Monday, December 30, 2013
My letter to the Philadelphia Inquirer re: Mark Zandi ignores reality
Re: Good Times Ahead, by Mark Zandi
According to Mark Zandi, chief economist for Moody's Analytics, the only possible bump in the inevitable road to economic recovery in 2014 is another threatened government shutdown. Mr. Zandi, like all good Keynesians, sees increased spending by consumers as the road to recovery. And consumers are more likely to spend if the spigot of federal dollars, created out of thin air when the Fed "purchases" government's trillion dollar per year debt, remains wide open. He is unconcerned about the risk of hyperinflation or the dislocations caused to the capital structure of production as businesses are enticed by low, manipulated interest rates to begin expansions for which there are insufficient resources for profitable completion. Mr. Zandi has no theory of economics more sophisticated than that of a child who demands a bigger allowance from his father. Like a child he does not care where the money comes from or how it is spent. For Mr. Zandi, spending alone is the key and savers are completely unnecessary. How anyone can believe this nonsense is beyond me.