U.S. Economy--No Comment Required
By Lee Russ
Friday, December 28, 2007 at 10:20 PM
I don't think any comment or elaboration from me would add anything at all to this. I ran a Google search in the news for "U.S. economy" tonight at about 10 p.m. Ignoring one duplicate subject matter story and one story about how the U.S. dollar was faring in the wake of the Bhutto incident in Pakistan, here's the 10 results, in order:US Economy: New-Home Sales Tumble to 12-Year Low (Update2) Bloomberg
Copper falls over US economic concerns The Australian, Australia
Equities slide on further evidence of a slowdown in US economy Financial Times, UK
Paris shares down midday amid concerns over US economy ... CNNMoney.com
Heebner Sees Fund Gains More Challenging as US Economy Slows Bloomberg
GLOBAL MARKETS-Geopolitics, US economy fuel risk aversion Reuters
US economic forecast for 2008: bleak Christian Science Monitor, MA
US Economy: Durable Goods Orders Miss Forecast (Update1) Bloomberg
Dollar May Extend Drop Versus Euro on US Economy, Fed Outlook Bloomberg
Falling house prices signal tough times for US economy Stuff.co.nz, New Zealand
Oh, not to worry, someone will show up with crap like this one:
As the U.S. economy enters its seventh year of economic expansion, many are predicting that a recession is looming on the horizon in 2008.
Don't believe it. The U.S. economy is strong, healthy and stable, and it will continue on its expansionary path well into the new year.
The National Bureau of Economic Research, the nation's leading authority on business cycles, closely watches five economic variables to determine when the economy officially goes into a recession. You might be surprised, but the NBER doesn't look at any of the economic variables that get all of the attention in the media, like the subprime crisis, the falling dollar, foreclosures, the stock market and rising oil prices.
The only five variables that really matter for determining when a recession starts are payroll employment, production measured by real Gross Domestic Product and industrial production, real personal income, and real sales activity.
Despite all of the economic gloom and doom you've heard on the news, not a single one of these variables has started to show any signs of economic weakness. It's actually just the opposite -- all five of these economic variables are showing continuing economic strength and vitality!
That from Vindy.com, the author a PhD, of course. Now, the rebuttal:
A fairy tale? Consider America's "Goldilocks economy," neither too hot (inflation) nor cold (unemployment) of the Clinton era. But that was then. Today, President Bush is working to keep Goldilocks running and hiding from the Three Bears, economically speaking.
Economist Jim Devine writes: "The problem (for the American economy), of course, is the Three Bears: 1. Papa Bear: the steep rise of U.S. external indebtedness. 2. Mama Bear: the steep rise of U.S. consumer indebtedness. 3. Baby Bear: the increased indebtedness of non-financial corporations."
Ergo, what job growth we do see, is tantamount to a hiring binge at your local McDonald's:
Which brings us to Mama Bear. "The household sector's outstanding debt has nearly doubled since 1990," Jane D'Arista observes. Workers borrow to make up for falling or stagnant wages, which have just begun to rise. "The recent gain in wages is a welcome reversal of long-term wage decline, but most working families are still playing catch-up," economist Jared Bernstein notes. The U.S. minimum wage of $5.15 per hour helps drive the wage gap. Workers' lost ground has led to the wealthiest one percent of Americans now owning more wealth than the bottom 90 percent.
Changing relations between American employers and employees also help fuel wage inequality. Private and public employers cut the wages and benefits of employees, especially entry-level workers. Cases in point are their lower starting benefit packages and salaries.
Public and private employers also cut their employees' wages with unstable work. A study at UC San Francisco found that in 1999, "only a third of California workers have traditional jobs'--that is, single, permanent, full-time, day-shift work paid for by an employer at the employer's site." Part-time, contract, and other non-full-time workers represent 10% of the work force nationwide, the Wall Street Journal reports.
Translation? "Well, let them eat cake"
Happy new year, indeed.