"Instead of creating this uncertainty, which all this intervention does... it created tremendous certainty... When you intervene, it' s not just the question of the merit of the particular intervention, it's that nobody knows when you're going to intervene again.... nobody knows what gonna happen next" -Thomas Sowell
People are freaked out right now and do not know what to do with their money, where to put it, where to invest. In 2009 the personal savings rate shot up due to people deleveraging (paying off debt) and stashing away cash for the rainy day that was upon them. With the "transformation of America" well under way and thousands of pages of "emergency" legislation, people do not know what to do, so they are bunkering down. Not necessarily what you want for short-term immediate recovery, but might be healthy for the long haul.
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Articles
Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s
Articles
Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s
In the long decade of the 1930s, especially its latter half, many people had come to believe that the economic machine was irreparably broken. The frenetic activity of war production—never mind that it was just a lot of guns and ammunition—dispelled the hopelessness. People began to think: if we can produce all these planes, ships, and bombs, we can also turn out prodigious quantities of cars and refrigerators.
When the controls began to come off and the war ended more quickly than anticipated in 1945, consumers and producers launched eagerly into carrying out plans based on rosy forecasts and, by so doing, made their expectations a reality. Of course, the ability to draw on the accumulations of financial assets built up by “forced saving” (notice the spike in the graph) during the war was important, especially in conjunction with the Federal Reserve's continued support of bond prices. But the liquidation of those assets alone could not have turned the trick—if such tricks were possible, a government could produce prosperity simply by cranking the money presses.
...certain events of the war years—the buildup of financial wealth and especially the transformation of expectations—justify an interpretation that views the war as an event that recreated the possibility of genuine economic recovery. As the war ended, real prosperity returned.
When the controls began to come off and the war ended more quickly than anticipated in 1945, consumers and producers launched eagerly into carrying out plans based on rosy forecasts and, by so doing, made their expectations a reality. Of course, the ability to draw on the accumulations of financial assets built up by “forced saving” (notice the spike in the graph) during the war was important, especially in conjunction with the Federal Reserve's continued support of bond prices. But the liquidation of those assets alone could not have turned the trick—if such tricks were possible, a government could produce prosperity simply by cranking the money presses.
...certain events of the war years—the buildup of financial wealth and especially the transformation of expectations—justify an interpretation that views the war as an event that recreated the possibility of genuine economic recovery. As the war ended, real prosperity returned.
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Where are the New Jobs?
John Stossel
The problem today is that the economy is not being left alone. Instead, it is haunted by uncertainty on a hundred fronts.
John Stossel
The problem today is that the economy is not being left alone. Instead, it is haunted by uncertainty on a hundred fronts.
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