Dow Jones Industrial Average Closes Below 12,000
The Economy Is Still Slow. Why?
The Dow closed below 12,000 for the first time in several weeks. The Dow Jones Industrial average fell yesterday (Friday June 10, 2011) below 12,000 due to concerns about global demand, and persistent slow growth prospects for the U.S. The decline in the stock market coupled with unemployment above 9 percent has decreased investor sentiment and eroded consumer confidence.
Who Gets The Blame For The Slow Economy?
There is enough blame to go around but many would argue that the President and his economic advisers did not focus on the economy in the first days of his presidency. Remember health care town hall meetings, “saved jobs” and cash for clunkers? The President was given early evidence that the economy might need more help to pick up steam and the end of QE2 has signaled the end of easy money.
Romer Was Right.
The President needs to reach out to people with different perspectives and quickly implement a plan of action to improve sentiment first, then lead people to act. Perhaps that’s why his economic team bounced including Christina Romer who now looks more correct than ever about not raising taxes during an economic recession with high levels of prolonged unemployment.
