In an earlier piece today we looked at the idea that some in Europe actually hope that the Federal Reserve may act as the lender of last resort for the Eurozone. Sure, is this supposed to happen before or after it adopts NGDP or even QE3?
http://diaryofarepublicanhater.blogspot.com/2011/11/europe-looks-for-world-to-solve-its.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29
While the NGDP discussions have been fascinating whether listening to Sumner at Money Illusion or Delong or Krugman or Nick Rowe one wildcard that nobody has been noticing is that very quietly the U.S. economy is improving.
For more on the NGDP discussions please see http://diaryofarepublicanhater.blogspot.com/2011/11/europe-looks-for-world-to-solve-its.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29
Right now there seems to me to be many different moving parts in trying to understand the U.S. economy and society. First of all socially speaking the bad economy is the main event pure and simple. In terms of what to do about this economy that has looked so anemic different people have had different answers. You have the Republican party who doesn't want to do anything about it. They wont do fiscal stimulus and they have even tried to order Bernanke not to do monetary.
Because of the unpromising avenue in Congress the discussion has been best among the economic blogs where both New Keynesians and Market Monetarists have settled on-in lieu of anything fiscal-monetary stimulus most promising is perhaps Sumner and company's NGDP or level targeting. However you have the Austrian and austerity buffs-no accident the two words are almost alike-opposing this because they claim it will cause inflation.
All this has happened against a back drop of voter frustration that has spawned the Occupy Wall Street movement, which while the Republicans like Limbaugh, et al, have tried to claim are stooges of Obama, the DNC, etc, are far from this and conceivably could harm the Democrats more. Then in further relief we have had the backdrop of the Euro crisis. Where the ECB is willing to try anything other than doing its own job of being the EU's lender of last resort.
Because of the gridlock and frustration the blogs, particularly the economic blogs have been the place for lively informed discussion, almost like post modern salons or something.
However, with all this going on the economy has defintely improved during the 2nd half and at the least has recovered from the shocks of the 1st half-Japan, etc.
http://www.businessweek.com/news/2011-11-15/obama-prospects-brighten-as-economic-recovery-moves-to-expansion.html
"Less than 12 months from the presidential election, the U.S. economy has moved from recovery to expansion, prompting similar shifts in President Barack Obama’s political prospects."
"The unemployment rate moved downward last month, to 9 percent. The number of Americans filing applications for unemployment benefits fell to the lowest level in seven months two weeks ago, a sign the recovery may be encouraging companies to limit cuts in headcount. And a private outplacement company is predicting that jobs losses in the government sector, a drag on U.S. employment, may be leveling off."
"Gains in household spending, the biggest part of the economy, last quarter led economists to raise their growth forecasts for the remainder of this year and for 2012, the median estimate in a Bloomberg News survey showed last week. The services industry and manufacturing both continue to expand, according to figures this month from the Institute for Supply Management."
Obama's numbers have improved as he's back near a 50 percent approval rate. What is clear is that whether or not liberals think Obama has done enough he has done something and would do more if he were able to. Certainly the Republicans have not helped themselves by their catty comments about OWS being human debris, un-American, etc.
"White House officials are girding for an election they anticipate will be contested over an economy that was contracting at a 6.7% percent annual rate when Obama was inaugurated in January 2009 and that they predict will grow at 2.9 percent in 2012."
"The unemployment rate moved downward last month, to 9 percent. The number of Americans filing applications for unemployment benefits fell to the lowest level in seven months two weeks ago, a sign the recovery may be encouraging companies to limit cuts in headcount. And a private outplacement company is predicting that jobs losses in the government sector, a drag on U.S. employment, may be leveling off."
"Gains in household spending, the biggest part of the economy, last quarter led economists to raise their growth forecasts for the remainder of this year and for 2012, the median estimate in a Bloomberg News survey showed last week. The services industry and manufacturing both continue to expand, according to figures this month from the Institute for Supply Management."
That government sector job losses may be leveling off is a very good sign both because it is good for unemployment numbers going down but also that it suggests states are cutting less now.
"Government entities announced 2,785 job cuts in October, down from 54,182 in September, a 95% drop, bringing the sector’s job-cut total to its lowest level since January 2009.
Indeed the real worry remains Europe whose problems conceivably could ultimately sour the U.S. economy. But comparatively things here look almost-not terrible-LOL.
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