Hello Nancy,
Very interesting clip....
Hopefully it is political posturing.....aren"t they all the Same
But that governor's meeting may turn out to be important.
Sheesssh even the economists are baffled....is that unusual ?
BARROW -- BARROW -- BARROW
Economists Struggle To Figure It Out
By JOHN CUNNIFF
The Associated Press
NEW YORK (AP) -- What a strange world it is. With at least a third of the world's economies in serious trouble, Americans are enjoying the best economic times in three decades.
Growth has exceeded 3.5 percent for three straight years, unemployment is at a 28-year low, wages are rising, stocks seem to have no limits, inflation is benign, money is easy and spending is unrestrained.
But that may not be enough to satisfy. The price-earnings ratios of stocks, which average under 20 over the long term, are now nearer 30, and judging by the bullishness may be headed higher still.
After the major part of a decade of improving fortunes, you might think that consumers would have surrounded themselves with all the stuff their money could buy. But now they are borrowing to buy even more.
''The world economy is so strange these days that we are not even sure what to worry about,'' says David Wyss. And he, being the economist at Standard & Poor's ''U.S. Economic Service,'' is rather well informed.
The economy, he says, ''may be too strong to keep inflation under control, but the risk of a 1999 recession is still significant.'' The Federal Reserve fears inflation, but manufacturers fear deflation. Consumers are overspending, but if they don't it could mean recession.
Who can figure it out? ''The United States is walking a tightrope between these risks, but so far shows no sign of falling,'' says Wyss, who is rare among economists in confessing that it is indeed confusing.
Confusing to all, perhaps, but to forecasters.
It may be irritating, like ads during the telecast of a the football game, but those forecasters won't be censored. Confident, they are now foretelling a great millennium, and will do so until the next century.
Economic times have become so positively charged with confidence and acquisitiveness that America's households raised their spending 4.9 percent last year while their gains in disposable income rose just 3.1 percent.
This is a very visible change of personality, because in years past consumers seemed instinctively to cut their spending during the late stages of an economic advance, not wishing to become cash poor.
This time, it is their spending -- cars, houses, cruises, sports, tuitions -- that keeps things going. They are earning good money -- averaging $12.98 an hour, a gain of about $1.35 in three years -- but spending ever faster.
The way you do this, of course, is to borrow. ''Banks will lend you money if you can prove you don't need it,'' said Mark Twain, and his truth marches on. Consumers borrow with plastic, of course, and with nerve.
If you ever think people aren't different today you are overlooking how recently the opposite behavior was the norm. People today are borrowing on the house. Their parents thought it was a sacrilege to do so.
The uses of that money also represent a great change.
Borrow to invest in stocks? The idea seems strange, even shocking, to folks who were young in an earlier time, when paying off the house, not borrowing on it, was one of the great goals and accomplishments of life.
And then there is that question begging to be asked: If the baby boomers, now in their midyears, are so concerned with saving for the future, where can you find evidence of it in the official statistics?
Strange. As ''anonymous'' is said to have said: ''Whoever said money can't buy happiness didn't know where to shop.''
AP-NY-01-12-99 0002EST
|
