Economics

More on the Endless Bummer

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It's right around the corner

Reuters econ columnist James Pethokoukis marches us down Recovery Summer's road to nowhere, in the pages of the Weekly Standard:

Declaring a "Recovery Summer" victory tour at the start of June must have looked like a pretty safe wager for the Obama administration. The economy seemed to have shifted firmly into gear during the spring. Lawrence Summers, director of the National Economic Council, told the Financial Times in early April that the economy was "moving toward escape velocity. You hear a lot less talk of 'W'-shaped recoveries and double-dips than you did six months ago."

A big reason for White House optimism was a stronger job market. The economy added an average of 320,000 net new jobs a month during March, April, and May, about half of them in the private sector. Granted, the unemployment rate still hovered close to 10 percent. But if the economy kept growing at a 3 percent annual clip or greater—creating lots and lots of new jobs in the process—unemployment would eventually fall, perhaps dramatically. As one White House insider remarked upon reviewing all the macro-indicators and then evaluating the economic team's performance, "It looks like we got things just about right."

Since then, however, the economy has fallen back to earth, and "Recovery Summer" looks more like a bad bet. Private sector job growth has fallen by two-thirds, and the unemployment rate is still at a sky-high 9.5 percent. And if the size of the U.S. workforce, as measured by the Labor Department, had stayed constant since April—instead of shrinking by a million—the unemployment rate would be 10.4 percent. Jobless claims are at their highest level since February. Worse yet, the expansion is decelerating. After growing by 5.7 percent in the final quarter of 2009 and 3.7 percent in the first quarter of 2010, GDP advanced by just 2.4 percent from April through June, according to the Commerce Department. And new data show the final second-quarter number may actually be closer to flat, with growth for the rest of the year just 1 to 2 percent at best.

Whole thing here. Related content: A couple of days back, AOL News Opinion Editor John Merline created a detailed "green shoots" timeline of optimistic administration statements plotted against worsening unemployment figures. Merline's conclusion:

[T]here's a real danger with all this "turning the corner, things are getting better, recovery is on the way" talk. If you don't think so, just ask Herbert Hoover, who infamously claimed that "prosperity is just around the corner" right before the worst of the Great Depression.

At some point, someone is going to have to level with the American people about just how bad things really are and why, despite all the ministrations from Washington over the past two years, they don't seem to be getting much better.

Me on the Endless Bummer last week.

NEXT: Mad Lib Legislation

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  1. I am not sure what scares me more, the state of the economy or the fact that people like Larry Summners actually thought the shit the government was doing would work.

    1. Did he not trust Christina Romer’s math?

    2. They honestly believe the government is capable of anything, and that with the right experts they can reshape reality to their vision.

      1. And if the government can’t do it, no one can. See Joe Biden this weekend

        “Vice President Joe Biden gave a stark assessment of the economy today, telling an audience of supporters, “there’s no possibility to restore 8 million jobs lost in the Great Recession.”

        Fuck you Joe Biden. If you and your kind would stop stealing and trying to run everything, those jobs and more of them would come back. The stupidity of our ruling class is just staggering.

        1. Now that the boot is off of BP’s neck, it’s gotta go somewhere, John.

        2. Boy, that’s a far cry from “the stimulus is working”, isn’t it?

        3. They can’t conceive of anything getting accomplished without force, which is the flipside to believing that force can accomplish everything.

        4. “Vice President Joe Biden gave a stark assessment of the economy today, telling an audience of supporters, “there’s no possibility to restore 8 million jobs lost in the Great Recession.”

          Then added, “But we’re trying our damnest to elimate eight million more…”

    3. Why would what Larry thinks scare you? That’s like worrying about what the retarded guy with the radio dancing down on the corner thinks. Summers doesn’t even have the excuse of being a shill like Pauli Krugnuts for his massive failures.

      The guy has been rewarded for failure at every turn. I’m more interested in my cats opinion than his.

  2. “It looks like we got things just about right.”

    A gibbet is a gallows-type structure from which the dead bodies of executed criminals were hung on public display to deter other existing or potential criminals. To gibbet a criminal is to display the criminal on a gibbet. This practice is also called “hanging in chains”.

    1. That’s disgustingly close to giblets. And from what I know about linguistics, anything that disgustingly close is ever more disgustingly close.

  3. I hear that Michael Jackson was on fire during that tour.

    1. Absolutely brutal.

      1. Crap…that was supposed to read [rimshot!]

  4. What bothers me more than anything is that the Jacksons are still wearing those stupid aviator glasses. Indoors.

  5. Fucking businesses. How do they work?

    1. Fuckin’ Tila Tequila. How does she work?

    2. ..and I don’t want to talk to an ECONOMIST, yall mother fuckers lyin and gettin me pissed!

  6. China dumps treasuries again.

    China has now unloaded more than 10% of their U.S. Treasury holdings since their peak of about $940 billion one year ago. This has to be a big part of the reason why the Fed is jumping in now.

    1. I been telling ya: China is not in a dollar trap. They are methodically exiting the dollar. A move that huge will take years, but they are definitely well started.

    2. Are we just directly monetizing all of China’s decreases in holdings? that aritcle just skips over who is is doing the buying.

    3. 10 yr treasury yield approaching 2.5%. If Chinese don’t want them, somebody else appears to be happy to take them off their hands. WORRY ABOUT STOCKS – bonds are just fine for the time being.

  7. I am attempting to get my blog up and running…please add me!!

    http://landofschmohawks.blogspot.com/

    1. Blog pimping is gauche.

    2. Okay. I’ll add you:

      King Schmo + 1,000,000,000,000 = 0

      1. sqrt(King Schmo) = Prince Schmuck

  8. The problem, of course, is that Americans don’t have enough faith in their government. If they did, the economy would be right as rain.

  9. “there’s no possibility to restore 8 million jobs lost in the Great Recession.”

    Queeg went to Detroit and said something similar, and Team Hope went apeshit.

    Let’s hjave some replay action.

    1. Considering that the state of Michigan elected Jennifer Granholm to a position, I would say at least in Michigan, it is a good bet.

  10. The news will be bad through November at a minimum. I wish the Dems good luck with crowing about the stimulus that prevented an economic meltdown. Unempoloyment could have gone up to 8% without it.

    It ain’t over because we haven’t swallowed our medicine.

    1. “It ain’t over because we haven’t swallowed our medicine.”

      What, you mean stop looking for the clever easy way out and instead pursue the hard simple way? Never!! If we did that we would have to sacrifice and all the really smart people would no longer have an excuse to run everyone’s lives. And what fun is that?

      1. Like I’ve said a wound needs daylight (e.g. oxygen) to heal. Sometimes you just need to rip the bandage off quickly and be done with it, rather than prolonging the pain.

        1. Yup. And we don’t need anymore “genius” politicians. The solution to this is simple. We don’t need a genius who wants to build clever solutions that try to deny reality. We need someone with some common sense and the courage to tell the truth and do the right thing.

  11. Typeng is herd.

  12. The problem, of course, is that Americans don’t have enough faith in their government. If they did, the economy would be right as rain.

    It’s all MY fault!

  13. Obama and Biden?!?
    She sits. She watches. She licks her paws.

  14. Wow, Kinda scary when you think about it dude.

    Lou
    http://www.web-privacy.es.tc

  15. P Brooks,

    Now you understand. Snuff out your individuality and become one with the collective.

  16. I REVEL IN MY UNMUTUALNESS!!!1

  17. At some point, someone is going to have to level with the American people about just how bad things really are and why, despite all the ministrations from Washington over the past two years, they don’t seem to be getting much better.

    Don’t they have to know what the problem is before they can explain it? I think that the chances of anyone in the administration saying anything close to saying what they did isn’t working or that they can’t fix the problem is approaching 0.

    1. I’ve come to believe that it’s all about getting to ride the $4 trillion pony anymore, seeing how much you can plunder before leaving and making sure you’re not standing when the music stops.

      This isn’t governance, it’s organized crime.

      1. Unfortunately, these crooks are free to profit from the crimes when they leave office. The Obamas will be raking in millions in speaking fees and book writing royalties for the rest of their lives. And I don’t think Biden will need to ride Amtrak much longer.

      2. “This isn’t governance, it’s organized crime.”

        That’s a damn good campaign slogan.

      3. +100000000

  18. I didn’t know there were six Jacksons. None of those is Latoya, right?

    1. Th original five were Jackie, Tito, Jermaine, Marlon and Micheal. The sixth is Randy. He was the youngest and didn’t join until 1975 when the Jackson 5 was a brand. Kind of like Penn State being the 11th member of the Big 10.

      1. I find your knowledge level disturbing. And wonderful!

        1. C’mon, Matt, everybody in flyover country knows that Penn State is the 11th member of the Big 10.

    2. Not sure. I don’t remember what she looked like before the surgery…

      1. Only the brothers could join the band. The girls were not tough enough to take the daily rehearsal beatings from the old man.

  19. The best is always yet to come
    That’s what they explain to me

  20. This is why we need more high speed rail.

    1. I don’t know why, but I suddenly got this image in my head of D-Day saying “Ramming speed!”

  21. Repeat after me:
    “UNexpected”

  22. Home builders are “unexpectedly” pessimistic.

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