Slow growth: What the new normal GDP means for monetary policy, stocks

Yahoo Finance ^

[Red in Blue PA]

A new report from Morgan Stanley chief economist Vincent Reinhart and his team paints a picture of a new economic normal that features GDP growth of just 2%, half a percent lower than previous estimates. Part of the cause for this adjustment, according to the report is:

“In the past few years, population growth has declined, labor force participation is on a secular downtrend, and productivity is increasing at a slower clip.”

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In short a lower participation rate leads to a slower growth economy and if the former isn’t changing, and Kenny doesn’t think it will, the latter can’t change either.

So the next logical question is what, if anything, can monetary policy and namely the Fed do to juice the economy in this kind of environment?

“No one is really sure what the Fed intends to do about that,

[Red in Blue PA]

They make it sound like nothing can be done. Allow for drilling wherever there is oil. Build the Keystone Pipeline. Cut down on business and environmental regulations.

These few things along could create millions of dollars yet these "experts" cannot see the bleeding obvious.

[Red in Blue PA]

Meant to say could create millions of jobs

[BenLurkin]

So...Obama’s “summer of recovery” is still a few years off?

[ckilmer]

2% is what the oil fracking boom delivers. The rest of the economy won’t go anywhere until obamacare is repealed and the banking laws reformed.

[Buckeye McFrog]

They could have just posted “we have become Europe” and saved themselves a whole bunch of typing.

[griswold3]

Exactly!
I really don’t think I could take August off though.

[Blackirish]

Yes. Open AWAR and drill. Pound down the price of crude and it’s a world wide stimulus. Then simplify the tax code.

[Graewoulf]

Impeach Hussein Soetoro-Obama in 2014, PERIOD.