Comments on: Inventory-driven U.S. recovery may be delayed http://blogs.reuters.com/great-debate/2009/06/08/inventory-driven-us-recovery-may-be-delayed/ Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Don http://blogs.reuters.com/great-debate/2009/06/08/inventory-driven-us-recovery-may-be-delayed/#comment-16280 Mon, 08 Jun 2009 14:33:25 +0000 http://blogs.reuters.com/great-debate/?p=3887#comment-16280 Supply-side economics suffers from conceptual deficiencies. Using an extreme and unrealistic example, if tomorrow we hired everybody to make pencils, pumping billions into the economy to get people working, I argue that we would be making the inevitable realization of the crash much more painful.

Ronald Reagan did not just keep companies operating to generate products. His underlying theme was to modernize the US economy – both its industrial and commercial base. Through his funding schemes he helped companies introduce micro-computers, which at the time represented a new technology. Iacocca for his part did not rescue Chrysler by making the same old products. He brought in something cheap and practical that people on low wages could afford – the Chrysler K car.

So it is oversimplistic to simply wait out and expect positive developments. In the process of attempting to revive the economy, Obama has actually attacked secured bond holders. Who in the world would buy the debts of these companies in the future? You only get to screw the bond holders once. If he spent less time trying to be like Reagan and more time thinking just a few steps ahead, we would all be better off.

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By: Anubis http://blogs.reuters.com/great-debate/2009/06/08/inventory-driven-us-recovery-may-be-delayed/#comment-16278 Mon, 08 Jun 2009 14:23:09 +0000 http://blogs.reuters.com/great-debate/?p=3887#comment-16278 The wild card is consumer sentiment and behavior. The old recovery models will probably not hold up. The specter of rising energy costs and inflation are going to fundamentally alter U.S. consumer behavior.

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