Yes, I think that Obozo's totalitarian/socialist ideology is a serious drag on the economy.
Yes, I think that Governments, Fed, State, and Local, are far too large and inefficient--not to mention contentious and obstreperous--for growing an economy.
But those problems are hardly the biggest ones faced here.
Barry has a chart which is ghastly. Consumer discretionary spending on services and quite a few durables has near fallen off the face of the earth; this is the worst it's been--by FAR--since the 1960's.
Seek ye then, 'demand'? Persuade people that it's safe to spend.
One good way: Dump Obozo and McConnell, too.
The savings rate is still below historical average which means we haven't even reverted to the mean yet. This is a deleveraging story not a confidence problem.
ReplyDeleteChicken/Egg.
ReplyDeleteThe NYT maintains that it's deleveraging. I'm willing to buy that--but not without the confidence problem.
Correlation/causation? Let's be serious. Steve Wynn IS a Democrat and he's very clear about Obozo.
If you're trying to tell me that consumers aren't very confident that they can sustain a near zero savings rate with negative equity in their biggest asset than yes it's a "confidence" problem.
ReplyDeleteDe-leveraging, the burden of Ritholtz's post, necessarily implies low savings.
ReplyDeleteSo yah, it's 'confidence.'
Doesn't take a PhD Econ to figure out that when things are uncertain, you pull in a bit.