In response to the Dec. 3 Perspectives column by Tom Taulli, "":
In corporate America, at businesses of all sizes, spending has practically ground to a halt. We've swung from the manic exaltation of growth in the late 1990s to a manic exaltation of profits, with a protracted near-disconnect between the two. Any student of business recognizes that both are necessary for an enterprise's success and the broader success of the economy.
Unfortunately, the emphasis foolishly remains on short-term results. Many companies continue to wring out "inefficiencies," depleting their organizations of key employees and the essentials for future growth for the sake of showing a meager quarterly profit. We're caught up in a potentially disastrous feedback loop. A sick economy is one that relies heavily on consumer spending, is nearly stagnant in regard to business spending and expansion, and has a near-total disregard for the long view.
We can all recognize these symptoms in the U.S. economy as well as throughout much of the developed world. There are few bright spots if any, and they tend to exist in developing markets where politics and business are uncertain and not synchronized to models of the past.
Too few economists, much less administration officials and legislators, wish to confirm that we are sailing on uncharted waters in the midst of major structural and global economic change. The Fed has only a few good arrows remaining in its quiver. One must wonder how far out we will see the culmination of these changes and if deflation or worse is somewhere on the horizon.
Read the history of the aftermath of the Gilded Age and later, the Roaring Twenties. History does repeat itself if we forget the lessons of the past--and, once again, we have.Dennis Jugan