate, governmental. We’re comprehensively broke. The securitization of mortgages was one of the so-called products that allowed the financial industry to swell from around 8 percent of our economy thirty years ago to over 20 percent just before the crash of 2008.

The commercial-real-estate sector, which accessorizes the suburban-development pattern by providing strip malls and big-box stores near suburban neighborhoods, is now imploding, as well. Unfortunately in the last several decades we’ve gotten rid of our manufacturing economy and replaced it, not with a postindustrial economy or an information economy or any of these other bullshit economies we think we created, but with a suburban-sprawl-building economy. We built more suburban tract houses, more strip malls, more highways, and more chain stores. That system has now entered a state of terminal decline.

Sometimes it’s hard to know who to believe.

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4 thoughts on “Fed to Prop Up Economy

  1. Kunstler seems to make sense,but truthfully,if economists knew what they were talking about,we’d be doing better.
    Turns out Greenspan was wrong,as he admits-now we pay-people like him NEVER have to pay.Andrea Mitchell either because she is married to that old goat.

  2. The laws of physics says that you can’t have infinite growth, regardless of what the laws of economics says.
    No mention of the service sector, which will need to grow as the population ages. Eldercare not only provides service, it creates jobs and frees working families from having to choose between caring for their children and caring for their parents.

  3. It’s not that economists don’t know what they’re talking about. They do. The problem is that corporate-owned media will only present the views of wholly-owned subsidiary economists who will say the ‘correct’ thing. The ‘correct’ thing is to provides support for the corporate agenda that allows even more power to be concentrated in the hands of a few very wealthy individuals.

    Krugman, OTOH, is one of the few exceptions. So is Mark Thoma, at Economist’s View. Read both their sites early and often, and you will get a healthy dose of truth. These guys have been consistenly correct over the past 10 years. More than one can say about the corporate shills. And yet, it’s the latter that seem to get all the press attention.

    Why is that? (nudge-nudge, wink-wink)

    And, btw, read the piece in the 8/30 New Yorker about the Koch brothers. They have collectively-but secretly–given almost $200 Million dollars to finance Wrong-Wing causes. IOW, that’s more than George Soros, by a factor of 10. Then, add in the money from Murdoch, Scaife, Mellon, and Coors, and you realize that the wrong-wing propaganda machine is much, much, MUCH better financed than anything the left wing has going for it.

    If you can’t read that, read Frank Rich’s column in today’s NYT. Same info, shorter form.

    As for whom to believe, as a rule of thumb: whatever Beck and Rush and Boehner and Cantor and Bachmann and Palin, or most of what the MSM say, believe the opposite and you’ll be on pretty solid ground.

  4. I actually avoid reading any economic writers because I have simplified my economic life to go along with my lack of knowledge and interest in that subject.
    I don’t get in over my head on anything and I avoid any and all invitations to invest.
    If something is so great,why would someone I don’t know have the need to “get me in”on it?
    George Soros,in addition to putting a lot of money into left wing causes here(how much I wouldn’t know),has engaged in monetary manipulation that has had the effect of hurting a lot of ordinary people.
    Soros collaborated with the Nazis as a teenager against other Jews.(BARF)
    Soros has sparkplugged a UN initiative to eliminate private ownership of firearms under the camouflage of limiting arms trafficking.
    Of the people you demean,I’d say Cantor and Boehner have pretty good ideas.Palin is a motivator,but her depth of knowledge is questionable.Bachmann is weird,like Sharon Angle,but then there’s always a dangerous clown like Al Franken-we’re really losing the ability to differentiate between entertainment and the serious business of government.So if Bachmann balances out Franken,it’s not so bad.
    Rush and Beck are in it for the money,like Maddow and Olbermann.They’re just better at it.
    People are money driven or not.I have enough to provide for my family,but I don’t have any desire for trips to resorts,expensive cars,a boat,a vacation home,clothing to impress anyone,etc.
    I don’t live like a miser either.Money is there to be used.I came by every cent honestly and I’m just glad I’m old enough not to worry about a future career.
    If I can get a shirt for $6 at Walmart and it fits,what the hell do I care about the label?
    The need to impress others causes a lot of waste.
    I read an article in the NY Post about a 17 year old daughter of an ambassador who got drunk and was killed falling off a ledge.
    They discussed the club she’d been at where a table reservation was $600 and bottle service started at $400.WTF??I just can’t process that kind of waste.
    Didn’t the former governor of NY pay $4000 an hour for a call girl?He probably could’ve done better for 1/10th the price.
    Not a great pair of examples,I guess,but it shows the utter lack of restraint some people exihbit-there’s much worse,and it isn’t a particularly American trait-it’s worldwide.
    Interestingly,this over the top consumption does have the side effect of creating jobs.
    So who knows?

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