The so-called "deal" is beyond pathetic. If the vote fails, it will be a disaster since then everything remains uncertain.
If it passes it will be a catastrophe since the "deal" is so economically destructive.
Take your pick.
Read it at CNBC NetNet
The Debt Ceiling Deal Extends Uncertainty for Businesses
by John Carney
9 comments:
This "uncertainty" B.S. is tied in with the whole, confidence fairy argument. It goes like this: "If only the government would just tell us what it plans to do, then confidence will boom, etc"
There is not one business person I know who mentions the debt ceiling when I ask how their business is going. They all say, sales are down, business is slow, etc.
Carney is spouting the same, stale, conservative talking point about the government creating uncertainty.
We've had wars, recessions, depressions, civil strife, presidential assassinations, terrorist attacks, natural disasters, political swings from teh left to right and back again and plenty more and businesses have found ways to survive and thrive. If one thing is certain, it's that uncertainty will always be around.
An other sycophantic paper by neoliberal economists Reinharts & Rogoff on public debt btw: Reinharts And Rogoff On Why The Debt Overhang Matters
If uncertainty mattered all that much, there would be no entrepreneurs or innovators.
Of course, when it comes to REH and DSGE, there is no uncertainty. Everything in "nature" is ergodic and markets are based on perfect knowledge.
Right, business are so frightened about the future, they head over to China. It's amazing how fragile capitalism is when it's convenient, otherwise it's all about rugged individualism.
I've only been in the business world for seven years, but as far as I can tell uncertainty is the nature of the beast - good times and bad times. It's radical, perplexing, anxiety-producing uncertainty all the time. Some plug away, use their imaginations, innovate and thrive; others don't. The things that end up delivering great benefits are often unplanned, but are seat-of-the-pants innovations that grow.
The CNBC audience might crave certainty however, since a lot of them are not actual business people, but people who buy and trade stakes in the businesses of others. They are playing a game, and wish somebody would tell them a head of time who is going to win. But it doesn't work that way.
I don't know if nyone noticed Nick Rowe's new post. Very interesting and definitely worth some applied critique.
I posted it here already. Dan K and Sergei are already commenting over there.
Bill Mitchell has called "savings" a 'hedge against uncertainty over time' and "savings" are damaging to AD as we all know...
So all of this focus on 'uncertainty' is damaging in general; whether it is driving AD destroying savings or whether morons base a deranged policy on it.
Resp
It's not "B.S." for businesses tied very closely to government budgets.
Businesses deal with uncertainty all the time. We all do. But adding in new and more complex sources of uncertainty does matter.
When I was a bank lawyer, we'd build these things into credit agreements. Fiscal cliffs, health care spending cliffs, etc. We attempted to hedge these areas of uncertainties. The hedge were costs. They slowed business.
Pretending it doesn't matter is silly.
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