In my email this morning from Jim Geraghty at National Review:
Hey, news world, let’s analyze Marco Rubio’s comment about the age of the Earth for days and days!
. . . eh, let’s not, and say we did, because some really much more important news is going on. How old is the Earth? Slightly older than the tradition of the media asking Republicans questions about evolution and creationism that they never seem to ask any stripe of Democrat.
So, that much more important news that’s going on includes this:
U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.
Half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.
Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.
You know those automated “STALL! STALL!” warning voices that pilots hear from the aircraft system? Well, one of those is going off in the Treasury Department.
“In addition to the economic woes overseas they also cited the looming fiscal cliff and coming tax increases,” notes the Lonely Conservative. “Then we have Obamacare and the regulations from Dodd Frank which only make things worse. The left will argue that these companies are just being greedy, but actually they’re being realistic, and if they aren’t investing they won’t be hiring.”
Bruce McQuain: “As before the election, an unstable business climate persists which does not provide any incentive to expand, spend or hire. In fact, as indicated above, it is providing precisely the opposite incentives. It’s one reason the GDP forecast for the country has been downgraded again to 1.5% (Mexico, for heaven sake, has GDP growth of 3.2%). But when you vote for the status quo, well, you get what you vote for — enjoy.”
Erika Johnsen, at Hot Air: “There’s a distinct lack of optimism about the prospects in a continuing global economic slowdown and the uncertainty of the United States’ pending policy decisions, so companies and investors are going small rather than risking big. If the government manages to navigate us around the fiscal cliff, there may be a short-term burst of pent-up investment energy, but how long can that last? With global governments still trying to solve their massive fiscal problems by Robin-Hooding the wealthy instead of balancing their budgets, how long can any of it last?”
“Hopefully, Washington will reach a solution to the (entirely self-inflicted and unnecessary) fiscal cliff problem,” writes Walter Russell Mead. “Hopefully, that will show that fear and uncertainty over the consequences were the real reasons for the collapse. Hopefully, in other words, the roots of the slowing demand aren’t deeper than the foolish political brinkmanship on display in Washington. But, laying aside our hopes for a moment, if, as has happened first in Japan, then the UK, and next the whole eurozone, we were going to have a double dip recession, a collapse in business investment would be one way it would start.”
Over at The Atlantic, Derek Thompson argues the biggest problems are overseas, not at home:
For the moment, imagine two American economies. The Home Economy and the Away Economy. In the Home Economy, there is mostly good news to report, so long as Washington doesn’t screw it up. GDP growth and job growth have been steady, if slow, for more than three years. Consumer spending is healthy. Housing indicators are turning up all over the place, like home prices, home starts, home sales, and construction employment. It adds up to the possibility of accelerating job growth and a recovery worthy of its name in 2013. Small businesses sentiment, which relies less on world markets and more on the animal spirits of the neighborhood, is still higher than it was for most of 2011.
Meanwhile, in the Away Economy, there is a world of precarious, scary, and outright depressing news, which is weighing on large corporations that tend to make more than half of their income from customers outside the U.S. GE and Pfizer, for example, are listed in U.S. stock indices. When their prices fall, it looks like a reflection of the U.S. economy. But both companies make more than 50% of their revenue abroad, and Apple makes more than 60% outside the Americas. When the world catches a cold, multinationals sneeze . . . even if the typical U.S. household is feeling alright.
That strikes me as a particularly cheery take on the domestic picture, but maybe I’m too gloomy . . .