06 August 2010

Mr. Optimist versus Mr. Pessimist

In today's NY Times is an article contrasting Mr. Optimist and Mr. Pessimist in the economists' dog fight.

Here's a quote from the beginning of the article:
Instead, the [monthly employment] numbers will be a clue as to which of the two economists is right about where the American economy is headed. Their sharp disagreement over that question adds yet another twist to the fierce rivalry between the firms, Wall Street's version of the New York Yankees and the Boston Red Sox.

And from the end of the article:
As for Friday's numbers, Mr. Berner is calling for a private sector gain of 145,000 jobs versus Mr. Hatzius's prediction of 75,000 new jobs.

Now for the actual number:

Remember: It's the Distribution, Stupid. While profits continue to grow, with the rich getting richer, the poor get poorer, and the middle class disappears into the lower class. The Fatman in Famine is happy to see wages drop and deflation get a stronger foothold. But once the Golden Goose (aka, the middle class) is finally dead and gone, the Fatman will eventually perish, too. With no one left to buy up all that output from no workers, the Fatman's world collapses, much like a black hole.

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