The post-stimulus macroeconomy is panning out pretty much the way Austrians said it would. Unemployment is still high, and now that the Census workers are fired, jobs are being shed. Home construction is declining. Manufacturing growth is falling. Stocks: don’t make me laugh.
Everyone is talking about a double dip, as if that would be a shocking thing to see after all the right medicine had been applied to fix the last recession. Meanwhile, says the WSJ, “the latest figures should reinforce the Federal Reserve’s view that short-term interest rates need to stay close to zero to lift the economy.”
Yeah, those zero rates are really lifting the economy, huh? Wow. Meanwhile, saved money is making nearly no money at all, and lenders have no good reason to let go over their over-the-top reserves. More and more, it’s looking like the thirties all over again. This prompts many to wonder: when is the newest war coming? Perhaps the Mises Institute was right in its timing in the release of Pearl Harbor: The Seeds and Fruits of Infamy.
World War II didn’t end the depression — cuts in spending after the war did — but it surely changed the subject in ways that the politicians wanted.