Cash Is the Problem, Not "Confidence"

At the start of every economic downturn in memory there has been a chorus of voices saying that recovery is just a matter of â??confidence.â? Supposedly all we have to do is pick ourselves up and â??not talk ourselves into a recession.â? Politicians, particularly those in power, are the ones who adhere most fervently to the confidence hypothesis. After all, it couldnâ??t possibly be the failure of their policies that is the cause of economic distress.