Torn between two economic lovers.

In economic terms I consider Paul Krugman my wife. The steady and sure unapologetic liberal with the Nobel prize around his neck. He hails from my home country- The New Deal - and I trust his gut like I trust few others.

However, in my own midlife political crisis I have, of late, taken an economic mistress...one vibrant and cocksure bloke named Peter Schiff. A man utterly convinced that monstrous inflation is right around the corner. To hear Schiff is - it seems - to hear common sense. Of course all this dollar printing is going to cause inflation...

Then Krugman mentions in his steady, unpretentious way, that it looks like deflation is coming. I don't understand the details but Krugman does - and I trust him...too...

Inflation?
Deflation?
Which to pick?

Lunch Break

Moon over Obama: Wrong Wright replaced by Sun Moon?

Sock in it: Every time the Obama Admin makes a statement or reveals a plan the market sheds value. Are they trying to make it worse?

Tough calls: Tomato/Tomahto, Serena/Sabrina, Obama/Reality, Serena/Venus, Inflation/Deflation.

Cartman says: I am seriously! Look south, my friends. That civil war you see in the rear view is closer than it appears.

Future Shock: I want to live in Chimerica!

Music:





Quote: Bill S. speaks about the phenomenon of throwing people under the bus:

But 'tis a common proof
That lowliness is young ambition's ladder,
Whereto the climber upward turns his face;
But when he once attains the upmost round,
He then unto the ladder turns his back,
Looks in the clouds, scorning the base degrees
By which he did ascend.

- William Shakespeare, Julius Caesar
(Brutus at II, i)

The last bubble?

If anyone can explain to me (feel free to pretend I am a fifth grader) how spending a trillion dollars that does not exist will result in anything but hyperinflation - I would greatly appreciate it. The stimulus/debt bill is being pushed as essential. It may be. I just don't understand how printing or borrowing cash on that scale does not have a major downside.

The cash creates jobs, the workers then spend the earnings, which employs other workers. Good so far.

But the original money came from someone...right? It either came from future Americans or current foreigners...right? Will they require pay back? Or not? Do we have any real obligation regarding this conjured cash? Are there consequences?

I know I am a simpleton on this point. But are we not simply choosing inflation over deflation? I wonder if this is the better bitter pill. I think it is, but I'm nowhere near certain. What bothers me is what appears to be the guiding assumption that we must endeavor to recreate the alleged wealth of days gone by. "Recovery" equates to 1998. Is this a good goal?

We may not need to "downsize" but we do need to "re size". To live in reality. Cheney once quipped that "the American way of life was not negotiable."

Wrong again, Dick.

We either negotiate our "way of life" now, with eyes open, or reality will set the terms.

I am instinctively in favor of Mr. Obama's massive debt bill. I am also clear that it appears to be a gigantic band-aid and not a cure.

Abandon smope all ye who enter here.

The miserable have no other medicine But only hope.

William Shakespeare
Measure for Measure
Act 3 Scene 1

Economics baffle me. I operate on the gut check methodology. Are things in the economy bad but salvageable, or much worse then we imagine?

My gut is going with the latter. It is burbling one sentence every time I tune in: We are in for a sh**storm in the next few years. I've been in a purge and cutback mode for a few months. It appears that many others are as well. In fact, the entire nation is engulfed in the cutback gestalt.
After a few months of being startled with price hikes at the supermarkets where I hunt and gather - I've noticed that prices are now falling again. Wish I thought this was good news. It should be but.... Lower prices also raise the threat of deflation, a prolonged bout of falling prices that hasn't been seen in the U.S. since the Great Depression of the 1930s.

Though I don't understand economics anymore than I understand meerkat social behavior - I've observed overtime that economic "experts" don't know much either. The so called seers are those who are first to yell out what is in the immediate past and claim it as wisdom. 8 months ago inflation was all the rage - now deflation is in vogue. Are many in the middle class about to join the "former middle class" class?

So much is changing. As a Californian I hesitate to use the "ground is shifting under our feet" metaphor - but it feels true. We were told 9/11 "changed America forever" - after a few months we were back to our media diet of celebrities behaving badly and 'catastrophe' du jour nonsense. Even the wars lapsed into events that were happening elsewhere, to other people.

And irony - reportedly killed on September 11, 2001 - was revived and made normative. So normal in fact that by 2007 many millions were desperate to jump off the Irony Express and indulge in some credulity and false, but charming, naivete, going from "everything is ironic" to "Got Hope?" one afternoon over diet coke and Oprah. Happily, hope came dressed as a smart black man so everyone could mix in a liberal pinch of smug to smooth their transition backward from spoiled adolescents to idiot - uh, i mean innocent - children.

(Should we call this hybrid Obama induced state of being that combines hope and smug "smope" or "hug"??? GOT SMOPE?! KEEP SMOPE ALIVE!)

Of course, both lazy irony and false hope are mostly just the ego defending itself against mean truths and adult responsibility - as any dime store therapist will tell you.

Nevertheless, nothing will sober up a population drunk on cheetos, Dancing with the Stars, and smope quite like LACK.

So if we are headed into a Greater Depression is there any collective wisdom left to help this democracy through? The social contract of the 1930s seems D.O.A. in 2008 America. Studied stupidity and entitled helplessness are now as "American" as "We holds these truth to be self evident..." More so actually.
How will we respond to a new Depression? I am not hopeful. (or smopeful). But I am not hopeless, either.

Still, at some point we became a willfully stupid society. We revel in it. Stupid people cornered do all sorts of unfortunate things.

Some morning music to suit the mood

"they used to tell me I was building a dream so I followed the mob..."