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Welcome to the New Normal, Comrade

March 3rd, 2013 - 7:04 am

Some days it seems much easier to tell yourself that you’re the crazy, stupid one, and that everything isn’t as bad as it seems. Then you wouldn’t have to keep shouting from the rooftops while being ruthlessly ignored. But then the Washington Post publishes a report that sends you racing right back up the fire escapes:

The reason the economy has been underperforming, Warsh says, is that policymakers responded poorly to the financial crisis. They focused on short-term growth boosts and neglected what you might call basic economic infrastructure investments. They didn’t open big new markets for international trade in order to expand exports, and they didn’t streamline the tax code to promote investment.

Meanwhile, Warsh said, lawmakers added new regulations to the financial system that solidified an oligopoly at the top of the banking industry, one that has served to restrict the flow of credit to small businesses and entrepreneurs. The Fed’s easy-money policies, he adds, have padded corporate profits but haven’t “trickled down” — his words — to average Americans.

Slow growth is the consequence of those policies, Warsh says. He fears the consequence of prolonged slow growth is a drop in the economy’s potential to grow. Longtime unemployed workers have lost skills, making it harder for them to find work. Executives have lost confidence in the economy’s ability to expand and willingness to invest in it. “We’ve been in this period of the new malaise for so long that workers and companies have lowered their expectations for what the U.S. economy can do,” Warsh says.

“Lowered expectations” is a phrase we’ve heard a lot these last few years. It’s right up there now with “bad luck.”

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All Comments   (6)
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"Wonder who these "they" are, especially the "they" who was supposed to open international markets, and the "they" who "invested" e.g. $2 billions in Soros' Petrobra, $535 millions to close down Kaiser's Solyndra, instead of in "basic economic infrastructure".

WaPo's "journolists" are trying to salvage some of their credibility by blaming some generic policymakers for not-doing/doing things that their Man was responsible for. I bet in the next few weeks, these generic policymakers will all turn out to be Republican policymakers.
1 year ago
1 year ago Link To Comment
Can we burn it all down yet?
1 year ago
1 year ago Link To Comment
Mad magazine used to produce a tv show that competed with SNL. One of the ongoing "ads" was for a match-making service for losers, called "Lowered Expectations." Seems about right.
1 year ago
1 year ago Link To Comment
Expectations have not be lowered. They have been blown up.
1 year ago
1 year ago Link To Comment
His description of what happened in the banking industry sounds a lot like "Never let a crisis go to waste" meets an old-fashioned coup.
1 year ago
1 year ago Link To Comment
“Lowered expectations” is a phrase we’ve heard a lot these last few years. It’s right up there now with “bad luck.” and UNEXPECTEDLY!!

1 year ago
1 year ago Link To Comment
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