Friday, September 01, 2006

It's the Stupid Economy

131 It’s the Stupid Economy

Bill Clinton’s self-reminder during his presidential campaign years: “It’s the economy, stupid.” New warning for the rest of us: It’s the stupid economy.

Let’s clear this up first: Government statistics – any statistics – can be fudged, manipulated and bent any which-way.

Now that that’s clear, let’s clear THIS up: Economics is a pseudo science. It establishes premises and methodology based on nothing, assumes them as truth and goes on from there making its statements and predictions. They make the whole thing up. Then they debate among themselves which fake theories and calculations are true and which aren’t. These guys would be laughed out of high school biology.

Now that THOSE things are clear, let’s clear THIS up: Economic conditions are getting worse, no matter what the PhD axis is telling you.

Inflation is low. Costs are low and stable. That’s what they say. Footnote: excludes fuel and food.

That’s like going to the doctor and hearing, “you’re perfectly healthy except you have a brain tumor and your heart is beating irregularly.”

Don’t worry about a thing.

Big Charles of Florida had heart trouble once. He went to the doc and asked about a bypass operation. After some tests, the doc said “nah,” no way.

Charlie died maybe three months later. The “nah” didn’t mean “you don’t need one,” it meant “get one, it won’t do any good.”

Back to the economy.

There is no way to gauge it. There’s scarce little way to predict it. It is less precise than meteorology. But at least the weather guys admit that there are too many factors to be even 90 percent accurate.

Does that mean we shouldn’t try? No. Like the weather guys, the economists are sometimes right. Just don’t do any heavy betting on the outcomes of their predictions. The house always wins, just like in Vegas. Except there IS no house.

Economists are like the psychics in the supermarket tabloids. No one ever checks back to see how accurate they were. It’s a one-day story.

The really smart ones realize they’re mostly pulling scams and they hedge their bets.

You think Greenspan talked like that because his head was in the clouds and he’s so much smarter than the rest of us that we just can’t understand him? No. He talked that way so no one could say for sure what he meant. Try tealeaves. Designate values or directions, thus: Half a leaf signifies a major change in inflation or interest rates or wholesale prices or retail prices or wholesale inventories or anything you want.

Which way the change? Make it up. Then make up reasons to support your conclusion. Then make up supporting equations and statistics. You might win the Nobel Prize.

Here’s a link to the winners. Check it out. Nothing there makes a bit or sense. Or, if it does, it doesn’t take a PhD to figure it out.

http://almaz.com/nobel/economics/

We know prices can rise when something is in short supply and vice versa. But we also know that price increases and decreases don’t matter (see “Here Spike,” Wessay #118, for just one example.)

Other than that, we don’t know much, we just won’t admit it.

I'm Wes Richards, my opinions are my own, but you're welcome to them.

(c) 2006 WJR

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