Sometimes, I hate being right. Most of those times are when I take a pessimistic view of data; this has happened a lot recently.
It gets worse when the people who agree with you are none other than The Giant Vampire Squid. As the Wall Street Journal notes:
Zero — First quarter GDP growth, minus the temporary factors of government stimulus and inventories, as estimated by Goldman Sachs.
With the economic recovery already nine months old, it’s easy to forget just how tenuous it remains. Consumers are spending and businesses are investing, but an uncertain amount of that activity depends on temporary lifts, most notably the American Recovery and Reinvestment Act of 2009.
I promise to get enthusiastic about inventory growth when people stop claiming that the drop in sales is based on the Demand side of the equation; that the banks aren’t holding more than $1 Billion in Excess Reserves because they want to, but rather because they can’t find borrowers.
Looking at state budget projections for next year, the reality that inventories cannot grow indefinitely, the unemployment and discouraged-workers levels, and the growth in long-term unemployment, it’s difficult to find engines for growth.
Real GDP recovery is described fairly as, at best, lethargic. And now we know that even the lethargic recovery is stimulus-induced, not real.
But the headline numbers have given an excuse to do nothing, and steroid withdrawal is, I am told, a very painful experience.