Lifted from comments from Spencer’s post on Productivity and the stock market
Mike Panzer at Financial Armageddon has been on the issue that the “street” is missing all that is going on around them. From his blog: http://panzner.typepad.com/
However, I wonder if a new paper, From Keeping Up with the Joneses to Keeping Above Water: The Status of the US Consumer from the BlackRock Investment Institute,
If long-term leverage sustainability is assumed to reside near 1990 levels, then the bulk of the deleveraging process remains ahead of the American consumer, regardless of the income measure used…
We think that these trends, coupled with stubbornly high unemployment, higher commodities prices, and slower growth in wages and salaries, will likely contribute to a lower level of personal consumption growth over the next few years. Moreover, since consumer spending is a key component of the GDP growth rate, this would argue for generalized economic growth levels that are, at best, modest for years to come, and may in fact appear anemic when compared to pre-crisis growth rates.
I have believed for years that the US is following the Japanese model.
But note that while the general belief is that the Japanese government policy has not stimulated the economy, the alternative might very well (be the) belief that Japanese policy may be preventing a depression.