A snapshot of a moving target is of limited use, but: Sales the day after Thanksgiving were 3 percent higher than last year. Over the weekend, 172 million people, shopping in stores and online, spent an average of $372.57, a 7.2 percent increase over a year ago, when 147 million shoppers spent $347.55 per person. Is this evidence that the recent deleveraging of indebted households has breathed fresh life into personal consumption, which normally is 70 percent of economic activity? Is it evidence of underestimated strength of an economy in which more than 93 percent of those who want to work are employed, and more than 93 percent of mortgages are being paid on time? Is it evidence that Washington's jaw-dropping interventions with hundreds of billions of dollars are having their intended psychotherapeutic effects? How much is it evidence of the decline of the price of a gallon of regular gasoline from $4.10 in July to $1.81 today? Over a year, every 1 cent decline is a $1.5 billion saving to consumers.
Whatever else historians will say about Washington's response to today's crisis, they are not apt to say the government did too little. It certainly has not suffered the fate of Buridan's ass, the animal in a philosophic puzzle who, placed equidistant from two piles of hay, starved to death from indecision. Some Washingtonians can remember when the federal government first had a budget of $100 billion (1962); this year's decisiveness might contribute to a deficit next year of $1 trillion.
In his wise book "Capitalism, Democracy & Ralph's Pretty Good Grocery," John Mueller, an Ohio State political scientist, notes that John Maynard Keynes' central theme, according to his biographer Robert Skidelsky, was that "the state is wise and the market is stupid." Mueller continues: "Working from that sort of perspective, India's top economists for a generation supported policies of regulation and central control that failed abysmally -- leading one of them to lament recently, 'India's misfortune was to have brilliant economists.'"
Many of them were educated in Britain, by Keynes' followers. In America today, everyone agrees that the president-elect's economic team is composed of brilliant economists.
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