WND column

Fallacy of Recovery

A one-time skeptic of fiscal stimulus, [German chancellor] Ms Merkel plans what amounts to a third stimulus package worth about € 7 billion ($10.4 billion), starting on January 1st.
– The Economist, Oct. 31, 2009

The mainstream media is full of reports of economic recovery and an end to the recession of 2008, even though the Business Cycle Dating Committee of the National Bureau of Economic Research has not yet spoken its official word on the matter. The significant rise in the stock markets and a single advance GDP report has been enough to convince nearly every economist and financial analyst that the worst is past, that 10.2 percent unemployment is a lagging indicator, and that the primary concern at hand is now too much monetary and fiscal stimulus leading to inflation.

Read the rest of the column at WND
Karl Denninger at the Market Ticker appears to have reached the same conclusion. Note that I wrote my column prior to reading his post To the Barkers: Answer This Question:

“The recession ended in June”: Dennis Kneale

“The recession was definitely over in September”: Any one of a number of people.

Ok. Let’s say that I accept all this at face value, even though while driving through my definitely-beach-oriented local town here this afternoon I noted even more closed-and-gone storefronts than there were a couple of weeks ago, and last night at the local open-air mall, although the evening was absolutely gorgeous, you could have fired a 155mm Howitzer down the “main drag” without killing anyone – because there was almost nobody there, and literally not one shopping bag was in evidence.

I simply have to ask the pundits and the carnival barkers, of which CNBC is the worst (but certainly not the only sinner) the following – why do we need any of these programs if in fact the economy is growing again:

Something clearly isn’t adding up. So, who is more likely to be correct? The skeptical economists looking at the evidence and seeing that nothing fundamental has changed or the mainstream economists utilizing the very same models that didn’t let them see a recession coming in the first place? And furthermore, if the models are known to be unreliable, then how does it make any sense to put faith in an estimate that is constructed on the bases of those models?