Tuesday, July 10, 2007

Pessimists Take Another Blow to the Head

The priests of Rubinomics, those chaps who tell us that the 2003 tax cuts did nothing to spur the economy, that income inequality is a pox on capitalism, and that we need to ramp up government spending to ensure a bright future are just taking hit after hit from the economic data. All these blows to the head have disoriented them and resulted in increasingly humorous attempts to bash the current economic expansion. I've read enough of this stuff to sum up what constitutes a healthy economy to the Rubinomists - plenty of unionized heavy industry. If we are not building factories for heavy industry that can be staffed by plenty of unionized, $80/hour workers, we just aren't running a sound economy. We still do alot of that type of stuff and we are still pretty good at it, but those days are past. We are a service economy now and we create most of our opportunities for "knowledge workers." Where do "knowledge workers" actually work? Well, they can work anywhere really, but basically, they still work out of offices. So, one thing that companies do when they are optimistic about the future is sign leases for offices to house all those knowledge workers. Judging from this report, there seems to be a fair bit of optimism across the business landscape. The strong demand for office space deals another blow to the head of this silly notion that corporations are pessimistic and scaling back and that the only logical consequence is a US recession.


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