Sunday, October 19, 2003
The Fronkensteen Economy
Dug up from the local graveyard, the economy lies on a slab in the basement of the mad scientist, Dr. BushNGreenspan. Poking and prodding at the lifeless hulk sprawled out upon the lab table, but all the usual tricks failed to work. He replaced all the body parts with enlarged versions (including the Shwanstooker). He reversed the polarity. He even tried deficit spending . . . all to no avail. The dead body would not get off the cold slab.
Dr. BushNGreenspan sighed as recalled the most recent mishap. His trusted lieutenant, Herr Vogel Cheneywitz, was supposed to come back with the brain labeled “Early Stages Recovery.” At the brain depository, Herr Cheneywitz grabbed the wrong brain. He brought back one labeled “Post Bubble/Excess Capacity.” Even though Cheneywitz tore off the label before returning to the lab, BushNGreenspan suspected something was amiss.
A storm approached, and that gave the Doctor an idea. He fixed a copper cable to the lightening rod on the roof of the castle. The line ran down to a transformer which would step up the voltage. Desperate times called for desperate measures. The mad doctor jammed the copper cable into the nether regions of the beast, and waited for the next Fed meeting.
Finally, lightning struck! The room lit up white as the energy raced downt he copper into the machinary terminating in the beast.
BushNGreenspan called out to his assistant, Snowgor, “Throw the 1st Switch!”
Never before seen levels of electricity flowed into the hulking corpse. Nothing happened.
“Throw the 2nd Switch!”
More and yet more amperage poured into the lifeless body of the creature. And still no moment, no animus.
“THROW THE 3rd SWITCH!”
“ No, not the 3rd switch, master!”
“YES, THE 3rd SWITCH -- THROW IT NOW!!”
Gigajoules of of juice flowed into decaying behemoth.
And then, it stirred. Slowly, the creature lumbered off the table. At first, he twitched this way and that. As more and more amperage poured into his body, he began to dance, to jump, to move about.
And yet, something was not right. He walked, but awkwardly. He was alive, but still hooked up to the electrical stimulus. The big question: When the madman pull the cable out of the monster, will he be reanimated? Is it alive, or was it merely twitching dumbly to the powerful surge of electrical stimulus?
Will it collapse back once again when the juice is cut off?
I fear we are living in a “Frankenstein Economy.” That, IMHO, is the big question with the present economy. Can we defeat the normal business cycle? Can we take a dead piece of inanimate tissue, and by applying historical levels of tax cuts, interst rate cuts, increase monetary supply, devalue the currency, and any other trick you can think of, to defeat the usual refractory period?
Are we seeing the beginnings of a new cycle, or are we witnessing temporary effects of historical levels of stimulus? If its the latter, what sort of problems might this engender when we slump back onto the slab?
We hope the economy is getting better on a self sustaining basis; We fear it merely been “reanimated” due to the incredible levels of stimulus we’ve applied over the past few years (most especially, since the Iraq war started). The recent data points to a recovery that may be showing early signs of decay. The next 60 days will be crucial . . .
For an informative (and more serious) sequel to this piece, see the "Frankenstein Economy."
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