When I list the economy's strengths and weaknesses, I mention policy uncertainty. Here's a good explanation, courtesy of Larry Summers, director of the President's National Economic Council.
I first met Ben Bernanke in the late 1970s, when he presented one of
the key papers from his thesis at a seminar at Harvard. It was, as you
would expect, a rather elaborate and quantitative analysis; but it also
made a very fundamental point. If you were considering buying a new
boiler, and you knew the price of energy was going to be high, you
would buy one kind of boiler. If you knew the price of energy was going
to be low, you would buy another kind of boiler. If you did not know
what the price of energy was going to be, but you thought you would
know a year from now, you would not buy any boiler at all.
A couple of months ago I ran into a doctor whose clinic was planning on converting from paper records to electronic medical records. This would be an expensive undertaking, due to hardware, software, and training costs, but the clinic directors knew it was necessary. They had the money, but they had not ordered the new stuff. They were waiting to see what Congress passed in health care reform. They were nervous that new legislation might specify certain standards for a health records system, and it seemed prudent to wait until Congress acted. Now multiply that attitude by the entire health care and insurance industry. Add in the automobile sector (where a major player is now GM, "Government Motors").
I'm hopeful that the stalling of health care reform legislation will lead many in that industry to get off the fence and buy new equipment and software. However, potential action by Congress in many sectors is slowing down spending. If Snowmageddon could be counted on to last another 12 months, then the economy would get a shot in the arm.