Paul B. Farrell: Romney, Obama both stock-market killers. Both lack vision and courage, Pimco CEO says
October 2nd, 2012
The economy is going to be a disappointment whether President Barack Obama or challenger Mitt Romney is elected in November.
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. — “Like an earthquake rocking a house, the 2008 global financial crisis exposed a shaky new foundation underpinning Western economies,” warns Pimco’s CEO Mohamed El-Erian, in the latest Foreign Policy journal.
Unemployment and inequality has “heaped social unrest atop financial turmoil,” spreading uncertainty, volatility and lower market returns that Pimco labeled the New Normal a few years ago.
Flash forward: “Something has changed” as this economic crisis has gone on far too long without a political solution: Instability has morphed into “vicious feedback loops that turned bad economics into bad politics” that’s now recycling, converting “bad politics into even worse economics, further threatening an already tenuous economic future … welcome to the New New Normal.”
The core problem? Washington’s “inability to deal with the aftermath of a huge wave of excessive debt creation and credit entitlement gone crazy … But where politicians … act ponderously, markets don’t. They move at much faster speeds … so as the New Normal morphs into the New New Normal, the economic and financial system risks breakages that the political system will be increasingly incapable of mending rapidly enough.”
Yes, America is sinking into this toxic New, New Normal hell with more and “more political dysfunction and greater sluggishness in economic growth, unacceptably high youth unemployment and long-term joblessness, redoubled debt and deficit concerns, and worsening inequalities between rich and poor.” Normal? No, Abnormal.
New New Abnormal: Neither politician has a real solution