In a disdainfully snarky little report, Adam Davidson explains what’s going wrong with everything everywhere, more or less:
Though it doesn’t always seem true, times actually have changed. During the worst of the recession, people were just plain broke. Their debts were at historic highs, and their savings were at record lows. That’s no longer the case. American households have reduced much of that debt and built up some savings. They’re just not spending it yet. So whereas the Federal Reserve was once tasked with performing life support on the financial sector, it’s new challenge is more subtle but nearly as complicated. It needs to convince consumers that they can trust the economy again, that now really is the time to jump back into the stock market or buy that bigger house.
I didn’t quote any of Davidson’s little digs at us poor untermenschen for being all “twitchy” and suffering “agita” and unable to just get “over the terror.” Because it’s obvious that he’s just a dick. He’s also a lousy reporter, because he’s only gives you half the story.
Washington needs to inflate away the results of the last dozen years of multi-trillion dollar profligacy. But Bernanke can’t get a good general inflation going until people start spending their money. Sure, food and energy prices are necessarily skyrocketing, but wage inflation and general price inflation are stuck in the mud. That’s just no good when The Beard has to make a $16,000,000,000,000 mountain of debt into a molehill. And with the Fed’s balance sheet set to rise to perhaps $5,000,000,000,000, Bernanke has even more incentive to inflate, inflate, inflate.
Consumers aren’t cooperating, because, yeah, we are nervous. There’s a fiscal cliff coming. ObamaCare is raping our paychecks. We know the jobs aren’t coming because investors are getting whacked and entrepreneurs have gone Galt. So instead of spending like sober Congressmen, we’re saving our money for the proverbial rainy day. Which, I might add, is already here. And it’s not just a drizzle, either; let’s call it Hurricane Barack.
So what we have is a Mexican standoff between a $16,000,000,000,000 economy that’s just sitting there, waiting out the storm, and a $16,000,000,000,000 debt Bernanke needs to make go away. We also seem to understand that as soon as we start spending our savings, it will inflate into nothing. It’s us versus Ben.
Think of it as our little way of saying “Eff you, Washington,” before Washington can say “Eff you” to the money we’ve saved.