U.S. economy is being suffocated by uncertainty

Posted on Sat, Jun. 04, 2011 10:15 PM

COMMENTARY

By E. THOMAS McCLANAHAN
The Kansas City Star

The economic recovery is two years old this month. Isn’t that reassuring? I didn’t think so. As recoveries go, this one is as blah as it gets. Judging by the most recent indicators, we may be headed for a double dip, or perhaps a period of flatlining that feels just as bad.

Job growth is sluggish and unemployment is again on the rise. In the first three months of this year, the economy slowed substantially, from a 3.1 percent pace at the end of 2010 to a growth rate of only 1.8 percent.

Consumer spending is lackluster, thanks to stagnant wages and high fuel prices. Confidence remains low — and it took another hit last week: Americans learned that the value of their homes — for many, their largest investment — once again sagged.

Why is this economy taking so long to get moving? I can point to two reasons. One, this recovery is getting no help from housing, which is typically the sector that perks up first as interest rates fall when the economy slows.

But the bigger factor is an extraordinarily high level of economic uncertainty, for which the Obama administration deserves the major share of blame.

The mood was captured in a recent column by Yale law prof Stephen Carter.

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http://www.kansascity.com/2011/06/04/2926820/us-economy-is-being-suffocated.html#ixzz1OTNKzYO0