(NYS) The monthly survey of manufacturers released by the Federal Reserve Bank of New York (FRB NY) on Apr. 15 shows that while the positive level for the general conditions index indicates manufacturing growth, there is a noticeable trend in the index – downwards, as federal stimulus spending recedes. Per the FRB NY: “The headline general business conditions index from the April 2013 report was 3.1—down 6 points from March and not much above zero. The positive reading indicates that activity is growing, though its decline suggests that the pace of growth has slowed”.
These data reflect a growing concern that economists have about recovery from the 2008-9 recession in more advanced economies generally – that government spending is unusually low during this recovery when compared to prior recoveries, contributing to the recovery’s weakness. Budget hawks and those who incessantly warn about inflation had captured the policy debate until quite recently, when much of their supporting argument was discovered to be based on poor analysis.
Workers and their families in WNY have a vital interest in seeing effective policy pursued by their elected officials – whether these politicians serve at the national, state, or local levels of government. A WNY-WJ editorial from Apr. 19 advocates on behalf of labor for a large federal stimulus program to bring full and sustainable recovery to the US economy. This is the kind of policy that workers should support, as opposed to the now-discredited policy of austerity – when government deficits are lowered in the hope of spurring economic growth through a better government fiscal position.