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The 'Rocky Balboa' recovery

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    Why does economic recovery keep getting knocked down?

  • Duration 4:16
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That's a song that John Scott played every morning I only want you know let's get it up top hits and brilliance firing it at Jack read everything you can think this really does -- -- dad is one of the most famous theme songs out there.

And you might instantly envision Rocky Balboa running up those steps getting into the ring taking if you -- getting knocked down over and over again.

Well apparently this is kind of like our economy ever since the recession ended three years ago.

We're seeing the weakest recovery since the Great Depression that's -- the Associated Press.

And one economist says were actually ended.

What he describes.

As a rocky bow -- Recovery Stephen Davies is a professor of international business and economics at the university of Chicago's -- probably inspired a little bit by that song -- -- Why is this a Rocky Balboa recovery.

Well as you say again -- economy does have a certain stop go aspect in the last three years and it reminded me in my.

Coauthors of Rocky Balboa.

Springing into action trying to recover in getting whacked and knock knock down on the -- again.

-- -- -- -- -- -- What keeps knocking the economy down.

Yes several things the one thing we focused on is the -- highly uncertain policy environment.

Facing businesses and households both in the United States but also in Europe.

Which has spillover effects on the US and so does that look like it's gonna end any time soon.

Well it's not looking really good for the near term I'm everybody -- talks about the fiscal cliff.

That's coming due in January of next year that is a big deal.

If there are some changes in the law.

There will be major tax hikes.

On businesses and households.

And big cutbacks in defense spending and some other areas of government spending.

And and of course we've also got a very important.

National election coming up and -- there's a lot riding on that.

President Obama and governor Romney have very different views about.

Health Care Reform tax policy and and just the overall size and scope of government involvement in the economy.

The -- a lot of dynamics at play we were having had a fun conversation amongst the crew here on set before you got to air because your your peace really sparked lot of conversation.

About what rocky movie were and you know are we in and rocky -- five where he's going -- Fred RBS yeah and -- -- -- -- an Italian restaurant like.

What Iraq here we put rocky movie are re in right -- -- Well it.

As I recall it in almost every rocky movie that was a dramatic fight where he got knocked down several times.

Before he finally prevailed and -- -- the metaphor we had in mind when thinking about the US economy.

But ultimately prevails right so what what do you think -- that and gets the American economy back to that place where it is you know for lack of -- better term.

The champion.

Yeah that that's it that's a good question I'm -- still on the policy and -- theme I think it's pretty apparent to everybody that.

Our policy process has been dysfunctional in some respects.

Probably the clearest example of that was the debt ceiling dispute last summer.

In which Democrats and Republicans fought over whether and how much to raise the debt ceiling.

And under what conditions.

And we got very close to a curtailment of critical government functions because.

Democrats Republicans couldn't couldn't agree as adults about how to proceed.

You know in addition to that we do face Virginia wine.

Long term and difficult.

Questions.

About what kind of society we're going to be.

And what will be the role of government taxation and spending in that society -- those are hard things to resolve.

After this isn't a question -- -- talking about the lack of compromise maybe they issued.

You know when the -- the lawmakers to start playing the Rocky Balboa theme every morning before they get ready for some of those meetings his -- in a position where they get really.

-- they -- fight some but they get off the come together professor Davis nice package today might put them at a better -- with certainly it certainly did that for me today I have to say that that's that's for certain and that's worth something.

-- professors nice to have you thanks for the creative look at the economy we appreciate it's okay thank you Bob I.

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