I sure wish I could see the demand you're seeing.
Potential demand. FED has loaded the banks with reserves.
What I see is over-capacity, down-sizing, bankruptcy, approaching double digit unemployment, foreclosures, and banks unwilling to extend credit..
What you report is old capacity, reduction of old capacity due to its previously inflated inefficiencies, Schumpeteran destruction on an accelerated basis due to decades of persistent rising GPL(general price level), unutilizable labor due to its noncompetitive inflated inefficiency, inflated property looking for equilibrium, and banks unwilling to lend the abundant reserves FED created. All of that represents potential demand in that it must be addressed. This condition is similar to that which existed after WW2.
This isn't a post-war "re-tooling" scenario like you're talking about.
It quite is. Retooling would address what you see.
If anything, we have oversupply and insufficient demand.
We have oversupply of poorly constructed inflated items like Detroit's autos, and insufficient demand for previously inflated items, only. This is also similar to the environment existing after WW2, too many Jeeps and too few Ford Fairlanes.
Concerning "demand", you use the term in lieu of "sales". Sales are as robust as ever. It's just that the sales are going to low cost producers at any price point, and that ain't much made in the USA.
But given your concept of demand, if there's too little of it, why does GPL and real incomes continue to rise? |
