Think everything’s fine in the US economy?
Austan Goolsbee — Obama’s former top econ advisor — is not so sure.
In a comment to Ben White’s Morning Money at POLITICO, Goolsbee explains how easily it could all slip away.
‘Unlike in other V-shaped recoveries from recessions, we cannot go back to what we were doing before … We have to shift away from housing and consumption to exporting and investing and that’s a very slow process … And the world has not been tremendously friendly to enabling us to do that. Europeans have fumbled and fumbled their way to negative growth … And China is slowing while the price of gas is going up. There are definitely some clouds. I’m not pessimistic. I’m just guardedly optimistic. … Productivity grows 2 per cent a year. So if the growth rate slows to around 2 per cent then the job market will stop improving and the unemployment rate will start going back up again. …
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