“Surprisingly” Bad Economic News

Have you noticed how often the elitist “economists” in government, academia and the media are surprised by bad economic news?

They are constantly “surprised” by high unemployment numbers. They say the low manufacturing numbers were “unexpected.” They claim they didn’t “foresee” such a great trade imbalance.

When the Fed Open Market Committee met in June it said the economic recovery was “proceeding” and was likely to advance at a moderate pace. At the time they were talking of “tightening” monetary policy to fend off inflation.

Vice President Joe Biden has said we are in the “Summer of Recovery.” President Barack Obama has been saying his policies have “pulled us back from the brink of another Great Depression.” As recently as Aug. 2, Treasury Secretary Timothy Geithner, in an op-ed piece for The New York Times, wrote an uplifting column entitled “Welcome to the Recovery.” And he wasn’t being facetious.

He wrote that exports are booming, private job growth has returned, businesses now have strong balance sheets. But then he mentions his surprise.

“The new data show that this recession was even deeper than previously estimated,” Geithner wrote.

Still, he says, all economic measures represent an encouraging turnaround. He must have forgotten to tell that to the Fed.

Because the Fed’s had an “oops” moment. It has decided inflation isn’t an immediate threat after all, and they are “loosening” monetary policy again to try and stave off deflation and a second recession. But with the interest rate at zero there is little left to do.

Fed Chairman Ben Bernanke signals he fears a double-dip recession. The Fed decides it’s going to buy back debt. Buy back debt?

Fiat currency is debt. So the Fed is buying debt with debt. It’s shuffling money piles around. It’s taking money from one pocket and putting it in another. Meanwhile, the International Monetary Fund declares the United States is essentially bankrupt, writes Laurence Kotlikoff of Bloomberg News.

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