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Update: Time to play “Where’s My Porkulus Money?

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While the Porkulus Package being shoved by Obama and congress-critters is predicated on fear, loathing, and hysteria, let’s try to get some perspective.

No one is denying that the financial situation is not bad or that the job situation is not a rather harsh toke.

But to go and do everything, even anything, based on emotional assumptions not rooted in fact is kind of dangerous.

Look at the Unemployment Rate:

unemployment-vs-year-1948-2008

click to embiggen

It is safe to say that 4% unemployment is always there.  These are people who are laid off through normal influences, fired, had to leave for reasons out of their control, and those who just couldn’t be employed if you threw jobs at them.

Unemployment is now at 7.6%.  In the 70’s and 80’s it was at 9% and almost 11% respectively.  It’s been over 7% six times since 1948.  Go to the source on the graph and look at the key historical events they’ve noted and look at the relationships.

Inflation rates:

click to embiggen

click to embiggen

We’re actually seeing it go down.  Which (1) has it’s own problems, and (2) means that our gov’t just might be stupid enough to print vast scads of money to offset it and to get more money “out there”.  This would be bad.  Very very bad.

Far better to treat this as a market adjustment and stop trying to fix everything by using methods that might make it worse by driving inflation up very rapidly.

Just trying to put this all in perspective.  Just like antivirus companies have it in their best interest to make you concerned about the horrible dangers around every corner, so too do economists and reporters have a built-in bias to add to any assessment of the economy.  Here’s a great example of fearmongering that actually acts as a sh*t-multiplier:

Bill Gross, co-chief investment officer of Pacific Investment Management Co., said the U.S. may slump into a “mini depression” unless policy makers spend trillions of dollars to spur growth.  – Bloomberg.com

Yeah, that’s real helpful guys, and you could do it all in the name of “public service” and feel good about yourselves.  I’m not saying suppress the news, just make sure people realize that this is a guy’s opinion not fact.  The key word there was “may“, and you also need to understand why he said that, what his motivation is – of course he wants more money freed up… for him and his ilk.  But by scaring people you will cause them to be even more cautious and thus locking up more money.  We’ve already seen how “helping the credit markets” has done precious damn little down here on earth – it has allowed the companies themselves to pad themselves, not really free up money to be loaned.

Here’s another example of why I believe panic is… bad.

CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing. – WA Times

For more fun, find Dick Morris and read his piece on why throwing money out there just isn’t going to work – it’s too simplistic.  Keynsian  Fallacy.

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Poor Obama.  He’s found out that when you’re not being worshipped continually doing work worthy of being commended for is… work… and it ain’t easy.  Notice how the media isn’t throwing softballs nearly as much?

Obama bemoans: Everyone’s an economist
Feb 6 12:22 PM US/Eastern

Comments (23)
WASHINGTON (AP) – President Barack Obama says in Washington these days, everyone’s an economist—or thinks they are.

Obama introduced a team of outside economic advisers Friday at a White House ceremony in which he also renewed his demand that Congress act quickly on his economic recovery package.

As the country struggles with the worst financial crisis since the Great Depression, Obama said there has been no shortage of advice on how to solve the nation’s woes.

“You’ve got some economists and some folks who think they’re economists. By the way, these days everybody thinks they’re economists,” he joked.

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For a bit of comic relief, go check out a blog devoted to… Cake Wrecks.

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