Really? A spending freeze?
(Alternate title: Obama Gives the Finger to Everyone who Still Liked Him)
They are panicking in the White House. I mean, Obama gave his speech on bank re-regulation basically on the spur of the moment. Barney Frank came out a few hours later to say it wasn't going to happen in the next 4 years. These decisions just seem to be coming impulsively.
And now this? Obama wants to freeze spending and pass a second stimulus bill? It just doesn't work, and it comes off as a transparent pander. Not only that, but it's a pander to the economically illiterate Tea Partiers who will never like him anyway. It's bad economics, it'll never get through Congress, and it demonstrates to a lot of people that Obama is just not serious about governing.
Jon Stewart has been asking for the last year whether Obama was getting his ass handed to him, or whether he was a Jedi master, 5 steps ahead of his opponents. I guess now we know which it is...
About Me
- Jesse Livermore
- A neuroscientist by day, and a crusher of Intrade by night. Starting in 2008, I've turned a single $50 deposit into more than $50,000. Follow me on Twitter here. Contact me at wiserthanthecrowd@gmail.com
5 comments:
This spending freeze is more populist rhetoric. Very little will be frozen, and none of the frozen funds are going to do jack about our mounting debt.
Maybe I misinterpreted your comments.. but it appears that you'll happily participate in a prediction market but when it comes to real life you'd prefer to leave it up to economic planners?
It makes perfect sense -- I participate in markets because the prices are often wrong. If they were always right, none of the market participants would have an advantage or make any money.
After the dot-com, commodity, and real-estate bubbles within a span of 10 years, does anyone seriously believe that markets do an efficient job of allocating capital?
My problem with the spending freeze announcement is not so much that it's bad policy (although it is), it's that it's terrible politics. Obama has just shown that he will bend to the will of whoever yells at him loudest. Not good.
You are participating in the price discovery process on Intrade. The market value of a contract is established because it is a zero sum game.
Bubbles form when regulations interfere with the market. You would not lend money to a deadbeat without any collateral. Why would banks give mortgages without requiring a down payment? Because Congress gave them a backstop.
Corporate welfare is borne by self-serving bureaucrats directing taxpayer money without any incentive or mechanism to find market value. Fractional reserve banking and economic planning are a fraud perpetrated on taxpayers. It is the Keynesians who are economically illiterate.
Reaks of "Hey, I can chuck my State of the Union script now that HCR won't transpire right away so I need to come up with something else quickly... What's popular out there?"
-Chris-
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