Saturday, May 30, 2009

Goolsbee's moon is the budget

At the confab sponsored by Vanity Fair at Bloomberg's headquarters last night, Obama adviser Austin Goolsbee said this:

"My budget is from the moon, Jack is from Mars, Joe is from Venus (Jack Welch, Joe Stiglitz) “We enter the government essentially in a hotel that is on fire. We’re throwing people from the windows into the pool to save their lives and this is the evaluation of the Olympic diving committee: Well, the splash was too big...The fact that we are here to bitch about the economy and about this policy and that and the budget forecasts for GDP growth are 1 percent too low, I’m thrilled, I’m overjoyed that we aren’t all out of our jobs and we prevented the Great Depression. That in itself is an overwhelming accomplishment."

That was his response when Jack Welch had this to say:

But I would say that Austan’s budget is from the moon. His plan for the next five years can’t happen. His growth rate can’t happen. We’re deleveraging the growth.

Meredith Whitney had this to say:

Unfortunately, what the government has done has been buying time. The green shoots have successfully allowed - or the idea, the notion that there’re green shoots, that things are improving, which the numbers support they’re clearly not, and I’ll say that in a second. Banks have been able to raise capital, buy them time, but by raising capital, they’re delaying the inevitable...

Look at the responses from this august panel when they were asked this simple question.

Does the panel expect the rate of return on U.S. government bonds to outpace the weight of return on U.S. stocks over the next 5 to 10 years?

Here's their responses:

WHITNEY: It’s tough. If you had asked me a couple of months ago before the massive equity rally, it would be an easier question, which would be no. It’s tough now, because as the stocks broke loose, the national stocks reach tops grossly overvalued, and treasuries are over valued as well. I’m - can I be agnostic on this one?

SARKOZY: You know, it’s - it’s not a real area of expertise, but both assets are - it’s tough to make an investment case for either. I guess I - I would be into very short-term treasuries.

STIGLITZ: Economists are not very good at trying to predict those short-term movements in markets. We’d be richer if we were.

WELCH: I’ll pass on that one.

Not one person can recommend stocks over bonds?

From the panel of the "best and the brightest?"

No wonder the panel was called, "No Visibility Ahead: Predicting What’s Next"

Take stocks, and Goolsbee's moon over the panel!

Despite the bears attempts to end Obama's honeymoon!


Ray Errol Fox said...

What a treat, having just returned from two weeks in China and Taiwan, to read such a civilized, astutely-written blog! Bravo and thanks.

Palmoni said...

Ray--what a trip! Loved your Asimov story. Welcome home!

Ray Errol Fox / Son of the Cucumber King said...

Thanks. So good to be home--nothing like New York anywhere. I'm pleased you liked the Asimov story. Isaac got the biggest kick of anyone from a story about him. My eventual book will tell more.