Why the Economic Recovery's Been So Weak

Federal Reserve Chairman Ben Bernanke last week became the latest economist to ask why the current economic recovery has been so weak. The question has inspired a cottage industry of studies, papers and speeches with often-esoteric and murky theories. The explanation is actually straightforward: The financial crisis and Great Recession scared the wits out of most Americans — not just consumers but also corporate managers, bankers and small-business owners. They are reacting accordingly. They’re cautious, risk-averse and defensive. They’re spending less and saving more.