Tuesday, August 5, 2008

SAR #8218

It might be a good idea to form a line
and calmly leave the building.

What Goes Up : Inflation surged in June at the fastest clip since 1981, while consumer spending fell two-tenths of a percent. Things cost more & we've got less money.

No-No: Bush, McCain and the GOP in general want to stampede the public into 'opening the continental slope to off-shore drilling. Never mind that the odds are against significant recoverable oil being found. Or that if it is, it can't be brought into production for 10 years. And that even then it would be an insignificant drop in the barrel. But them's the facts, and telling the truth is not what politics is about.

One View: Melting ice caps, acidifying oceans, windfall oil taxes - distractions, one and all. The most serious problem confronting the world is husbanding enough fuel to both develop an alternative energy regime and to avoid a crippling recession so a workable alternative energy regime can be financed.

Multiple Choice: Can the US economy survive the current mess? (a) No. (b) No. (c) Hell no. (d) All of the above.

Perspective: The housing vacancy rate has about doubled during the current housing contretemps. To return to an historically normal rate, about a million of these houses need new owners. Pull up a chair, this could take a while.

It's A Gas: Edmunds, the car people, report that the median household ($48k) is spending 11.5% of its income on gasoline, up from 4.6% of its income five years ago. They assume 30,000 miles in various vehicles, which might not be as far off as it seems.

Porn O'Graph: Housing data - AlARMing.


Anonymous said...

Re: Some Assembly Required, One View

There are several dollar related econometric definitions of recession and depression. The only one that makes sense is a human related not dollar related definition. The current unrelated-to-reality definitions are a big part of our problem.
In human terms, a recession is when people get laid off and a depression is when the jobs leave town.
Why are we here?
Its the cures for recession and depression.
To cure a recession one needs to give tax breaks and outright government grants to corporations and wealthy people. The theory being that the corporations will upgrade facilities, increase sales and hire back the laid off employees. Wealthy people on the other hand are supposed to spend extra money to purchase local goods and services and therefore will employ laid off workers.
A depression on the other hand is cured by spending government money to create jobs and to support unemployed workers.
The elites - large corporations and wealthy people - are addicted to the cure for 'recession' so is it any wonder that no matter how many jobs 'leave town' there is never a depression; somehow its always a recession - strange about that!
There is no deep or shallow recession!!
The truth is it is a depression not a recession. The elite owned media would rather cut their tongues out and stand on them than say that (the emperor has no clothes) its a depression.
As long as we fail to admit the economic truth about the depression in North America and continue to try to cure something that's not happening, a recession, we will continue to have deeper and deeper economic errosion as more and more jobs disappear.
Hoover tried the same 'ignore reality' approach to economic policy and it created a total disaster. It wasn't until FDR admitted that it was a deprtession and started to cure economic depression instead of economic recession that the economy of the USA began to recover. Apparently we have learned nothing whatever of any use from the dirty thirties. We use econometric hogwash to try to disguise depression as recession - all because we are using disfunctional highly manipulated definitions of recession and depression.
We need to get it straight.
A recession is when workers are laid off and a depression is when the jobs leave town.
This definition relates directly and immediately to reality and can be measured fairly precisely.

Anonymous said...

The problem is that when government gives tax breaks and grants to the wealthy and corporations, virtually none of it trickles down to the masses any more.

The wealthy already have everything they want anyway so they don't spend any more money when they get a tax cut. They just save it or invest it.

"Business investment" for American companies now means building factories in Asia, firing US workers who have middle class jobs, and exporting those jobs to Asia.

We also need to remove gimmicks from official government statistics. For example, the official inflation rate may be 5% a year, but that's an average for everybody and it now has so many adjustments and other gimmicks that it is meaningless. The reality is that the inflation rate for the rich is approximately zero, while the inflation rate for 60% of Americans is at least 10% a year.

The same types of gimmicks are used to mask the true unemployment rate. By not counting those who "give up" looking for work and those who are underemployed, we somehow magically take a true unemployment rate of 9 to 12% and report it as 5.7%

What is needed to cure this depression is massive tax hikes on the wealthy, along with tax incentives for corporations and the wealthy to improve the standard of living for everyday Americans.