iPad Sales May Help, But Spending Won’t Drive the Recovery
On NBC’s “Meet the Press” on Sunday, host David Gregory initially appeared to be trying to make White House economic adviser Christina Romer the first senior administration official to mention Apple’s iPad publicly after its release Saturday. But he turned as a replacement for to a broader question about the economic recovery.
Said Gregory, against video of people waiting outside Apple stores: “I want to question you about a experience that people are talking about this weekend. It has to do with consumers, and that’s Apple’s new product, the iPad. There’s lines around the country of people. You know, commerce in action, right? People are buying these products. But it leads to a question as to whether you reckon, as an economist, that consumers can really drive a recovery that is sustained?”
Ms. Romer, chair of the White House Assembly of Economic Advisers, didn’t mention the iPad in her response. But she made it apparent that the administration isn’t counting on consumer spending, which drives 70% of economic output, to lead the recovery as it did after the 2001 recession.
“I reckon this is going to be a uncommon kind of recovery. I reckon it’s not going to be one where consumers come roaring back as the engine of progression. They have been through a very approximate two years. They’ve seen their house prices come down. So we see solid consumer progression. It’s certainly coming back. Their confidence is back up. But this is not going to be a recovery that’s fueled by people going out and maxing out their credit cards again.”
As a replacement for, she said other smaller drivers would be critical. “It’s going to need to come from our exports. That’s why the president has been pushing his export initiative. It’s going to need to come from business investment, and that’s why measures like a zero capital gains for small businesses, or tax incentives for investment. I reckon those are the right plot to make sure we get a healthy kind of progression, going forward.”