Posted by Peter Lawler
That’s why the stock market is surging a bit, Kudlow says. And no inflation, low energy prices, and no tax increases are great news if you have a job, which more than 90% of Americans still do.
I think that Meagan McCardle over at the Atlantic Monthly might be a better guide than Kudlow on how this downturn plays out. He is treating it like the kind of recessions we had in the early 1990s and 2000s. McCardle is treating it as something more serious.
We should also remember that the Obama tax increases are coming. Clinton was smart to put them at the front of his first term so that the public had cooled off by reelection time. For both political and economic reasons, Obama has put off his tax increases until later in his term. That means the tax increase will be fresh in people's memories either during the midterms of 2012. Its also an open question how big these tax hikes are and what effect they have on the economy.
Kudlow is correct...in my view, the world has had an economic "fever" that has finally broken ($4 a gallon gasoline and shipping all our factories to China -- a recipe for utter collapse). If you have a job is this climate, things are getting back to "normal" (i.e., solvent people are the ones who can get loans, real estate is reentering the atmosphere, and gasoline has returned to its true value). We need to simply ride this out, but instead the Dims will spend money we don't have to stimulate things like ACORN. This really could turn into another Great Depression, and for the same reason...the cure is far worse than the ailment.
I hope that Kudlow is more accurate than Bob Chapman. "Normal" What is that? Back to consumerism? If the normal lead to the fall then getting back to normal is neither a promissing development nor reason to be optimistic about the future. I know everyone is very concerned about the money they lost in the market but come on? Is "normal" worth going back to if not only to cash out and run.
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