Two via the Wall Street Journal's Real Time Economics blog:
Seven in ten Americans say that “when the U.S. economy recovers, the way the economy looks and works will be very different from what it was before the recession,” according to a new poll. Baby-boomers, in particular, see it that way, pollster Ed Reilly said.
The poll also found significant skepticism towards government and business, a reflection, perhaps, of the antiestablishment attitude spurred by the recession and financial crisis.
Some 52% said all the things that government at all levels do “create more obstacles for people like yourself to get ahead” versus 38% who said government actions “create more opportunity for people like you to get ahead.”
Asked about companies, 52% of the respondents say they “think only about the short-term view and see employees as a cost that can be reduced if the economy gets bad,” and 40% say companies “do a good job of identifying the most qualified and talents employees… and providing them opportunities for them to advance.”>>>MORE
And from The Economist, former WSJ and RTE scribe Greg Ip:Can America wean itself off consumption? The first of a series on how the world’s four biggest economies must change to ensure sustainable global growth
The tip on the Economist's story at RTE:
GENERAL ELECTRIC has historically been a manufacturer, but in the long boom leading up to the financial crisis it became more like a bank. Half its profit came from its finance arm, GE Capital, which among other things had a lucrative business issuing mortgages and credit cards to American consumers. GE’s chief executive, Jeffrey Immelt, now talks like a man chastened. With GE Capital acting as a drag on the company, he vows that in the future finance will be a smaller part of the company. In its place GE touts its manufacturing and exporting prowess. Mr Immelt boasts of record aircraft engine orders at the Paris Air Show in June, none of them to American airlines.
Like GE, the entire American economy is at an inflection point. For decades, its growth has been led by consumer spending. Thanks to rising asset prices and ever easier access to credit, Americans went on a seemingly unstoppable spending binge, fuelling the global economy as they bought ever bigger houses and filled them with ever more stuff. Consumer spending and residential investment rose from 67% of GDP in 1980 to 75% in 2007 (see chart 1, left-hand side). The household saving rate fell from 10% of disposable income in 1980 to close to zero in 2007; household indebtedness raced from 67% of disposable income to 132%. As Americans spent more than they produced, the country’s current-account balance went from a surplus of 0.4% of GDP in 1980 to a deficit of almost 6% in 2006 (see chart 1, right-hand side).Economists had hoped that these imbalances would unwind gradually as Americans saved more and the rest of the world spent more....Continued
A roundup of economic news from around the Web.
- Remaking America: Greg Ip has a great piece in the Economist on the U.S. economy’s expected transition from a consumption-led economy. “The American economy is like a supertanker that, even in calm waters, changes direction very slowly. It is now being forced to do so in a gale. With the help of still sturdy growth in emerging markets America should be able to reorient itself. But come what may, changing direction means losing speed. On the demand side foreign spending is unlikely to compensate for the freewheeling American consumer. On the supply side investment has slumped and will take time to right its course. Pimco’s Mr El-Erian reckons that the transition from consumption to export-oriented expansion will lead to prolonged subpar growth and high unemployment.” Also, check out this great video graphic that goes along with the article....