"The news that the UK, with negative growth in the fourth quarter of 2012, faces the prospect of a triple-dip recession, should be the final blow to the intellectual credibility of deficit hawks. You just can't get more wrong than this flat-earth bunch of economic policy-makers.
They're pretty much batting zero. They failed to foresee the collapse of housing bubbles in the US and Europe and its consequent downturn. They grossly underestimated its severity after it hit. And their policy prescription of austerity has been shown to be wrong everywhere that applied it: in the US, the eurozone and, especially, the UK.
By all rights, these folks should be laughed out of town. They should be retrained for a job more suited to their skill set – preferably, something that doesn't involve numbers, or people."
I thought this next part was interesting. Anybody think if the stock market had gone down the tubes and stayed there, that the talk out of DC would be the debt?
"Of course, the cynical among us might note that the highest earners have done just fine. High unemployment rates undermine workers' bargaining power, which ensures that almost all gains from economic growth go to those at the top. In the US, the profit share of national income is near its post-second world war high.
Even if this upward redistribution was not a deliberate goal, it certainly affects the urgency with which policy-makers attend to depressed economies and high unemployment. If the stock markets were tumbling, as they were in 2008-09, there would likely be a lot more attention devoted to fixing the economy. (And if you think a plunging stock market has to mean that the economy is going down, you need to study more economics.)
Instead of focusing on glaring issues, like how the economy is down 9m jobs from its trend growth path, or how the typical worker's real wage has risen by just 2% over the last decade, the policy people in Washington are debating how to reduce the deficit. This makes about as much sense as debating the right color to paint the White House kitchen."
And the ending:
"The unfortunate reality is that on both sides of the ocean we have policy-makers who are sputtering nonsense about how to remedy the economy. And for the foreseeable future, they will have the political power to keep their jobs – no matter how disastrous their policy might be."
I've said it here before. I'm not sure the debt (public and private) isn't the REAL problem, and every economists I know of will admit that at some level our debt is hurting the economy.
But this was such a point blank salvo at the current leadership of governments around the world by somebody that has a better idea of what he's talking about than me, that it was hard to not pay attention.