One word: Exports

Ed Leamer and his colleagues at the UCLA Anderson Forecast are doubling down on exports as the best chance at pumping up the recovery. Exports? Well, it's been about the strongest sector of the economy, fueled by the manufacturing of airplanes, movies, medical equipment and all kinds of technology. "It's exports that we will need to rely on going forward," he said in the UCLA report. "We need to turn our shopping malls into factories." Leamer, speaking to a group at the Anderson School this afternoon, expects a lot of vacant storefronts - folks are saving, not spending, and that puts a drag on the economy. Look for a very sluggish recovery in 2010 and 2011, with unemployment likely to stay high. Economist David Shulman says the economy will have to create 200,000 jobs a month for that jobless rate to go down. Right now, we would be doing cartwheels if the economy wasn't losing jobs. All this will have huge political consequences. Shulman repeated a great line by Rep. Barney Frank: "No politician ever got re-elected with a bumper sticker that said, "It Could Have Been Worse."

Earlier: UCLA: Slow times ahead