Tuesday, August 4, 2009
It looks like Obama’s out there, talking about how we are back from the brink again. It would help Obama’s credibility if the economic news was actually positive. Here is a recap since I left on vacation a little more than a week ago.
GDP declined over the last most at an annual rate of 1%. Everyone’s getting excited that it’s a little better than expected. Break out the champagne at the white house. For all you on the left that think we are on the cusp of recovery, you need a little refresher in the art of big recessions. I know, we haven’t had one in 30 years, but this is what a long recession looks like (GDP for the 80’s recession at the right) and we haven’t even had an uptick in GDP yet.
It looks like incomes dropped, but according to the news it’s not bad because it was the result of timing issues in the stimulus. Personally, I find it appalling that the stimulus is so poorly timed. The benefit to the long term stimulus was supposed to be that we were going to see a continuous stream of stimulus. People aren’t going to increase spending if their incomes are constantly increasing/decreasing by historic amounts. Also, weren’t we supposed to double the rate of the stimulus spending for the summer?
The big positive news that everyone is talking about is that consumer spending increased by .04 percent. That’s great news except the increase was a result of inflation increasing in the same month. We actually had a decrease in consumer spending, because it didn’t keep pace with inflation.
It’s time to break free of the economists and their “it’s better than predicted” predictions. These guys haven’t seen a real recession in 30 years. They are rusty.
The unemployment data comes out on Friday. I can’t wait to hear the administration talk about how great the economy is doing next week.