Faking it with Felix

Felix tells whoppers today:

The fiscal cliff has already found at least one victim, the WSJ reports: “half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next”. Felix the Fake 

Not quite so, and the WSJ article he refers to disagrees. Corporate earning are down, we just had the termination of the tech bubble, Google, Apple, and Facebook all facing much lower earnings. Exports are down, as the article referenced shows. The minor down turn we are experiencing is only modestly related to Congressional fiscal cliffing. Congressional riscal cliffing is most likely related to the finally acknowledged problem that multipliers are less than 1.0. Growth rates way below 2%, and the bond market is not sure that Congress can go one more round of borrowings without killing off the middle class. Felix failed to get the memo, mthe Romer multipliers greater than one story is false, bogus research. Felix, pay attention. I suggest you read Mark Thoma's blog, he follows the developing research.