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     Ferrari Side Hero Username: Ferrari Post Number: 5160 Registered: 10-2008 Posted From: 90.211.206.84 Rating: |
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| Ashton Comedian Username: Ashton Post Number: 1501 Registered: 05-2008 Posted From: 208.53.157.30 Rating: N/A |
http://www.businessinsider.com/robert-reich-the-economy-will -never-recover-2009-7 Oy Oy | ||
| Ashton Comedian Username: Ashton Post Number: 1500 Registered: 05-2008 Posted From: 208.53.157.30 Rating: N/A |
Anyone looking for the economy to "recover" is going to be disappointed, according to Robert Reich. The problem is that the old economy was built on sand--rising spending, falling wages, mounting debt, housing bubble--and it's gone forever. If we are ever going to see prosperity again, it will have to be because we build it on a new basis. The so-called "green shoots" of recovery are turning brown in the scorching summer sun. In fact, the whole debate about when and how a recovery will begin is wrongly framed. On one side are the V-shapers who look back at prior recessions and conclude that the faster an economy drops, the faster it gets back on track. And because this economy fell off a cliff late last fall, they expect it to roar to life early next year. Hence the V shape. Unfortunately, V-shapers are looking back at the wrong recessions. Focus on those that started with the bursting of a giant speculative bubble and you see slow recoveries. The reason is asset values at bottom are so low that investor confidence returns only gradually. That's where the more sober U-shapers come in. They predict a more gradual recovery, as investors slowly tiptoe back into the market. Personally, I don't buy into either camp. In a recession this deep, recovery doesn't depend on investors. It depends on consumers who, after all, are 70 percent of the U.S. economy. And this time consumers got really whacked. Until consumers start spending again, you can forget any recovery, V or U shaped. Oy Oy |
