a policy vaccuum

Consider this an update to my post on resolving global imbalances. I pointed there to articles in the Washington Post in preparation for the State of the Union speech. Here are two items post-mortem:

Steven Pearlstein is witty about the economic policy vaccuum in the US. He says:

We've known for the past several years that the Democrats have nothing original, credible or even mildly intellectually intriguing to say about trade and immigration, the health care crisis, the energy crisis, the income inequality crisis, the education crisis, the global warming crisis, the looming entitlement crisis and the ballooning federal budget deficit.

But now it's official: the Republicans have nothing original, credible or even mildly intellectually intriguing to say about them, either.

It's unanimous.

Read the whole article, it's short and pithy: Bush Echoes Presidents Past in Empty Talk of Economics, by Steven Pearlstein, Wednesday, February 1, 2006; Page D01

When you've read it, look at this one: Savings Rate at Lowest Level Since 1933. The author of the AP item says "Americans' personal savings rate dipped into negative territory in 2005, something that hasn't happened since the Great Depression. Consumers depleted their savings to finance the purchases of cars and other big-ticket items. ... Americans not only spent all of their after-tax income last year but had to dip into previous savings or increase borrowing. The savings rate has been negative for an entire year only twice before _ in 1932 and 1933 _ two years when the country was struggling to cope with the Great Depression, a time of massive business failures and job layoffs."

Rajan's vision of an America that consumes less and invests more (particularly in emerging-market countries) remains a pipe dream, no?