The G20, the new president, and Tom Friedman
Well now, anyone who took my advice on Friday should have had a pleasant weekend, unconcerned about what the G20 leaders would do, which as I figured was just about nothing. They pledged to rig up more regulations that would preserve the place of the money-shuffling class in the world's power structure, and made a few noises about the United States having somewhat less influence in that power structure going forward. Neither of which was much of a surprise.
The next meeting is April 30, barring some calamity between now and then. That's when things might start to get interesting.
The big news of the weekend turned out to be the president-elect's interview on 60 Minutes, in which either 1) he showed the back of his hand to the people who sounded alarm bells in I.O.U.S.A., or 2) the subsection of people who sounded alarm bells in I.O.U.S.A. who serve as his economic advisers have shifted sentiment on a dime. "The consensus is this," he declared, "that we have to do whatever it takes to get this economy moving again, that we have to — we're going to have to spend money now to stimulate the economy… And (consensus is) that we shouldn't worry about the deficit next year or even the year after; that short term, the most important thing is that we avoid a deepening recession."
Ah, I love the sound of printing presses in the morning!
(By the way, the "Personal Bailout Bundle" that features a free copy of the I.O.U.S.A. DVD is still available.)
The new president's "consensus" announced last night was presaged yesterday morning by that fount of depressingly conventional wisdom, Thomas Friedman. He actually went a step further and urged the new president to take a page from the George W. Bush post-9/11 playbook and tell folks to go shopping. Of course, that's a challenge right now for folks who have no savings, no retirement, and no home equity. (Perhaps Friedman's judgment is clouded at the moment by the fact the family fortune he married into, once worth $3.6 billion, is now worth under $25 million. Poor baby.)
Still, Friedman's flaky musings make me wonder exactly what the next "stimulus" will be all about. When bankers collected their bailout money, they used a good chunk of it to shore up their balance sheets rather than loan it out. You and I might not have the same option. Imagine: When we collect our next "stimulus" check, it might come on the condition that it can't be used to shore up our personal balance sheets and pay off debt. Maybe our checks will come in the form of vouchers that can be spent only on consumer goods.
Update: Bill Bonner executes a more thorough filleting of Friedman in today's DR.