The Creative Destruction of Anthony Weiner
The correction I’ve been expecting is now in full swing. Stocks have retreated nearly 7% from the recent high, commodity prices have fallen a similar magnitude and the dollar is attempting to stabilize. We have entered a transition phase for the economy and the market that will likely take several months to play out but could ultimately prove to be very beneficial - if the politicians and Fed officials can hold back the urge to “do something”. It isn’t encouraging that we’re starting to hear renewed calls for more “stimulus” from the DC crowd but I suspect the only form of stimulus that can emerge from that swamp in the age of austerity will be of the variety displayed so recently and graphically by Rep. Anthony Weiner (D, NY).
Mr. Weiner, in case you missed it, is in trouble for sending out photos of his inflated…um….ego to women who aren’t his wife, via Twitter. Mr. Weiner spent last week strictly adhering to the well established script for disgraced public officials by holding a tear filled press conference, professing his love for his wife and dramatically redefining the phrase “public service”. He also announced that he would be entering rehab although it is unclear whether a facility had been found with expertise in turning misogynist louts into productive citizens. Rep. Weiner may have single handedly - no pun intended - done more for the US economy than all the stimulus to date by launching two new industries in one week - rehab facilities for powerful male chauvinist pigs with impulse control issues and package delivery via Twitter. He will probably have to pay royalties to Dominique Strauss Kahn.
Weinergate also serves to remind us that dynamic economies are always undergoing what Schumpeter called “creative destruction”, something sadly missing from the US economy of the last few years. The impulse of government officials to be seen as “doing something” about the economy is a large reason why we find ourselves with a 9.1% unemployment rate and barely discernible growth nearly two years after the end of the recession. Government efforts to prop up the existing structure of the economy rather than allowing a new one to emerge naturally have impeded progress. Quite possibly the only positive to come out of the huge deficits of recent years is that the size of the public debt now precludes more such efforts....MORE