Edmund Phelps Op-Ed Piece at the New York Times

Today Edmund Phelps has an Op-Ed piece in the Times about the economy and stimulus.  He contends that the problem is not with aggregate demand.  He states that there are "no symptoms of deficient demand, like deflation, and no signs of anything like a huge liquidity shortage that could cause a deficiency."  While he is right about a liquidity shortage, the recent lackluster trends in retail sales show that aggregate demand is actually deficient.  In addition, price trends have several economists concerned about deflation.  Finally, corporations are sitting on bundles of cash.  There are indications they are becoming more willing to spend that cash, but uncertainty over consumer demand is still a concern.  My take on Phelps piece is that he supports a supply side solution,business tax cuts, but without consumers willing to buy, whay would they bother?