So says Howard Davidowitz, chairman of Davidowitz and Associates, which specializes in providing consulting and investment banking services to the retail industry. If you are afraid you've been too pessimistic about the current state of the economy, he will assure you that you are not pessimistic enough. He always makes for a lively discussion while at the same time providing interesting relevant facts.
In this interview from July 1 on TechTicker (which I always find thought provoking and often entertaining), Davidowitz points out that the housing and jobs markets are still in shambles and President's current spending commitments and future health care spending points to a long struggle.
Prosperity is the result of accumulated capital wisely invested in a free market division of labor. Government subsidization of mortgages, socialization of automobile and health care industries, draconian regulation of financial markets, increased government spending, massive government borrowing, artificially low interest rates, and increases in taxes are not the way to get us back on track. All of these policies hamper the market process by directing scarce factors of production away from their comparative advantage, resulting in capital consumption. A shrinking capital stock results in less productivity, lower real incomes, and will keep prosperity further around the corner.
The solution is to do almost the exact opposite, no matter how painful. Government spending should be slashed along with taxes and regulation of the economy. The Fed should cease inflating. Better yet, we should end the Fed altogether.