Whether it is managing healthcare or alternative energy, our government bureaucrats repeatedly fail to see our economic future.
As we all know, our stock market is finally starting to shred the delusions that have built it up over the past months and years. One major domino that started the cascade was China’s experience of the same thing.
When China started to show major signs of shredding, Jack Lew was asked about it. Jack Lew is President Barack Obama’s Secretary of the Treasury. I’d love to know where his portfolio is invested and what decisions he or his hired manager was making about those investments at the time when he answered the question.
What is revealing here is not just that Jack Lew’s answer about China’s effect on the United States was wrong. What should really teach us something about our government-banking complex is that he agreed to express an opinion! Why couldn’t he have said, “I have no certainty whether or how China’s economic problems will affect us.”
Instead, he pretended he had expertise. The Washington Examiner reports, “Did Treasury misread China’s market impact on U.S.?”
The U.S. stock market showed strong linkages to China’s market this week, a few short months after Treasury Secretary Jack Lew strongly implied that China’s market and the U.S. market have almost no direct linkage.
“I will say that China’s markets still are pretty much separated from world markets,” Lew said at the Brookings Institution in July. “They’re, obviously, moving towards being more integrated, but right now they’re not.”
“So you’re not going to, I don’t think, see the direct linkage there,” Lew added.
He gave those responses after being asked whether the U.S. has anything to fear from the meltdown in China’s stock market over the last few months. Lew also seemed to indicate that China’s stock market doesn’t necessarily reflect what’s going on in China’s core economy.
That was, of course, all disproven by recent events.
Did Lew know that what he was saying was exactly the opposite of the truth? I think he had to suspect it. At the same time, no one can be sure of the economic future. So if he had claimed ignorance, he could have defended his answer as truthful. He could argue that his guesses are not certain.
But the bottom line is that Lew, as a government bureaucrat appointed to watch over the Treasury, had to 1) pretend to have special knowledge, and 2) promote optimism about our economic future.
That is all these people do. They have all decided that what matters most about the economy is “consumer confidence” and “investor confidence” and other psychological feelings in the American populace. Therefore, their primary duty to the American people is to always tell them that things are good, that they are getting better, and that any economic bad news will end soon.
So if you are already certain that our economic future is going to be good, you can listen to government bureaucrats tell you what you already know. But if you are not already confident about our economic future, then there is no reason to listen to any of them. They only have one message up until the emergency overtakes us.
Then they demand more money and power to fix the problem they always fail to foresee.