Do attempt to convince me that the economy is not now in recession. Please. I want to have something to laugh about when you brag about all those bargains you picked up on the way down. Will they be worth anything a year from now?
I've been through many recessions in my time, and over the years, I have discovered one sure-fire sign that the economy is in recession: employers carp about having to pay their workers more than they "deserve". "Expensive" labor causes employers to take out their poor management on their employees' incomes, including reducing their hours of work (if workers aren't terminated completely) even though productivity improved. As Nigel Gault, chief U.S. economist at research firm Global Insight, insists, "As long wages stay under control, inflation is not going to be able to get out of control like it did in the 1970s".
No matter how the captains of industry and commerce attempt to spin the facts, workers know that they are being made the fall guys. Those who have jobs are doing all that they can to keep them, and those who were thinking of changing jobs are delaying taking action. There is a significant correlation between workers' impressions of the condition of the job market and the onset of recessions. As people lose jobs and seek work, their neighbors are approached to aid in the search for replacement income, being asked if their own employers are hiring. That condition is more likely to be seen as an accurate assessment of the state of the economy no matter what so-called experts like Ben Bernanke and Henry Paulson say. These jobless facts don't lie.
The search for new employment isn't being helped by the record oil prices. Local LA television news is reporting, as of this writing, gas prices as high as $3.80 a gallon, and the effects of the record wholesale oil prices aren't going to hit the pumps for several weeks yet. Few of those interviewed by the local reporters doubt that $4 gas is on the way.
Without that job, even those with good credit aren't going to be able to continue to pay the mortgage. Those not yet caught up in the record numbers of foreclosures are instead walking away from their homes before they are foreclosed.
Just to show that the trickle-down theory can work only if one inverts the scale — as homeowners lose their homes, the investors who originally funded the mortgages are increasingly in borrowing trouble themselves. This will only lead to more investors distancing themselves from the mortgage market, making home loans as rare as a truthful statement from the Bush administration.
Article comments
— go to most recent comments1 - Dave Nalle
Rather than try to convince your closed mind of anything, Propagandist, I'm just going to quote the textbook definition of a recession:
Have we had two successive quarters of GDP decline or negative real economic growth?
Oh, and BTW, I heard a report today of gas prices in California over $5 a gallon, so your article is already dated. Think how much more you could have fearmongered if you'd had that bit of data to work eith.
Dave
2 - Propagandist
Hey! What did I do?!
As for the article - I have two words;
Business Cycle.
3 - STM
Yeah, I guess that's pretty much where it's at.
It's not a recession until it meets the criteria for a recession.
And it's a ways from that at the moment.
A poorly performing economy doesn't automatically add up to an economy in recession.
In which case, is propagandist's work here just a) plain wrong, b) wishful thinking in regard to the demise of America, c) a complete waste of time and effort, or d) dreadfully misinformed?
Or e) all of the above.
4 - Clavos
It's "realist" (the quotes are obligatory), Dave.
But it's still bullshit.
The tone of "realist's" article is telling.
It's gleeful and triumphant.
He's rooting for the economic collapse of the US.
You're going to be soooo disappointed, "realist."
Even if there is a recession, the US economic juggernaut will continue rolling right along (albeit at a temporarily slower pace), leaving you with egg all over your face.
If you're going to be cutesy in your writing, at least try do so intelligently:
"Obdurator" is nonsense; there is no such thing, aerodynamic or otherwise.
If somebody taught you that this is good writing, you should sue for malpractice.
5 - STM
Or are realist and propagandist really two different people. Stay tuned ...
6 - Clavos
Well, "realist" is a propagandist...
(Sorry, Propa)
7 - STM
Yeah, sorry Propa. Mistaken identity
... flummed by Dave's comment :)
8 - Dr Dreadful
Ah yes, but is Propagandist a realist?
9 - Dave Nalle
When I called 'realist' 'propagandist' I had forgotten that we had a commenter using that name, hence the terrible confusion.
But here's the question. Since 'realist' is actually a propagandist, does that mean that 'propagandist' is actually a realist?
Dave
10 - Cannonshop
I think "realist" goes too far, but he's not entirely wrong, just taking what "Is" a bit beyond what is, and to what he wishes it to be.
(this would be consistent, incidentally, with propogandists on both sides of the economic aisle.)
One of the things that both Liberals and "Conservatives" seem to miss is this: if you're going to have "Free Trade" you can NOT have aggressive, Punitive, nanny-state regulations-that's creating a carrot-and-stick situation to drive your industries overseas and put your citizens out of work. If you're going to have Nanny-State Socialist economics with all the regulations, exemptions, and special treatment laws WE have, you have to accept Protectionism as the price- and Theory-X management/micromanagement of the economy rarely works well for long outside of a major war.
There is a balance, but it's generally repugnant to so-called "progressives", along with anyone who makes their cash off taxes.
Wealth is not manipulating numbers on a spreadsheet, it's also not a zero-sum game, you need to CREATE wealth to have it- this means you have to make things rather than trying to live off of what your ancestors made. This isn't popular with the American Left, or many sectors of the American Right-both benefit heavily from being able to manipulate the system at the topmost levels, and both gain a lot of their power from claiming to represent the rest of us.
11 - troll
while BC's comments form frowns on charts here's some perspective (from bls)
Year Unemp. Rate
1929 3.2%
1930 8.7
1931 15.9
1932 23.6
1933 24.9
1934 21.7
1935 20.1
1936 16.9
1937 14.3
1938 19.0
1939 17.2
1940 14.6
1941 9.9
1942 4.7
12 - John Bambenek
To be fair, a recession may be 2 consecutive quarters of negative growth, but the recession *is* those 2 quarters. So while he can't say we are definitively in a recession, you can only recognize a recession in hindsight based on the definition.
But yes, he's throwing all the bad economic data against the wall as a way of rooting for a collapse. We're in trouble, to be sure, but even a recession isn't the end of the world. A recession is a far cry from an economic collapse. But we've societally established that anything other than great growth every year forever is a catastrophic failure of the government. In reality, every market including housing has its up years and down years, and the infantilizing of the American people to make sure we live in Disneyland disconnected from the reality of how the world works only contributes to the latest pushes for statism...
13 - troll
Clavos says - *Well, "realist" is a propagandist...*
...and I suppose that he represents the unbiased and agenda free voice of reason
we're all propagandists here
14 - Clavos
Not unbiased and agenda free, no.
Voice of reason: absolutely. :>)
15 - troll
...further complicating the recession call is that present figures will be 'adjusted' in hindsight
16 - Clavos
Bambenek #13:
Well said.
17 - troll
John says - *We're in trouble, to be sure, but even a recession isn't the end of the world.*
a quick perusal of suicide stats might well show this to be a hasty conclusion - for some it will prove to be just that
we live in a world of individuals...(taking some liberty with the original): to destroy one life is to destroy the entire universe
18 - Clavos
"a quick perusal of suicide stats might well show this to be a hasty conclusion - for some it will prove to be just that"
True, but so what?
Suicide is:
A) Illegal
B) Irrational
C) Stupid
D) Cowardly
E) For many religious believers: a sin
There will always be unstable people in any society, who even in the best of times will commit suicide.
Bambenek is right: it's not the end of the world, it's another stage in the normal rotation of business cycles.
19 - troll
Yes John is correct - recessions and the devastation that they cause are normal and necessary to the capitalist process
as for your rigid ideas about suicide let me remind you that it all depends and you never can tell
20 - Clavos
"as for your rigid ideas about suicide let me remind you that it all depends and you never can tell"
Whatever that means...
21 - troll
just something an old shaman shared with me...when you figure it out you will have attained enlightenment or something like that
22 - Maurice
It is interesting to contrast our governments tax strategy vs. Hong Kong's.
It should be noticed that they are benefiting from a trickle down philosophy. In fact the article points out that they are getting ready to cut corporate taxes again because they have such a large surplus. U.S. business could learn a lot from this model.
23 - Les Slater
Formal definition notwithstanding, we ARE in a RECESSION. Yesterday, economists at JPMorgan Chase stated that a recession appeared to have started earlier this year. The trend is clearly down. Nobody of any credibility is talking reversal anytime soon. Even if it’s not official till the end of the year, we're in one now.
There are many signs pointing to this becoming a very severe one. For many, it's already quite severe.
24 - Maurice
Certainly a large cause of the current economic woes are due to our unfriendly business climate. I work for Micron Technology. We are the last U.S. manufacturer of DRAM memory. We had a large layoff in July of 2007 and will have another in April of 2008. The taxes (even our property taxes!) are killing us. We are moving some of our manufacturing operations overseas. Taxes in the U.S. and tariffs from other nations (China in particular) make business in the U.S. impractical.
The U.S. is losing the global economic race because we have continued to move to the left when the rest of the world is moving more to the right (economically). If you don't believe that last sentence please click the link in my #22 post.
25 - Les Slater
Maurice,
"...due to our unfriendly business climate."
A lot more friendly to businesses than workers.
"...we have continued to move to the left when the rest of the world is moving more to the right (economically)."
Nobody's moving to the left. Capitalists are competing by driving down wage and social benefit costs. Many social benefits are funded through taxation. Getting behind the boss's drive to gut social benefits only makes us weaker.
A good example is in Detroit where I presently live. Caving in to the demands of the bosses only emboldens them and we end up with neither jobs nor even a city to live in. No better will come to Boise with similar tactics. You can't win that way.
Les