-- Posted Wednesday, 23 September 2009 | Digg This Article
| | Source: GoldSeek.com
Rick’s Picks
Wednesday, September 23, 2009
“Phenomenally accurate forecasts”
Our memory stumbles whenever we try to recall any recent sightings of “green shoots” that would support the officially promoted illusion of a U.S. economy in recovery. Actually, this vision is more of a hallucination than an illusion, since one’s mind needs to venture beyond the pale of rationality, light years beyond the fringe of statistical evidence, to conjure up supposed signs of sustainable growth. Does “recovery” square with the reality that you, personally, see all around you? Indeed, whatever picture the government and the news media want us to see will be unconvincing at best, since a hundred million Americans are each day living the anecdotal evidence that flatly contradicts what we are being told. How many of the 50 million homeowners who are underwater on their mortgages, for instance, jumped for joy when it was reported yesterday that home prices in the U.S. rose 0.3% in August? Optimists would say it’s the trend that matters, but realists would point out that at that rate, it will take a decade for prices merely to return to where they were before the housing market collapsed.
Someone in the Rick’s Picks forum said the news media were in cahoots with the government to sell us on the idea that America’s worst downturn since the 1930s had ended. Speaking as a former newspaper reporter and editor myself, I have a more boring theory -- that journalists are simply too lazy intellectually to pursue a story line that doesn’t perfectly fit the Administration’s script. With some cursory background reading in Econ 101, they could nail Greenspan and Bernanke to the wall for their lies and sometimes startling economic ignorance. But that would be a far more difficult story to write than the ones that flow so easily from The Government’s press releases and speeches. Journalists’ other big problem is that 95% of them are hard-core liberals for whom Big Government, warts and all, will always be the answer.
Bastiat’s Parable
Many of the reporters I’ve know have been very intelligent, but where economics is concerned, they seem incapable of understanding Frederic Bastiat’s so-called broken window fallacy. Bastiat’s parable, written in 1850, describes (from Wikipedia) “a shopkeeper whose window is broken by a little boy. Everyone sympathizes with the man whose window was broken, but pretty soon they start to suggest that the broken window makes work for the glazier, who will then buy bread, benefiting the baker, who will then buy shoes, benefiting the cobbler, etc. Finally, the onlookers conclude that the little boy was not guilty of vandalism; instead he was a public benefactor, creating economic benefits for everyone in town.”
And so it is for all those who continue to see Government as America’s economic benefactor, nay savior. Would someone please explain to such as the New York Times, the Wall Street Journal, and other zealous purveyors of green shoots where, exactly, the fallacy lies.
***
Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not b construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Wednesday, 23 September 2009 | Digg This Article | Source: GoldSeek.com
