Someone ought to do a chart of GDP growth in the most recent four or even six or eight years of Republican control of Congress vs. the most recent four, six or eight years of Democratic control of Congress.

If Obama is the messiah, I sure hate to meet the devil.

This might be close to what you are looking for:

https://www.asymptosis.com/congress-presidents-spending-taxes-debt-gdp.html

I don't think we are in a pessimism bubble, but certainly if we were that would rule out a double dip, the main danger of a double dip is from an optimism bubble(the sense that valuations are rich)

"There is a lot of money out there not being spent, both by the consumer and by companies (not replacing equipment, hiring, etc.); at some point, perhaps after November, the flood gates will open and the bubble will burst."

This is certainly true, and you can also look at declining inventories to an extent, but companies that are expecting or expected to have orders or have received them are already much higher this year, like cummins. Companies that are not really rallying are doing so because there is no real inventory demand to replace(and because such inventory requires a bullish outlook for the life of the equipment which is often multiple years.) But if you look at valuations you have to ask are these companies with all this cash that can only have a very conservative return really worth higher multiples? That is companies are hording cash perhaps to buy out competitors or to buy back stock on a dip. Why are these companies holding the cash so to speak? Why not put it to use? Companies holding cash signal no great projects to put money to use on.

Which is why the bullish IPO on Tesla was really bearish, I mean here is a company that isn't going to make a profit in the next 5 years comming out the gates surging (only to be devoured by shorts/thus neither optimism nor pessimism bubble) But if Tesla is worthy of cash, what does that say about the number of projects that are worthy of cash?

The Tesla IPO is loose aggressive action, That signals "optimism bubble". That shorts came in and quickly knocked it down from 30 to 19 only two dollars above the IPO price that is realism.

If you look at Apple which at one point had considerable cash, it is one of the few companies burning thru cash, Google is certainly stocking up. A large majority of companies are stocking up cash, and a lot of bank are holding unto cash in part because they can safely use it for arbitrage given treasuries, which is why what Santelli said about interest rates makes some measure of sense. a slight raise in interest rates would cut into the profitability of the arbitrage and actually make other investments more attractive on a relative basis. 2.5 Trillion on the sidelines according to Kudlow.

If there is any possibility that raising rates could get corporate cash off the sidelines then it is worthwhile to think about it. In addition if the Fed raised rates it would signal to many that the economy was actually getting better.

Look if we are in a pessimism bubble then the fed can burst it by raising rates.

To say we are in a pessimism bubble in terms of where the market is sounds pretty bullish.

It's interesting to compare the Douthat piece with one published in the Washington Post by Fareed Zakaria.

https://www.washingtonpost.com/wp-dyn/content/article/2010/07/04/AR2010070403856.html

Businessmen I know are worried to do anything, not so much out of fear of the economy as out of fear of what the Democrats in power are going to do. They still don't know what health care is going to be like or if or how they are going to provide for that. Given the current financial reforms, they may have to make adjustments in their relationships with banks and pensions and no one really knows how or what those changes will be. Even if Republicans sweep into both houses of Congress in the fall, for awhile there will be uncertainty as to if they will be changing the current changes and there has to worry about how that will all work out. The business community may have more hope, but there will be caution for some time, still.

Maybe one of the great arguments for conservative government is that massive politically-based changes in the nation's economy. For example there is the current threat that the president will decide to take over your company if he doesn't like the way it is being handled. This kind of thing, as others mentioned the other day on the front page, create a climate of business uncertainty and no one with money to invest is quite sure how to do so, nor are businesses certain how to plan for the future, and everyone is too uncomfortable to do anything but the sure things like investing in the most highly successful established businesses, like Apple or Google. Once upon a time it would have been oil companies or automobile manufacturers, but times have changed.

This is not malaise, it is fear. Bad enough economic uncertainty: as John Lewis points out, people know how to deal with that. They simply adjust how and where they invest and how they plan for the future. You get politics involved, especially politicians who seem blind to economic facts about supply and demand in the marketplace and caution rules the day in the private sector. It has to since national politicians don't know how to be cautious or prudent about the economy.

I doubt anyone will tack into serious optimism about the economy until after the 2012 elections. The president is a powerful symbol of the nation and this one seems to breed economic pessimism in the business sector in a way that seems very realistic to me.

A really good article just came out in the Wall Street Journal, this is basically what I took Santelli to be saying: Easy Fed Loans Are Cheapening the Recovery
by David Reilly.(suscribers only unfortunately)

I love comparing the points of view from the Markets section of the WSJ, with the editorial page. liked this one, which seems open so far . "Hard Knocks From Easy Money, The Federal Reserve is feeding big government and harming middle-class savers."
https://online.wsj.com/article/SB10001424052748704103904575337282033232118.html?mod=djemEditorialPage_h