Clueless on Economics

Jim Hoagland has a really foolish column in the Washington Post, "Ignoring the Invisible Hand." He warns that the world economic system is on the brink of doomsday.

Ideally, nations also create a greater good by anchoring policies in enlightened self-interest. That seemed to be taking place in the 1990s, for example. But the shocks the international system has received since Sept. 11, 2001, suggest that we have been knocked off Smith's rational trajectory at least temporarily. Many world leaders are stubbornly refusing to address mounting imbalances among resources, obligations and aspirations.

It is not just Smith's famous hand that is invisible these days. So are the solutions that policymakers need to devise and implement to deal with an era of national self-interest run amok. Things have come to this previously unimaginable question: Where are the economists when we need them?

Can economists do what nuclear scientists did during the Cold War with the magazine-cover clock ticking toward doomsday? Is it close enough to five minutes before financial midnight to justify that kind of dramatization for the public by the experts? Even if we are half an hour away, isn't that the time to look at a rickety global financial superstructure that is being shaken by a new energy crisis, dollar turmoil and out-of-control American public finances?

What a bunch of garbage. What "energy crisis"? The price of oil is up in dollar terms, but lower in Euros. There are no shortages. And "dollar turmoil"? What is he talking about? Finally, "out-of-control American public finances"?! The US public debt as a percentage of GDP is substantially lower than most other countries.

Then we get to some seriously ridiculous stupidity:

This is the new global balance of terror: China and Japan could bring the U.S. economy to its knees by massively selling off the dollar, but they would gravely harm themselves -- and by extension Europe's major trading nations -- in the process.

No kidding! They could also harm themselves and the rest of the world by starting a nuclear war. The US helped set off the world-wide Great Depression by enacting trade tariffs. It has ALWAYS been possible for someone to wreck a market if they act against their own best interests. Just ask anyone who has ever owned a hotel in an area that is seriously over-built.

Fortunately, Hoagland spares us from reading his ideas on how we can save ourselves from this imagined catastrophe. Although, if his "diagnosis" is representative of the quality of his thought, I'm not sure his solutions would qualify as "ideas".

Can you believe he got paid for that mess?!