Will The Economy Grow Or Slow?

Generally, good economic discussion occurs at this blog.  There is a little too much commentary regarding what other folks are saying at other blogs (put another way, too much navel gazing and chest thumping).  The comparison between the first blog’s authors and others is especially silly when the following two statements were made in the same blog post:

In other words, the blogospheric Doomgasm has been prompted by fears that the economy will grow 1% more this quarter than last quarter!

For the record, I still see a slowdown or stall this quarter and/or next.

Look, either you think the economy will grow or slow this quarter.  It can’t do both at the same time.  Make a prediction based on what data you think you have that can support that prediction.

I don’t, for instance, write that I think the next 10 years will be hotter than the last 10 in one sentence, then write that I think cooling will occur.  It always amazes me how people slam climate science predictions (which have been correct more often than not, by the way) but let economists and economic commentators get away with double-speak.  Economists are not infallible gods.

By the way, I think I’ll listen to what Paul Krugman has to say about the potential future state of the U.S. economy.  He has earned a Nobel Prize, after all.

Ryan Grim: Obama Economic Policy Article

This is well worth the read: Ryan Grim writes a piece that includes Obama’s economic advisers recognizing their deficit-peacock attitude will not be beneficial politically or policy-wise in the long-term.

So why adhere to that mis-begotten attitude?

Stimulus Bill Created Up To 2.1 Million Jobs

So says the non-partisan Congressional Budget Office.

The package boosted the economy by up to 3.5 percent and lowered the unemployment rate by up to 2.1 percent during that period, CBO said.

The stimulus has worked so far.  The Great Recession was worse than any economist that it was or would be prior to its passage.  There is more stimulus money (much more, actually) that has yet to be spent.  About the only problems with it?  It was too small and it included too many b.s. tax breaks that don’t stimulate the economy.  Tax breaks don’t stimulate the economy.  They never have and they never will.  The largest expansion of the U.S. economy didn’t occur after the largest tax breaks in American history – during the Bush regime; they happened when taxes on the rich were higher – during the Clinton years.

I Love This Feature

An by feature, I mean regularly occurring diary series.  I remember the original piece the diarist refers to because I copied part of it here.  The following is a copy of the follow-up, written today:

Dear Conservative Free-Market Capitalism Muckety Mucks,

Ninety-one days ago I gave you thirty days to fix the U.S. economy that you broke:

I’m just a simple, average citizen who has listened to you jawbone for decades—amplified non-stop by Fox News, CNBC, the Wall Street Journal and right-wing radio—about how perfect your system of “unfettered everything” is. How greed is good and regulation is the devil’s work. And yet, you seem to be strangely ineffective at fixing it when it breaks. Could it be you’ve been bullshitting us all along? …

Fix the damn economy on Main Street already, you Ayn Rand-worshipping free-market capitalist wizards. Show us how it’s done. Be the heroes we’ve been holding out for.

Bummer. You couldn’t do it, even with a two-month extension. Not even close. Instead of rolling up your sleeves and getting to work, all you’ve done is continue pointing your fingers at the Big Bad Government—the one that statistics confirm single-handedly saved your asses from Great Depression II—and whine. Hell, even your Savior of All Things Economic, Grover “Ayn Rand With a Beard” Norquist, couldn’t convince voters in Washington and Maine that your ideas were worth a bucket of warm spit.

Oh, sure, Wall Street is thriving, in large measure because they’re up to their old backroom book-cooking tricks again. (I did challenge you to work your magic “honestly, ethically and legally,” remember?) But Main Street is still tanking. So I guess it’s true—you’ve been bullshitting us all along.

That doesn’t sit well with me. Because, see, I’ve been programmed by Frank Luntz and the GOP spin machine to think of two things when I hear the word conservative: fiscal competence and defense. You fucked up the defense part real good. And now you’ve failed to prove your worth on the economy. I mean, good gracious Gerty, I gave you 90 days and look at what you did: in what should’ve been your moment of triumph, you dithered.

Rethinking Economic Actions By Democrats

After encountering two independent mentions of recent economic actions proposed and enacted by Democrats by sources I’ve come to trust, I find myself looking at them in new light.  The program most in question for me is Cash for Clunkers.  It’s proven wildly popular, and at first I thought that was a great thing.  With additional perspectives, I’m no longer sure it is.

First of all, I’m going to squash a talking point that Democrats are using to justify the program: the environmental benefits.  They don’t exist.  At least not the to the extent that Democrats like Sen. Levin would have you believe.  The environmental benefits of Cash for Clunkers is negligible.  Here are the key stats:

The total savings per year from cash for clunkers translates to about 57 minutes of America’s output of the chief greenhouse gas.

U.S. drivers go through that amount of gas every 4 1/2 hours, according to the Department of Energy.

So we’re giving away $1,000,000,000 dollars to get 250,000 cars off the road to save 57 minutes of carbon emissions and 4 1/2 hours of gas.  Is that really the best use of money that we can come up with?  I don’t think so.  How about investing that $1 Billion in research on battery technologies – that would generate many times the investment in future returns.

Corporate Media & the Economy

With the economy in free-fall since last September, most Americans’ focus has been on this issue to the exclusion of everything else.  As such, wouldn’t it be prudent for the media outlets in America to provide analysis of the problem and different solutions by … economists?  Note that I don’t have a a lot of respect for economists these days in general.  For one, their forecasts aren’t held to the same standards as weather forecasts when validating them.  When was the last time someone else at the water cooler took their local economist to task for missing their unemployment forecast by hundreds of thousands of people or retail sales by hundreds of millions of dollars?  You haven’t because economists aren’t held accountable to the public.  But beyond that rant, the American people might benefit from having different economic views presented to them.

Why then have economists been on the weekend political talk shows and cable shows only 5% of the time the economy was being discussed in recent weeks?  Because the corporate media played a hand in wrecking the economy, along with the Cons they serve so well.  They have no interest in presenting qualified information to their viewers.  The corporate media distributes entertainment, not news.

My ire at this situation is non-partisan.  I hold Keith Olbermann and Rachel Maddow in much higher regard than I do Glenn Beck or Bill O’Reilly.  Yet even KO and Maddow only had a single economist on their shows in two weeks’ time.  That is unacceptable.  Talking heads and pundits are shown to the public.  Just as in the physical sciences, economists need to engage the public more often.  Our public discourse would benefit from it.  Our pressure to develop intelligent policies would also then benefit from it.

News Items 9/8/08: CO Amendment 48, Mortgage Crisis, Obama Economy, Palin’s Ego; McCain’s Tantrum

There are plenty of immoral things about Colorado’s Amendment 48, an attempt by the extremist right-wing to define a fertilized egg as a person, eligible for all the rights that those of us who are actually born enjoy.  It’s an attempt to challenge Roe v. Wade in the long-term.  As written, it will certainly be ruled unconstitutional if voters pass it this November.  So the easy thing to do is vote against it.  Here is one reason to do so: somebody is making anonymous donations to the campaign working to pass A48.  Unfortunately for the donors, if they make more than $20 in donations, their names and addresses must be reported.  Surprise, surprise, that hasn’t happened.  A complaint has been filed to the Secretary of State’s office.

Republicans equal responsibility, that’s been one of their mantras for as long as I can remember. So why can’t Republicans practice taking responsibility for their failures, as they expect everybody else to do? In one of the more ridiculous statements I’ve heard Republicans make, Dana Perino, the White House press secretary, said that it’s Congress’ fault the federal government had to take control of Fannie Mae and Freddie Mac this weekend.

Riiiight. In between all of the talk of how we should privatize everything and businesses are more efficient than government (false), I totally missed where the White House was warning the American public that Fannie and Freddie posed unacceptable risk to the housing market. In fact, it was quite the opposite: Republicans have obsessively talked about how good the housing market’s makeup has been for the past seven years. No warnings of any kind were issued by the White House, even when the sub-prime market started failing. No warnings of any kind were issued by the White House, even when the prime market started failing. The only warnings issued in the past two years were brought up by liberals. Once they did so, I’d like to point out, Republicans went into character assassiantion mode, calling anyone who thought the housing market was souring everything from traitors to permanent pessimists. It’s time Republicans took responsibility for their religious belief that markets should have no regulation. If they won’t, the American voter will do it for them in November.

Just what would an Obama economy look like? Well, for starters, Obama will increase work incentives for low-income workers by tripling the earned-income tax credit. More people working would result in … gosh, an expanding economy and a prosperous, growing middle class, two things that a John McCain economy wouldn’t produce.

Republican Vice-Presidential nominee Sarah Palin is still to scared to talk to the media. Or is it that the media hasn’t shown her enough love? Sarah Palin was the only member of the major parties’ ticket to not show up on a network talk show yesterday. Why? A McCain representative gave one reason on the extremist Fox Network: reporters need to treat her “with some level of respect and deference.” The Republican ego knows no bounds. Somehow, Sarah Palin has been deemed to be more special than any other candidate. The McCain campaign is demostrating to Americans how undemocratic they really are: voters shouldn’t have the opportunity to learn who Palin is and what her policy stances are until the corporate media treat her like royalty. Our government is founded on the idea that elected officials are actually public servants. They serve us, not the other way around. McCain and Palin don’t agree with this tradtitional premise.

Bob Schaffer’s Insane Economic Policy

Bob Schaffer wants the U.S. economy to implode. That’s the only reasonable lesson that could be drawn from the following: “Schaffer criticized Congress’ decision to bail out Bear Stearns, which once was one of the largest investment banking, securities trading and brokage firms in the world.” He wanted the “free-market” to magically take care of everything. I’d like magical unicorns to spit out hundred dollar bills, but that isn’t going to happen either. The “free-market” allowed Stearns and the other mortgage lenders to purposefully issue loans to people without credit or ability to pay. Now, even folks with better ability to repay their loans are being forced to face foreclosure, at a higher rate than the sub-prime crisis by the way. No, the “free-market” has proven itself quite unable to control itself. Republicans like Bob Schaffer want government to butt out of regulations but then beg for assistance when high-risk plans fail.

Those days should end. If a huge house like Bear Stearns or Fannie Mae can’t keep themselves on the up-and-up, if they package crappy financial packages together in order to squeeze out every possible penny for their shareholders and homeowners are left holding on to worthless property or are foreclosed upon as a result, and if they go crawling to the government for another taxpayer-funded bailout, they should become the property of the people until such time as a private entity wants to pay to run the corporation again. It’s immoral that as citizens, we keep getting stuck with the tab to fix the mistakes of the compulsively greedy.

Had the corporations been left to the whims of those folks, as Bob Schaffer wanted, our economy wouldn’t be looking at minimizing a recession. It would be hurtling face first into a depression. The collapse of American financial institutions like Stearns and others would have caused a domino effect, resulting in an unheard of disaster.

Morsels like this illustrate why Republicans are losing so many races across the country and why that trend will continue through this November.  When presented with a problem their policies have created, what do Republicans do?  They tell everybody their crappy policies are the solutions!  More people are seeing the writing on the wall: real solutions require honest approaches.  Democrats will provide that.  Republicans like Schaffer have proven they won’t.

Geothermal, Recession, Inflation & McCain is still Struggling

Climate Progress had a good post up the other day regarding geothermal power‘s advances recently. Though not as robust as solar or wind, geothermal is slowly gaining popularity and accessibility. Some quick numbers: “manufacturers shipped 63,682 geothermal heat pumps (GHP) in 2006, a 33 percent increase over the 2005 total of 47,830″ (from U.S. Energy Information Administration). I’m glad to see an increase, but 64,000 GHPs is still quite a small number out of the total number of households nationwide. Geothermal is part of the solution to reduce our fossil fuel usage.

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bonddad explains why he thinks the U.S. is currently in a recession, despite the lack of “official word” from up-high. Personal incomes, job growth, industrial production and two major export markets are all in the mix. I’ve thought we were in a recession for a while and bonddad’s explanation provides additional reasoning why that is.

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In news that should shock no one, big-time inflation is still around.  Inflation hit 5.6% in July, up from 5% in June.  The last time inflation was that high?  During the previous Bush’s administration.  Like father, like son, goes the old adage.  About the only thing that might hold this inflation in check?  The recession.  How wonderful!  We have prices increasing at rates our incomes can’t keep up with, and that’s if we can keep our jobs.  Thanks for the awesome economy, Republicans!

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John McCain hasn’t polled better than 44% support during this race. 44% isn’t going to get him elected President, especially when Barack Obama continually garners 47-49% support and has never trailed McCain. Yet the corporate media would have you believe they’re continually tied and Barack is the candidate with all the problems. Without explanation, pundits are holding a 10% bar up for Obama and criticizing him for not reaching it. Reality has a well-known liberal bias. That will be on display this November when McCain loses.

Unemployment & Housing Numbers Still Bad

The ranks of the unemployed jumped in the last week, much more than those high-paid economists predicted. How, in this crummy economy, economists can miss all the job layoff announcements by companies in every sector is beyond me. Corporations did well in the 2001-2007 time frame. But they didn’t hire like they did in the past, despite their good fortunes. Which means when the economy headed south late last year and all of this year, those same corporations aren’t going to hire now. Unemployment grew by 34,000 people to 406,000. The unemployment rate remained steady at 5.5%, but is expected to hit 6% by early next year.

The way these numbers are counted and calculated is a joke. It’s not indicative of the real employment situation Americans face. I’ve read estimates that the unemployment rate is probably double what the Labor Department reports. Because after all, 5.5% sounds a lot better than 10%+, doesn’t it? More and more people are looking around their communities and realizing the actual numbers are worse that what’s reported. It’s why more Americans surveyed believe the economy is in worse shape than our elected officials do.

The number of existing homes sold in June fell 2.6% from May’s numbers. Once again, the number was larger than economists expected. The housing crisis is far from over. How are people going to buy new houses when they can’t afford the houses they’re already paying on and thousands are losing their mediocre jobs?

These are but a few of the wonderful things conservative economic policies give us!