Helicopters can be dangerous by Gavyn Davies
(via Thoma)
Will McBride and Goldman's Hatzius be correct in their prediction that we'll see a pickup in growth in 2013H2 and 2014? Or will Waldman be correct and the Fed won't have to use an "exit strategy" for the indefinite future?
The negative view usually pans out. However after the lame recovery of 90-92, 1990s job growth was good with the stock/tech bubble and accomodative Fed policy.
After flirting with deflation in 2003, the 2000s saw $8 trillion in housing bubble wealth and low unemployment despite poor job growth. Unemployment didn't go up until 2008.
So the pattern is a shampoo economy with bubble and bust. Not unsurprising given the enactment of rightwing polices.
Question two is the fate of the Republican party. Demographics are against them. Tea Partiers are sabotaging primaries. They caved on the debt ceiling clown show. They are suffering from epistemic closure with Marco Rubio insisting that Fannie and Freddie caused the housing bubble and financial crisis. They still hold the House. They filibustered Hagel. Obamacare is law. Obama will nominate a new Fed chair next January. (Republican will filibuster.) He might get another Supreme Court judge. Will Obama break the Republican fever? History suggests they'll need a long time in the wilderness.
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