Feature

The economy: Why there’s no recovery

The nation's pessimistic mood is one of the reasons for the country's economic stagnation.

What’s keeping the economy from bouncing back from the recession? asked Mort Zuckerman in the Financial Times. Just ask the people who run companies and hire workers. They’ll tell you they’re unnerved by President Obama’s “anti-business policies,” and populist attacks on “fat cats.’’ With consumer demand flatlining and unemployment stuck at 9 percent, companies urgently need to ramp up hiring and spending if we’re going to escape a double-dip recession. But instead of helping job creators, Obama keeps hitting them with “new regulations, health-care costs, and an increased bureaucracy.” This regulatory overload deters companies and investors from taking risks on “expansions and startups.” No wonder a Gallup poll found that only 26 percent of Americans approve of Obama’s handling of the economy.

It’s ridiculous to accuse Obama of being anti-business, said Michael Schuman in Time.com. This is the president who saved Wall Street and the American auto industry from collapse, and is now pushing Congress to slash the corporate payroll tax. He did increase regulation of the financial industry, but only to prevent the wild, dangerous speculation that “created the Great Recession in the first place.” Conservative attacks on Obama’s economic policies are based on “pure fantasy,” said Paul Krugman in The New York Times. Surveys of business owners have named regulation and taxes as top concerns for 40 years, regardless of who was president. Right now, those same surveys find that businesses aren’t expanding and hiring for a very simple reason: Sales are weak. The bursting of the mortgage bubble and subsequent recession have left many Americans in deep debt, so they’re spending less. That—and not Obama—is why the recovery is lagging.

In other words, “we are prisoners of our rotten mood,” said Robert Samuelson in The Washington Post. Rattled by continuing bad news about the economy, consumers and companies are refusing to make the very investments and purchases that would turn things around. The pessimistic behavior is understandable, but “when everyone is super-cautious, the result is stagnation or worse.” With a bit more confidence, consumers—who’ve already worked down a lot of debt—could now spend a bit more. Businesses, which are sitting on $2 trillion in cash, could invest in new workers and plants. First, though, we’ll need a change of mood. “Franklin Roosevelt was right: What we have to fear is fear itself.”

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