Lafferite supply-side "deficits don't matter" voodoo Reaganomics is having its comeuppance right about now, no matter what lead cheerleader Ben Bernanke has to say
. For a second consecutive month (after saving basically nothing before that), American consumers dipped into their microscopic savings to spend themselves silly. A troika of bad news
then: personal income and personal spending went down while personal savings "improved" to -0.7% from a revised -1.1%. Calculated Risk hit the nail on the head when he said that Hurricanes Rita and Katrina are not responsible for the most part for this slowdown; rather, it seems that a perfect storm was already gathering
in the form of "soaring gas prices, nightmarish home-heating costs this winter, plunging consumer confidence, rising interest rates and falling new-home sales".
How much lower can Bush's little girlie man approval ratings get if a full-blown slowdown takes hold? Will the Fed start cutting interest rates again till they reach one percent? Will the dollar finally become toilet paper as the pundits have predicted for so long? As the Chinese curse says, "May you live in interesting times".
Posted by Emmanuel |
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