'
why are we snailing along?
1) "a large overhang of private debt"
check
2) " a still-depressed housing sector"
check
3) " contractionary fiscal policy"
check
okay
-------------------------------
but here comes the gilding of the lilly
a " well-established fact"
" recovery tends to be slow
after recessions
caused not by
tight money
but by
private-sector overreach"
ie recovery from a gratuitous CB crimping move
in particular aimed at
nominal wage growth
mechanism "
:
slowing net credit flows... slowing credit induced spending
leading to cuts that increase the ratio of layoffs to hires
loosening job markets ...lowering wage expansion
---tight money has sickeningly bad associations
its tight credit friends tight credit ---
hmmm
look at points one and two
both really are about the same thing
equity to debt ratios
lot to mortgage
stock value to bond value
human capital value to personal loans etc etc
see again its all about a reactionary tightening of credit
a pro cyclical discretionary decision
emerging simultaneously out of the composite financing sector
triggered and enforced
by the lender of last resort
so equally contrived as the overt wage crimp
sure here its about
collateral value implosion
but that was contrived too
both the debt build up and the sudden turkey roping
.
