Dean Baker: Robert Samuelson's Psychological Problems:
Robert Samuelson is convinced that the U.S. economy is suffering from psychological problems. In a piece titled, "why job creation is so hard" he tells readers: "We have gone from being an expansive, risk-taking society to a skittish, risk-averse one." Point number one is the rise in the saving rate: "In the boom years, the personal saving rate (savings as a share of after-tax income) fell from 10.9 percent in 1982 to 1.5 percent in 2005. Now it’s edging up; from 2010 to 2012, it averaged 4.4 percent."
Is this really a matter of psychology? People have lost $8 trillion in housing wealth as a result of the collapse of the bubble. Homeless people generally don't spend much money, is this due to psychological issues?…. If anything, we should be surprised by how much people are spending.
In short, the story of the downturn remains depressingly simple. We have nothing to replace the huge amount of construction and consumption demand created by the $8 trillion housing bubble. Perhaps if the problem were more complicated policy types would have an easier time seeing it.