Sunday, May 3, 2009
More from the argumentum ad populum crowd
Another deflationista opines--We are all Japan! Another wrong but popular belief!
The Fed and the Obama administration are playing a dangerous game. The Fed is going to print trillions of dollars to forestall deflation and try to re-ignite the economy. But for a variety of reasons we will go into next week, a real, sustainable recovery may be a few years away. What happens when the market start balking at high and unsustainable national deficits? What happens when inflation (finally) does return? Can the Fed remain independent and take back the money it is printing in the face of what will likely be a tepid recovery? And if they don't, what happens to the dollar? Next year, we will be entering what will certainly be the most dangerous era in my lifetime for the US economy. It is not clear what will happen. There are a lot of paths that can be taken, though some are more likely than others. For those who are convinced that high inflation and a falling dollar are absolutely, unequivocally in the future I have just one word: Japan.
And then his comments on Chrysler:
If the Obama administration arbitrarily changes those rules to favor a political class (unions), then that is going to have a chilling effect on future lending to all corporations.
Beware of arguments that start with Japan or those with a chilling effect! Think of all those times you have heard the words "chilling effect" from the right or the left with regard to the Bush Administration.
Did any of those instances amount to more than a hill of beans?
It's not any different with market punditry!
And it sure hasn't had a chilling effect on the freedom of speech of these doomsdayers and their predictions!
Last week, we were warned about the $4 trillion from the coming "Aporkalypse" or "Hamageddon" because of the swine flu!
This week we have "chilling effect" and "Japan."
Sell your story to someone else!
Now didn't 50 Cent make an album called, "Get Rich or Die Tryin'?"
And didn't the WSJ have this article entitled "Slacker Nation" about Japan?
In a country once proud of its success-driven "salarymen," managers are grappling with a new phenomenon: Many young workers are shunning choice promotions -- even forgoing raises -- in favor of humdrum jobs with minimal responsibilities. Even as Japan faces a sharp recession, civil servants are opting out of career-advancing exams and information-technology workers are flocking to headhunters to switch to less-demanding careers. A study this year by the consulting firm Towers Perrin found just 3% of Japanese workers say they're putting their full effort into their jobs -- the lowest of 18 countries surveyed.
So now Japan and the US are the same?
If you want a simplistic argument, I'll give it to you. The only difference is, this is from the real world instead of academia. Which means, it actually works!
The other day, I stopped in the neighborhood Kmart to get something for the house, and as I was walking by the shoe department, I heard this guy say, "I'm tired of these no brand shoes. I'm going to get something with a name on it."
The return of the aspirational shopper!
As Fifty said:
I wear Throwback jerseys, and you wear Starter's!
Maybe the deflationists forgot we have a new player in the house!
That may have a chilling effect on their portfolios!
Posted by Palmoni at 8:12 AM