Tag: David Stockman

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Accountability folly free trade & free markets ideological culture media and media people national politics & policies

Next Bubble to Pop?

bubble, Paul Krugman, recession, student loans, debt, folly, David Stockman

There was a great and wondrous moment, a decade and a half ago, when economist Paul Krugman, Nobel Laureate and New York Times’s unregistered shill for the Democratic Party, suggested that what the economy really needed was another housing bubble.

What he wrote, specifically, was this: “To fight this recession, the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

Krugman later reinterpreted that statement in a clever (if not convincingly honest) way. After the subprime loan industry collapsed in 2008, he attributed that bust to financial market malfeasance, not the Fed-inflated bubble we got . . . and that he had previously called for.

Now we are looking at several ready-to-burst bubbles:

  • The student loan debt problem seems scary.
  • The sovereign debt problem is undoubtedly more dangerous and far larger, but is perhaps still able to take on more fake money — all the world’s 1s and 0s have to go somewhere!
  • So the current bets seem to be on a huge auto loan industry bubble, about to pop.

Loan terms have increased in duration, and the average amount new car buyers are financing has jumped over 17 percent in five years. The idea has been “to continually lower monthly payments,” says David Stockman, “so people can get behind the wheels of vehicles they can’t really afford.”*

Which bubble does Krugman favor? I don’t have the stomach to check.

But, be certain, as we play pop goes the bubble, he’ll play pop goes the weasel.

This is Common Sense. I’m Paul Jacob.

 

* Stockman seems to be echoing warnings made by Eric Peters, of Eric Peters Autos.

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Accountability free trade & free markets

The Fed Feeds a Scam

D. Stockman

Real and effective “anti-establishment” ideas come from unexpected places. That is, they are unexpected if you read only the dominant media and its insider sources, or follow politics only during the quadrennial presidential farce.

Quite a few news junkies would be surprised at David Stockman’s critique of current Federal Reserve behavior and policy, for example. In “Why Ronald Reagan Is Rolling In His Grave: The Keynesian Putsch At The Fed,” he charges the central bank with having managed “an economic coup d’etat” by engaging in an ongoing wealth redistribution scam — shoveling wealth to the rich.

Stockman sees the confidence of Fed Chair Yellen’s macro-policy micromanagement agenda as a scary case of hubris, of self-appointed effrontery. “Yellen & Co believe they are in charge of virtually everything on the main street economy . . . based on nothing more than their own subjective and unexplained wisdom.”

Stockman is in high form, here. Yellen’s latest pronouncement, he says, is “unaltered Keynesian claptrap. It is the arrogant over-reach of a model-obsessed academic zealot who has no respect whatsoever for the real main street economy and for the historically proven truth that free markets are the best route to prosperity and higher living standards for the people. . . .”

Her policies, he claims, amount to “‘trickle down’ economics with malice of forethought.”

Does that sound Bernie Sanderish to you? It shouldn’t.

The case for limited government and against the Fed (and federal government management in general) are that it is modern unlimited government that serves the few at the expense of the many. Stockman is just restating very old wisdom.

Remind your Occupier friends of this. They are on the wrong team.

This is Common Sense. I’m Paul Jacob.

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D. Stockman