I’ve been talking about the balance sheet recession and the “pushing on a string” meme forever. But it’s still the root cause of our lethargic un-recovery.
Hedge fund billionaire David Einhorn weighs in with a Simpson’s reference-laden op-ed at the Huffington Post:
A Jelly Donut is a yummy mid-afternoon energy boost.Two Jelly Donuts are an indulgent breakfast.Three Jelly Donuts may induce a tummy ache.Six Jelly Donuts — that’s an eating disorder.Twelve Jelly Donuts is fraternity pledge hazing.My point is that you can have too much of a good thing and overdoses are destructive. Chairman Bernanke is presently force-feeding us what seems like the 36th Jelly Donut of easy money and wondering why it isn’t giving us energy or making us feel better. Instead of a robust recovery, the economy continues to be sluggish. Last year, when asked why his measures weren’t working, he suggested it was “bad luck.”
I don’t think luck has anything to do with it. The blame lies in his misunderstanding of human nature. The textbooks presume that easier money will always result in a stronger economy, but that’s a bad assumption.
Continue on for some really smart and basic stuff, including David’s bullish outlook for equities.
Hat tip Linette Lopez