Terry Connelly is dean of the Ageno School of Business at Golden Gate University and is frequently quoted on business, financial, and economic issues by Bay Area local, as well as national, news media.
What passes for conventional wisdom from CNBC, Fox and multiple radio commentators these days on the economy is reflecting more politics and ideology than hard analysis.
For example — Obama has failed because he hasn’t secured passage of comprehensive health care legislation in his first six months in office: what utter nonsense. Whether or not legislation passes later this year, the idea that a he should be written off because in that short a time he hasn’t accomplished what 11 Presidents before him failed in the their full terms to do is preposterous except on cable TV.
The stimulus package has failed: if so, then why is 2nd quarter GDP down only 1% while the previous two quarters were down by over 5% each?
The “cash for clunkers” program is a Katrina-like failure of Federal government intervention: then why were the appropriated funds exhausted in on only the first week of eleigibility?
The Chinese and other foreign central banks are going to stop buying US Treasury securities: then why were the vast majority of recent Treasury note auctions quite successful from the US taxpayers’ standpoint?
Warren Buffett was a fool to take an option on Goldman Sachs at $115/share: enough said, with Goldeman now at $160 or so. And his GE is climbing in share price as well.
The government has no business involved in the auto industry, and will surely botch the bankruptcies of GM and Chrysler: then why are both already out of bankruptcy succesfully, faster than any airline in history, and why are auto sales up? (See “cash for clunkers”, above, as well.) And what do these commentators suggest the Government do with its equity interests in the compnaies — sell them now and deprive the taxpayers of any upside?
If the Government fails to step in to save CIT, it will be another Lehman Brothers with dire consequences for small business: but CIT lives on and obtained private credit and bridge financing.
TARP is a failure, a waste of taxpayer money and a boondoggle: then why have the biggest and best banks already paid their TARP loans back, with profitable interest, to the US taxpayer?
Ken Lewis was an idiot to buy Merrill Lynch, and the Government was a knave for forcing him to do so: then why is Ken crying all the way to the (pardon the expression) bank with the flush of cash generated by the folks at Merrill this fiscal year?
Carol Bartz should do a deal with Microsoft; but when she does a deal, she shouldn’t have — let’s wait maybe a week to see how things sort out!
The Obama Adminstration is spending too much money and Bernanke is printing too much money and neither will be able to stop runaway inflation: OK, so let’s go back to the Hoover approach and and adopt an austerity budget and contract the money supply — worked before, right?
Those who want to use ideology as a basis for stock trading are welcome test the returns that type of focus brings. But let’s not replace the “efficient market” hypothesis with another fantasy version of real economic behavior.
Filed under: Uncategorized
