Every day the government makes new mistakes or discovers new economic consequences of their past errors. Arbitrary Vote brings you the country's biggest economic bloopers.
t Blooper of the week Blooper of the month
7/15/09 - Stocks rally on Fed outlook; Fed not to be compromised
Did the Fed predict the economic crisis even within months of it taking place? No, fundamentals were "strong". Did the Fed predict the depth potential of the housing crisis? No, estimates by Bernanke were somewhere around a couple hundred billion in losses. Did the Fed predict the current level of unemployment? No, their earlier prediction was 9.6% by year end - we are now at 9.5%, and now they are making their first adjustment to 10.1%. Is the Fed likely to be right about the prospects of the economy "sinking at a slower pace than it previously thought"? Of course! Let's all buy stocks and drive the market up 250+ points today! Stocks end with big gains following Fed news - MSNBC/Associated Press
Speaking of the Fed, because of its stellar track record of predictions, managing monetary policy, and fixing systemic economic problems, 175 economists are speaking out against Fed auditing - such as that required under Ron Paul's proposed Fed audit bill.
To bailout - or not to bailout CIT - a direct competitor to GE Capital and the biggest potential failure since WaMu. Not to worry, Geithner is clearly on the case...And his track record of nationalizing businesses and failing to turn them around is impeccable. CIT Group Says Its Failure Risks Demise of Customers - Bloomberg
7/10/09 - Turnaround specialists have GM back on the road
Amazing what the government can do in 40 days. The new Obama business venture will be wildly successful. Six months from now when the economy is perfectly healthy and GM is selling green cars like hotcakes I will have my wallet wide open to collect all of the taxpayer dollars I voluntarily lent to them. Can't wait!
7/9/09 - Obama to defy the laws of economics - and the law
Apparently Obama is an economic miracle worker. No need to obey fundamental economic laws or learn from historical economic mistakes. Wage controls and centralized compensation design will mystically work this time because of his magic wand.
7/6/09 - Oracles suggest more stimulus to stimulate
Months have passed since we exceeded the 2009 average unemployment estimate of 8.1% included in Obama's budget assumptions. Suddenly the oracles of economic forecasting are investigating another stimulus since the original stimulus they thought would work isn't working. Their forecasting precision and ability to spend a whopping 10% of a five-month old stimulus package should lead all to believe that the next go-round will be different.
7/3/09 - Barney Frank and the SEC's investment strategy
Those evil short-sellers need to be controlled. How dare they short stock of banks that are insolvent. How dare they believe a business is overvalued. From now on, investors may only be long on stocks and they are never allowed to sell. This will ensure the markets will always go up.
When are we going to start the U.S. stressed debt program? Is U.S. debt not stressed? Should the banks get loans or funding when the lender (i.e. the U.S.) needs a loan itself? Aside from this underlying concept, surely this program will work after all its failures.
Home prices falling but not setting records means "home prices declines are moderating - another sign the beleaguered housing market is stabilizing". Once again, the article's author is anticipating that you will blissfully online casino games ignore all government price-propping, approaching alt-a/option arm threats, and the fact that economic stats often undergo temporary fluctuations.
6/23/09 - First $787 billion should save enough jobs
Obama: "Even though the first $787 billion stimulus I passed hasn't kicked in yet, when it does, 3.5 million jobs will be saved OR created. "Saved" jobs are more statistically clear than "created" jobs and that's why we threw that into the language. Anyway, once this stimulus package works, we won't need another one cause enough jobs will have been saved by then. If it weren't to save enough jobs, we'll create another stimulus package that will."
Of course California will be downgraded...But the U.S. won't be downgraded because it is in much better financial condition. For example California has a $24 billion deficit, which is 1.5% of their $1.8 trillion GDP. The U.S. has a $1.8 trillion deficit making up 13% of a $14 trillion GDP and adding to $11.4 trillion of its national debt. Obviously the U.S. should not be downgraded.
Interesting that this half-positive news story about continuing claims fails to point out that most of the drop was not because people found jobs, but because they have expired their 26-week limit of unemployment benefits...But this is a sign of stabilization.
New regulatory organizations, new powers for the Fed (that created the dramatic boom/bust), new loopholes for financial institutions to exploit, and Chris Dodd and Barney Frank (who both made great contributions to cause the crisis) are heading it up...A fresh start down the same dead end road! Obama unveils broad financial oversight plan - MSNBC/Associated Press
Wait...Didn't Japan say something along these lines on Friday? And earlier last week (6/10 Blooper), didn't Russia say they were moving away from U.S. Treasuries? Couldn't be a coordinated confidence-building effort organized by the United States, could it?