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All of the hype about an economic recovery is just that. If you want to see if the economy is recovering, look around you. The economy is a “bubble-up” process. Signs of recovery appear locally first. Job creation, businesses expanding the work week, investing in new plant and equipment and consumers feeling better. None of this is happening in Chicago or anywhere else.
Mish presents a detailed picture of Chicago. Chicago has its own uniqueness (every area does). But what Mish describes is going on all around the country. How can there be a recovery when sales taxes are plunging everywhere.? Ditto with income taxes. Strapped consumers, trying to survive, are being showered with tax and fee increases everywhere. Gasoline costs are rising as are heating costs. Citizens who are fortunate enough to still have jobs at their old incomes are poorer because they have less money to spend.
Fear in the economy is palpable. Businesses are afraid to make commitments because they don’t know what new legislation, regulation and taxes will be imposed upon them. Consumers are repairing their balance sheets and deferring purchases so as to have a “cushion” in case conditions worsen. In effect, rational economic actors are “hoarding” money to the extent they are able. (“Hoarding” is not a pejorative term. All economic actors hold cash balances as cushions against uncertainty. It is a natural, defensive act. In times of great uncertainty, it is only rational to increase the “insurance” funds.)
How can anyone claim the economy is recovering? The government can pump up the numbers for a quarter or two, but that cannot represent or even cause a recovery. The number-pumping is little more than a fraud levied on the public, a fraud for which they will pay for years to come. There can be no economic recovery that does not start at the local level and in the private sector of the economy. Evidence suggests we are nowhere near a recovery. There are not even signs that we have yet reached a bottom.
It is not in the power of the government to make everybody more prosperous. Ludwig von Mises
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