Maybe I CAN Write for Bloomberg

Bloomberg's Caroline Baum in a recent column titled Economy's I-Told-You-So Naysayers Hold a Reunion is clearly in need of some factual content review and correction.  The column is proof positive of the continued failure in what passes for economic reporting that was complicit in the financial fraud pulled on economy and its citizens in 2008.  

Baum begins her puppeted piece by regurgitating the same old failed assumptions, "Higher interest rates, burdensome taxation, and intrusive rules and regulations all act to slow growth."  Not only were these reasons at their lowest historical levels or the least "burdensome" on economic activity in the run up to the recession.  They are still the primary culprits for continued sluggish growth as a result of commodity speculation, threats to government insolvency and continually poor regulation.  No mention of a few that actually do impact economic growth and are the primary causes for a continually sluggish recovery such as insufficient aggregate demand(see housing), financial uncertainty(see Greece, Ireland and US states), high levels of unemployment, cost push inflation(Oil Prices), excessive consumer debt and low wage inflation.   

The column continues as an episode in revisionism so let's pick it up. Citing Say's Law, the idea that supply creates its own demand, Baum conveniently uses the Iphone as proof of its validity. 

I should have known to stop but then she continues with "The expiration of the Bush tax cuts at the end of 2012 is also stifling business." Really, first of all they were just extended plus their expiration in 2012 will no doubt be an election issue so of course they will get extended again.  So I wonder, where is the proof in that statement.  I challenge her or anyone else to provide proof of their validity from a policy perspective that the voodoo of trickle down economics offered any more help to the economy than it did during the Reagan presidency. We do know one thing about them if reversed they would wipe out the "US debt crisis".  

Meanwhile she takes cheap shots at car and home incentive plans absent any mention of tax incentives that allow companies to write off capital expenditure with the same net effect of bringing forward spending.  The next bogeyman, malinvestment, clearly continues to be an issue, however, you would have been hard pressed to find anyone with an Austrian bent to tell you that policy makers had a responsibility or role to step in when housing was clearly in a bubble.  Never mind other areas of malinvestment that continue to flog consumers like excessive healthcare expenditures or commodity speculation.

I wish it were over folks. But Baum is acting consistent with the mantra don't let any poor economic news pass without passing off all your broken dogma.  Continuing with taxes,"Reducing the payroll tax on employees may generate more spending, but cutting it for employers -- something now being considered -- might actually create a few jobs." No they won't. They will serve as an opportunity to bump up earnings and share prices, sprinkle in a stock buy back,addition cash reserves or M&A activity.  This argument in light of the actual experience of the economy is so contrary to reality it baffles the mind to think "informed" Bloomberg writers and editors would allow it to be published. Businesses aren't going to produce if they don't have demand for their products.

Then literally the next paragraph, "All the Fed’s quantitative easing hasn’t translated into broad money supply growth, because banks are holding onto excess reserves and corporations are sitting on cash."  But I thought corporations needed more tax breaks so they could "actually create a few jobs".  The Fed is doing the only thing it can do, incease money supply in the face of excess capacity, or well actually in the case of the QE's in coordination with Treasury purchases keep rates low to allow for easier returns on capital.  What would you have the Fed do?  Nominal spending targets  good luck getting that through Congress or more accurately past lobbyists.

Finally, fittingly, without an adequate conclusion more final random thoughts on supply chain disruptions and an impaired Medicare.  And this deep thought "The last thing we need is for Washington to refocus on “improving” and take its eye off “impaired.” 

Incredibly, business and economic journalism still hasn't learned from or changed their ways in the face of the crisis.  I don't know why I bother to read these "expert" opinions since they are always without merit instead serving as the mouthpiece for capital at the expense of society while continually failing to provide for meaningful perspective.  Maybe some day you too can write for Bloomberg.