You know how I feel about AEP.
Some interesting excerpts:
“The decision to throw everything we had at the crisis after Lehman-AIG was a legitimate gamble at the time, given the near certainty of depression if shock therapy had been tried – as in 1931”
In his opening salvo, AEP says that Keynesian policies have failed. Most Western countries have pushed their debt burden to the limits of safety and yet, our debt burden has not diminished.
“It is too early to say the policy has failed, and failure is a false term when leaders confront cruel choices. Yet last week’s drama has brought home the truth that suffocating debt has not gone away; it has merely hopped on to the shoulders of sovereign states, threatening just as much damage. ”
Considering that the trajectory of debt has been demonstrably proved unsustainable for the past 40 years, one wonders why it should be puzzling that adding even more debt upon old debt should fail to diminish the overall debt burden…
I too want a column in The Telegraph.
But it gets better. Having established that overall debt burdens have worsened and are now threatening our entire socio/economic construct, AEP now advocates stretching this aberrant situation even farther in time… I am not making this up…
“The US Treasury is right to disregard the verdict and keep risk weightings unchanged to avoid a cascade of forced debt sales.”
In the same breath, AEP chastises the rating agencies for not having acted 6 years ago (whilst himself too was egging the farce on during the same period of time) but now wants to avoid doing what should exactly have been done 6 years ago if not earlier.
But it gets better.
“If China had not distorted world trade in this fashion, the US would not be in such a mess. ”
Considering that the USA have been steadily devaluing the US$ over the past 40 years, and considering the WTO, and considering corporate tax legislation in the USA and considering the expedient manipulation lower of interest rates in the USA, and considering Western corporations are very happy to set up production facilities in China and sell their wares back into the West… saying that China distorts world trade is arrogant and ignorant mixed with decline-of-empire sour grapes.
But wait!! Just when you thought he might be done!
“Unlike America, Europe still has stimulus cards it could play. Yet EMU politics prevents the use of these cards.”
AEP just finished saying that Western countries are pushing the limits of this monetary system and our obtuse remedies have made things worse rather than better… and he goes on to lament the fact that there should be legislative obstacles to doing more of the same…
I absolutely must get me a column in The Telegraph too. Seriously; how difficult is it to dish out pablum and continuously contradict yourself?
Not content with having slagged China, AEP goes on to slag Germany.
“Germany still fails to understand the logic of monetary union: that (Teutonic) surplus states have a duty to boost demand in order to offset austerity in (Latin) deficit states until equilibrium is restored. Instead, Berlin is imposing a 1930s Gold Standard formula of deflation decrees through the EU machinery, with the burden of adjustment falling on debtor states. ”
Besides the fact that AEP claims there to be a logic in monetary union he also advocates that it is not those that have taken advantage of the system that should now pay the consequences. If the banks ever had any shills, AEP certainly qualifies as a high ranking officer in the shill army.
“We may learn over coming days whether the European Central Bank is at least willing to stop the bond crisis in Italy and Spain from spiralling out of control. ”
The sheer inability of Mr. AEP to observe reality is staggering. I’m not an economist but if the ECB now has to bail out Italy it is because it has singularly failed staunch crisis in Greece, Ireland and Portugal. Considering that the financial crisis in these three countries is still smoldering and that countries like France are now about to lose their AAA at a time when the US has already lost theirs, why would throwing more money at Italy stabilize anything? And, anyway, didn’t AEP just say that we’ve been unable to diminish our debt burdens and that is a bad thing? So, which is it Mr. AEP?
I DEMAND A COLUMN IN THE TELEGRAPH FOR MY SELF!!
“The search for a scapegoat has begun.” claims AEP. All I can say is: pot, kettle. Remember what you just said about China?
In closing, AEP says:
“Yet the Bank for International Settlements is surely right that we are pushing ever closer to the limits of a model that relies on artificial stimulus to keep stealing extra prosperity from the future. There is ever less to steal.”
What is that? Is it contrition? Is it resignation? Is it recognition of the fact that our leaders deliberately pursue aberrant and regressive policies?
Is AEP suffering from a psychological condition?