People Are Not As Stupid As Wall Street Economists Think – – -The US Economy Actually Stinks

Economists will not remove themselves from seeing the economy as it ‘should be’ rather than take it for what it is (and what that actually means). They have latched their narrative to the idea that it is you who has the perception problem no matter how isolated the ‘recovery’ becomes. There never was much indication for a decent recovery all these years let alone one that is in imminent danger of ‘overheating.’ On that score, there were only a few points in favor and they were the most derivative and indirect:
By most measures, the economy is doing great. The US labor market is creating around 200,000 jobs a month, which has brought the unemployment rate tumbling to 5%. Meanwhile, home prices are up and stock prices (GSPC) are near all-time highs.
If that is all there is to indicate the mainstream version of the economy, we really are in serious trouble. The major payroll statistics are increasingly detached from even orthodox measures of broader data on the labor market. There is also the massive inconsistency of global trade collapse and the US manufacturing recession that are mutually exclusive to the idea of 200,000 jobs a month. Home prices are up, but the overall real estate condition is conspicuously odd and actually suggests major economic problems. Stock prices might be near record highs now, but they have been that way for almost two years with increasing volatility; sideways suggests only swelling, broad-based caution about fundamental prospects, not evidence of Janet Yellen’s vision.
With so very little holding up the idea of continued and even more robust advance, you might wonder why economists don’t challenge their own views. It is pure ideology as at the center of monetarism is the core, unshakable faith in monetarism – ‘stimulus’ always works, and the more of it that is delivered the better the economic prospects. Rather than reconsider whether any of that is actually true, economists have been busy trying to explain why you don’t see it. At least they now understand that there is indeed a very wide gulf between their version and what the vast majority of everyone else perceives.

This post was published at David Stockmans Contra Corner on April 26, 2016.