Despite the administration's and its supporters' feverish beating of the drums to the tune of "Happy Days Are Here Again," the economic evidence is mounting that not only have we not emerged from the recession, but that we may well be heading for a double dip, as economists call back-to-back recessions.
Here then, the Four Horsemen of our potential economic apocalypse:
Unemployment, which began to improve in November 2010, slipped again in April, 2011, after only five months of anemic upward ticks, stalling the rebound, according to a Bureau of Labor Statistics (BLS) news release on May 6.
Housing continued its slide, as CNBC reports, "Pending sales of existing U.S. homes dropped far more than expected in April to touch a seven-month low, a trade group said on Friday, dealing a blow to hopes of a recovery in the housing market." CNBC also noted "The National Association of Realtors Pending Home Sales Index dropped 11.6 percent to 81.9 in April, the lowest since September." Pending refers to what were previously known as new homes. Pending sales are reported with up to two months' lead on existing home sales, which, of course, appears to forebode a dip in that housing sector as well.
Economists were disappointed that the Fed's ongoing zero interest rate policies and quantitative easing programs, which fueled a significant rally in the securities markets, had virtually no effect on housing.
Mother Nature played a role in depressing pending home sales in the south, as a series of killer tornadoes pummeled that region and parts of the Midwest in recent weeks, resulting in a 17.2 percent drop in that region.
Commodity prices, especially fuel prices, are also taking their toll on the economy, as consumers rein in their spending over a wide spectrum of goods and services in order to keep their vehicles on the road. Rising fuel prices have also put upward pressure on consumers' food budgets as farmers and grocers are forced to pay more to harvest and transport products to market. In fact, overall consumer spending plunged to only a 2.2 percent annual growth rate in the first quarter, contrasting sharply with the 4 percent pace in the last quarter of 2010.
Article comments
— go to most recent comments1 - El Bicho
Are fuel prices still rising? I only ask because gas finally fell under $4 last week and am too lazy to look it up
2 - Clavos' iPhone
You are correct, EB. Fuel prices have dropped in the last week or so (about a dime a gallon at retail here in Florida). The data in the article is all for April, as May prices have not yet been reported. However, I have read a couple of reports from "experts" forecasting that the drop is temporary at best, and that we can expect them to resume their upward trajectory shortly.
3 - Cannonshop
Uh, Clavos, don't you know? It's all better now, Obama Saved us! Just ask a Democrat, any day now the Rainbows will gift out the pots of gold, and the Unicorns will fart our energy woes away...and if they don't, well, that's all Bushitler and his Imp Cheney's fault.
Of course, for those of us whom have NOT been drinking the koolaid, offering the least skepticism about the rosy future under our socialist masters and their nanny-state is the mark of shallow thinking and brain-dead rhetorical parroting.
The Emperor, after all, has this splendid new clothing only visible to the Enlightened and Wise. Everyone else sees his naked ass.
4 - El Bicho
It seems like prices usually go up in summer, so that info is not surprising, although the time you are up is surprising, Clavos.
5 - Irene Athena
I wondered why you picked "Galloping Toward Bethlehem" instead of "Galloping Toward Armageddon." Isn't that what the four horseman were bringing the world to the brink of? Armageddon seems a more appropriate destination for the horseman carrying bad economic news: Recession, depression, and then war, war, war, to give the unemployed something to do, and the military industrial complex something to get richer with.
I recall reading about something ominous heading toward Bethlehem, but it isn't galloping:
"...twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?" (Yeats, The Second Coming)
6 - Clavos' iPhone
That's the reference, Irene. I picked it because Armageddon's been done to death (pun intended).
And EB: insomnia. The older I get, the shorter my nights.
7 - Clavos' iPhone
EB, again, you're right, our gas prices do usually go up in summer, but this year, they went up (sharply) in April, which usually comes in spring. Also, last night I forgot to point out that, while fuel prices did recede somewhat this past week, the easing is considerably less (so far) than the overall increase (so far).
8 - Irene Athena
*b'da BOOM*
9 - Clavos
Oh, and EB, thanks for the edit. What can I say? It was late.
10 - Glenn Contrarian
Clavos -
Actually, our federal workforce has been falling fairly steadily over the years. The columns are:
President, Total Federal Workforce, Total U.S. Population, and Federal Workers per 1000 Americans.
1962 (Kennedy)......2.48 million......186.5 million......13.3
1964 (Johnson)......2.47 million......191.8 million......12.9
1970 (Nixon)......2.94 million*......205 million......14.4
1975 (Ford)......2.84 million......215.9 million......13.2
1978 (Carter)......2.87 million......222.5 million......12.9
1982 (Reagan)......2.77 million......232.1 million......11.9
1990 (Bush)......3.06 million*......249.6 million......12.3
1994 (Clinton)......2.9 million......263.1 million......11.1
2002 (Bush)......2.63 million......287.8 million......9.1
2010 (Obama)......2.65 million+......310.3 million+......8.4+
(Figures are from OMB data. Asterisks include temporary Census workers and pluses denote data gathered by both OMB and Census Bureau)
Furthermore, we are now paying LESS in total taxes than we have since 1950:
Federal, state and local income taxes consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.
In other words, Clavos, the Republican memes that we're taxed way too much, that government is bloated are strawmen.
Is government bloated? Surely...but not in terms of number of personnel. What's bloated worst of all is our defense budget, because there is NO reason why we would be spending as much on defense as the rest of the world put together...but you also know very well that defense is the ONE section of the economy that most Republican legislators will never touch. You cannot accuse the Democrats of not being willing to cut on social programs - we agreed to big cuts in Medicare as part of health care reform. As my very conservative mother will tell you, "Obama cost me my Medicare!" He didn't (it's a long story), but that's what she said.
What WE need - the country as a whole - is more revenue...and cutting taxes is not only not proven to increase revenue, but the lack of revenue is allowing the interest on the debt to hurt our economy more and more.
We're paying less now in taxes than we have in the past 50 years...yet all we hear from the right is "We're paying way too much in taxes!" That is not true. We - and especially the wealthy - are paying too little in taxes...which is precisely why Warren Buffet - one of the richest men in the world - said:
"If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further," Buffett said. "But I think that people at the high end -- people like myself -- should be paying a lot more in taxes. We have it better than we've ever had it."
11 - Catherine
So no doubt that our national debt is a problem, and for sure the government (regardless of which party is in power at that point in time) should not be allowed to use national debt as a giant unlimited credit card.
But I just want to point out a couple points. First, the government bailout of financial institutions, which arguably prevented the economy from getting worse, was expensive and was done under the previous administration. The wars in Iraq and Afghanistan of course were obviously extremely expensive coupled with the fact that there was a huge tax cut that cost the government a lot of money. And I definitely agree that our national infrastructure is suffering - I would much rather seeing government money going towards national building projects than wars or the financial institutions that started this mess to begin with.
My main point, is that it's not just this administration that holds the blame, the Bush administration does as well - and of course the numerous financial institutions that pulled a quick one on a lot of Americans.
Another point to consider, is that a lot of the sharp rise in the national debt also has a lot to do with certain payouts the government has to make when unemployment goes up. Unemployment benefits, welfare, and medicaid for those who lose their jobs and qualify are also huge burdens on the government that has nothing to do with Obama or anyone else passing new legislation.
Plus, if current country leaders are to be blamed, it certainly wouldn't just be Obama. There are a lot of countries around the world that are still suffering from the effects of the financial crisis - this was a global crisis after all. The only countries that didn't suffer from the longer term effects of the crisis were, ironically, the less developed countries with fewer connections to global markets.
12 - Clavos
Glenn and Catherine, interesting that you should both respond to this article with a purely reflexive, vigorous defense of the Democrats and President Obama.
As I wrote it, I was scrupulously careful not to lay responsibility for our near moribund economy on any one party or individual. In fact, the word Democrat doesn't even appear once in the article; President Obama's name is used only once, and then only in the context of the debate over his possibilities for re-election in 2012.
I was also careful to put responsibility on Washington collectively, not either of the parties, and even in my narration of how both Congress and the administration are largely not addressing the remedies necessary to fix the economy, which of course is the reason why the economy is not improving, I was careful to point out that both have responsibility in that regard. In short, this article lays ALL the blame for this mess at the feet of everybody, administration and Congress (in its entirety -- both houses), because I believe they are all to blame and all are focused, not on serving the people who pay them (and pay everything), but on their own schemes largely designed to further their own ambitions and dogma and/or line their own nests.
But both of you, very erroneously in my opinion, focus only on what you perceive as an attack by me on the Democrats in general and the administration in particular.
You fail to see the obvious fact which is mentioned by Cannonshop on another thread, and which is both the thesis and the conclusion of the article: the whole damn lot of them, all of them, from the president right on down to the most junior senators and congressmen, are not serving the people.
13 - handyguy
It's easy to complain, harder to point out specific policies that would make things better.
Presidents and legislators, either party, are not magicians. Of course they make wrong-headed mistakes. But even when they more or less do what the expert consensus recommends, which would be one way of describing Bush in late 2008 and Obama since 2009 -- even then, the economy can be slow to move and improve. There are no fast, easy answers.
If John McCain, Hillary Clinton, Mitt Romney or even Ron Paul were president now, we would still be digging ourselves out of a very deep hole, and most people would still be impatient and unhappy, as they are now.
14 - handyguy
The figure you will hear cited most often by the administration and its supporters [such as moi] is private sector job growth, which changed from negative to positive in March 2010 and revved up in April [268,000 jobs added], even as the unemployment rate, measured separately, ticked up.
[If more people are looking, the unemployment rate increases. They may have been sitting on the sidelines in discouragement previously.]
The total jobs added by companies from March 2010 - April 2011 is 2.1 million. This is a positive sign -- but only about 1/4 way out of a very deep hole.
[Compare that to losing over 700,000 jobs a month in late 2008 and early 2009. The difference is dramatic.]
And if you leave food and gas out of the equation, as most economists do, inflation is not a galloping horse but a cute My Little Pony.
Opponents of the administration try to spin everything negatively, and this article is 100% spin. The real picture is more mixed, and certainly far from all bad.
15 - Glenn Contrarian
Clavos -
I did notice that you didn't couch it in terms of Republican or Democrat...just like you posted recently on another thread how there's "not a dime's worth of difference" between the two parties.
But that's a false equivalency.
While they do have many similarities, and while there are things that both do right and both do wrong, you cannot lump them both into the same pot and say, "a pox on both their houses".
What everyone should do is to look at the issues, such as "What's the problem with our national debt?" I showed you recently what the problem was, and where MOST of our debt came from...and you immediately took the line - the excuse - of "it's from a liberal source"...and then when I pointed out how the numbers were from the CBO, then you decided to take the 'figures don't lie, but liars figure' line.
Again, Clavos, we've LESS of a tax burden now than we've had for fifty years! By keeping the tax revenue from the government, you're NOT "starving the beast" (see "Defense Department"). Instead, you're taking away the ability we DO have to pay down our deficit.
And AGAIN I'll point out how we were on track to have our entire national debt paid of next year when Clinton handed it over to Bush...and it's Bush's tax cuts more than any other single factor that is keeping our deficit where it is.
Clavos, don't get me wrong - tax cuts are a GOOD thing when they're needed (like they certainly were in 1960). But they were NOT needed in 2001, and we're all paying the price for it now.
16 - Glenn Contrarian
Handy -
But even when they more or less do what the expert consensus recommends, which would be one way of describing Bush in late 2008 and Obama since 2009
But we've got one side that doesn't want to hear about the expert consensus - see 'global warming', 'evolution', 'taxes', 'energy independence'....
One side has no problem with listening to intellectuals, with taking the consensus of most - not all, but most - of those who are most qualified to speak on a subject...
...and the other side feels that if the 'intellectuals' say anything that is against that side's dogma, then the intellectuals therefore must be wrong.
And how to bridge this particular divide, I've no idea.
17 - Tommy Mack
We have no mechanism with which to reduce the size of government that is the government bureaucracy. Big government is the result of a growing process that began with the modern post-WWII presidency.
Ronald Reagan said, “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!”
The term “government spending” itself is inaccurate. Partisan rhetoric that blames parties and presidents for government outlay is juvenile. Voters get to choose who legislates and their choices are limited by juvenile arguments that feature such inaccuracies.
Tommy
18 - handyguy
The standard Dem line "But it could have been so much worse without the stimulus etc" is unprovable and unconvincing [even though I happen to believe it].
The standard right-wing taunt "See? I told you Obama's stimulus was bullshit" is just useless hot air when the only solutions offered by that side are Cut Taxes and Reduce Federal Regulation, which is their 'solution' to all situations, all the time. Know what? we tried that already.
19 - Clavos
And if you leave food and gas out of the equation, as most economists do, inflation is not a galloping horse but a cute My Little Pony.
You (and of course those economists) are absolutely right, handy. I have to confess I was dishonest about that, because I knew we all quit eating months ago, and of course we all also flipped the switch in our cars which allows them to burn air instead of gasoline.
Puleeze.
20 - Clavos
[If more people are looking, the unemployment rate increases. They may have been sitting on the sidelines in discouragement previously.]
Again, you're right of course. Shame on those folks for trying to look for jobs and falsely distorting the unemployment figures! Hell, they don't even need jobs now that they don't need to buy food or gas!
21 - Clavos
...this article is 100% spin.
Did you even look at my links??? Every number in the article is real and verified.
Spin my ass.
22 - handyguy
It's spin because you don't acknowledge other arguments or points of view...you only cite statistics that back you up.
So you don't mention the consistently good [not great, but good] news in the private sector jobs data.
You go all sarcastic Know-Nothing about inflation in #19. Economists talk about core inflation, not including food and energy, because food and energy are frequently volatile.
The type of inflation that would be disastrous would be across the board, and it would show up in the core numbers. Yes, food and fuel affect household budgets and they are not great news at the moment, but they are not evidence for overall inflation heating up. So don't present them as if they were. And don't pretend you don't know this. But if you really don't, look it up.
And again, instead of acknowledging the various factors that can affect one monthly unemployment figure, you use April's uptick to "prove" your point that things are getting worse instead of better. It doesn't prove any such thing.
This is games-playing and spin, and it's dishonest and disingenuous. Puh-leeze right back atcha.
23 - Clavos
handy do your own research -- the news is not good. I wrote this article because I work in a very volatile "canary in the coal mine" industry which is among the first to feel the effects of a slump, and we are in a slump, we have steadily sliding downhill for more than two years now, no matter how much "consistently good [not great, but good] news in the private sector jobs data" (most of which is government spin) you think you're seeing.
People are hurting -- some of them very badly, and all you dems can do is saunter past the graveyard, whistling.
Meh.
24 - handyguy
It's an opinion article, and spin is expected. Counterspin in the comments section is also expected. But deriding jobs reports as 'government spin' while selectively citing other government figures as proof of your thesis is, well, spin.
PS I am one of those hurting, having been laid off two weeks before the Lehman Brothers debacle. I face age discrimination as well as a lot of competition for jobs from other out of work people. But many people I know who were laid off about the same time have started to find good jobs in the last 6 months or so.
The most accurate way to describe things is, "We have some good news and some bad news." I'm not 100% cheerily optimistic, but things are certainly better now than they were from fall '08 through all of '09.
I'm sure your luxury boat school of economic prognostication has some value, but to pretend it's 100% infallible and applies to all the moving parts of a huge, complex economy -- well, that's a rather limited way of looking at things.
25 - Glenn Contrarian
Clavos -
Like Handy said, our economy's a lot better now than it was in fall '08 and through all of '09.
The problem is this: those on the Right simply don't want to give the Dems (and particularly Obama) credit for anything. It does not matter that the economy is better now than before - what does matter to the Right is that they're not the ones in charge.
Is everything hunkydory with the economy now? Of course not - and it won't be until we have a sensible fiscal policy which includes (1) regulations to make Wall Street behave with other peoples' money, and (2) a fair tax policy that ensures that the rich DO pay as much of their income in taxes as do those of us in the middle class.
But those two factors will never be allowed as long as the Right can stop their implementation.