Saturday, November 15, 2008

Economics for Dummies

JUST BOUGHT  my first copy of Economics for Dummies and I'm all the way back to the glossary.  But I still don't see my fail-safe mutual funds showing any signs of good health.  I do, however,  have some advice for George  Bush as he meets with the global trade partners to update my new economics study guide.  The idea is not original with me, but it seemed to work when it was tried out by an old boss:  Plan the meeting with no chairs in the room so that everyone has to stand many  hours to resolve the problems and cut eons from the process.  It forces everyone to think harder than is normal for people in black suits, white shirts and wingtip shoes.  Sounds drastic, I know.  But what do they have to lose that hasn't already been lost?

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SO LONG as we're on the doleful  subject of the economy, why do the experts insist on telling us the things that we already know?   The script arrives every day from Washington via the media and I keep hoping that sometime soon somebody will flub his or her lines and invents a new way to teach old economists new tricks that doesn't include reducing interest rates to subatomic levels.  It is nothing more than psychological warfare with a very brief shelf life.  Even to an amateur like me, it doesn't seem to be working.  All of this came to mind when I noted this lift-out quote in the Beacon Journal from Sandra Pianalto, president and chief executive of the Federal Reserve in Cleveland.   Speaking to the Cleveland City Club, Ms Pianalto observed:

"The financial stress is raising the cost of credit, restricting the availability of  credit and inducing  cautious behavior by borrowers and lenders.  All of this is reducing spending by both businesses and  consumers."   


 She also said she has changed her earlier forecast of an "economic slowdown" to, from all appearances,  a recession.   I have felt for some time that we were dealing with semantics with the r-word here and the many people who are hurting today couldn't care less about the textbook terms offered by people who aren't hurting .  

Meantime,  although it won't help retail sales, I'm returning my copy of Economics for Dummies for a bailout.  

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