Saturday, February 10, 2007

Loren Steffy: Pop Economist

I have finally figured out why the Houston Chronicle allows Loren Steffy to despoil the pages of the business pages: He is Pop Economist. In his roll, he spreads populous economic myths that fan the flames of class warfare all the while serving to undermine capitalism and the free market. In his latest piece (of doggy doo-doo), Steffy thanks Asians for lending us cash. Of course, that is less than half the story. Asians and others should be thanking us for providing excellent investment opportunities with low risks that they, apparently, cannot get in their own countries. They are willing to purchase Treasuries, we are willing to pay very small interest rates, and both parties are happy. Foreign investors come here for safety and stability; they get what they want. We want to take their money and pay next to nothing to get it. Foreign investors also find American stocks a viable investment option. Another reason for us to stay competitive. Of course, Steffy doesn't think it important to make our capital markets attractive preferring instead that capital investment go elsewhere. Yet another indication he does not know what he is talking about.

What Steffy also fails to realize is that Americans invest in foreign economies with much higher rates of return. This return differential partially explains the sustainable, 30 year trade deficit. I am afraid that is the subject of another post. I'll have to dumb in down for Steffy so he can understanding. However, it is likely the Pop Economist filters won't allow facts to counter the populous agenda. His loss.


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