Joe Queenan of The Wall Street Journal, published a terrific essay in the March 24-25, 2012, weekend review, titled, “The Index of Silly Economic Indicators.” Queenan wryly points out that there “are dandy little indicators of economic revival” like the number of liposuctions, visits to drycleaners, and the number of haircuts.
Amidst moments of laughter and good fun, a more serious Queenan is revealed. The serious one takes a look around his hometown and sees shuttered businesses, out-of-work Americans facing foreclosure, and empty hair salons (contrary to economic indices reporting otherwise).
Queenan’s point is well-taken.
For the majority of Americans, economic vital signs remain uncertain—oftentimes, muddied by long periods of un- or underemployment. Queenan, aware of the biases of proximity, admits that “it is always dangerous to base assumptions about the state of the economy on anecdotal information.” “But,” he goes on, “anecdotal information trumps government statistics any day of the week.”
Enter Chairman Bernanke and Secretary Geithner.
Dressed in tailored suits, the two converse inside an air-conditioned office, reviewing theoretical economic models and indices. They use government-generated statistics to evaluate economic vital signs.
Nevertheless, the Bernanke-Geithner duo applies their theoretical models to the real economy, infusing the market with easy money. It is no longer necessary to fire up the presses to print new bills—no new labor or capital is required. Bank lending rates are changed electronically—or, more recently, held constant, near zero. The FOMC calls in its trades.
Bernanke retires to the Federal Reserve; Geithner to the Treasury. They wait for the next round of models to provide feedback on the success or failure of their policies.
Meanwhile, as Queenan reports from the frontlines, “everyone is waiting tables, or parking cars, or pinch-hitting as a substitute teacher, or on the prowl for a nonpaying internship.”
With a sharp pen and cunning wit, Queenan drafts new headlines signaling economic vital signs:
Maybe some of these headlines will actually make front page news where Messrs. Bernanke and Geithner might make note of them. Better yet? Maybe, just maybe, Bernanke and Geithner will take a closer look at the golden era of monetary policy when the economy was based on sound—not easy—money.