It's cut and paste Monday, so Sydney Brillo Duodenum presents choice parts of a Barron's article by Gene Epstein entitled "Sorry, Chicken Little." Epstein argues that the economy "may not be as bad as everyone thinks" and "it's possible that the downturn could prove to be one of the briefest and mildest on record."
If Mr. Epstein is correct, one of two things will happen.
1. These things will come to pass and President Obama will receive all the credit, attribute them to his "pohlasays" and embark on a radical socialistic agenda.
2. These things will not come to pass, allowing President Obama to immediately embark on his radical socialistic agenda.
Some main points:
- "The main positive is the huge boost to consumer spending that will come from the decline in energy costs."
- "The energy payback will be enormous. This economic shock absorber should help offset the cruel blows of the credit crunch and declining wealth from equities and homes.
- The consensus of the 10 most optimistic forecasts in the latest survey published by Kansas City-based Blue Chip Economic Indicators is that a recession began in this year's third quarter and will persist through 2009's first three months. "However, the average of the 10 most optimistic predictions put economic expansion at an annual rate of 0.6% in both 2008's third and fourth quarters."
- "Labor income should rise. The projected jobless rate of 6.2% is still fairly low by historical standards, and should be enough to lift wages and salaries."
- "The expansion phase of this business cycle produced relatively modest increases in capital investment. Thus, there's no capital overhang to work off. Manufacturing capacity, in high-tech and other industries, grew at a subdued rate. Sometime in 2009, then, capital investment could start contributing to growth."
- "net exports should keep boosting gross domestic product growth through 2009, although at a diminished rate."
- "the only quarter of contraction . . . will have been 2007's fourth, in which GDP fell at an annualized 0.2%. The economy won't be great through the end of 2009, but it should do far better than the gloom-mongers expect."
A boring list:
A pretty chart!