Guest Posting at The Big Picture

My friend Barry Ritholtz is getting some well-deserved R&R and arranged for some of those he knows, including yours truly, to serve as guest posters at his popular blog while he is away. Below is my first column of the week for The Big Picture, entitled "Blaming the Wrong Group":

Dan Gross is one of America’s best financial journalists, but that doesn’t mean he always gets it right (He did, after all, publish a book in the spring of 2007, just before the financial world fell apart, which claimed that “bubbles are great for the economy”).

In his latest column for Newsweek, “The Failure Caucus,” Gross maintains that those who are skeptical about the near term prospects for a sustainable recovery have a vested interest in a different kind of outcome — they want to see the U.S. economy fail.

Most Americans have a lot riding on the success of the government’s efforts to pull the U.S. economy out of its ditch: individual investors, bankers, Federal Reserve Chairman Ben Bernanke, Democratic politicians, and taxpayers. A somewhat smaller group has a lot riding on the failure of these efforts. I’m not simply talking about investors who are betting against the markets and who believe the recent stock-market rally is overdone. I’m talking about the Failure Caucus, a group spanning the political spectrum that has invested reputations, egos, and, in some instances, their political futures on the notion that we’re in for several more years of economic trauma.

Unfortunately, Gross relies on the old propagandist’s trick of lumping fools and crazies together with rational observers who have legitimate cause for concern, in a way that discredits them all.

Worse, he fails to see the irony of his position: it’s actually the permabull posse of policymakers and financial leaders — not to mention the cheerleaders in the media – who failed to see the disaster coming, and who now argue that a debt-and-speculation-fueled overdose can only be cured with more of the same, who are the ones betting on failure.

In fact, the real risk right now, to paraphrase Michael Darda, an optimistic economist cited by Gross, is in being too positive.

Source:
The Failure Caucus
Daniel Gross
Newsweek, September 02, 2009 11:47 AM ET
http://www.newsweek.com/id/214765

Comments

[roger]

Skeptical is not the word,change it to positively certain,
no recovery( and I'm not selling any books)
For the American people, ahead lies a very painful period
of decline in living standards,prestige and self respect with
a big dip in self confidence, both for themselves and their
government who will become the #1 scapegoat.Not being # 1
anymore is going to be traumatic. But then I'm just an old frt,
what the hell do I know.

[Jay (market folly)]

hey congrats on the Big Picture guest posting gig. Lots of great content over there, but you're used to cranking out great content here so you'll have no problem filling his shoes for a bit. Look forward to your commentary over there & continued posts here!

Jay
@marketfolly