Obama against consumption

Another tantalising glimpse of Barack Obama’s growth scepticism. In his joint press conference with Gordon Brown this week he said:

“In some ways the world has become accustomed to the United States being a voracious consumer market and the engine that drives a lot of economic growth worldwide. And I think that in the wake of this crisis, even as we’re doing stimulus we have to take into account our own deficits. We’re going to have to take into account a whole host of factors that can increase our savings rate and start dealing with our long-term fiscal position, as well as our current account deficits” (added emphasis).

As with many growth sceptic formulations this one is ambiguous. It can be read as a reference to the specific bubble that emerged in America before the crisis broke or as a more general criticism of “overconsumption”. No doubt Obama will interpret it to mean whatever suits him at the particular time he is speaking. Either way it gives a strong hint of austerity ahead.