I know a little bit about economics, but no one will ever mistake me for an economics genius. I do know that some economic ideas may, from time to time, be helpful in the short run under some circumstances but can be a disaster in the long term. This administration has taken the ideas of Keynes and Bernanke and turned them into long term policy. Short term, maybe. Long term, no.
For some reason, liberals think of John Maynard Keynes as a economics god. When they took over a faltering economy, over four years ago, they went full, pedal to the metal, Keynesian. They have taken deficit spending to the point that our country's indebtedness could bankrupt us. It will certainly do irreparable harm to the financial health of future generations. In other words, your grandkid's kids will still be paying for Obamanomics. And here we are four plus years down the line with no improvement.
But, you say, there is improvement. Just look at the stock market. I see the stock market just as well as anyone else. We just see different things. American companies are profitable right now so their stock represent a good purchase. They are profitable because they have downsized to the point of profitability, not because of a boom in business. Mutual funds and folks with serious money are buying stock because, right now, it's the only way to go.
The stock market is not about yesterday's performance, or today's. The market is about the future. Very rich people are making money in the market today because they have money to invest. Average people, not so much. Big investors also watch the market on a second by second basis. Joe Average, who checks the stock market when he gets home. Thinks about it for a day or two. Then makes a move will always be behind the curve. In this market, the rich are getting richer.
But there's more. Back on my February 15th blog I coined the phrase "Bernanke Bubble". I posited at the time that an economy that had artificially controlled, extremely low interest rates and was flooding the banks with newly printed dollars (which the banks are sitting on) is not sustainable in the long term. And when the bubble pops, the wheels might fall off. (I love a well mixed metaphor.)
If you haven't noticed, the stock market is getting a tad shaky of late. Rumors are hitting the street that Bernanke's out by midsummer. The future is on the way. Soon the profit taking starts. The short selling will begin. The bear will stroll in and bite the bull in the butt as it gallops out the door.
The worst part is that because of poor monetary policy, the weak economy that Obama took over has gotten weaker. It is not strong enough to rebound quickly from another hit. Those in charge have not the knowledge, skills, training, or experience to control the situation. It will probably be a very rocky road. And a very long road at that.