I think we're moving in a new direction, dear.
The recovery is over.
For the past year, the pundits, the cheerleaders, the bulls and partisans have all been pushing the recovery theme. It started last March, it started when the White House and Congress blew out the debt with a $787 billion stimulus plan, it started when the Fed pledged to buy more than a trillion worth of Treasurys and mortgage-backed securities. But the government juicebox is empty, it isn’t clear what they’ll unveil next, or how effective it’ll be. Or if they’ll do anything.
So you can say we’re in a new phase now. The slog, or the plod, or the galumph. It should be clear to everybody that the economy, which White House snake economic guru Lawrence Summers claimed back in April had reached “escape velocity,” has stalled.
What happens next is “unusually uncertain,” in the word of Fed shaman Ben Bernanke. But I’ll tell you what is certain: everybody’s thinking, from the White House to Congress to the Fed to the corporate boardroom to the family dinner table, is going to shift. You thought people were being tight-fisted before? If the Fed chairman doesn’t know what’s going on, why should anybody feel confident about spending money?
I’ll tell you, you can already see the change among the bulls. Don’t get me wrong. They’re not throwing in the towel. That’s not in their DNA. But they’re not quite as excited as they were six months ago, or a year ago. It’s obvious to everybody, even Christina Romer apparently, that the recovery is turning into a big dud. This morning’s jobs report was just another dollop of sour cream on your recovery sundae.
Posted by Steven Russolillo
on April 12, 2010
When New York Times columnist Floyd Norris put on his rose-colored glasses last week and wondered why so many folks were doubting the economic recovery, we immediately thought his front-page piece could be the perfect contrary indicator, representing a market top.
Now, he’s got competition.
BusinessWeek joins the party, claiming the Obama plan is working and markets are clearly showing the economy’s back on track. (Hey BusinessWeek, what were the markets saying in October 2007 when the Dow crossed 14000? Weren’t exactly predicting the worst financial collapse since the Great Depression, were they?)
Robert Samuelson of Washington Post also declares in an op-ed today that the “glumness may be overdone, just as the optimism of the Goldilocks Economy was overdone.”
Not to be outdone, Newsweek’s upcoming cover story – titled “America’s Back! The Remarkable Tale of Our Economic Turnaround” – tops them all. Dan Gross describes how “America is coming back stronger, better, and faster than nearly anyone expected.”
Posted by Paul Vigna
on November 17, 2009
I don’t usually write comments on other people websites, but I really almost commented on Daniel Gross’s piece for Slate, “Coming Soon: Jobs!” Then, of course, I realized I didn’t have to comment on his site, when I’ve got my own.
Now, I’ve heard of Daniel Gross before, and I’d be willing to be he’s never heard of me, which means he’s probably better known than I am (no false modestly there, it’s just true,) but I just don’t think his optimism is very well founded. He writes:
Some recent data points, and an understanding of the behavior of companies at different phases of the business cycle, suggest we’ll have job creation sooner rather than later.
He’s right about one thing: at this early point in the recovery, companies are still reluctant to ramp up hiring, as one might expect. “We aren’t close to needing to hire people in a significant way,” Applied Materials CEO Mike Splinter said at the WSJ’s CEO Council. And that’s about what we’ve been hearing for the past month.
But Gross looks ahead, and this is where I think he’s tripping himself up. He starts making some shaky assumptions about growth, and seeing as most of his argument rests upon that growth, his sunny optimism is suspect.