Wednesday, July 25, 2007

Dismal Science

I remain convinced that economists have shucked any continual Malthusian pessimism about our subject of inquiry.

However, the job of that has been handed over to those less economically literate. In response to the strong retail sales/TSX drop/dollar appreciation of yesterday:
Looks like a recession is on the way.
...
It's only a matter of time before everyone gets worried and tightens their spending, driving up inventory that leads to massive layoffs and then next thing you know...
...
start penny saving... interest rates rising fast... looks like another recession coming...
...
it's going to get very ugly indeed...

There is no pleasing some people. I concede that the report (which I blogged on) can be considered inflationary. But my reaction to 'strong consumer spending' is not 'recession'.

Granted, I am cherrypicking (slightly), but it's hard to avoid the irrationality that characterizes the public economic debate:
when will Canadians stand up to the goverment and tell them we are tired of being gouged every time we buy something
...
The weak dollar forces our economy into a mode where we simply export raw materials. A stronger dollar would promote the growth of the industrial sector, perhaps then we can start making goods in Canada for once. It is about time we got out of the practice of mercantalism, we are a "developed" nation.

Stay tuned: Why it is irrational to ever expect an educated public discussion?

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