June 19, 2013


Even Pessimists Feel Optimistic About the American Economy (NELSON D. SCHWARTZ, 6/15/13, NY Times)

Whatever the Fed's conclusion, many analysts insist the more upbeat view is justified this time.

In particular, Mr. Behravesh and other economists said, the economy has shown greater resilience than expected in the face of tax increases and spending cuts in Washington. As the impact from this fiscal tightening eases, the overall growth rate should pick up. [...]

Mr. Cowen, who is also an occasional contributor to the Sunday Business section of The New York Times, is more skeptical about a short-term takeoff, focusing instead on what he sees as a brightening, longer-term picture of the United States economy.

The recent surge in domestic oil and gas production signals "the start of a new era of cheap energy," he said, while less expensive online education programs could open the door to millions of people who have been priced out of more traditional academics.

At the same time, Mr. Cowen said, he now expects subtler improvements in the country's economic well-being that will not necessarily be reflected in statistics like gross domestic product, but will be significant nonetheless.

For example, slower growth in the cost of health care will be a boon for the government and businesses, but will actually subtract from reported economic activity. "It's like the music industry," he said. "Revenues are lower at record companies but the experience for listeners is better."

Counting is easy.  Listening is hard.

Posted by at June 19, 2013 5:25 AM

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