I’ll post as I can today but I’m a bit tied up with various obligations.
Obviously, the GDP numbers are disappointing but not particularly surprising to me. Using my tried and true measure of economic activity, the mall parking lot-o-meter, not to mention quizzing practically everybody I run into on how their business is, it’s pretty clear that things are slow.
If we think back to those halcyon days of late 2008 and early 2009, it’s pretty clear that the estimates that of economic activity and growth that President Obama’s economic advisors were using were gobstoppingly wrong. What that implied or implies can be debated but what I don’t think can be debated is that they were wrong.
We’ve got to move on from here and one step in the right direction would be abandoning the “don’t let a good crisis go to waste” mentality which, if the interviews on the television news are any gauge, still prevails in Washington.
I think we’ve also got to dump the Wall Street-centric strategy that has been deployed to date. But I guess that’s a subject for another post.
As I mentioned in a comment on th last thread, the revisions go back quite a ways, and they are major. The revisions are showing that the recession was (is) much worse than previously “estimated” by the government.
RMA.
As for the current crowd in charge in Wahington – why expect them to change their song now?
Zero Hedge:
I didn’t see a link to the Bloomberg article.
This is shades of September 2008.
And Dave, are you interested in this yet?
This appears to be the Bloomberg article in question.
Things are moving very quickly now.
Don’t forget to buy the dip.
No, really, just buy the dip.
Does anyone want to start a pool on QE3?
About ten days ago Dave Schuler wrote the following over at my place:
Dave, I thought you might find this article interesting. Here’s a taste:
Hat tip to Information Processing for the article.
When all y’all wake up and start posting, here’s some more gist for the mill. Not only are we still below the pre-recession peak, that peak just got lower. Additionally, the Chicago PMI declined (and the internals are not good), and consumer confidence (surprise, surprise) continues to weaken. (Although I prefer my own version of Dave’s mall parking lot-o-meter for that test.)
Note that a good deal of the bad economic news above was not impacted by the debt ceiling debate, although it probably had some impact on the Chicago PMI.
(Personally I am more concerned about the fact that I am paying 34 cents more per gallon of gasoline NOW than I was when Obama announced his plan to tap the Strategic Petroleum Reserves to bring down the price of gasoline. Mission NOT accomplished.)
Incidentally, this puts the idea that concerns about uncertainty in the government lead to economic problems. Everyone, including the President, now agrees that it the case. That’s no longer open for debate.
Now that I’ve dropped both knowledge (or links anyway) and a couple of fire bombs into the conversational pit, I am going back to real life. Have fun watching the markets bounce around to the headlines and HFT bots today….
And because I haven’t brought you enough good news yet today, here’s more! The leadership of the Turkish military has resigned! Not sure what this means, but it can’t be good.
Three things:
The Stimulus
Stimulus II (the Dec. 2010 tax cuts/unemployment extension deal)
QE2
Each of these was either not very effective, or we would have been in much worse shape without them. How would we know which?
Well, Stimulus II* got completely wiped out by rising gas prices. It probably helped out a little bit, but that’s all it could have ever done.
The original Stimulus* also would have helped some – it kept money in the pockets of a fair number of people (me, for example) that wouldn’t have had anything at all. The tax credits were probably laargely a wash because of the complexity of them. They helped the states out some by providing some money that they otherwise wouldn’t have had, but as discussed on previous comment threads here, the states really just shuffled money around to help offset future & current loses. Obviously, “shovel ready wasn’t as shovel ready as we thought.” And also obviously, “What you me “WE”, Paleface?”
The astericks above are because I wouldn’t call those Stimulus I and II. Bush had at least one, and I believe two smaller stimulus packages through 2007 and 2008, consisting of tax rebates and the like. Remember, this is what we got after a LOT of stimulus, and a lot of deficit spending NOT earmarked as stimulus, and a lot of money thrown at the looter class.
And QE2? Well, you can check the results of that next time you go shopping.
All and all, these things have had no appreciable impact on the economy as a whole, but a few measures have helped out those of us at the bottom a little bit, and a good many measures have helped out the kleptocrats on Wall Street and in various government offices a lot.
All of this looks like what you would expect after a banking crisis. When you let the banks run wild, they crash the economy in ways that take many years to recover. We had massive personal debt and we built up a huge overhang in real estate. Who doesnt think that banks arent sitting on lots of bad debt yet? There just isnt a magic bullet for our problems.
Steve
There just isnt a magic bullet for our problems.
Well, we could stop digging. As it is everyone else is de-leveraging while the government is going deeper into debt. As I have mentioned elsewhere, we haven’t had the government debt crisis yet. The only place where aggregate demand has been sustained is for debt. (Financed in part by our magical non-central-bank bank, the Fed.)
Additionally, the government could quit trying to find magic bullets: cash for clunkers, attempts to re-inflate the property market, alleged stimulus packages that don’t, keeping zombie banks (and pseudo-banks) alive, keeping zombie companies alive, refusing to take any meaningful financial reforms, etc. Much less adding additional burdens to the government (new wars, new entitlements, etc.) Doing what Japan did and thinking we would get a different result was willful stupidity.