Blame it on the GFC or the hip pocket shuddering aftermath of the market meltdown, but toilet humour has come to business and economics commentary. Overnight, one US expert has stooped to the headline grabbing lows of the tabloid press in suggesting that America is staring at a, wait for it, a toilet-shaped recovery!
I have to say it has been fascinating seeing the graphically-minded commentators clamouring to outdraw each other in depicting how the US economic recovery will play out.
To date, there has been the traditional up and down V-shaped bounce back, the slower-around-the-bottom U-shaped recovery, the down-and-go-sideways L-shaped one, the double-dip W-shaped outcome and an economist with a PR-inclination has plumped for a Nike-like swoosh symbol recovery.
My favourite, which could have some relevance in America, is the square root recovery, which can be seen as up, down, up and then sideways. But now, we have stooped to the lavatory level.
The perpetrator of this new-shaped recovery is David Roche, who is a global strategist at Independent Strategy, who gave his considered views to CNBC.
“You want to know my shape? My shape is a toilet shape,” he said. “Because I think that's where 14 per cent of Gross Domestic Product in terms of spending and central bank help will disappear.”
So, this is not really a S-bend shaped reference to the course of GDP growth, but a comment on the value of the Obama Administration’s spending program.
Roche thinks bad decisions on spending will create a short-term recovery, but then demand will wane as the problems of the credit crisis have not been fixed.
He thinks household indebtedness has not been properly fixed and the Government has come off the bench to replace businesses and consumers as the spenders without a grasp on reality.
“The problem about the recovery is that none of the problems that caused the credit crisis have been resolved,” he said. “Household leverage is worse than before, banking leverage is worse than before. The bad debts problem has not been dealt with and we have a new level of prophesy and leverage which is the government.”
Guys like these make me laugh. They think they have a mortgage on responsible behaviour and then, in some quasi-patrician sense, lecture everyone about how the GFC repair job lacks some kind of rigorous, intellectual and economic integrity.
What a load of crap! (That outburst was not constructed for toilet humour consistency — it’s the way I feel about these so-called experts.)
The modern capitalist world operates off debt. It can get out of hand and it can be used for less valuable reasons. Debt for infrastructure promotes growth and so does debt for housing, machinery and profit-generating equipment.
Even consumer debt is okay as long as it is serviceable. It was neither governments nor consumers that let debt escalation get out of control but financial institutions.
They should have paid the price, but a lot of innocent people and businesses would have been unfairly exterminated. The rescue job has saved the global economy from Great Depression Mk II and it has brought some questionable spending decisions but there are no handbook instructions that ensure the best outcome.
People like David Roche are experts on a theoretical world where throwaway lines about toilet-shaped recoveries have entertainment value but that’s about all.
While politicians generally deserve a serve, at the moment they have a really tough job but their real test will be managing the recovery responsibly so that the rescue debt gets paid down while achieving enough growth to get people back to work.
Smart Alec comments about toilet-shaped recoveries deserve to be flushed down the appropriate bathroom contraption designed for such tasks.
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