Green shoots are still to be found

Fortunately, in contrast to my supply-side-induced gloom and doom this week, the evidence continues to support the view that the housing market is recovering. As this chart shows, the stocks of major home builders have more than doubled since September 2011.

This may be the most miserable recovery in modern times, but it nevertheless remains a recovery, and that is very important. The U.S. economy doesn't need the ministrations of policy to recovery; it's fully capable of recovering by itself. In fact, if policy were less blatantly stimulative, we would probably have a much healthier economy today.