This author of this article, Larry McDonald, points out that a certain economic phenomenon known as an "inverted yield curve" signals recession. Right now, the curve goes the opposite way, indicating recovery. In fact, he points out, the ratio of 2-year to the 10-year treasury yield is at a historical high. Wow! Should be a gangbusters economy this year, right?
He then seems to scratch his head at this strange phenomenon: Banks are not lending. Despite being able to borrow cheap and lend high, they are not lending. Commercial lending has contracted 10% over the last 12 months. The previous record (since the 70s) for such a contraction is 2% in the 1990s.
The yield curve does not explain this. The author scratches his head and wonders how this can be. Why are banks refusing to make a profit?
To which I reply: Duh! It's because a lot of people have been making war on profit, promising to punish wealth-builders (the "evil rich"), vigorously attacking the incentive to earn.
As I have said before, the most convincing argument I have ever heard to explain what ended the Great Depression was that FDR finally stopped waging war on profit and started waging war on Nazis. It's all there in his speeches. He scared wealth-builders into seclusion until 1940 when he called a truce to get them to build warships and tanks. It makes no sense to say that borrowing tons of money to build things that you are planning to blow up is somehow an increase in "production". If wartime was so productive, why were people rationing every staple in sight? Ultimately, war is destructive -- literally so.
What you'll never get Paul Krugman and his crowd to admit is that the people's incentive to earn is essential to economic recovery. Guess who is at war on wealth-builders today? Just as FDR unwittingly and ineptly prolonged the Depression, so Obama keeps this economy depressed. That's my theory, at least.