Wednesday, January 19, 2011
new new deal
I really like this quote from David Rosenberg, a real economist who works for the investment firm Gluskin Sheff. It's the best short description of the new economic reality in our pilfered and impoverished new republic I've seen yet.
“The economy remains on government-assisted life support, and the government has been very successful in creating the illusion of economic prosperity. It is doing this to buy time and help preserve social stability as the adjustment towards housing deflation, consumer deleveraging, and chronic unemployment takes its toll on the growth rate in organic final demand.”
Translated into laymanese, this means that the "recovery" is a scam, that the housing market is permanently collapsed, and that people from now on will not have as much money to buy stuff as they did in previous times, because not nearly as many of us are going to be working, or at least not working at officially recognized "jobs" for "da man."
It looks bad, but there's a silver lining. It means consumerism is significantly weakened, that we're going to be driving fewer miles in fewer cars, and this will have a positive environmental impact. People will have more free time to raise their kids and live their lives under less pressure from the rat race, which has slowed considerably. The economy won't return to its formerly frenetic level because demand, the one and only driver of modern industrial economies, has departed, and gone to China.
Maybe the Chinese can handle consumerism with a little more grace than we did, but I doubt it.