Don Luskin's Failure To Connect Cause With Effect
Anyway though, what is most interesting is this section when he claims that bears are inconsistent:
"How often over the last 10 years have you heard that Americans don't save enough? That we're going to starve investment and growth because all we do is consume?
Now the same people who've been saying that all this time are saying that we face a permanent recession because consumers will save. Huh? How can the economy be doomed when consumers don't save, and also when they do save?"
Apparently Luskin can't see the difference between the cause of problems and the actual problems, or in this case the boom phase and the bust phase. This is a quite obvious distinction, which can be illustrated with many real life examples. Suppose for example that a soldier in a battle were warned not waste all of his ammo by shooting recklessly because that would result in him running out of ammo. By Luskin's "logic" that should be rejected that by saying "huh, how could shooting needlessly and not being able to shoot both doom you?". Or suppose that someone were warned not to stay up too late because then he would oversleep in the morning when he is supposed to go to work. By Luskin's logic that should be rejected by saying that "Huh? How could both not sleeping and sleeping be a problem?
The first phenomenon in all these cases weren't directly problematic in itself, but they were still problematic because they would lead to these later problems. Cause of problems, and the actual problems, respectively. That shouldn't be too difficult to understand.