The guy says "most economists are predicting a recession". Then
he goes on to claim that the last few recessions we've had aren't
"real recessions"; that 72-74 was the last real one. (I find it
hard to see how one can refrain from calling the early 80's
anything but a major recession, with unemployment around 10%, from
memory.) But, "most economists" aren't predicting a '72-74,
so it's a bit disingenuous to cite their predictions of recession,
then use *his* definition of recesssion. Like MB, I don't buy
the idea that the increase in services (which are less likely to be
traded) increases our vulnerability to the worldwide contractionary
forces. Trade as % of GNP is about the same as it was late in the
Carter administration, so the globalization arguments must have
something else in mind, perhaps capital markets...
Maybe the worries about credit expansion, bubble bursting, etc... are
well-placed but this article doesn't do much for their credibility,
since they're mixed with so much questionable stuff.
Lots of people, when it comes to economics (and plenty of
other things, actually), tend to
believe theories that "sound plausible" and bolster conclusions
they want to come to. (Like, that this bubble's going to pop,
with Biblical consequences for the corrupted people who participated
in it. Or, that deficits are destroying our economy, because they
hate Ron Reagan, and he brought us big deficits.) I know I have a bit of that tendency; I try to resist it. It ain't science, and it ain't going to make us any money, either, except by accident.
That's why I trust someone like Krugman (or MB, for that matter)
more than these gold-eagle
guys. You read their stuff, they says things that may be wrong, but
for the most part no obvious BS.
Cheers,
HB |
