Green Shoots, Leaves?
More dour news from the economy, on retail sales and new jobless claims. I concur with John Cole:
I guess we can throw “Sure, we are losing jobs but at least the rate of job losses slowed” out the window. Anyone who uses the phrase “green shoots” should be viewed as a lunatic.
And with 800 Chrysler dealerships about to shutter, more bankruptcies (Wow, Clear Channel, really?) on the way, and CRE loans threatening to take down regional banks as part of a second foreclosure wave, I think the new move from the political leadership needs to be from optimism to pessimism. If we continue to live in a rosy stress test world, we'll end up unprepared for the potential dangers to come. Complacency will sink us - contemporary reports in 1930 featured a lot of hopeful happy talk, too:
I will say that I think the greatest objective economic risk at this point is policymaker over-optimism. We need the European Central bank to continue loosening monetary policy, and it wouldn’t hurt if some of the world’s lesser central banks followed suit. We could use more stimulus in the United States and elsewhere in the developed world. We need corporate executives to understand the main risk to their interests to be coming from a lack of adequate economic recovery efforts rather than from losing small-bore political arguments with congressional Democrats. We need smart growth policy in terms of tax reform and trade. We need, in short, policymakers to continue to be worried. If they’re worried, and if they act on those worries, then more likely than not things won’t stay too bad for too long. But if they feel confident, then we might really be in trouble.
Unfortunately, the policy world has a hard time steering a middle ground between an atmosphere of panic, which is counterproductive, and an atmosphere of overconfidence, which is also counterproductive.
Leave the green shoots at the door and talk straight to the American people. And yes, we need a second stimulus bad.