Unearthing the Real Reasons for Weakness
When you start your analysis by discerning what the real problems are, it becomes much easier to tell which news items are important and which are not. The U.S. economy is suffering through a lackluster recovery from a very deep recession. But what are the real problems that are causing the recovery to be so weak? I see two main problems, one of which is clearly improving. The other is not, and it may even be getting worse.
We're hearing a litany of reasons to explain the slow recovery. Some are confusing the reasons for the deep recession -- which, by itself, doesn't necessarily have anything to do with why the recovery is slow. For example, there is scant evidence that housing prices are preventing consumption. Indeed, consumption spending has fully recovered to 2007 levels. Saying that the U.S. needs to boost housing prices in order to speed the recovery is like arguing we needed to boost the number of dot-com initial public offerings during the 2001 recession....738 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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