Convention logic

I try to avoid watching political conventions, they are about as useful to good political decision making as watching 20 hours of car commercials is to wise auto shopping. The primary goal of a convention is not to let facts get in the way of building a fan base.

But, to some extent you can't avoid them. The snippits I caught of speeches from the Republican convention were, as with all convention speeches, a continuing string of vague and misleading factual assertions mixed with glittering generalities. 

But, I guess I did get a sense of the Republican argument that Mitt and Paul should be elected. What it comes down to is the Republican's whose screwball policy ideas implemented when they controlled Congress from 1995 to 2007 effectively shot our country in the foot are now trying to blame Obama for the limp - so they can get back into power and continue with the same policies.

Republican objections to QE3

The Fed's decision to begin another round of creating money to buy assets (QE3) brought howls of protest from Republicans even though the Stock market leaped up to new highs in response.  Normally one thinks anything that makes the stock market happy will make Republican's happy. 

I am frequently critical of Republican's, but I share at least some of their doubts about QE3.

While QE3 is a bit of an opportunity for stock traders, I don't think the stock market leaping up in response to QE3 is really something to celebrate for the country.  The stock market uptick in response to QE3 may turn out to be largely fake money. 

Trading in stocks and bonds falls within the generic term "investing".  But, although some investments produce jobs by investing in people creating food, shelter or other things necessary or useful, trading on stock markets is also often just gamblers shuffling money back and forth (with the more sophisticated picking the pockets of the unsuspecting) and producing nothing.  

The hope is QE3 will produce the jobs kind of investment, but based on the initial stock market response I suspect the outcome will be a lot more of the gambling than production.  To the extent investment turns out to be gambling it does long term damage to the economy by creating instability and uncertainty.

However, I am not critical about the Fed's choice.  I think it was a tough call.  I read a blog yesterday by a commentator arguing the Fed was doing QE3 because Congress has been unwilling to do anything and QE3 was the only tool available to the Fed to try to juice up the economy.  Lot of truth in that I believe.