The pro-growth Fed needs a partner in Congress; so far, it doesn’t have one.

Resisting the ‘New Normal’

By James Pethokoukis

Let’s be optimistic and assume the U.S. economy grew 3 percent in the first quarter, adjusted for inflation (vs. 0.4 percent in last year’s fourth quarter, as the Commerce Department reported last week). That would be no small achievement. Since the recovery began in the summer of 2009, the economy has performed that well or better over a three-month period only three times. But let’s go even further. Assume the economy grows 3 percent for all of 2013. We haven’t had a full year like that since 2005.

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So what to do? One option is acceptance. Accept that we will never fully close the growth gap or income gap or jobs gap. Accept that unemployment will never return to the levels of the Bush and Clinton years. It’s time to move on and be grateful that America avoided an outright depression and isn’t suffering recessionary relapse as Europe is. The Dow and S&P 500 are making records, and home prices are again rising. Slow and steady is better than bubbles and busts, right? Forward!

The other option is defiance. Refuse to embrace the “new normal” reality. Refuse to lower expectations of what America can be. As Larry Kudlow likes to say, “Growth, growth, growth!”

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