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Macro Advisors forecast for Q1 2011 GDP growth cut to 1.5% on annual basis. Probably due to forced cuts in federal spending.
The UK has gone to where conservatives would like to take the US. Expansionary austerity has led to a big drop in retail sales. The confidence fairy, which is supposed to boost spending because of austerity plans, is not working as planned.
Larry Summers bets his reputation on the failure of the austerity plan in the UK.
Larry Summers interviewed by Matin Wolf of the Financial Times explains why macro economics based upon micro economic assumptions has not worked out well.
The are two great short quotes from Adam Smith's Wealth of Nations. Conservatives love to quote the part that provides the micro basis for "Economic Man". If any of them have ever read the entire book, they have neglected Smith's writing about the bad side of human nature, and laws which amplified the bad side and have contributed to inequality and economic inefficiencies, including slavery.
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