My favorite analogy in describing the random, rudderless veering of the political and economic “minds” that bedevil us on the idiot’s lantern is Brownian motion—microscopic particles (the minds in question) in motion, suspended in gas. Peter Schiff likens the flurry to a “flock of pigeons that stays in tight formation, flies feverishly, while refusing to stick to any particular direction for very long”:
“Today’s weak GDP numbers have finally caused the mass of economists to revise downward their formerly optimistic recovery forecasts, with many finally entertaining the possibility of a ‘double dip’ recession. It should be obvious by now that these economists only have the capacity to describe where the economy is moving in the short-term…they have no ability to explain the reasons behind the macro trends or make predictions that go beyond the next data release. But economics is not dart throwing. It can be understood and properly forecast.
The major mental block is that most economists believe that an economy grows as a result of spending. Any policy that encourages spending and discourages savings and investment is considered beneficial. Unfortunately, these policies, which only succeed in growing debt and government, act more as an economic sedative than a stimulant.”
[SNIP]
What do you know, the geese described above have news: it’s all good. TIME magazine wants you to know: Rising unemployment is good.
The Department of Labor reported August job numbers on Friday, and the numbers appeared to be another bad sign for the recovery. The economy lost 54,000 positions in the last full month of summer. Worse, the unemployment rate rose for the first time in four months to 9.6%, from a rate of 9.5% the month before.
So is this jobs report the latest sign that we are headed for a double dip? Probably not. Actually it’s the opposite. Despite what it looks like, today’s jobs numbers are good news for the economy. Mark Zandi, a closely watched economist, had this to say on CNBC when the job report was announced, “It solidifies the idea the economic recovery is going to remain intact.”
For a moment I was worried (actually, I began to worry—and warned of hyperinflation—in 2003, when “W” began the deficit spending in earnest).
The fig leaf of a “jobless recovery” is being used a bit less, but substitutes are coming fast and furious.