- Well the tone and tenor of the discourse of the various market pundits and Wall Street economists seems to be that this recovery is on track
- I guess there were some doubts about the recovery until the Federal Reserve laid all those doubts to rest based on the confidence with which they discussed the likelihood that the Fed would raise interest rates in June or July
- The confidence persists despite the drumbeat of consistently weaker than expected numbers
- Once in a while, we’re getting better than expected numbers, but the beats are in the minority
- Sometimes we get a number that superficially appears better than the forecast, but as soon as you actually delve beneath a very thin surface, you see a lot of negative details that don’t make the headlines
- People overlook a lot of information beneath the surface that is actually quite bad
- But before I get into the economic data, I want to talk a little about Janet Yellen
- On Friday she gave a monetary policy speech at the Radcliffe Institute for Advanced Studies at Harvard
- Yellen studied economics at prestigious institutions, herself
- Economics is Janet Yellen’s passion; she’s dedicated to economics
- For someone who has dedicated herself to one subject, it’s amazing how little she actually knows, despite going to our nation’s best universities
- It might be that the upper echelon universities are so deeply wedded to Keynesianism that a student might get a better economics education at a community college
- One of the things that Janet Yellen said during her speech was that she she believes in capitalism, but that the government needs to protect the economy because capital is prone to “breakdowns” that cause mass unemployment and that we need government, or central banks to save capitalism from itself
- Capitalism is not prone to breakdowns, nor is it prone to mass unemployment – in fact it’s just the opposite
- Capitalism is stable; it has a cyclical nature much less pronounced absent the Fed
- Huge breakdowns and mass unemployment are always the result of government interference
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