Recently, using the comforting, measured and boring tones perfected by Alan Greenspan, Chairman Bernanke in a speech to the New York Economic Club observed that the best of the policy options open to us might lead us back to our economic potential by 2018. Apart from the idea that we can’t have our economy back for maybe six more years, at least three things in his speech are cause for profound worry no matter how analgesic the language is meant to sound.
The presidential campaign drove the first and most serious point home. No one seems to have any sense of urgency regarding growth. The "guild" economists who advised both sides focused more on blaming various actors for why the recession won’t end rather than showing any sense of the profound costs of what a lost decade of growth means to America. President Obama’s "George did it" narrative met Mitt Romney’s mantra of "Obama doesn’t know anything about business." Romney’s feint at growth sure sounded more like "I can manage better." [more...]