The Global Economy in Turbulent Times

CHAPTER 3 Beware of PME in a Jobless 2009 Recovery¹

This chapter is not on medicine. I have no interest in the medical dysfunction PME (premature ejaculation) that afflicts many males. I am concerned about the possibility of inflationary and rising debt pressures in the face of early “green shoots” from substantial global stimulus, which has led to talk of the early withdrawal of stimulus. Hence, PME, or premature exit. Don’t be fooled. At this time, if there is irresponsible talk, this is it. Unfortunately, a lot of this is politics. Indeed, any early pullback of stimuli can—and very likely will—lead to a premature end to the buildup of growth in Asia. Sure, in the end, if we are not careful, the large stimuli arising from massive pump-priming and easy money can well lead to inflation and high debt. But the world, especially the United States, needs the fiscal red ink in order to get out of the bigger evil—recession that is threatening to turn into a depression. This piling on of money and massive debt saved the United States, but there is still growing unemployment. As I see it, both can be readily managed. If there is a potential problem, it’s not because the United States, Europe, and Japan can’t handle the debt or inflationary expectations. It’s the politics that’s messing things up—same in most of Asia, including here at home. Politicians like to play to the gallery. They only want to do what’s popular. Tough times call for tough measures. It’s also time for reform, and ...