Steven Rattner is a Wall Street executive who in this article discusses the possible reasons that the global economy has been slowed. He starts off by mentioning that many people, possibly pessimists, view the slow-down as high potential for another recession, Globally he mentions that factors include governments lack of action when necessary or incorrect action, causing more problems rather than helping each other which is to be expected. In the United States, he sees the possible issues as a lack of investment as businesses like Amazon are less capital-oriented, a restrictive banking policy due to fear of recession, and an increase in use of loopholes by cooperation due to the absence of a recent tax reform. Abroad he mentions countries like Greece causing issues for the Euro, and China's opacity when it comes to decisions and growth.
Rattner avoids much discussion about whether we are heading towards recession or what factor exactly will be to blame, but keeps his analysis more general, identifying which factors potentially could cause a bigger issue, The article discussed a variety of topics mentioned in class such as investment and policy and is worth a read.
http://www.nytimes.com/2016/03/10/opinion/who-gets-the-blame-for-the-slowing-economy.html?ref=economy&_r=0
There has been lots of talk recently about whether we are heading to another recession. There are many indicators that are necessary to look at. However, predicting the economy is very difficult. As professor Skosples recently said in class, economists are still trying to figure out how to best explain how the most recent recession happened.
ReplyDeleteThis was an interesting article read. There were a lot of connections to class. It is worrisome that people are concerned that there will be another recession. As shown through the power of expected inflation, sometimes expecting a recession may cause people to act in a defensive manner, which may end up leading to a recession. If people believe that a recession is about to occur, people may withdraw their money from banks and spend less, leading to negative economic consequences.
ReplyDeleteWhile there are some signs we are heading towards a recession in the future I think it is more than likely just a cyclical decline in the nature cycle of the strength of our economy. Since the 2008 crisis passed, we have seen steady growth for about 6 years, and the dollar is currently very strong. I think the slow-down could just be a product of the reduction of our exports because of the strong dollar.
ReplyDeleteIt seems so easy to create a self fulfilled prophecy in terms of a bad market. If people think its going to happen and start pulling out investments, then everyone else will start doing the same. How does one convince these pessimists to have faith in the economy? As far as the slow down is concerned I believe Richard has a good argument.
ReplyDeleteI am not quite sure how everyone got on the topic of the individual since the article primarily pertains to global markets and recessions due to Investment lacking (Banks lack of lending). And yes we have had steady growth rate, that is lower than prior to the recession, but I guess nonetheless growth. Moreover, the article shows that economists’ predictions on how well the economy in the future will be doing are have been far too optimistic (Table: Falling Growth Forecast). That is not to mention as shown by the Graph: Bearish Stock Markets, we are expecting the majority of markets to go down. Rattner, seems to (As Erica mentioned!!) be pointing out that nations are being told over and over what the problem is and seem negligent in taking efforts to make a difference. Additionally, Rattner is saying there is still time to deflect this foreboding recession, but something has to be done.
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