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In Their Own Words - Economic Quotes

Saturday, May 16, 2009, 11:28 AM

One of my favorite internet articles of all time, entitled "Pompous Prognosticators," placed quotes of various politicians and other authority figures across a chart of the Dow Jones, spanning the years 1925 to 1933. A portion of that article is located here.

Here's an image from the original article to jog your memory, in case you can't recall which article I am referring to:

I loved that article when it came out, and still love it today, because it reveals that nothing has changed through the decades and that believing the self-interested pronouncements of "green shoots" can be hazardous to your wealth.

So I decided to recreate that effort but update it for our modern times. Let's continue to update this chart over time and see where it goes.  The people at Lowesville will recognize the work below, because I presented it there, along with a lot of other new information, inlcuding the Crash Course Toolbox, which is a main feature of my in-person seminars.

If you see a great, defining-moment sort of a quote, please send it along to me, preferably with a working link to the primary source. Okay - here goes:

(1)

"At this juncture . . . the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained," 

Ben Bernanke, March 28, 2007
in a statement to Congress’ joint economic committee


(2)

"It is not the responsibility of the Federal Reserve - nor would it be appropriate - to protect lenders and investors from the consequences of their financial decisions.“  

Ben Bernanke, October 15th, 2007


(3)

"[The U.S. economy] has a strong labor force, excellent productivity and technology, and a deep and liquid financial market that is in the process of repairing itself.”

Ben Bernanke, January 18, 2008


(4)

“The long-term fundamentals of our economy are strong," but "[w]e believe the economy is going to continue to grow slowly here. This is not an emergency.“   

Hank Paulson January 18, 2008


5) 

"[The economy] is fundamentally strong, diverse and resilient.“

Hank Paulson, February 14th, 2008


(6) 

'The worst is likely to be behind us . . . . ”  

Hank Paulson, May 7, 2008


(7)

On Freddie and Fannie: “They will make it through the storm”, "… in no danger of failing.","…adequately capitalized“ (two months later they were nationalized)

Ben Bernanke, July 16th, 2008


(8)

"I think all of our efforts, so far, have produced results. … And I think as those green shoots begin to appear in different markets and as some confidence begins to come back that will begin the positive dynamic that brings our economy back. … I do see green shoots"

Ben Bernanke, March 15, 2009


And:

“What you’re starting to see is glimmers of hope across the economy.” 

President Obama, April 10, 2009


(9)

"I think the sense of a ball falling off the table -- which is what the economy has felt like since the middle of last fall -- I think we can be reasonably confident that that's going to end within the next few months and you will no longer have that sense of free-fall,"   

Lawrence Summers, April 8, 2009


(10)

“We are hopeful that the very sharp decline we saw beginning last fall through early this year will moderate considerably in the near term and we will see positive growth by the end of the year,"

Ben Bernanke, May 5, 2009
to the Joint Economic Committee


and

"The recent data ... suggest that the pace of contraction may be slowing, and they include some tentative signs that final demand, especially demand by households, may be stabilizing,“ 

Ben Bernanke, May 5, 2009
to the Joint Economic Committee


More to follow as time goes on.....

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10 Comments

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: In Their Own Words - Economic Quotes

 AWESOME read Chris!!!

Those economists and officials who missed the economic train wreck of the century, and in many instances contributed to exacerbating it's severity are now looked to for guidance, bottom picking and in some instances are even being asked to fix it.

I'll look to the blogoshpere instead.

I often wonder if some other event will be blamed for the depression that ensues or if 10, 20, 30 however many years after we will look back and say "What were these "economists" thinking? "How could they have not seen this?"

In any event the fundamentals for depression are spelled out: We are insolvent. Emerging economies have better governmental balance sheets and even their citizens have stronger balance sheets. Jim Puplava pegs total debt at 80,000,000,000,000.00 (Debt 11trn, Obligations Medicare A & D and Social Security 55trn. 2 wars, stimulus, TARP, TALP and the rest of the deficits make up another 14 trillion).

We make GDP 12 trillion pre bust, and like your Fuzzy Numbers video explains, that number is probably a good 40% less. 

1,333% equity to debt.

Or, the equivilent of buying a $650,000.00 dollar home with a $50,000.00 gross income.

~Not going to have a pretty ending!

taco's picture
taco
Status: Bronze Member (Offline)
Joined: Jun 21 2008
Posts: 26
Re: In Their Own Words - Economic Quotes

 I like the idea of a modern version of the original chart. However, I think it is too easy if we use quotes from anyone in the administration or the Fed. Why? Because from a pragmatic viewpoint, what these people say and what they think are probably very different. They act as cheerleaders and publicly say ridiculously optimistic things because that is their job -- it is part of what they think they are paid to do, or part of what they think they need to do in order to accomplish their other objectives. Whether we believe that they should be acting this way is a separate matter. 

I think a better set of quotes would come from the media, economics professors, or independent economic analysts. These are people who make their money (presumably) on saying what they actually think and continue to make money based on being somewhat correct. I find it astonishing that this group of people has been so wrong. I do not find it astonishing that the public statements of administration or the fed are consistently wrong.

bluebird's picture
bluebird
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Posts: 75
Re: In Their Own Words - Economic Quotes

These are great! Do you have any quotes from Geithner?

VeganDB12's picture
VeganDB12
Status: Platinum Member (Offline)
Joined: Jul 18 2008
Posts: 731
Re: In Their Own Words - Economic Quotes

Hi Bluebird

I spent a few minutes looking into this and found a few sites with the same collection of quotes (no time date stamp on this that I can find, sorry to say).  Here is a sampling of his wisdom:

http://thinkexist.com/quotes/timothy_geithner/

What impressed me (if they are really his quotes, I think they are) is that he doesn't make it seem simple like Ben and Hank. Instead he seems to prefer intellectualized contradictions (a different kind of BS from simple, condescending lies I guess).....you will see what I mean when you look at the quotes.

Regards

Denise

Fred Dupont.'s picture
Fred Dupont.
Status: Member (Offline)
Joined: May 15 2009
Posts: 1
Re: In Their Own Words - Economic Quotes

This is great - I was looking for this timeline, visual representation, parallele between impressions, valuations and charlatan cheering... I think Greenspan said: "...the last responsibility of a central banker is to tell the truth..."

The generally accepted idea is that these guys are ignorant fools - I do not think so: my belief based on perception is that we have been dumbed down and misled to accept to play along in a grand design; the collusion between politics, central banking and high finance obeys to the forceful purpose of protecting the status quo of power.

What we need now, is a similar representation of the USD index and the "strong dollar policy" & China=currency manipulator frequence.

Thanks for the great work.

SamLinder's picture
SamLinder
Status: Diamond Member (Offline)
Joined: Jul 10 2008
Posts: 1499
Re: In Their Own Words - Economic Quotes

Chris,

Here's another one to add to your collection:

http://www.comcast.net/articles/finance/20090517/US.Obama.Economy/

Obama budget chief: Economy almost bottomed out

WASHINGTON — The worst seems to be over, President Barack Obama's budget director said Sunday.

...

Peter Orszag said the nation's economy appears to have bottomed out,...

Juvysen's picture
Juvysen
Status: Martenson Brigade Member (Offline)
Joined: Sep 30 2008
Posts: 121
Re: In Their Own Words - Economic Quotes

I think my favorite quote from the past few months (which was on NPR, but I'm not sure who said it) was "flat is the new up"...

Dogs_In_A_Pile's picture
Dogs_In_A_Pile
Status: Martenson Brigade Member (Offline)
Joined: Jan 4 2009
Posts: 2606
Re: In Their Own Words - Economic Quotes

You just can’t make this stuff up.  I took the liberty of bolding the bons mots.

http://www.msnbc.msn.com/id/30793038

Obama budget chief sees economy near bottom

Work on health care reform to continue despite depth of downturn

WASHINGTON - The worst seems to be over, President Barack Obama’s budget director said Sunday. But he also warned against taking signs of economic recovery as a reason to celebrate or delay changes in health care policy.

Peter Orszag said the U.S. economy appears to have bottomed out, even as the White House prepared to revise its budget projections to reflect higher-than-expected unemployment. He said an improving economy and changes to how the United States provides health care would help narrow federal deficits.

“I think what happened is the free-fall in the economy seems to have stopped and we’re — I guess the analogy (is) there are some glimmers of sun shining through the trees, but we’re not out of the woods yet,” said Orszag, the director of the White House Office of Management and Budget. “We do have more work ahead.”

Work, Orszag said on CNN’s “State of the Union,” that would include passing this year Obama’s health care plans despite the economic crisis.

“Let’s be very clear. We’ve always said health care reform has to be deficit neutral over a five- or 10-year window and much better than that over the long term,” said Orszag, whose knowledge of health policy has strengthened his Cabinet-level position. “So we are committed to making sure health care reform is self-financing and also brings down costs over time, both for families and for the federal government.”

The administration, however, faces serious challenges. Some 1.3 million jobs have been lost since February and the auto and financial industries are in precarious positions.

Obama’s Democratic allies have been reluctant to endorse the White House’s health proposals while Republicans have vowed to stop them; Republican National Committee chairman Michael Steele told NBC television’s “Meet the Press” that he doesn’t think health care will pass this year.

Meanwhile, Orszag said the administration would update its budget numbers in the coming months.

“You have to remember the deficit is very sensitive to the state of the economy,” said Orszag, noting that officials always planned to revise those figures. “As the economy starts to recover the deficit comes down quickly.”

 

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
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Posts: 5570
Re: In Their Own Words - Economic Quotes

“I think what happened is the free-fall in the economy seems to have stopped and we’re — I guess the analogy (is) there are some glimmers of sun shining through the trees, but we’re not out of the woods yet,”

   ~  Peter Orszag, the director of the White House Office of Management and Budget.

Good one DIAP!

I am a big believer in reviewing a person's track record when weighing how much credence to give their points of view:

WASHINGTON — The proposed government rescue of the nation’s two mortgage finance giants will appear on the federal budget as a $25 billion cost to taxpayers, the independent Congressional Budget Office said on Tuesday even though officials conceded that there was no way of really knowing what, if anything, a bailout would cost.

According to the estimate, which was delivered in the form of a letter to the House Budget Committee chairman, Representative John M. Spratt Jr., Democrat of South Carolina, the director of the budget office, Peter R. Orszag, predicted that “a significant chance, probably better than 50 percent, that the proposed new Treasury authority would not be used before it expired at the end of December 2009.”

Well, Peter, at the time I and many others predicted hundreds of billions in taxpayer costs you predicted a better than 50% chance that the cost would be zero for 2009 and no more than $25 billion in a worst case scenario.

I wonder how it was that we here on the outside, with practically no support staff or budget compared to you, happened to have so much clearer a view of things?

Odd isn't it?

Better luck with your current prediction!

Dogs_In_A_Pile's picture
Dogs_In_A_Pile
Status: Martenson Brigade Member (Offline)
Joined: Jan 4 2009
Posts: 2606
Breaking Update - In Their Own Words - Economic Quotes

10 July 2009 - President Barack Obama said Friday the world apparently has averted economic collapse but a "full recovery is still a ways off."

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