Matthew's Foray into Blogging

Wednesday, July 13, 2005

“So This Is a Weak Economy?”

In a June 28 Wall Street Journal opinion piece entitled “So This Is a Weak Economy?” David Malpass, chief economist at Bear Stearns, convincingly asserts that the U.S. economy is thriving, notwithstanding what the media, analysts, pundits, and naysayers aver.

Mr. Malpass cites an average U.S. growth at “a fast 3.9% pace since the initial 7.4% tax-cut-related growth celebration of the third quarter of 2003,” whatever that means. He also cites unemployment of 5.1%, and wage and salary income growth at a 10% annual rate. He says that “household liquid assets have increased more than both total debt and foreign debt.” He says that the nation has “a robust system of innovation, market-based capital allocation, and decentralized decision-making.”

Mr. Malpass considers the strengths and vulnerabilities of the U.S. economy, and concludes that the outlook is generally rosy. He does warn that government policy mistakes often result in recessions. Among other policy goals he recommends is improvement of the quality of investment and savings in the U.S. The chief economist at a worldwide investment banking and securities trading and brokerage firm would suggest that the government take measures to facilitate investing and saving.

I do not know that I am convinced, however. If the economy is humming right along, why is employment not readily forthcoming for me? What are Mr. Malpass’s motives?

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