September 15, 2008

WHAT A BUNCH OF FUNDAMENTALISTS!:

Despite Market Troubles, Economy Keeps Growing (Michael A. Fletcher, 9/15/08, Washington Post)

Since the housing problems began to boil over last year, the economy has continued to expand. Boosted by federal stimulus payments, the country's gross domestic product grew at a 3.3 percent annual pace in the second quarter of this year, making up for anemic growth the quarter beforehand.

Many analysts call the growth -- halting and tepid as it may be -- evidence of the strength and resilience of the U.S. economy, which they say has evolved in ways that have so far have allowed it to absorb the shocks to the housing and financial sectors.

The weakened U.S. dollar, for instance, has fueled a sharp increase in exports. Rising prices for commodities, from soybeans to natural gas, have contributed to upswings in agriculture and mining.

"We are in a weakened but not weak state," said J.D. Foster, a senior fellow at the Heritage Foundation and a former associate director of the Office of Management and Budget under President Bush. "There are other strengths in the economy that have allowed us to offset weaknesses in housing and the financial markets."

Technology and globalization have also allowed businesses to operate with fewer people and boost productivity, some economists said. While those efficiencies have squeezed wages and slowed job creation, they also have led to generally healthy corporate balance sheets, helping the economy withstand market turbulence.


Tell it to the Okies.

Posted by Orrin Judd at September 15, 2008 7:17 PM
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