Tuesday, November 3, 2009

Recovery Or Pause Before The Next Meltdown? Discuss.

TWO ECONOMIC QUOTES FOR THE DAY, saying basically the opposite. Which is correct? The first is from the Fox News:
“The good news is that this deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation,” according to Lynn Reaser, chief economist at Point Loma Nazarene University and NABE President-elect."
The second is from Mike Whitney, writing on Counterpunch:
"Positive growth is an illusion created by government spending. In fact, the economy is still flat on its back. Consumer spending and credit are in sharp decline. Unemployment is steadily rising (although at a slower pace) and wages are flatlining with a chance of falling for the first time in 30 years. Deflationary pressures are building. The talk of a "jobless recovery" is intentionally misleading. Jobs ARE recovery; therefore a jobless recovery merely points to asset-inflation brought on by erratic monetary policy. Surging stocks shouldn't be confused with a real recovery.
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