Unchaining From the Consumer

NEW YORK CITY—Can one imagine an economy not yoked to the consumer? In his most recent post, Ethan Penner tackles this problem, and notes that, while policy has continued to be geared toward consumer spending, such a task is not impossible and indeed should be the main lesson from 2008.

The economy has been geared towards the consumer for some time, Penner writes. Indeed, between the emphasis on homeownership and consumer debt, the focus on consumer spending was one of the main culprits of the financial crash of 2008. And the lesson has not been learned, and is going global, Penner writes. With China now giving incentives as a way to bailout ailing housing interest in its cities, the pattern seems ripe for a repeat. Domestically, safe lending options are still being punished through policy, and sliding mortgage standards are putting a familiar face on the attempts at recovery. And that face is the consumer.