Just one quick addition to Prof. Blanchard's fine exegesis on economics below. I have made this point several times, so one more won't hurt. Anyone who has a pension, and that's a lot of average Americans, should care about business investment. Those pensions are invested in the stock market, which, as Prof. Blanchard notes, is a measure of business investment. If you want a healthy pension, pray for a growing stock market. Also, half of all Americans have some direct investment in stock, either in buying stock or through mutual funds or their like. The evidence that the average Joe cares about the stock market is that you don't see ads for investment companies just on golf programs anymore; they are also shown during NFL football games.
Where do people think business investment comes from anyway? Elves who live in trees and in their spare time bake delicious cookies?
By the way, I share Prof. Blanchard's assessment of the Clinton/Bush economies, but I would just add that Bill Clinton was a fortunate beneficiary of a revolution in technology, which, I might add, produced profits that in many cases just existed on paper, and when (metaphor alert) chickens came home to roost in 2000-2001, those profits were gone with the wind. Still, Clinton obeyed the first rule of economics: first, do no harm.
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