Corporate America's Turn

David Altig at Macroblog comments in Too Clever by Half? one of the reasons interest rates have remained so low in the U.S. -- prompting, in my opinion, the oddly maligned boom in the housing market -- is that business fixed investment has been unusually soft over the course of the current expansion. To paraphrase Professor Duy, if investment spending springs back, consumers are free to retrench, and all will be forgiven.

We agree with Dave, and maintain that corporate America has to stop chasing yield through money shuffling and global labor arbitrage, and has to start investing at home. Otherwise, its a hard landing and game over, much sooner than most think.