The biggest story in the world is the comeback of the American consumer.
The unemployment rate is collapsing.
Housing starts are booming.
Confidence is on the rise.
Writing at The American Conservative, Scott Galupo states the crucial point about what this means for Mitt Romney, if he gets elected.
What this means is that, if he’s elected, Romney may inherit an economy that, while far from ideal, has achieved escape velocity. President Obama, meanwhile, will have borne the brunt of the nastiest crisis since the Depression and still gotten the boot. One man’s unjust legacy is another man’s just deserts, however. Recall that George H.W. Bush passed on an already-recovered economy to his successor, Bill Clinton, who in turn passed on a recession to George W. Bush.
The narrative that will be pushed by corporate leaders and the media is already pre-written: With the switch to Romney, people will say, American corporate leaders finally got the confidence to invest, and so the economy took off.
And in fact, there’s a good reason to think that corporate America IS on the verge of a ferocious investment comeback, since currently corporations are pessimistic and under-investing. But that under-investment won’t be able to stand in the face of the consumer comeback, which is the most powerful force in the global economy.
A reminder of how much corporate investment has slowed down is this year-over-year change chart in the 3-month average of core Capital Expenditures.
Photo: Bloomberg, Business Insider
The idea that corporate confidence is the main problem in this economy is a complete myth.
But with consumers powering forward, and corporations inevitably caught in a place where they have to catch up, the timing could not be better for a Romney victory to “validate” that storyline.
As an aside, Zeke Miller at Buzzfeed reports that in the closing days of the campaign, Obama is going to start taking credit for the economic comeback, something he’s never done before. The news is spreading: The US economy is on the mend.
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