I'm Feeling Better

clipped from www.forbes.com There is nothing like data to kill a good story. Clearly, there is no evidence of recovery in this picture or that the stimulus has had any effect on consumption. As is well known and easily inferred, people have to rebuild their balances sheets and are saving more. The next picture shows the time path of investment in the same way. The last picture shows data for employment. The two previous recessions were not as severe and did not last as long as our most current decline. Evidently, the current recession will hit bottom much later than most of its predecessor’s. The severity of the downturn is evident in all of these pictures. So as not to be hoist with our own petard, we reiterate that the pictures tell us very little about whether the stimulus is working. Things could have looked even worse without it! we should take a lesson from the medical profession concerning cold remedies: They may not actually do anything, they just make us feel a little better.