Many times as I read an article I find a few sentences that capture the essence of the piece. In “Phrase-e-ology” I’ll post some thought followed by key phrases. As always I’ll have a link (in blue) to the original article.
The latest episode of Phrase-e-ology is from the business section and was startling in that it seems to be making the case for the sluggish recovery as the “new normal” rather than the direct result of bad economic policy from the Obama White House. As if this is now how we should expect recoveries to unfold. Even as Obama’s economic advisers abandon his ship for academia (they’re much better at theory than reality) the “new normal” may actually be some sub-standard level that he can actually achieve…as long as he can fool the electorate that they are doing better…
“there is too little to show for all the stimulus the government’s provided to resuscitate the economy.”
“Economic weakness doesn’t mean a disaster for investors. But it does mean a readjustment in bullish thinking.”
“reduced growth expectations should weigh on equities through the summer. There’s a shift back toward the thinking of the “new normalists,”
“In other words, there’s a return to concerns that growth will be impaired as Americans struggle to pay down extraordinary levels of debt, while unemployment remains high and credit still tight.”
“Now, almost two years into the recovery, the economy has displayed growth a lot like the “new normal” course.”
“During the first year of recovery, U.S. GDP advanced only 3 percent, or less than half the normal pace of the usual post-recession period, according to Standard & Poor’s. The economy will complete its second year of recovery at the end of this month, and it appears GDP will be 2.7 percent versus the typical 4.1 percent”
If I may paraphrase…Obama spent way too much money (the “extraordinary levels of debt), has done nothing to get out of the way of the private sector for growth (that’s the high unemployment), and has created such uncertainty that banks won’t lend money and businesses don’t want to borrow it anyway (that’s the tight credit). Since the Democrats/Republicans can not control their spending and printing more money has not helped, they just redefine what constitutes a good recovery. I wish that I could screw up and simply redefine my goals to show a “new normal.”
This stuff can only happen in Washington!