November 28, 2009

WSJ’s ‘The Uncertainty Economy’ Also Inadvertently Flags the POR Economy’s Beginning

Filed under: Economy,Taxes & Government — Tom @ 1:16 pm

They name the malaise, but not the timing, which I’ll take care of

What last month had appeared to be third-quarter growth of 3.5% in gross domestic product turns out to have been a more modest 2.8%. Consumer spending was pared back to 2.9% from 3.4%. The cash-for-clunkers subsidy produced fewer new-vehicle purchases than first estimated. In short, we aren’t getting much bang for our $787 billion stimulus bucks. But you already knew that.

…. The panicked Democrats’ biggest problem is that Congress and the President have erected the biggest overhang of economic policy uncertainty that anyone can remember.

One big difference between Washington and private markets is that politicians think everything they do is free-standing. Markets, however, combine all the potential costs of Washington’s policies and then decide whether to invest, or not.

Guess what?

They’re not, and nobody can make them do it when they don’t want to (yet).

“The Uncertainty Economy” is just another name for the POR (Pelosi-Obama-Reid) Economy, the one we’ve been living in since mid-2008. That’s when the needle in the uncertainty meter started into the red. It went to “iceberg ahead” during the September-October 2008 bailout fiasco. It’s been reading “man the lifeboats” since the 2008 presidential election returns came in.

During the era of uncertainty the POR Economy ushered in, quarterly annualized GDP changes have been -2.7%, -5.4%, -6.4%, -0.7%, and +2.8% (pending one more revision).

I do agree with Democrats who are all of a sudden discovering that Tim Geithner is an awful Treasury Secretary. One reason they don’t want him around is that more of the truth about his role in creating the current mess is emerging (see AIG).

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1 Comment

  1. Pinning Geithner with the failure of the Stimulus? Do I sense another pedestrian encounter with Obama driving the bus? You know I’m getting the distinct feeling that all of the appointed liberal/socialist/communist flunkies are nothing more than convenient fall guys for Obama when the policy goes bad to distance himself from the consequences.

    Comment by dscott — November 29, 2009 @ 8:28 am

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