Economists have fascinated me for decades, so much so that I actually when to school for a degree in economics. After years of bogus economic theory after bogus economic theory, I was still in the game. That’s until I predicted that a steady increase in the cost of energy would send the US Economy into an unprecedented type of economic turmoil. I called it Energy Based Inflation in my paper, and subsequently received my first B on a term paper in college.

I even came up with a solution to Energy Based Inflation. Yet, to date, I still see economists following the same failed economic concepts being taught while I was going to school.

Yahoo published an Associated Press article about recent slashing of jobs. The article indicated that a growing number of economists were starting to believe that we were in a recession.

Here is a bit of news to economists: We’ve been in a recession since at least 4th quarter of 2007. The collapse of the financial market is due to the fact that we financed the recession via our properties, equity, and homes. The Federal Reserve resisted the idea of being in a recession during 2007, and took no action to curb the debt spending taking place. By the 4th quarter, there was no longer any equity in our property and the market began collapsing.

At this point, there is very little that the Fed or the Whitehouse can do to turn this situation around quickly. Prices on homes have plunged so much that it has exacerbated the debt situation. Lowering interest rates won’t provide an immediate relief because the prices are too low. It will act more as a tourniquet against the virtual free fall of property value.

If we can fix our economic education system, we can fix the problem long-term. Until we stop teaching the antiquated and failed economic theory of the last 30 years, we’ll repeat the same mistakes.

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  1. Economists rely on good data. Unfortunately, there aren’t too many good sources of data that they can use to predict a recession. But economists should have been able to at least conclude from the recent actions taken by the Fed, which has the best of data, that a recession was prominent. We all know that cutting interest rates is a way to expand the economy to avoid a recession, and the Fed has been doing this aggressively.

  2. leafless: Economists rely on good data, but the problem is the economists and the predictive models and theories we base our decisions on. They are severely flawed.

    I accurately predicted inflation based upon energy price increases long before it started happening and was told it was an absurd theory. Every time Exxon and big oil meets with Congress to talk about their record profits while we all suffer from record gas prices, the press talks about how they said “What goes up must come down.” It’s a bogus theory given how our economy works.

    Cutting interest rates does not always stimulate an economy, as it can (and has) caused stagflation.

  1. 1 Radio Show Highlights 4/5/08 : Words Cause

    […] briefly explain why we have been financing the the recession since late 2007 with the equity in our […]

  2. 2 When is a Recession not a Recession? : Words Cause

    […] for visiting!I have been saying that we are in a recession for quite some time. My estimates put the recession as having started in late 2007. There are varying opinions about when the recession started and even IF we are in a recession. […]




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