Jack

I'd rather see that magician try to be president... than see this president trying to be a magician and think this crisis will disappear with a slight of hand.. didn't fool many at the G20....

Jon

Interesting piece. Basically he said that turning a car into a skid helps you get out of the skid and that speeding up before a crash doesnt help you get out of the crash, ans he doesnt know what is happening right now with the economy.

Interesting no doubt, but what exactly did you learn besides how Jillette learn how to drive a car and eat fire?

Leszek Pawlowicz

As soon as I read this line:

"Obama tells us that we can spend our way out of debt."

I stopped. Obama has never said this - never.

He's said we need to spend money now to get the economy moving again. You can agree or disagree with this policy. But ascribing the above statement as Obama's policy is either ignorant, dishonest, or both.

tudza

There are many things that are not intuitive that are still provable, the number of people needed in a room to insure that two have the same birthday comes to mind. The Monty Hall problem is another.

Penn has two problems working against him. The problem is huge and hard to quantify and economics is not an exact science.

Mojo Bone

Well, I suppose one could argue that economics isn't a science at all, merely a collection of differing opinions sometimes based on empirical data...

Kevin

That's a rather misleading representation of economic policy. 'Spending to get out of debt' is not the same as spending in order to stimulate the economy.

Scott Supak

Here's Penn:

"He tells us that even though the government had control over the banks and did nothing to stop the bad that's going on, if we give them more control over more other bank-like things, then they can make sure bad stuff doesn't happen ever again."

Steven, maybe you shouldn't listen to anyone who doesn't know what they're talking about. We haven't had control of the banks since Phil Gramm's Enron-type deregulatory insanity, or the under-capitalization rules from Paulson. So re-regulating the banks sounds pretty good to me.

Turn into the skid.

Ike

I fear that some of you are missing the point.

When Penn's DAD tells him to turn into the skid, there is a baseline of trust built on a relationship, based on a demonstrable concern for Penn's well-being.

When Penn's fire-eating mentor shows him how it's done, the mentor uses his OWN mouth, not Penn's. That's a trust-building action.

When Penn's President claims that a massive future debt-load is required to kick-start an economy, at the SAME TIME that the Chief of Staff is saying "Don't let this crisis go to waste," then it might be time to wonder.

The trust isn't there. It is not implicit, it is not explicit.

Re-phrased:

If your Dad told you which pedal to press to keep from hitting the wall, you'd believe him,

If your driving instructor SHOWED you which pedal to press, by doing it himself right in front of you, you'd believe him.

If someone you don't know called you while you were in the car (and they weren't), and told you to hit that pedal on the right as hard as you could...

?

Read more...

charles

Nice. Indeed Obama has said we can spend our way out of debt. It's step one in his 12 step plan. I don't know if it will work, but it's what he's doing. So please people untangle the undies.

The biggest problem we face is that people have tossed reason to the wind in order that they can properly swoon for our newly elected president.

KK

Ike, well said.
You forgot the ... "and the person who told you to push that pedal on the right holds an insurance policy on your life..."

gatersaw

Absolutely not worth reading. Pennunderstands driving a car on slick pavement but has no clue about econic policies or theory and worse yet he trusts a slick talking politician during an economic crisi attempting to turn a poorly managed free market into a socialistcountry.
PppPenn c

Kevin MN

gatersaw,

How can you have a poorly managed "free market"? Obama isn't trying to turn the US into a socialist country. We have a mixed economy. Every single first world country has a mixed economy that combines elements of capitalism and socialism. This is something people would learn on the first day of an economics class. Obama is trying to manage the free market better, which is exactly what is needed.

Kinglink

Isn't this a sign of the end of times? Our Economists listening to Magicians?

blue92

> Indeed Obama has said we can spend our way out of debt. It's step one in his 12 step plan.

Cite?

* * *

More importantly, what does Teller have to say about the economy?

Ted Smith

Of all the commenters, there are only about two people who actually understood what the article was about. Hint: It really has nothing to do with economic policy.

Taylor Hickem

Yea the resurgence of "New" Keynesian economics
http://en.wikipedia.org/wiki/New_Keynesian_economics

is really frightening, I thought the word "stagflation" sums up in a nutshell why we abandoned that logic in the 80's. People who make mistakes on things they've never tried before are courageous. People who make mistakes on things they already know are a bad idea are what we call fools.

Erick

Paul Krugman addresses this issue on his blog today:
http://krugman.blogs.nytimes.com/2009/04/06/balance-sheets-and-the-trade-cycle-somewhat-wonkish/

Basically because of the cyclical nature of our economy (bubble/burst if you will), the private sector lends and spends money in good times till the bubble bursts then the government steps in to lend and spend in hard times because the private sector cannot. Once the economy gets back on its feet, then the private sector takes over and we repeat the whole cycle again.

GW

I spent my way out of debt. I borrowed a lot of money. I spent it on my education. That enabled me to get a job with a salary high enough to allow me to repay the debt (and make a lot more money than if I had never taken the loan in the first place).

Is spending for investment really counter-intuitive?

tjohnson

First of alI, never listen to anyone from Minnesota. They elected Al Franken. Paul krugman is a pundit. Investing in yourself is the best investment you can make. Unlike our politicians who like to take our money and invest it in someone we dont know. The banks didn't rip us off our government did. Why people dont get this is beyond me. Fannie Mae and Freddie Mac is a scandal 1000 times larger in scope and total dollars than Enron. Its not a mixed economy its a mixed up economy. Our government wanted companies to breach contracts on contracts they the government had written. Our politicians do not read they watch then talk. The economy doesn't work in cycles it works on a circuit and Obama is about ready to flip the switch. Finally, its virtually impossible to steer into or out of a turn at 100 mph in car with no wheels.