In my post yesterday about Rudy “Fucking Nuts” Giuliani, I made some parenthetical remarks about how to handle the current economic situation. These remarks were based not on my expertise in economics–I’ve got none–but on common sense, intuition, and the rule of thumb that if some smarmy asshole in a suit and tie on teevee is telling me something, the truth is likely to be the diametric opposite.
Well, Stirling Newberry over at Agonist published an analysis today–one based on his truly deep expertise in economics–that confirms what I pulled out of my ass yesterday. Here is a sample:
Abstractly, what we ought to do isn’t hard: raise, not lower, interest rates, then lower them at the time of the bail out, to make borrowing to bail out cheaper. Buffer the pay check to pay check classes of the economy, and then put in place an economic stimulus package – decided by the results of an election over just that issue – and go forward.
Of course, what Bernanke has signaled the Fed is going to do is the exact opposite: lower interest rates, fuck the pay check to pay check classes of the economy with increased inflation, and float the compulsive Wall Street gambler classes.
I urge you to go over to Agonist and read the whole post. Newberry is a really smart guy.