Pundits everywhere are excited about the economic news. The unemployment numbers seem a lot less gruesome than they’ve been lately. But it may not be time to pop the champagne. Jeff Harding looks at factory orders and fears that something is rotten underneath. He fears that the employment numbers may be a temporary uptick due to the fleeting effects of the stimulus package. I suspect he is right. Long ago, Austrian economists examined the logic of “easy money” credit expansion. Logic predicts a temporary burst of good news, followed by a return to the doldrums. LvMI documents it all, concluding with this great bit of insight:
What Christina Roemer does not understand is that, for society as a whole, jobs are not ends in and of themselves. For society, they are only a boon insofar as they produce goods and services without consuming capital. For society, they are liabilities insofar as they are allocated toward unsustainable projects, as they will tend to be under artificial credit expansion. The consequences of Bernanke’s mind-boggling credit expansion will eventually catch up to us. Far from being a sign of better days to come, the job report everybody’s so excited about today may very well be a harbinger of those consequences.