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-- welcome back to this special edition of The Journal Editorial Report I'm apology go well if you haven't checked your.
Lately you may be pleasantly surprised 2012.
It turns out was a pretty good year for the markets despite continued high unemployment.
And slow economic growth so what can we expect in 23 -- we're back with Dan -- Mary Anastasia O'Grady and Steve -- so Mary explain this seeming contradiction between slow growth that.
It's well first of all and with respect to the markets I would say that if you look at a chart for example the S&P 500.
If you go back to saint 2000.
April of 2011.
-- -- October of 2012 year basically flat there's been a lot of churning up and down but.
The S&P 500 index was not any higher now in the last couple of months we have seen a little bit of a pick up there and certainly from the end of from the beginning of this year you saw -- run in the market.
But I I you don't have a great return if you're a long term investor.
Right so OK but if if you if if growth is still spears is still slow OK why art in some people are still investing in companies in the corporate balance sheets earnings have been pretty good -- You know they've clean -- on the debt from the the crisis could we be always here for faster growth going forward.
Well I think one of the things that explains why the corporate sectors doing well is because they basically have access to money at zero interest rates that's not true for the broader population and -- not true for a lot of small businesses it's just true for.
You know large -- corporations who can borrow.
Very cheap money.
You have high unemployment which means that employers can -- more productivity out of there workers' rights you know the workers need jobs.
So I think if you take all those factors into account.
You know you're not looking at an environment that is as bullish for the broad American public.
As it might seem looking at the stock market -- one of the.
Economists I followed -- Hyman of ISI group points out that they have been 312.
Stimulant it's easy someone -- policy stimulus and Central Bank -- over the last sixteen months around the world that's extraordinary 312.
So once answer to this question may be that there's just an awful lot of money sloshing around.
From central banks around the world who are just saying look we've got to drive this economy and -- opening the -- They are opening this biggest but the question is what is happening to that capital is it being deployed for productive uses.
And I think in the case of the United States what we have seen what is has been.
Is been written about is that many.
Hundreds of billions of dollars buying back their own stock had been borrowing this money cheaply and using it to buy back their own stock.
Rather than investing it in in productive capital projects.
And there is that school of thought that says most of the growth and stock market has been because companies have been net buyers of stock.
-- retail investors -- even a mutual funds have been net sellers of stock so we're not in a very productive economy right.
Now we have seen investment in energy there's no question about that across the country so -- what about our favorite bull Steve Moore here as you what is so what do you think is 2013 gonna turn the corner in a better direction like Ben Bernanke the Fed Chairman others are saying.
I never liked about against American economy and in others just Sony -- spirits and Paul we haven't had a a real recovery of four years you know we really happen it's all right you just get -- feeling.
That the economy is ready to pop.
That that countervailing argument -- policy everything in Washington is doing is holding back this expansion and that's the frustration.
I think investors and businesses -- -- on the positive side.
You've got the energy I highly agree with your previous conversation that energy technology urges drivers -- high powered -- But the countervailing force I think polish those higher tax rates that are coming in 2013.
Am -- some of these regulations and obamacare are holding back businesses willingness to expand and hire more worker.
Well it is not the regulatory wave on health care there's gonna be a huge regulatory -- to finish out the Dodd-Frank financial reform you're seeing a huge pent up.
Regulatory wave hit on energy.
All kinds of rules hitting utilities and energy companies.
So who winds up -- let me -- the private contract.
Well I I think actually if you if you look at a couple of indicators it's not good for at least the first half of 2013 one is business investment.
Business investment is now weaker than it was in 2008.
And on topic so you have lots of companies sitting on their hands you also have small business confidence.
Taking a huge hit in November which is very worrying.
Per capita a personal -- still -- it's still -- isn't even at the start of of this recovery Steve you wanted to get in there.
Yeah out -- me -- the bull their permit -- we talk all the time about the energy -- it's not just the energy sector that is affected by that you know we got a mini Renaissance of manufacturing in this country I -- transportation.
Because of the fact that energy prices have been falling and it makes American manufacturers much more competitive.
At the margin I think as we I think 2000.
Thirteen is gonna see continued declines in energy prices that's like a tax cut for the American consumer -- But Paul -- and we it was mentioned here is unemployment we've had high unemployment for four years which means a lot of people out of jobs.
We would need a tremendously.
Bullish economy -- -- -- -- -- percent.
Produce enough jobs it would take had -- to get back to where we were before this recession -- no question about so we just need to do what.
Ever we can't to allow economic growth in this country.
But declining energy prices are not necessarily good for energy production because at some point.
An energy producers are gonna say the prices too -- and to mitigate that problem they have to be able to export.
The Obama administration still hasn't decided if they should be able act export natural gas and that's right that's a key policy move ahead still ahead the.
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