Are We Headed for a 1937 Double-Dip Recession?
Posted at 12:45 p.m. on Nov. 19, 2012
Amity Shlaes warns against following the same policy path that led to the 1937 “depression within the Depression”: High spending before the election, budget cuts after the election, attacks on the status quo, and fallout from first-term legislation.
“After this year’s election, President Barack Obama made it clear that budgeting was his priority… In his first news conference on Nov. 14, Obama went out of his way to make clear his tax increases would fall on the rich… Obama signed his health-care act in 2010, postponing much of its enforcement until 2013, after the election. Now that the effects of the act are so proximate, markets are wondering whether they or investors can handle the changes demanded.”
In a worrying sign, the Wall Street Journal reports that US companies are “scaling back investment plans at the fastest pace since the recession.”