Sunday, November 17, 2013

As usual, the Onion is way ahead of us

Business Insider, Nov. 17, 2013, reporting on Larry Summers' big speech at the International Monetary Fund: 

Here's The Scary Possibility That The US Might Need Permanent Bubbles In Order To Grow
Over the past couple of decades, strong economic growth has consistently been spurred on by bubbles - the tech bubble in the 90s, the housing bubble more recently. In his speech at the IMF on November 8, Larry Summers brings up an important question: Is a bubble a prerequisite for economic growth?

Recession-Plagued Nation Demands New Bubble To Invest In
WASHINGTON—A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest. …
 The current economic woes, brought on by the collapse of the so-called "housing bubble," are considered the worst to hit investors since the equally untenable dot-com bubble burst in 2001. According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent. …
 "America needs another bubble," said Chicago investor Bob Taiken. "At this point, bubbles are the only thing keeping us afloat."
P.S.: FWIW, Paul Krugman, who strongly praised Summers' speech, gave an appreciative shout-out to the Onion's piece at the time. For me, the icing on the cake is that the Onion piece not only calls out out the economy's dependency on bubbles, but implicitly makes roughly the same criticisms of said dependence that Dean Baker does.

P.P.S.: Zero Hedge is on the case.

1 comment:

  1. The best purpose of satire is to show us when our supposedly logical train of thought is running us right off the rails. Summers, Baker, Krugman, et. al. See the problems created by an overly controlled economy and provide an explanation that sounds dangerously like a foundation for more control (who shall host the bubble this year?).

    Onion, if they're successful here, may prevent us from actually adopting such an absurd theory as the "necessity" of bubbles as a matter of policy. One can only hope.