Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Wall Street Says "New Normal" Will Be the Same Old Thing

According to a Jan 19 Bloomberg article:

"Wall Street economists aren’t buying the theory propounded by Bill Gross and Mohamed El-Erian, co-chief investment officers at Pacific Investment Management Co., that the U.S. will be mired in long-term sluggish growth averaging 2 percent a year. They see potential real growth, or the rate of expansion at which inflation is steady, at 2.5 percent, matching the average quarterly rate of the past 20 years, according to the median forecast in a Bloomberg News survey of 46 economists.

“I don’t think it’s different this time,” said Christopher Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ in New York, who pegs potential growth at 2.6 percent. “We’ve had financial-market crises and big workforce changes before, and growth has pretty consistently come in around 2.5 percent over the past 50 to 60 years.”"

Yet to me the 9.1% unemployment rate forcast for 2011 in the cited Bloomberg survey hardly seems "normal," even by the very lackluster standards of the last decade.  But I guess I'm looking at it wrong.

According to Robert MacIntosh, chief economist at Eaton Vance Management in Boston, "“The potential for jobs may be lower, but I don’t see it for growth."  He sees long-term expansion at 3.75 percent, which would be quite high. “We’re still Americans and we’re still going to consume.”

I guess that's the "more things change, the more they stay the same" school of forecasting.