A frustrating day here for me — I whacked my funny bone and it hurts to type for me more than a few minutes, but there’s a ton to blog about today!
But here’s a short New Yorker piece on the new meme (pushed by Bobo and throughout Kaplan, for example) that the economy sucks because Obama hurt Mort Zuckerma’s fee-fees and made all the business geniuses go Galt:
There’s also a pervasive feeling that Obama’s tone—as evidenced by tough rhetoric against Wall Street and BP—is dampening the spirits of business leaders, making them unwilling to take risks. The implicit idea here is that when businesspeople feel poorly treated they’ll just take their ball and go home, even if that means giving up chances for profit. This isn’t a completely crazy idea: as Keynes argued, “animal spirits” play an important role in driving business decisions, and there are historical examples of so-called “capital strikes”—where investors pulled capital out of an economy in reaction to anti-business policies. But there’s no evidence that anything like this is happening in the U.S. right now. Corporate profits are healthy. Investment may be low, but, given how slowly the economy is growing, it’s about where you’d expect. If businesses truly were holding back on hiring new workers or building new plants in the face of real opportunities, we’d see them working their current employees and factories to the limit. But they aren’t: weekly hours worked have scarcely budged in two years, and factory usage is at just seventy per cent of capacity, which is historically quite low.
If businesses aren’t hiring or investing, in other words, it’s because they don’t need to: they have enough workers and factories to meet the demand for their products. And there are few signs that this is going to change any time soon: consumer demand remains weak, economic indicators—inflation rates, consumer confidence, the stock market, bond rates—aren’t forecasting a quick return to boom times, and, just last week, the Fed chairman, Ben Bernanke, told Congress that the state of the U.S. economy was “unusually uncertain.” So it’s no wonder that companies are feeling cautious. The uncertainty that’s keeping businesses from spending or hiring isn’t uncertainty about what Barack Obama is doing or saying. It’s uncertainty about whether the economic recovery is going to stick.