My Savior! Tim Geithner!

Hallelujah!

 

I wake up this morning this Sunday morning. I grab my paper and my breakfast and turn on the TV, which is still on the “All Barack Channel” from last nights football game.

 

A group of people were discussing how great the spending on “Black Friday” was due to the appointment of Tim Geithner as Treasury Secretary.

 

Hallelujah!

 

The Dow is up 17% since the blessed appointment was announced!

 

Geithner is our Savior!

 

All hail the wisdom of our exalted Present-Elect on his selection.

 

I promptly changed the channel.

 

I know the main stream media loves simple superficial cause and effect analysis that supports their political leanings. They love to say, “well, these two things happened around the same time, so they must be related.” And then leave it at that.

Of course, if you say the Dow dropped over 20% after Barack Obama’s election, well that can’t be related. I would have to agree with them on that, but for different reasons.

 

All good is because of Obama, all bad is because of Bush. This headline could uniformly be applied to almost any story published by the Associated Press. Investigative reporting has seemingly perished in our society.

 

But back to “Black Friday”

 

What would happen if these people did some real reporting. They actually went out to figure out why the things that are happening are happening.

 

They have one fact, people were spending more than expected.

 

The natural question to ask would be “Why?”

 

The natural assumption would not be “Because the appointment of non-elected government bureaucrat yet to take office has been announced.”

 

What would happen if the reporters went out to the malls and the big-box retailers and asked the people there why they were shopping?

 

What response would they most likely get is they asked the question, “Are you here shopping because the appointment of Tim Geithner?”

 

I have to make an assumption here, but I would be willing to put money down saying 90% of the people would respond with “Who the (explicative) is Tim Geithner?” and that would probably be followed by a “Get the (explicative) out my way, you’re blocking the good deals!”

 

 

 

 

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6 Responses to My Savior! Tim Geithner!

  1. Don Tabor says:

    Relax.

    Belief in “Cults of Personality” is one of the ways socialists destroy themselves.

    Its part of the process.

  2. Len Rothman says:

    The question is not how well the Dow is doing, the important thing is how the labor market is doing. 1.2 million jobs lost in the first 10 months of the 2008 is not a good indicator of the health of our economy. And of course, before that, when the dot com bust came, the jobs shifted from high tech to waiters and retail clerks. Our economy is 70% retail. If folks don’t make good incomes, they don’t increase our GDP. Simple economics.

  3. Don Tabor says:

    If there is a shift from hi-tech manufacturing jobs to service and retail sector jobs, that is indeed grim.

    But manufacturing jobs require capital investment. You just mandate them into existence, nor can you prevent their export by punishing companies that can’t compete with foreign competitors.

    Capital investment comes from letting people keep income above what they need to get by and pay off debts,and that capital remains in this country only if we allow a good return on that investment.

    So, I assume you will be advocating lower taxes for the investing class and reductions in corporate and capital gains taxation in order to fix the problem.

  4. Len Rothman says:

    Since we are all invested in the stock market, we are all part of the investing class. And, somehow,we managed to find a lot of money for investment in the 50’s when the top rates were over 90%. If a product or service is profitable, people will find a way to invest, taxes or no taxes. Now a reduction in corporate taxes might make sense if the loopholes are removed.

  5. Rich Roberts says:

    I agree the question is not how well the Dow is doing.

    The media likes to throw it out there like it does. Well, I guess it does if you invest in any of those 30 companies, but it isn’t an idicator of the economy.

    Consumers spent much more on “black friday” than was expected. I figure this was because of the discounting, I would be suprised if the increased spending persists. I simply don’t think Mr. Geithner is the reason for the better than expected spending and I find it comical that the media suggests that he was.

    Yes, the lost jobs has been staggering and the econmy continues to suffer.

    But you can’t just say that folks need to make good incomes to increase our GDP, since 70% of GDP is retail. The economics aren’t that simple.

    There is a difference in money and wealth. I can increase GDP by simply increasing the money supply. There doesn’t have to be any increases in production or productivity.

    Argentinia and Zimbabwae are pulling that very trick off right now. It isn’t working out so hot for them, just like it didn’t do well for the Germans back in the ’20s. I’m pretty sure it won’t work out well for us either if we keep trying to head down that route.

    Since agree that more jobs, and more production in the US would be a good thing, how about dropping the corporate income tax. Preferably to zero, but no longer having the second highest rate in the world would be a good start. You would see less fleeing of businesses trying to escape our tax code. You would see captial investment in the US because it would be profitable to do so. Capitial investment that converts into real production, real wealth, and yes, growth in real GDP.

    It has worked for many of the Eastern European countries who are rebuilding themselves for soviet oppression.
    But it would give ours a good kick in the pants.

    Unfortunately we seem to be heading in the opposite direction.

  6. Len Rothman says:

    Well, the obvious question, then, is a GDP based on retail sustainable? I personally think we need to push our GDP into less retail, which, I would hazard a layman’s guess, to be more export. We can’t compete making retail goods, but we can compete in technology and science. Japan is exporting more efficient steel making methods and nuclear plants to China and doing rather well.
    Is it time we stopped buying everyone’s cheap shirts and started investing in serious industry?
    Wall Street invested in worthless paper for the last decade or so. Can we get them interested in doing something for real? Or are they so infused with a sense of entitlement for huge bonuses that they forgot how to make some real economic contributions?

    I know this is an oversimplification, but I think the point is pertinent. I had mentioned once on another site that the Bush tax cuts resulted in very little useful or new investment. I was reminded that the corporate rates were too high. I think that was a cop out because after all the loopholes are used, the final rates are probably not bad. But, let’s reduce those rates and see if that would help. That will probably add to our economic woes in the short term, but it might be worth it.

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