Sequester II

It must give meteorologists satisfaction knowing that their track record forecasting the weather, while not that good, seems to be far better than government economists.  As the stock market continues to move ahead and economic indicators roll in showing the recovery is gaining strength, we are no longer hearing about the coming “bread lines” and the forecasted spike in the unemployment rate.  As I have recently said (well not that recently), maybe government budget cuts are giving businesses and individuals more confidence in the future.

With all this positive news about the economy, Paul Krugman (and his colleagues who continue to call for more government stimulus) must be at a loss for  words.  (That must be particularly difficult for Krugman, who I always think of as the “Jim Cramer” of the Economics profession.)  So far the best they can come up with is; “the news would be even better if we had more spending of the tax payers money.”  They should be celebrating the recovery but my guess is they would be a lot happier if the unemployment rate had spiked to 8.5% and the economy had fallen back into a recession.

As the recovery gains momentum President Obama will be distancing him self from all the dire forecasts, and find a way to take credit for the recovery.  That’s fine with me, “always better to be lucky than good.” Perhaps one day he will realize that “government” does not have all the answers.

As I watch the NBA playoffs, I can’t help but think that the government’s role is analogues to the officials who are there to enforce the rules.  The officials are not there to control the outcome.  Fans would become very frustrated and angry if the officials started dictating strategy to the coaches and players in the belief that they know what is best for the fans.  Our government also has a set of rules which they are supposed to follow, it’s called The Constitution and when politicians begin to bend the rules because “they know better” our democracy is in trouble.

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Note for Advisors:  Mark Hebner, one of the early advisors to use DFA, is building a web based investment library.  He is searching for Matrix books for the years prior to 1999 and any investment books written by advisors.  The entire library will be accessible to the public.  If you are interested Mark’s email is mark@ifa.com.  I think it is a great idea.