Its been exactly 6 months since the single dumbest newspaper column ever published appeared in The Washington Post. Breathtaking in its ignorance, shocking in its fallibility, astonishing in its author’s perversely misperceived world view, it stands as a monument to sheer cluelessness as an economic discipline.

It wasn’t merely off — its simply hard to find anything market or economic related in it that wasn’t 180 degrees wrong. It is a monument to why economists should never allow their politics to influence their day jobs.

I was otherwise occupied when this fetid pile of foolishness was published. Six months later, it reads even more ridiculously than it did on 9/14/08.

Let’s take a closer look at this, sentence by sentence, and see if we can find anything of value in it.  (My comments are ALL CAPS AND BOLD)

Quit Doling Out That Bad-Economy Line

“It was the worst of times, and it was the worst of times.”

I imagine that’s what Charles Dickens would conclude about the current condition of the U.S. economy, based on the relentless drumbeat of pessimism in the media and on the campaign trail. [THAT PESSIMISM WAS THE CORRECT CONCLUSION]  In the past two months, this newspaper alone has written no fewer than nine times, in news stories, columns and op-eds, that key elements of the economy are the worst they’ve been “since the Great Depression.” That diagnosis has been applied twice to the housing “slump” and once to the housing “crisis,” to the “severe” decline in home prices, to the “spike” in mortgage foreclosures, to the “change” in the mortgage market and the “turmoil” in debt markets, and to the “crisis” or “meltdown” in financial markets. [THAT'S BECAUSE ALL THOSE SECTORS HAVE BEEN IN ENORMOUS SLUMPS]

It’s a virus — and it’s spreading. Do a Google News search for “since the Great Depression,” and you come up with more than 4,500 examples of the phrase’s use in just the past month. [HOW DOES THIS COMPARE TO OTHER PERIODS? IS THIS A LOT OR A LITTLE?]

But that doesn’t make any of it true. [BUT IT WAS & IS] Things today just aren’t that bad. [UNLESS YOU LOOK AT THE DATA; THEN ITS EVEN WORSE] Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. [JITTERS? ABOUT THE BIGGEST BANKRUPTCY IN AMERICAN HISTORY? NICE TIMING]  And unemployment figures are up a bit, too. [A BIT? 4 MILLION JOBS LOST SINCE THE RECESSION BEGAN] None of this, however, is cause for depression — or exaggerated Depression comparisons.  [WHY NOT?]

Overall, the pessimists are up against an insurmountable reality: In the last reported quarter, the U.S. economy grew at an annual rate of 3.3 percent, adjusted for inflation. [HOW'S THE REVISED GDP DATA?]  That’s virtually the same as the 3.4 percent average growth rate since — yes — the Great Depression. [EVERYTHING IS FINE, NOTHING TO SEE HERE, MOVE ALONG]

Why, then, does the public appear to agree with the media? [BECAUSE THEY ARE SMARTER THAN YOU] A recent Zogby poll shows that 66 percent of likely voters believe that “the entire world is either now locked in a global economic recession or soon will be.” [AS WE HAVE LEARNED, A LOT SMARTER] Actually, that’s a major clue to what started this thought-contagion about everything being the worst it has been “since the Great Depression”: Politics. [THE FIRST THING YOU GOT RIGHT: YOUR POLITICS HAS BLINDED YOU TO REALITY]

Patient zero in this epidemic is the Democratic candidate for president. [ITS ALL HIS FAULT!] As it would be for any challenger, it’s in his interest to portray the incumbent party’s economic performance in the grimmest possible terms. [LIKE: "ARE YOU BETTER OFF NOW THAN YOU WERE 8 YEARS AGO?"] Barack Obama has frequently used the Depression exaggeration, including during a campaign speech in June, when he said that the “percentage of homes in foreclosure and late mortgage payments is the highest since the Great Depression.” [DAMN FACTS, HOW DARE HE] At best, this statement is a good guess. [NO, ITS ACCURATE DEPICTION OF DATA. DO YOU KNOW WHAT DATA IS?] To be really true, it would have to be heavily qualified with words such as “maybe” or “probably.” [HOW ABOUT 2 MILLION PLUS FORECLOSURES AND RISING?] According to economist David C. Wheelock of the Federal Reserve Bank of St. Louis, who has studied the history of mortgage markets for the Fed, “there are no consistent data on foreclosure or delinquency going all the way back to the Depression.”  [YOU ARE GOING WITH "WE DONT HAVE FORECLOSURE DATA GOING BACK THAT FAR?" REALLY?]

The Mortgage Bankers Association (MBA) database, which allows rigorous apples-to-apples comparisons, only goes back to 1979. It shows that today’s delinquency rate is only a little higher than the level seen in 1985. [WHY DON'T I BELEIVE THIS?] As to the foreclosure rate, it was setting records for the day — the highest since the Great Depression, one supposes — in 1999, at the peak of the Clinton-era prosperity that Obama celebrated [IN PERCENTAGE TERMS?] I DONT BELIEVE THAT EITHER] in his acceptance speech at the Democratic National Convention late last month. I don’t recall hearing any Democratic politicians complaining back then. [YES, THE HOUSING COLLAPSE AND CREDIT CRISIS WERE HUGE DURING THE CLINTON YEARS]

Even if Obama is right that the foreclosure rate is the worst since the Great Depression, it’s spurious to evoke memories of that great national calamity when talking about today — it’s akin to equating a sore throat with stomach cancer. [WTF ARE YOU TALKING ABOUT?] According to the MBA, 6.4 percent of mortgages are delinquent to some extent, and 2.75 percent are in foreclosure. During the Great Depression, according to Wheelock’s research, more than 50 percent of home loans were in default. [YOU MEAN BACK WHEN MORTGAGES WERE 3 YEAR, INTEREST-ONLY LOANS?]

Moreover, MBA data show that today’s foreclosures are concentrated in that small fraction of U.S. homes financed by subprime mortgages. [THAT WAS TRUE 2 YEARS AGO; WE HAVE SINCE SEEN ALT-A AND PRIME FORECLOSURES RISE]  Such homes make up only 12 percent of all mortgages, yet account for 52 percent of foreclosures. [NO LONGER TRUE] This suggests that today’s mortgage difficulties are probably a side effect of the otherwise happy fact that, over the past several years, millions of Americans of modest means have come to own their own homes for the first time. [ASSUMING A MORTGAGE YOU CANNOT POSSIBLY AFFORD IS NOT EQUIVALENT TO OWNING A HOME]

Here’s another one not to be too alarmed about: Obama is flat-out wrong when he frets on his campaign Web site that “the personal savings rate is now the lowest it’s been since the Great Depression.” The latest rate, for the second quarter of 2008, is 2.6 percent — higher than the 1.9 percent rate that prevailed in the last quarter of Bill Clinton’s presidency. [DEMAND DESTRUCTION OF CONSUMER SPENDING CAUSED BY A SEVERE RECESSION WILL DO THAT TO SAVINGS]

Full disclosure: I’m an adviser to John McCain’s campaign [THAT EXPLAINS WHY HE GOT HIS ASS KICKED SO BADLY], though as far as I know, the senator has never taken one word of my advice. [THEN THERE IS HOPE FOR MCCAIN'S JUDGMENT]  He’s been sounding a little pessimistic on the economy of late, too. And to be fair, he isn’t immune to the Depression-exaggeration virus, either. At a campaign news conference in July, my fellow adviser Steve Forbes warned that Obama was seeking “the biggest tax increase since Herbert Hoover and the Great Depression.” Factual? Almost certainly not.

But at least Forbes wasn’t dissing the economy — he was dissing Obama. And Obama’s infection by the Depression-exaggeration bug goes way back. His first outbreak came on Oct. 2, 2002, in his famous speech opposing the invasion of Iraq [WHAT WAS HE THINKING, OPPOSING THAT WAR?], delivered when he was an Illinois state senator. He said that the invasion was “the attempt by political hacks like Karl Rove to distract us from” a litany of economic troubles including “a stock market that has just gone through the worst month since the Great Depression.” [KARL ROVE ATTEMPT AN UNDERHANDED POLITICAL TRICK? SAY IT AINT SO!]

Quite an exaggeration. When state senator Obama made that remark, the Standard & Poor’s 500 had just dropped 11 percent for the month of September 2002. [WE ARE NOW 5 YEARS BELOW THAT LEVEL, TO 1997] But stocks dropped twice that much in October 1987. Since the Great Depression, the stock market has had bigger one-month drops on four occasions. Obama’s pessimism on stocks then happened to be as ineptly timed as it was factually incorrect. [HE DIDN'T SAY SELL STOCKS THEN -- DIDN'T YOU SAY THAT LAST WEEK?] Exactly one week later, stocks hit bottom, and over the next five years the S&P 500 more than doubled, surging to new all-time highs. [LEVERAGE, LIQUIDITY AND EASY MONEY WILL DO THAT -- TIL YOU RUN OUT OF FUEL . . . AND THEN WHAT?]

So much for Obama’s hyperbole about our terrible economy. But what about the media’s?

A housing “slump,” a housing “crisis”? A “severe” price decline? According to the latest report from the National Association of Realtors, the median price of an existing home is up 8.5 percent from the low of last February. [TRY LOOKING AT IT YEAR OVER YEAR FOR AN ACCURATE READ] And according to the U.S. Census Bureau, the median price of a new home is up 1.3 percent from the low of last December. [SOLD TO YOU] Home prices may not be at all-time highs — and there are pockets of continuing decline in some urban areas — but overall they’ve clearly stopped going down and have started to recover. [YET ANOTHER INCORRECT STATEMENT; DO YOU EVEN KNOW WHAT YEAR IT IS?] So why keep proclaiming a “crisis” after it’s over? [YOU DECLARED THE BEAR OVER WHEN THE DOW WAS OVER 11,000; IT HIT 6500 THIS WEEK, A 40% DROP. NICE CALL]

“Turmoil” in the debt markets? Sure, but we’ve seen plenty worse. According to the FDIC, there have been a total of 13 bank failures in 2007 and so far into 2008. There were 15 in 1999-2000, the climax of the Obama-celebrated era of Clintonian prosperity. And in recession-free 1988-89, there were 1,004 failures — almost an order of magnitude more than today. Since the Great Depression, the average number of bank failures each year has been 94. [THE LARGEST INSURER, THE 5 OF THE 10 LARGEST BANKS, AND THE 5 LARGEST INVESTMENT BANKS NO LONGER EXIST THE WAY THEY DID 1 YEAR AGO]

Despite highly publicized losses in subprime mortgage lending, bank equity capital — the best measure of core financial strength — is now $1.35 trillion, more than the $1.28 trillion level of mid-2007, before the “turmoil” even began.

Financial market “crisis” and “meltdown”? Yes, from all-time highs last October, the S&P 500 has fallen 20 percent. But that’s nothing by historical standards. [HOW ABOUT DOWN 50+% ? IS THAT ENOUGH?] Stocks have often fallen more than that over comparable spans of time. They fell more than twice that much in 1974 — which was truly the worst drop since the Great Depression. Even the present 20-percent loss isn’t what it seems. The damage has been heavily concentrated in the financial sector — banks, investment firms and mortgage companies. If you exclude that sector, stocks are off 14.8 percent. [YOU REALLY RAN A MUTUAL FUND ONCE? I CANT SEE WHY THAT DIDN'T WORK OUT]

Some economic indicators — export growth and non-defense capital goods orders such as industrial machinery, for example — are running at levels associated with brisk expansion. [OTHER THAN THE EMPTY SPACE BETWEEN YOUR EARS, MOTHING ELSE SEEMS TO BE "BRISKLY EXPANDING"]  Others are running at middling levels, such as the closely followed Institute for Supply Management manufacturing index. But it’s actually difficult to find many that are running at truly recessionary levels. [WHY DID KRUGMAN AND NOT YOU WIN THE NOBEL? IT JUST DOESN'T MAKE SENSE!]

There have been 11 recessions since the Great Depression. And we’re nowhere close to being in the 12th one now. [WOW, YOU AREN'T MERELY BAD -- YOU ARE THE WORST ECONOMIST EVER!] This isn’t just a matter of opinion. Words — even words as seemingly subjective as “recession” — have meaning.

In a new working paper, economist Edward Leamer of UCLA’s Anderson School of Management shows that changes in the unemployment rate, payroll jobs and industrial production almost precisely explain every recession as officially determined by the National Bureau of Economic Research. At present, only the unemployment rate exceeds the recession threshold. The other two factors are far from it. According to Leamer’s paper, we’ll only fall into recession “if things get much worse.” [WRONG AGAIN -- WE WERE IN A RECESSION 10 MONTHS BEFORE YOU WROTE THIS]

This would suggest that anyone who says we’re in a recession, or heading into one — especially the worst one since the Great Depression — is making up his own private definition of “recession.” And probably for his own political purposes. [HAVE YOU CONSIDERED DENTISTRY AS A CAREER? YOU SURE DON'T HAVE A KNACK FOR THIS ECONOMICS THING]

McCain campaign adviser and former U.S. senator Phil Gramm was right in July when he said that our current state “is a mental recession.” Maybe he was out of line when he added that the United States has become “a nation of whiners.” But when it comes to the economy, we have surely become a nation of exaggerators. [HOW ABOUT A CADRE OF CLUELESS FANTASISTS?]

Yet Gramm was pilloried for his remarks, and McCain had to distance himself from his adviser by joking that in a McCain administration, Gramm would be ambassador to Belarus. What does it say about our nation that it has become political suicide to state the good news that our economy is not in recession? [WE DONT APPRECIATE IDIOTS TELLING US EVERYTHING IS FINE WHEN ITS NOT].

Whatever the political outcome this year, hopefully this will prove to be yet another instance of that iron law of economics and markets: The sentiment of the majority is always wrong at key turning points. [GUESS THAT WASN'T A KEY TURNING POINT] And the majority is plenty pessimistic right now. That suggests that we’re on the brink not of recession, but of accelerating prosperity. [SERIOUSLY, THIS ECONOMICS THING ISNT FOR YOU.]

Maybe this will turn out to be the best of times — at least since the Great Depression. [PERHAPS FORESTRY?]

>

Source:

Quit Doling Out That Bad-Economy Line
By Donald Luskin
Washington Post, Sunday, September 14, 2008; B01

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/12/AR2008091202415.html

Category: Economy, Financial Press, Markets, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

38 Responses to “REVIEW: Quit Doling Out That Bad-Economy Line”

  1. Ken M. says:

    Great ranting Barry ! Falling of the chair laughing…

    –K

  2. Best line:

    What does it say about our nation that it has become political suicide to state the good news that our economy is not in recession?

    Offered without comment.

  3. Moss says:

    Way to go BR…. Luskin should have stayed in Disneyland, his belief system is governed by fantasy.

  4. Scott F says:

    Very funny, but you lose marks in terms of degree of difficulty.

    The bigger question is why the clown is still on TV? It reflects very poorly on Kudlow.

    As a Connecticut resident, Luskin’s appearance on K&Co. is reason enough to vote against him.

  5. number2son says:

    Honestly, you have to wonder how people like Luskin and Cramer are still provided a public forum. After being so spectacularly and completely wrong, why have they not been properly excluded from the discussion?

    I’m not sure about Luskin, but Cramer has now provided ruinous advice and market analysis (if you can call his clown act advice) at two major market turning points. He was, after all, so proud of coining the phrase “New Paradigm” to explain the inexplicable rise in the Nasdaq just before it crashed in 2001.

    Wouldn’t we all be better off if they just went away and toiled in their justly deserved obscurity? Leave the stage to those with honest and informed analysis.

  6. phb says:

    Seriously BR, why do you even bother? I had a hard time even reading half of what was written for the sheer lunacy!

  7. outthere says:

    If you have seen Luskin lately- he is playing the bear game and is long gold- boy have times changed

  8. ben22 says:

    wow, how pathetic. It’s amazing this far into this guys like Luskin are still in denial about it all. I wonder how much money he’s lost for his clients in the last 16 months. He really was a buyer…. all the way down, every single time I saw him on tv last year he was talking about how it was over and stocks were going up.

    what a tool.

  9. edwardnh says:

    Barry,

    This is a hilarious post. You definitely have a way with words.

    Ed

  10. Bruce N Tennessee says:

    Five months later…and we’ve had a conversion experience….read the new Donald:

    http://www.smartmoney.com/investing/economy/Even-Worse-Than-the-Great-Depression/

    Even Worse Than the Great Depression

  11. ottovbvs says:

    It’s hard to know who was funnier: Luskin or Laffer…….There’s a sort of poetic justice in the fact Laffer is phonetically Laugher…..

  12. krice2001 says:

    Nice Barry. I like to lol in the morning. Economics and politics are clearly a bad mix. What an embarrassment.

  13. Moss says:

    What is most troubling is that these supply side idealouges (Luskin, Laugher, Kudlow, Boyer, Moore) will never admit they are or were wrong. Since they have attained a sort of tenure among themselves they will each provide the other with a platform to continue with the fallacies. Of course the spin will be to lay all subsequent bad outcomes at the feet of Obama and all others who disagree with their deeply held beliefs.

  14. peterbod says:

    Don Luskin’s Arrogance:
    In CNBC’s bull/bear debates, Don luskin was always the bull – right into the teeth of biggest economic crisis since the Great Depression. How do you think his clients now feel about his ‘expert’ advice?
    I send him an email asking him if he feels stupid and embarrased appearing on CNBC nowadays . I also asked him if he has no shame. His reply to me was to program his server to reject my emails.

  15. gnomic says:

    Luskin seems the exception to the old adage “If you laid all the economists end-to-end, they still would not reach a conclusion.” I’m pretty sure Luskin has yet to be laid at all. What a nitwit!

  16. HCF says:

    I wonder if Luskin goes to Halloween parties dressed as a giant d-bag, because that is certainly his costume 365 days a year. Seriously, has this guy EVER said he was wrong? I guess he probably thinks that if he never admits to being wrong, then he never is. As bad of advice that Kudlow, Kneale, Cramer, etc. have given in the past 18 months or so, at least they sometimes say things like “I screwed up,” “I’m bullish but getting my head beat in,” or some other equivalent mea culpa…

    HCF

  17. Marcus Aurelius says:

    WaPo is talking its book. As a major buyer of RE advertising in the Post during the boom ($2 mil + in ’04), I have watched its RE ad insertions go from two full sections of full-color, display ads in 2004-2005, to a few small tombstones placed in the classifieds, currently.

    In addition to this decrease in revenue, the Post is not even a shadow of its former self when it comes to journalism.

    Maybe they should hire Jon Stewart to direct their Editorial Board.

  18. Luskin 2.0:

    What does it say about our nation that it has become career suicide for Jim Cramer to state the good news that our economy is not in recession?

  19. Kyle says:

    OMFG I just looked at this guy’s blog, he is fucking RETARDED for someone whose blog is titled “The Conspiracy to Keep You Poor and Stupid”.

    Money quote:

    “Over the last couple years I loved to ridicule all the scaremongers who always said this, that or the other thing is “the worst since the Great Depression.” I stand by my ridicule, for the most part — those prophets of doom were mostly broken clocks who look right now just by sheer luck. But there’s no question now that things have gotten quite bad in the economy and the markets.

    So let me do the preachers of Armageddon one better. Today’s stock market isn’t just the “worst since the Great Depression,” like they’re so fond of saying. No, it’s even worse than the Great Depression. ”

    He goes on to ask “[A]What will our world look like when President Obama “reforms” health care by nationalizing it given that it represents about one sixth of U.S. economic activity (and the part that’s still working)? [B]What will happen to the cost and availability of electricity when he puts in place a “cap-and-trade” tax on carbon emissions? [C]What will happen to Wall Street when taxes are raised on hedge fund and private-equity managers? [D]What will happen to all of us when all our taxes go up and our deductions go down?

    A. If he reduces cost by cutting out all the worthless middlemen, then I venture the country will look a lot BETTER.

    B. OMG, it might cost more! God forbid we ever have to use WIND power for anything.

    C. They will pay more taxes.

    D. You can just not pay them and go to jail. Or move to Ayn Rand’s island, and please, please, please don’t ever THINK about coming back.

  20. bolddan says:

    Credibility, accuracy and track record is apparentely not a requirement for journalistic integrity. Being a political hack/idealogue will get you places around certain circles, regardless. The real losers here are ones that waste a minute of their time listening to the useless diatribe and even worse are the ones that take any action based on the worthless spewing of distortions and omissions.

  21. Chief Tomahawk says:

    I guess I should be concerned Don Luskin is now touting gold.

    Seriously though: It’s been a long-standing weakness of the Kudlow program to invite on Luskin and Boyer when they hold the same views as Larry Kudlow and say the same things. This prevents the bearish case from being made when it turns out it should’ve been made and explained in far greater detail.

    For a period 1.5 years ago, Kudlow seized upon CNBC’s stock-picking turn when it added “Fast Money”, by inviting on 4 and 5-star fund managers to ask for their top 5 investment ideas. Of course it was all under the heading of “What would you buy?” What Kudlow and CNBC have neglected through the years is asking investment pros, “What would you sell?” That would’ve been particularly valuable during the recent downturn for Larry’s and CNBC’s audience. Instead they wasted gobs of time waxing poetic about the bottom being in and it being time to buy. It’s that very kind of one-sided bias that makes Jon Stewart and “The Daily Show” take off on sacrificial lambs like Jim Cramer.

    At least on “Fast Money” some of the traders, like Karen Finerman, have called out shorts.

  22. Mike in Nola says:

    You all misunderstand and misunderestimate the importance and purpose of this seemingly stupid polyanna propaganda. It comes clearly through in wingnut emails I get from a certain brother in law that this is the party line. While some of it is due to the fact that most of this blather comes out of rich guys who haven’t been touched other than a (for them) theoretical loss in their 401k’s, it’s that they are positioning themselves so that when things get worse or don’t improve for a long time, as most perceptive people know will happen, the blame can be placed squarely on the Dems in charge.

    When the next congressional elections come around, it won’t be about what has been acomplished to stave off the disaster, but about how Nancy Pelosi has destroyed the wonderful economy that W left her. Watch and see.

  23. Greg0658 says:

    FoxNews 15 minutes ago ran a story on an “empty foreclosed house gets kegger party treatment” .. 4 minute exposee’ .. ROTFL ….. good thing those types of kids are still in bed .. or we’ll be seeing EFHGKPT part-dux on Monday

    as they led out to commercial “next hour bb gun assault on Spring Mall parking lot” ( kidding here – writers freedom )

    point being – words and tranmission matter and ……… I don’t think Obama is the superman you are looking for .. no one is ..
    so pray to your Good Being for help .. then maybe ……………

  24. Mannwich says:

    @creon: Good morning, Luskin. How are you today? Keep up the great work.

    ~~~

    BR: Sorry, but he violated the No Asshats rule. Had to go!

  25. rheath says:

    hahahaahahahah my favorite line:

    “…there have been a total of 13 bank failures in 2007 and so far into 2008…. And in recession-free 1988-89, there were 1,004 failures — ALMOST an order of magnitude more than today”

  26. NJlou says:

    I think CNBC has really hit bottom with the morons like Luskin, Cramer, Kudlow and the rest of idiot newsreaders that they keep putting on to cater to the functional illiterates with the attention span of a fruit fly.

    With Cramer’s ‘brilliance’ you have to wonder why he is not still in the hedge fund business taking in other’s people money and turning it into a fortune? Why isn’t he able to reproduce his previous hedge fund miracles in today’s environment?

    There are only two ways to earn excess returns in the market—insider trading and Ponzi schemes. Both are now coming to light with Cramer’s and Madoff’s revelations.

    Just today, CNBC had on another lunatic Michael Porter ranting, raving and blaming the government for all of the economic problems. Porter ought to blame himself for part of the mess he help create.

    I think all the Fortune 500 companies followed his ‘Competitive Strategy’ advice and most are now bankrupt or severely hemorrhaging and unable to compete during a downturn. Companies like AT&T, the long distance company, once had Mercer, BCG, Monitor, McKinsey and others running around spouting the latest garbage theories from the likes of Porter. AT&T after bad advice, on the brink of bankruptcy and a mere shadow of its former self eventually sold itself to SBC, its sibling.

    Porter helped sell and institutionalize- at the major business schools, consulting companies and corporate board rooms- the globalization-financialization of America-free trade’ myth where all of our manufacturing industries were outsourced to cheap-labor-low-wage countries.

    Now Americans are left wondering what exactly they are supposed to do when all the factories are closed down and the service jobs shipped to India. We are now left with nothing to reindustrialize the country.

    Next up on CNBC is one Jack Welsh who helped turn a once great industrial company into a bank with GE Capital. Welsh would later loot GE to the tune of hundreds of millions of dollars in stock grants, bonuses and other perks while actually diluting shareholder value with his use of GE stock to acquire or dispose of GE assets to smooth out earnings.

    Now Welch in today’s FT is refuting all the garbage theories, first instituted at GE and quickly followed elsewhere, such as Shareholder Value, Economic Value Added, Total Quality Management, Activity Based Costing, Six Sigma and the Balridge Awards that were actually used to mask the fact that GE had turned into nothing more than a bank without the usual capital reserve requirements.

    Porter and Welsh don’t want to take part of the blame for their foolish ideas that contributed to the economic mess we are in.

  27. Mannwich says:

    @Bruce: For The Donald, it IS worse than GD I. His real estate empire is crumbling badly and he knows it will get far worse before it gets better. His pathetic casino business? Nice work there, Donald. 15 Minutes are up. Time to move along.

  28. Mannwich says:

    @peterbod: I got into a similar battle with Jerry Bowyer last year and after a few rounds of very enjoyable back and forth (he said he wanted to “short” my company), he told me my emails would be filtered to his junk mailbox. I then emailed him from a different email address. I think he got tired of my little screeds.

  29. JMH says:

    It occurred to me while watching “Damages” that Luskin would be a great addition to the cast of the program. Imagine him appearing in a hearing opposite Patty Hewes (Glenn Close) in his trademark sportcoat and T-shirt, tearing apart her arguments with half-truths. The rivalry would be quite entertaining. As long as he didn’t make any arguments based on economics, his character would be quite believable. I wonder how difficult he would be to direct.

  30. d4winds says:

    funny & well done.

  31. Whammer says:

    @ Mike in Nola: “When the next congressional elections come around, it won’t be about what has been accomplished to stave off the disaster, but about how Nancy Pelosi has destroyed the wonderful economy that W left her. Watch and see.”

    It would be hard to find truer words anywhere. Why did Limbaugh start calling this an Obama recession before he was even inaugurated? Same reason.

  32. Darkness says:

    There were 15 in 1999-2000, the climax of the Obama-celebrated era of Clintonian prosperity. And in recession-free 1988-89, there were 1,004 failures — almost an order of magnitude more than today. Since the Great Depression, the average number of bank failures each year has been 94.

    This is where he hands over his calling card and it has one word on it: TOOL. Given the changing landscape of banking, total assets and bailouts (and access to the discount window, even) would be the only honest measure to use for comparison, and he damn well knows it. We need a new word for his type, econowhore, perhaps.

  33. gnomic says:

    So this got me wondering… Is this gross incompetance, willful ignorance, or something else. And what are the root causes: ideology, lack of a quality education, false gods, money, fame, something else or all of the above? And – other than Barry’s fine work – is there some systemic way to weed these fools out of the national conversation such that they quit causing harm, much like an election does to the fools in power?

  34. The iTod says:

    Shame on you BR! You know better than to pick on retarded people…

    Seriously though, you made me read this crap and now I wish that I had that 13 minutes of my life back.. what a waste of time.

  35. The iTod says:

    PS – I meant Luskin’s “crap” and not your witty entendre.

  36. Am I the only one who has been around long enough to remember this particular episode in both Luskin and Cramer’s careers? I “watched” it live and it was perhaps one of the greatest internet blowups I have ever seen.

    http://online.barrons.com/article/SB993255274996045625.html

    I forgot about Luskin’s moronic “Openfund” idea trading in front of webcams and publishing every trade in real time. As if that would solve the problems of the mutual fund business.

    Most ironic moment was Cramer saying of Luskin that: “Performance can be a wicked taskmaster. If you can’t take the heat, get out of the kitchen.”

    Too bad Luskin still won’t take that advice and that Cramer no longer thinks it matters.

    -btc

  37. doug86 says:

    Maybe he should read this:

    [IMG]http://i159.photobucket.com/albums/t136/doug86_bucket/publicimages/AnnCoultertobank.jpg[/IMG]

  38. Alex says:

    Donald Luskin is really good at one thing only. Self Promotion. He is a living cognitive virus that constantly infects everything in sight. He does not care if he is right, he does not care if he is consistent, he only cares about being noticed and making money off of it.

    Now I am going to do something that is shocking to even myself; defend the economist profession. I have to say that calling him an economist is a bit like calling a bank robber a financier. He has no real formal education, and no meaningful experience. He has been regularly shown to have no grasp of even this simplest concepts of rational thought, much less economic concepts.

    I see “attention whore sociopaths” like him, and Limbaugh, and Ann Coulter are all cut from the same dirth rags. They don’t give a rats butt about whether they say anything of use to anyone, just as long as they are getting paid to be noticed. That’s all that matters to them.