Stutter Applause?
Since when did we all get excited over mediocrity? I have been suffering from all sorts of technology problems this week and so have been more an observer than a commenter on latest trends. I have learned that it is quite possible to drop out of the daily grind of data and not miss anything. Nothing has changed.
Nothing in the data.
Nothing in the politics.
Nothing in the policy.
Nothing at all.
Everything suggests we are adrift and will remain so.
Yet we are treated to breathless analysis by experts who hang on every nuance as if it represents a sea change.
Take, for instance, today’s “Beige Book” release. As its name suggests this is hardly an exciting compendium. It is an internal document circulated within the Fed summarizing anecdotal and other reports from the various Fed districts. It purports to give an up to the minute view of local economic activity and is a supplement to the steady flow of more formal information from government and industry sources. By and large it is rather dull. Nonetheless it provides useful color to the Fed’s internal policy discussions.
Today’s Beige Book describes a very weak economy with only a few – energy, autos, and tourism – bright spots. Yes, there is growth. Pathetic growth. The economy is still expanding, just not very quickly.
So why was its release greeted with such enthusiasm?
I suppose it could have been worse.
When we are supposed to get worked up over weak reports because they are not as bad as we feared they might be, we are clearly in a mess.
Another good example of this defeatist syndrome is the news, released earlier this week, that real estate construction businesses are more optimistic about the outlook this month. The construction industry’s outlook is surveyed monthly, and has been, as you would expect, stuck firmly in the doldrums for a very long time. This week, though we were told that the industry is more upbeat. Good. But look at the numbers: last month the index measuring the level of optimism stood at a near all time low of 14. That’s truly awful. This month things have really looked up. Now the index stands at 18.
What am I supposed to say?
That is also truly awful, just not as bad as the previous month. In any other month prior to this crisis a reading of 18 would have sent analysts running for the hills. Now we are treated to headlines lauding an improvement and a possible turn around.
Frankly that’s ridiculous.
The economy sucks.
It is going to stay that way, and possibly drift down a little, because our leadership is locked into a combination of incompetent policy making and ideologically driven trench building in preparation for an election that is still over a year away.
So we applaud the stutter. We have nothing else to do. And we are embarrassed about the way in which our elite is so obviously bereft of ideas, courage, and anything resembling a leadership quality.
But they do feel our pain.
Some of the more amusing comments this week have been those coming from our business leaders who apparently have noticed that the locals are getting a little restless. So they are lining up to make suitably sympathetic noises about how much they are also angry about the economy, the level of unemployment, and lack of wage growth.
They really feel our pain.
Personally I find it comforting that the very people responsible for our economic ills, and the extraordinary inequality that is tearing at our social fabric are worried about the consequences of their actions. Well not really. I don’t think they mean it at all. But their public relations departments evidently feel a need to ensure that their respective CEO’s express concern. I imagine they think we don’t understand the hypocrisy of a CEO whose business ships jobs abroad at the first sighting of potential profit, and who then turns around and sobs over the lack of progress in reducing unemployment.
I have an idea for this particular CEO: bring the jobs back!
Oh, wait, that would damage shareholder value, so we can’t do that, can we?
Setting aside my understandable cynicism, I think we can detect the first signs of reaction from the 1%: they are beginning to notice, albeit only vaguely, that something is wrong. Profits, don’t forget, are at seventy year highs, so people whose incomes depend upon income from capital are not feeling the same pinch everyone else. So for them to begin to make paternalistic statements about the pain they feel can be ascribed to the fact that the anger is seeping into even the most resistant of regressive ranks. Heck, even Eric Cantor, hardly a doyen of the progressive cause, is going to make a speech addressing inequality. I have no idea what he could possibly say. After all the current state of play is largely a direct outcome of the policies he has espoused his whole political life.
Perhaps there are cracks in those regressive ranks.
Meanwhile applause for the ongoing stutter rings so hollow. It’s better than nothing. It isn’t much. A ship being rudderless is generally not something we regard in a positive light, but at least we aren’t stuck on the rocks.
We aren’t, are we?
