Archive for August 6th, 2010

Romer’s Legacy: “Spend a trillion and unemployment will stay under 8%”

August 6, 2010

Which metaphor applies ?

Was she thrown under the bus or did she jump off the ship?

Romer’s history of academic research concluded that Keynesian fiscal stimulus doesn’t work.

Then, she drank the kool-aid and shilled for Obama’s trillion dollar faux-stimulus spending spree.

She seemed smart enough and sincere enough, that one had to think that she was dying of hypocrisy on the inside.

Now, after a short 18 months as Obama’s chief economic spokesperson, Romer woke up and realized that her youngest child was going to start high school, so she needed to move back to California,

Yeah, right.

If she didn’t see that one coming 18 months ago, how could she possibly forecast the economy?

I feel for the lady. 

She’ll end up being remembered for her 8% promise — which will go down in the history books next to “Mission Accomplished”.

If only she had maintained her academic integrity …

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Excerpted from WAJ: Romer to Resign as Obama Adviser,  August 6, 2010

Christina Romer said she would resign as chairman of President Barack Obama’s Council of Economic Advisers to return to her teaching post at the University of California at Berkeley, effective Sept. 3.

Ms. Romer is the second member of Mr. Obama’s economic team to leave.

White House budget director Peter Orszag left earlier this summer.

She said she is returning to California so the youngest of her three children can begin high school there.

Among her challenges was explaining why her prediction that the Obama-backed fiscal stimulus would keep the unemployment rate below 8% proved overly optimistic. The unemployment rate is now at 9.5%.

Ms. Romer’s academic work focused, among other things, on the causes of and recovery from the Great Depression and the impact of monetary, spending and tax policy on the economy.

Her 19 months in Washington has confirmed some of her prior beliefs …

Full article:
http://online.wsj.com/article/SB10001424052748704657504575411973910324964.html?mod=WSJ_hps_SECONDTopStories

Posted in Economics, Financial Crisis | Leave a Comment »

Geithner declares Mission Accomplished: “Welcome to the Recovery”

August 6, 2010

Well, Treasury Secretary Tim Geithner did it. He declared Mission Accomplished.

In a New York Times op-ed, titled Welcome to the Recovery, he argues that the Administration’s economic plan is working — even better than expected.

“Recent data on the American economy shows that we are on a path back to growth.”

Among his points:

“From the start, President Obama made clear that recovery from a crisis of this magnitude would not come quickly”

Ken’s Note: Well actually, the president said that the almost $1 trillion in stimulus money would be quickly deployed to shovel ready projects that would keep the unemployment rate under 8%. As everybody knows, it has been hovering just shy of double digits.

“The new data show that this recession was even deeper than previously estimated.”

English translation: Our initial analysis was deeply flawed, but you can trust that we’ve got this sucker figured out now. Don’t judge us based on our track record.

“We  expect the unemployment rate to go up before it goes down.”

Ken’s Note: How much recovery can we stand?

“The economic collapse drove tax revenue down, pushing the annual deficit up to $1.3 trillion by last January.”

Ken’s Note: Who could ever have imagined that lower aggregate income would generate less tax revenue

“It would be irresponsible to continue the Bush tax cuts for the wealthy.”

English translation: Let’s defy all empirical evidence and see what happens when you raise taxes during a recession.

Kens Note: I love it when a guy who was caught cheating on his taxes lectures on taxpaying responsibility.

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I don’t know about you, but I slept well last night…

NY Times, Welcome to the Recovery, August 2, 2010
http://www.nytimes.com/2010/08/03/opinion/03geithner.html?_r=1&ref=opinion

Posted in Economics, Financial Services & Crises | Leave a Comment »

In this economy, even counterfeiters are trading down …

August 6, 2010

Punch Line: It used to be that flashy names like Rolex were the ones susceptible to counterfeiting. 

Now, there’s more money in downscale brands …

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Excerpted from NY Times: Even Cheaper Knockoffs, Jul 31,2010

After years of knocking off luxury products like $2,800 Louis Vuitton handbags, criminals are discovering there is money to be made in faking the more ordinary — like $295 Kooba bags and $140 Ugg boots.

In California, the authorities recently seized a shipment of counterfeit Angel Soft toilet paper.

The shift in the counterfeiting industry plays to recession-weary customers looking for downmarket deals.

Knockoffs of lesser-known brands, which are easy to sell on the Internet, can be priced higher than obvious fakes, and avoid the aggressive programs by the big luxury brands to protect their labels, retail companies and customs enforcement officials say.

“If it’s making money over here in the U.S., it’s going to be reverse-engineered or made overseas.”

The lesson for many counterfeiters has been that they have a better chance of getting away with it if they copy smaller brands and market them on the Internet.

Posted in Mktg - Brands | Leave a Comment »