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Location: St. Louis, Missouri, United States

Wednesday, July 06, 2011

The Golden Days are Over

Jack Kemp

Mike Shedlock at skewers the "brilliant Kenysian minds" of Jeff Immelt of GE and Bill Gross of PIMCO bonds/investments as he analyzes their "fixes" for the economy, i.e., more of the same government programs that just so happen to benefit their organizations.

Here below are the concluding paragraphs. I strongly suggest you go to the link and read the entire piece.


A key reason we have a jobs problem and an education problem is costs are too high. Gross purports to fix the problem via more government spending.

The solution cannot be the same as the problem, yet Gross proposes just that. Unions, untenable wages and benefits, and excessive government spending caused Greece to go bankrupt. Massive public works programs put Japan in a very precarious situation, with nothing but debt to show for its efforts.

History has proven time and time again that public spending proposals cannot and will not work. Gross and Krugman are blind to history. Immelt is talking about what is good for GE, not America.

The bond market forced Greece's hand. If we listen to Gross, Krugman, and Immelt, the US will soon be in the same spot.


Reader "Brian"comments

1. Government doesn't create jobs. Government jobs come at the expense of private sector jobs.

2. Bill Gross' comment "I'd have them studying algebra, physics, and geometry" is wrong. Not everyone needs to learn algebra, physics, and geometry. If money is to be spent in education, it should be where it is needed in trade tech schools. Americans are brainwashed into thinking that getting a four year degree is a path to financial success when a highly skilled tradesman makes more money and is more in demand today than a student with a fluff degree working in an office. We are creating a nation of unskilled workers in debt and ill prepared for the necessary jobs in a diverse economy.

3. Bill Gross won't speak poorly of educators or unions so long as endowments and pension funds make up a large portion of PIMCO investors

Thanks again for the article!
Regarding point number 1 above: Much government "work" is makeshift, and not needed at all.

Regarding point number 2 above: How many math majors do we need? How many PhDs do we need? If everyone has a PhD, then by definition, Walmart greeters and trash collectors will be PhDs. As Brian suggests, much is to be said for learning a trade instead.

Regarding point number 3 above: Clearly PIMCO suffers from the same credibility problem as GE. Of course, one has to look at ideas presented instead of making Ad Hominem attacks, but Gross' proposal was very weak as noted. One cannot help wondering if Gross purposely strove to avoid offending unions and pension plans.

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