Wednesday, September 4, 2013

Crony columnists...

I sat down this morning to the usual NY Times and Washington Post opinion pages and, as usual, my pulse quickened as I read the words of those who would have their readers believe such things as: there's a certain class of politician who has no respect for working people, that emerging market problems are all about deregulation, and that McDonald's can easily maintain its present labor force---and, presumably, its hiring pace---while doubling the cost of its labor. I.e., same old stuff, different day.

While each of these probably deserves its own essay---not that I haven't essayed on these topics already---for today I'll simply condense my thoughts to a single paragraph for each:

Republican politicians care little for people who work for a living: If I were to rank all of the ridiculous pieces of propaganda I might expose myself to in the course of this day, this one I suspect would take the top spot---I mean working people vote, right? Not that Republican politicians---via all manner of subsidies for their cronies---don't do real harm to the working class (they indeed do), but proffering the notion that they literally set out to do so, however, is just dirty politicking---particularly when their accuser doesn't call out the other side as well. Seriously, one could just as easily point the accusing finger at the left: One could---with equal ridiculousness---say that Democratic politicians who lobby for a hike in the minimum wage despise workers. For---as studies commonsense suggests---a hike in low-skilled labor costs will destroy job opportunities for low-skilled laborers. Oh, and I have to add that Democrats push every bit as hard for subsidies to their cronies as do Republicans.

Emerging markets' present pain is primarily the result of financial deregulation: Huh?? The economist who makes this claim (same one who made the above claim btw) has been an outspoken critic of those who predicted that the present Fed's policies would lead to asset bubbles and generally high inflation. I think he's desperately trying to get in front of the fact that while inflation (excluding certain items) in the developed world has remained low, recipients of mass inflows of QE-spawned liquidity have indeed seen inflation rise (a 4-year high for Indonesia). Might we say that the U.S. hasn't seen the inflation many thought QE would spark because a lot of money migrated---as money does---to where it could yield better returns? Might we say, therefore, that we have exported the inflation to other parts of the world? Yes, indeed, we might. And now, with tapering on the horizon, all that money is fleeing those emerging nations in droves. Which is, therefore, doing a real number on their currencies and markets. The fact that Krugman won't even entertain this logic (that emerging markets are suffering withdrawals from a QE high)---for it entirely contradicts his position---while predictable, is, nonetheless, disgusting.

Investor note: The fact that emerging nations were the destinations of the developed world's liquidity speaks to the potential of those economies going forward (potential that---in my view---patient, long-term, strong-stomached, individual investors should exploit). The fact that there had been more flow to those nations than they could presently utilize efficiently---which led to an exodus at the first hint of taper---speaks more to the inherent risk of rampant money creation than it does to the prospects for developing economies.

McDonalds can afford to double its labor cost while conducting business as usual: Some assertions simply aren't worthy of a response.

I guess I shouldn't complain, this stuff is my material. But you know, in all honesty, there's nothing I'd love more than to have nothing of the above nature to write about. It is downright discouraging to read the stuff of presumably intelligent columnists with huge audiences when it's replete with half-truths and utter political sophistry. It has to be pure cronyism. A guy like Paul Krugman can make himself the world's most quoted happy hour economist by picking a side. His condemnation of Republican policymakers for their political calculations while defending the equally dirty left makes for robust book sales and lucrative speaking engagements---yet it makes the man himself, well, dirty. Same goes for the popular pundits personalities on the right---the Limbaughs and the Hannitys. I know, I just touched a few nerves, but you gotta work with me here folks. If you truly believe your side in Washington is virtuous, if you truly believe that their every move isn't first and foremost politically measured, well, I'm afraid you're fooling yourself. If you owe your allegiance to a political party, it would surely be better served if you would focus your attention on its transgressions---if you would call your own party out when you find its leaders catering to their supporters (which always, in myriad forms, occurs at the expense of the taxpayer), if you would hold the men and women you vote for to a higher standard...


1 comment:

  1. […] see in emerging market equities was not nearly realized (in fact share prices declined) in 2013. Here’s a recent blog post where I explain how quantitative easing in the U.S. has led to extreme volatility in the emerging […]