Tags: Will | economy | strength | overrated

George Will: Economy's Strength Overrated

By    |   Thursday, 05 February 2015 10:49 AM

Many analysts pronounced the economy perfectly healthy after last week's news that GDP expanded 2.6 percent in the fourth quarter and 2.4 percent for 2014 as a whole, the fastest annual growth since 2010.

But Pulitzer Prize-winning writer George Will says the enthusiasm is way overdone.

The 2.4 percent growth for 2014 marks the ninth straight year under 3 percent, he writes in Investor's Business Daily. "During the recovery from the recession of 1981-82, five quarters enjoyed 7 percent or higher growth, and five years averaged 4.6 percent growth."

Will makes an interesting connection between the economy and our culture.

"Economic weakness — new business formations are at a 35-year low — is both a cause and a consequence of alarming cultural changes," he says.

"In 1960, 12 percent of 25 to 34 year olds were never married. Today, 49 percent never have been. Although the population was 27 million larger in 2010 than in 2000, there were fewer births in 2010," Will explains.

"The lingering economic anemia is astonishing, given plummeting energy prices. To a considerable extent, the anemia is an iatrogenic social ailment, induced by government behavior," he adds.

"By making slow growth normal, iatrogenic government serves the progressive program of defining economic failure down."

Hedge fund luminary Paul Singer, CEO of Elliott Management, shares Will's pessimism.

"It is hard to imagine the American economy lighting up under [current] conditions," he writes in a letter to investors obtained by CNBC.

That's the case "even without the gravitational forces exerted by Europe's travails, the strengthening of the dollar, the oil crash, Japan's highly uncertain path, potential economic changes in China, the uncertain event stream of Islamic jihad, Russian expansionism and continued chaos in the Middle East," Singer notes.

He believes change is unlikely in Washington, to the economy's detriment.

"President Obama gives no sign of wanting to work with Congress, and also gives no sign of wanting to pursue a different agenda," Singer states. "Thus, the current tax and regulatory landscape is likely to remain in place at least for the next couple of years."

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Many analysts pronounced the economy perfectly healthy after last week's news that GDP expanded 2.6 percent in the fourth quarter and 2.4 percent for 2014 as a whole, the fastest annual growth since 2010.
Will, economy, strength, overrated
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2015-49-05
Thursday, 05 February 2015 10:49 AM
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