BEA: Still no recession
posted at 11:00 am on July 31, 2008 by Ed Morrissey
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The Bureau of Economic Analysis produced its second-quarter report, and it will surprise a few of the doom-and-gloom crowd. While certainly not spectacular, it shows that the economy continues to grow, improving on a weak first quarter to bounce up to 1.9% growth. The revised forecast for 2007’s final quarter reveals a retreat:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.9 percent in the second quarter of 2008 (that is, from the first quarter to the second quarter), according to advance estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.9 percent. ….
The increase in real GDP in the second quarter primarily reflected positive contributions from
exports, personal consumption expenditures (PCE), nonresidential structures, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment, residential fixed investment, and equipment and software. Imports, which are a subtraction in the calculation of GDP, decreased.The acceleration in real GDP growth in the second quarter primarily reflected a larger decrease in
imports, an acceleration in exports, a smaller decrease in residential fixed investment, and an
acceleration in PCE that were partly offset by a larger decrease in inventory investment.
The BEA will issue its final look at Q2 at the end of August. They revised 2007Q4 downwards, showing it as the first quarter of negative GDP movement in at least four years. The GDP had previously been rated as a positive 0.6%, but now has been calculated at -0.2%. Overall GDP growth in 2007 went down a full point from 4.8% to 3.8%, still healthy but not as robust as earlier thought.
At the current rate, Q2 is the strongest quarter in the past three, showing growth despite a fuel-price crisis and a housing downturn. Thanks to a weak dollar, exports increased and the fall in imports accelerated over Q1. Housing continued to suffer but actually improved over Q1, and despite all of the talk of a recession in the air, consumer spending increased as well.
John McCain lost no time in pointing out how important free-trade policies have been in allowing the American economy to remain resilient through this turbulence:
“Today’s GDP data are a stark reminder of the importance of focusing on the conditions facing American workers and the policies that will get our economy back on track. While growth continues to be disappointing, trade provides one of the few bright spots in an otherwise gloomy economic picture, raising questions about Barack Obama’s policy of economic isolationism.
“The data announced today show that exports grew 9.2%. Absent strong growth in trade, the economy would have turned negative in the second quarter, contracting by 0.52% instead of growing 1.9%. Senator Obama will throw up trade barriers that would seriously hurt American workers, businesses and our economy. When 95% of the world’s consumers live outside our borders, it is crucial that we do everything we can to expand markets for American goods and level the playing field for American businesses and workers.”
It might behoove Republicans, including McCain, to remind voters that issuing hyperbolic, unrealistic statements about the American economy intends to panic Americans into bad policy. The economy does not need a lot of top-down management, and in fact a great deal of what ails us now originates in government meddling, such as with Fannie Mae and Freddie Mac and mandates on lending practices.
Whatever else this economy might be, it’s not a recession, and it’s improving.
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Oh noes! Iraq war going well. Economy on the upswing. Gas prices going down. Whatever will the Democrats do?
carbon_footprint on July 31, 2008 at 11:05 AM
So, all of the people I see driving around in their cars and filling up shopping malls every weekend has not been an illusion?
Hmm.
fogw on July 31, 2008 at 11:06 AM
Is anyone going to apologize for making hysterical statements about Senator Gramm, now? I guess not.
thuja on July 31, 2008 at 11:07 AM
Democrats:
Economy good…check
Surge working…check
Voters want to drill…check
Hey, McCain thinks I have a funny name…now we have a platform, the funny name platform.
right2bright on July 31, 2008 at 11:07 AM
No recession yet, but there damn sure will be if the Messiah and Rangel get their tax plan passed into law – not to mention the Democrats tireless efforts to keep gas prices high.
forest on July 31, 2008 at 11:08 AM
Whatever is good for America is bad for the Dhimmicrats.
Mojave Mark on July 31, 2008 at 11:09 AM
Despite the Dhimmicrats best efforts to take the economy and the perception thereof down the tubes.
Connie on July 31, 2008 at 11:10 AM
But how will the lack of a recession help Michelle’s kids.
NoDonkey on July 31, 2008 at 11:12 AM
Time to dig Phil’s corpse out from under the bus. No wait, he wears his conservatism on his sleeve.
Valiant on July 31, 2008 at 11:12 AM
We may not be in a recession, but I think we face years, if not decades, of serious economic difficulties if we don’t reign-in big government and change the current trends. We need to let failing entities fail instead of bailing them out. We’ve got to get entitlements on sound financial footing. And we must stop debasing our currency. I don’t doubt people are still spending money and that our economy is growing, but I am afraid we’re just dancing on the Titanic. And neither McCain nor Obama have a clue how to steer around the iceberg.
flyfisher on July 31, 2008 at 11:19 AM
Real gross domestic product … increased at an annual rate of 1.9 percent in the second quarter of 2008 …
But how can this be? We’re suppossed to be going into the Second Great Depression!
Air travel is good idicator of the economy. Everyday that I go to work, the planes are full Full FULL! They’re full of businessmen going to close a deal, sign a contract or meet new partners. They’re full of families going on vacation to Disney World, or a cruise ship or a family reunion. Driving to work, I see tractor trailors all over the highway, hauling who knows what to who knows where. I see it everyday, the doom and gloom demonrats don’t scare me, I see the economy in action everyday and it’s rollin’.
Tony737 on July 31, 2008 at 11:20 AM
They will try to take credit for it. They were against the war, economy, gas prices, before they were for it
ConservativePartyNow on July 31, 2008 at 11:20 AM
Yeah Ed, you sound a whole lot like Phil Graham’s statements.
How much of that positive GDP is a result of the government giving away 150 billion dollars in ’stimulus checks’? You do realize that inflation is the problem so even if GDP is technically positive, we are losing to inflation.
The economy isn’t in very good shape dude. No matter how much you want to say it and show that Bush has done wonders for our economy, the Federal government is running a deficit of a HALF TRILLION dollars.
I’m doing great because I am selling a LOT of insurance. (thanks to those on here who might be my clients who have helped me succeed). But to point to one ‘positive’ number to show that ’see, we aren’t in a recession (technically). . . I told you so. . . ‘ is really quite childish and misunderstanding what is going on.
If oil continues to stay high, and housing continues to fall, and the dollar does not improve, our economy won’t succeed. On top of that if the government raises taxes, it’s 1970’s all over again.
But stick your head in the sand to all the negative news. . . just point to the positive news. Hey, I guess we are in a mental Bull Market.
ThackerAgency on July 31, 2008 at 11:20 AM
Really…?
“…The bad economic news is mounting daily for America’s families. Six straight months of job losses have followed the weakest job expansion since the Great Depression. Wages have fallen for much of the past two years, erasing most of the meager gains before then. And prices for large necessities are up sharply. At the same time, families still struggle with large amounts of debt. More and more families are succumbing to pressure to declare bankruptcy and default on their loans…”
J_Gocht on July 31, 2008 at 11:21 AM
Exactly.
All of the people out there who have been cautious, not made bad decisions or gotten greedy and paid the price for their actions – haven’t been suffering as much as those who have.
When he said:
It’s too bad that he really didn’t point out the people he was really intending, not the entire nation, because some of us aren’t whiners.
Examples of the whiners:
and
(For those of you who haven’t seen these two stories before.)
wise_man on July 31, 2008 at 11:21 AM
No, no, no! This can’t be right. The MSM has said the economy is in the toilet. Someone is cooking the books. We should all be wearing sack cloth and ashes! Doom! Dispair! That is to be our lot until the great awakening and the Anointed One (D) is elected.
GarandFan on July 31, 2008 at 11:23 AM
they are full because the airlines are cutting flights.
It’s hilarious that 3.75/gallon is considered good news because it is ‘down’. Wait until you get your home heating oil bill in a couple months and tell me if it’s ‘down’. It’s a ‘mental high gas price’ I tell ya, it’s all in your head that you paid $1.00 a gallon when Bush first got into office.
ThackerAgency on July 31, 2008 at 11:24 AM
Have you been forced to sell your Hummer yet?
RushBaby on July 31, 2008 at 11:24 AM
Of Course…The AP headline must take note of the fact that the economy shrank in 4Q of 2007… RAISING RECESSION FEARS!
originalpechanga on July 31, 2008 at 11:26 AM
“weakest job expansion since the Great Depression”
That’s rich.
Unemployment was over 20% at the height of the Great Depression.
It’s now below 6%, which is pretty much full employment.
“prices for large necessities are up sharply”
What is a “large necessity”? An SUV? A watermelon? Waterslides? Who writes this stuff?
“More and more families are succumbing to pressure to declare bankruptcy and default on their loans…””
Chalk full of verifiable data. Did the “reporter” file this from his mom’s basement?
NoDonkey on July 31, 2008 at 11:28 AM
Oo…Oh…
There goes the neighborhood!
J_Gocht on July 31, 2008 at 11:28 AM
Romeo13 on July 31, 2008 at 11:29 AM
Hold it… wait a sec… you mean they factor in Fed government spending into the GDP? So if, as is happening now, the Feds go more in debt (490 Bill deficit) by spending, or giving away money, they say that this means the economy is growing?
Thats like saying I’m richer because I borrowed money from my Credit card… your not rich until you pay it back…
I’d like to see the numbers WITHOUT Government spending in them, I think it would tell us a different story.
-sorry, should have looked like this…
Romeo13 on July 31, 2008 at 11:29 AM
NO, I said that I was doing great! Now I haven’t driven it in 3 months, but I’m keeping it forever. So it hasn’t cost me anything. And money is basically falling out of the sky on me because I’m writing so much business. . . but it’s because of my hard work. You can make money in any environment.
I don’t know of too many people who are making 6 figures selling health insurance to individuals over the internet though. Many of my clients have lost their jobs too. . . so that could be why my business is up.
But I’m doing better than I ever have done. And I thank God for the opportunities that I have had. I thank all of my clients for trusting me to recommend the appropriate plans for their situations. And I wish everyone could be lucky enough to be me. . . but they aren’t.
ThackerAgency on July 31, 2008 at 11:30 AM
Notice that Gas and Food prices weren’t included in the calculations…………….?
Seven Percent Solution on July 31, 2008 at 11:32 AM
According to the facts there is no recession.
According to the media and the Dems there is, and the only way to change that is more Dems, more taxes and lots more cowbell.
Hening on July 31, 2008 at 11:32 AM
You mean like statements that Bush’s deficit building tax cuts had created a unique growth story?
The stimulus package had no small role to play and anyone who says that things are going well simply has no understanding of the massive damage that has been inflicted upon the US financial system. Energy and food inflation continue to boost GDP. The one bright spot is consumer confidence.
Given a federal deficit that’s running over $400 billion per year (including the ‘free war’), the economy has benefited from a never-ending stimulus package under Bush. Unfortunately for the next President, this fantasy economy can’t last forever. The federal government can’t endlessly pump dollars into the economy that aren’t collected in tax revenue, and continue to issue more debt to the Middle East and China in order to subsidize economic growth.
For those who thought that adding $10,000 per US citizen to the national debt had created an economic miracle, the housing slowdown revealed an economy that truly had little to stand on. Lowering taxes on the wealthy over the last 8 years has done little more than create history’s greatest debtor nation.
bayam on July 31, 2008 at 11:33 AM
Maybe. As usual, the progressives are trying to use fear to drum up support for their view that everything sucks.
forest on July 31, 2008 at 11:33 AM
Romeo13, I thought it would be one darn cold day in “HE double toothpicks” I’d ever agree with you.
J_Gocht on July 31, 2008 at 11:37 AM
Last night on NBC news they highlighted a yuppie couple who had to canx their vacation plans to Europe due to the high exchange rate, they had to canx their American vacation because their big SUV cost too much to fill up the gas tank and finally they decided to go to Yosemite National Park however the smoke from the fire was to thick to see anything (i.e. due to Global Warming). It made me almost cry!
luckybogey on July 31, 2008 at 11:37 AM
And on MSNBC’s website… well… facts are irrelevant… Here’s how they’re discussing the GROWTH in the economy…
Skywise on July 31, 2008 at 11:37 AM
Hey newsflash, hysterical media. Recessions happen all the time. The economy is a circular thingie. It goes up, it goes down. Stop wringing your hands and acting like this recession is the firstest one ever.
P.S. It doesn’t look like it even COMPARES to the Great Depression of the 1930’s so shut the heck up.
mjk on July 31, 2008 at 11:37 AM
But they have every opportunity to be. Remarkably, in bad economies, people come out of nowhere and invent ways to make money. We need to cherish the freedom we have and encourage this type of entrepreneurship — not add our voices to the drumbeat that our economy sucks so much that everyone is doomed to struggle and strife.
I think it’s especially important for people who have “made it” to shine the light on the path for the next bunch who will. Not sit in our little castle and pity the masses.
RushBaby on July 31, 2008 at 11:39 AM
What needs to happpen is: we need to amend the constitution and get rid of the socialist income tax!
Is there anyone who would NOT vote to get rid of the income tax?
SaintOlaf on July 31, 2008 at 11:40 AM
Right on!
J_Gocht on July 31, 2008 at 11:40 AM
How sad is it that many Dems will see this as bad news and try to downplay it as much as possible. What does that about them that they practically want a recession so they can try to exploit it?
Yakko77 on July 31, 2008 at 11:42 AM
Exxon and Arabs, to name a few!
J_Gocht on July 31, 2008 at 11:43 AM
No. You’re wrong again.
Forget the deficit and other government excuses for MORE taxes..
What needs to happen is, abolish the income tax, go back to tariff system and cut the size of the government correspondingly.
SaintOlaf on July 31, 2008 at 11:44 AM
You geniuses are getting all worked up over a Bloomberg article last month that June’s stock market decline- in percentage terms- was the worst since the Great Depression for that month. The article was completely accurate. I don’t think this is the same as comparing today’s economy to that of the Great Depression.
Then again, it’s amazing that people seem to have no idea how much tax money will be spent on bailing out the financial system over the next 5 years. Freddie and Fannie acted with incredible incompetence and have essentially been nationalized to prevent their collapse, while Congress refuses to pass the type of reform that will prevent the same problems from occurring again at those lenders. Voters don’t seem to care though.
bayam on July 31, 2008 at 11:45 AM
they are full because the airlines are cutting flights. – Thack
MY airline has not cut any flights and we’ve been full the whole time. We do get some first timers on SW who used to fly the other guys, I know this because they ask where their seat number is. haha
Tony737 on July 31, 2008 at 11:45 AM
And it’s not just that they’re flying, it’s WHY they’re flying.
Tony737 on July 31, 2008 at 11:46 AM
To the benefit of people worldwide, you forgot to add.
RushBaby on July 31, 2008 at 11:46 AM
I don’t pity anyone. My success hasn’t been overnight either. I’ve been doing this for 15 years, and working hard on this project specifically for nearly 3 years. I have several other projects in the works that won’t likely pan out for another 2 years at least.
My concern is that the government will see my success and say I have the obligation to help those who haven’t succeeded by giving the government money. That’s what happens to those who have ‘made it’ in this country. We are free in that we get to pay more taxes the more success we have. . . even when we KNOW that the government will waste it.
ThackerAgency on July 31, 2008 at 11:46 AM
Exactly, that is what a liberal congress has done is just one year. Thanks for pointing that out.
All of those things were going to be resolved by Pelosi and her gang.
That is also the effect of relying too much on foreign oil, a major cause of our trade imbalance.
Once again, thanks for pointing out how ineffectual Pelosi and her gang have been.
I do believe you are finally coming around to the conservative side, pointing out all of these failed attempts by the liberals to “correct” a problem that didn’t exist.
Instead they have made it worse.
Thanks again for pointing out how ineffective the liberals have been this year.
P.S….if you still march to the liberal line, I would suggest they don’t hire you as a P.R. spokesperson.
right2bright on July 31, 2008 at 11:47 AM
How sad is it that many Dems will see this as bad news and try to downplay it as much as possible. – Yak
Yup, they’d rather see people suffer so that they can swoop in and save the day (even though they’d actually make things worse). They have a national version of Munchausen syndrome.
Tony737 on July 31, 2008 at 11:48 AM
Many people in the financial community expected 2ndQ GDP at around 2% primarily because of the influence of the stimulus checks most people received. Word on “the street” is that there won’t be a repeat this quarter.
JiangxiDad on July 31, 2008 at 11:50 AM
A simple question, that should require just one word.
Who controls the budget?
right2bright on July 31, 2008 at 11:50 AM
To the benefit of people worldwide, you forgot to add. – RushBaby
Hahaha BAM! Love your sarcasm!
Tony737 on July 31, 2008 at 11:50 AM
Cap’n Ed:
When I was commenting how the economy was going sour last fall, lots of folks on your blog blamed the media and said, no, the economy is great. Actually, the comments looked a lot like the ones I see here today.
Whoops, while they were saying that, the economy was contracting. And the Dow was a whole lot higher than where it is now.
And oopsie, Merrill Lynch said 2 weeks ago that some securities they held were worth $11 billion, but now they suddenly are barely worth 1/2 that. Gee, what happened to $5 billion in the last 2 weeks? Nothing, it was gone long ago but ML waited till after their quarterly reporting to fess up.
The SEC has done bupkis about all the banks that have been defrauding investors – all of you with pension funds, IRAs or 401Ks.
But hey, good news, Merrill Lynch says those hundreds of billions of dollars of mortgages all those banks put out are now worth about 22 cents on the dollar, and Merrill Lynch will even loan you 75% of that to take the bad paper off their books.
The meltdown has NOT YET happened, but it’s shaping up nicely for this fall or early spring.
Before you guys tell me how great the economy is, why don’t you check out Bernanke’s and Paulson’s boxer shorts and tell me if they are brown or not? By now they probably have crapped enough bricks to build a new Great Wall of China.
Our economy flows on credit, and the engine is seizing up.
Brace yourselves.
olddeadmeat on July 31, 2008 at 11:51 AM
Exactly, precisely, can’t argue with that! All I’m saying is, just be more bullish about your fellow Americans. Maybe find a few bright young ones and start them on your path. The macro will take care of itself if lots of good people act on the micro level.
RushBaby on July 31, 2008 at 11:53 AM
Yes, it can clearly go that way. Anyone who understates the danger isn’t paying close attention.
JiangxiDad on July 31, 2008 at 11:54 AM
“Many people in the financial community expected 2ndQ GDP at around 2% primarily because of the influence of the stimulus checks most people received.”
Really? The media and Democrats told us that these checks would make no difference.
Every quarter, positive growth. Every quarter, new “explanations” from the same people.
Just like your candidate, the unaccomplished incompetent Obama, you are wrong all of the time and worse yet, you can’t admit it.
NoDonkey on July 31, 2008 at 11:54 AM
It all boils down to this: The reason our economy seems bad now, even though we are not in a recession, is because the democrat party isn’t in the White House.
john1schn on July 31, 2008 at 11:55 AM
I’m busting a gut here. You actually provided a link to the “Center for American Progress” to support your theory that bad economic news is mounting daily for America’s families.
Center for American Progrss, Executive Committee:
John Podesta, President and Chief Executive Officer (served as Chief of Staff to President William J. Clinton from October 1998 until January 2001)
Laura Nichols, Senior Fellow (spent eight years as advisor, strategist and spokesperson for House Democratic Leader Richard Gephardt)
Sarah Wartell, (Executive VP for Management (served in the White House in the Clinton administration)
Jennifer Palmieri, (Senior VP for Communications (National Press Secretary for the 2004 Edwards for President campaign)
Peter Ogden, Chief of Staff (co-author of several papers on the geopolitics of energy, including … a chapter of The Age of Consequences: The National Security and Foreign Policy Implications of Climate Change)
And we can’t leave out ….
Distinguished Senior Fellow, Tom Daschle
ROFLMAO.
fogw on July 31, 2008 at 11:57 AM
Since GDP was invented government spending has been part of the equation because it’s a measure of the “total market value of all final goods and services produced within the country in a given period of time.” Government spending does cause goods to be produced whether they’re tanks or bridges to now where.
seanhackbarth on July 31, 2008 at 11:58 AM
Absolutely, thank you, for reminding me!
They have allowed the airhead in the White House to continue; what will soon be a trillion [with a T] dollar, despicable, war in Iraq that has totally run our economy into the proverbial ditch!
J_Gocht on July 31, 2008 at 12:02 PM
So simple a caveman could do it?
Connie on July 31, 2008 at 12:03 PM
He’s an unabashed liberal, we keep him around to remind us of why we are conservatives.
He actually made a case against Pelosi and her congress.
right2bright on July 31, 2008 at 12:05 PM
Well I guess it’s true. Every silver lining has a dark cloud.
jl on July 31, 2008 at 12:05 PM
“despicable, war in Iraq”
Despicable because we haven’t lost like you Democrats desperately wanted to?
Despicable because millions of people are free from a tyrant and that we’ve created what will be the first Arab Democracy?
Entitlement spending, social program spending and high taxes are the only problems our economy faces. Slash all three and everything will be fine.
NoDonkey on July 31, 2008 at 12:05 PM
NoDonkey, about those stimulous checks, this from the Big Picture:
Despite $100 billion in rebate checks, consumer spending was up only .56% — the bulk of which was (undercounted) food and energy inflation.
Those checks helped Americans pay the bills last month. BFD.
Next month they still have to pay those bills, do you want to run up the deficit to keep it up?
olddeadmeat on July 31, 2008 at 12:06 PM
Government spending is still spending, and is every bit as valid a component of the economy as your own personal spending.
That they stole your money at gunpoint and spent it on shit you never would is besides the point ;)
LimeyGeek on July 31, 2008 at 12:06 PM
Dammit, foggy. I can’t get anything past your “Google” key!
J_Gocht on July 31, 2008 at 12:06 PM
Oh, please. If the democrat party wanted to stop Bush, they would have. They want this Iraq war so they can fill their coffers with money. They have been in power in the legislative branch since 1/07, and why haven’t they done anything? Why haven’t they done something about the cost of gas? Hmmm? Answer: The democrat party WANTS you to suffer. Obama said it himself, he doesn’t mind the high price of gas, he just wishes it hadn’t happened so quickly.
Your messiah has horns.
john1schn on July 31, 2008 at 12:07 PM
Nothing has changed- $400 million plus, never-ending stimulus package continues with a free war thrown in as a special bonus. The average family of 4 has seen their national debt obligation rise by $40,000 under Bush. It isn’t sustainable, nor has creating the world’s greatest debtor nation led to a special economy.
To quote Jim Rogers: US deficits grow by a billion about every 10 months. You do the math.
bayam on July 31, 2008 at 12:08 PM
Congratulations on winning the Golden Banana Award
LimeyGeek on July 31, 2008 at 12:09 PM
I have no idea what the media or Dems said/say about the checks. I never listen to either. Stimulus checks are a perfectly reasonable way to “stimulate” the economy, but to suggest they have no effect on GDP is silly. Without it, we may indeed have had our second qtr. of negative growth and an “official” recession. (Nothing necessarily new or dire in that anyway.) If the credit situation doesn’t improve, and commodities don’t fall fast enough, without add’l stimulus (in the form of checks, or otherwise)we may very well see 3rd Q neg growth. That is not a political statement, (although the reason for the bad economy is surely political.) As for my candidate, he’s John McCain, reluctantly.
JiangxiDad on July 31, 2008 at 12:09 PM
Thanks r_2_b, even dim bulbs like me can be “right” on occasion?
J_Gocht on July 31, 2008 at 12:10 PM
Just imagine the stimulus of not stealin’ my feckin’ money in the first place.
LimeyGeek on July 31, 2008 at 12:11 PM
Didn’t google anything, just followed the link you provided.
Idiot.
fogw on July 31, 2008 at 12:11 PM
And Pelosi has done what about energy? Wasn’t that her promise?
The stats are in, the economy is healthy, you may have to wait awhile and hope the economy takes a turn for the worse.
What a strange place to be in, wishing for something bad to happen so liberals can retain power…how strange, what a strange hope.
The lack of drilling for oil, and it’s independence
is a major cause of concern right now. What are the liberals solution…fill your tires with air.
Pathetic, tell the retired couple in Wisconsin that they could have paid their oil bill for heating in November if they would have filled their tires full of air.
See how foolish your platform is, fill your tires with air, and oil prices will come down…that’s your platform.
right2bright on July 31, 2008 at 12:11 PM
Oh you betcha there are.
Akzed on July 31, 2008 at 12:12 PM
There might have been a recession 2007Q4-2008Q1 – if they eventually revise the 2008Q1 figure below 0. They already revised it downwards 0.3% this time. That’s besides the point, though, as it’s clear that we’re no longer in a recession if we were even in one.
Seixon on July 31, 2008 at 12:13 PM
There’s no simple fix for energy, and the largest cause of higher oiler prices within our control has been the war in Iraq and changed security scenario in the Middle East.
The US doesn’t have enough oil reserves to tilt the worldwide balance of oil supplies over any meaningful time period.
Based on campaign statements from both candidates, the next President will have a real long-term energy policy. We don’t have one now.
bayam on July 31, 2008 at 12:15 PM
When you hear a politician screaming, Oh no! The deficit! The deficit! Here is the translation: “WE WANT MORE OF YOUR MONEY! We haven’t taxed you nearly enough, even though we tax EVERYTHING imaginable(including your income,like socialists) WE WANT ALL OF YOUR MONEY AND WE WANT IT RIGHT NOW!”
SaintOlaf on July 31, 2008 at 12:15 PM
You were right above when you said gov’t spending is legit insofar as it represents “stimulus.” Pretty standard economic theory. And yeah, the douchebags squander so much of it. But other than the fact that our currency has been in the hole for so long and our interest rates so low, (big considerations I know), we’d want to see higher spending in times of slower economic activity. We’re caught between a wall and a hard place because of our past profligate spending–by both parties.
JiangxiDad on July 31, 2008 at 12:16 PM
Gosh, sorry. Just tryin’ to give you credit for “due diligence”?
J_Gocht on July 31, 2008 at 12:17 PM
“There’s no simple fix for energy, and the largest cause of higher oiler prices within our control has been the war in Iraq and changed security scenario in the Middle East.”
And of course the security situation in Iraq would have been fine with Saddam in charge of all of that yellow cake uranium. Maybe Uday and Qusay would have started some wind farms.
Must really burn you that we won a war you so desperately wanted to lose, bayem.
Must be why you’ve been so scarce around here lately.
Hopefully that will happen again, once Nambi Pambi Obambi blows the election this fall.
NoDonkey on July 31, 2008 at 12:18 PM
Is there anyone who would NOT vote to get rid of the income tax? SaintOlaf on July 31, 2008 at 11:40 AM
Politicians you mean.
Vote them out and vote in politicians who will.
SaintOlaf on July 31, 2008 at 12:18 PM
Do you know where he is these days? I’d heard he’d picked up stakes, sold his NYC home, and moved to Dalian, China, and put his kid’s wealth in Swiss francs. Wonder if he ever went through with it.
JiangxiDad on July 31, 2008 at 12:19 PM
Please go look at the numbers in the report…
They revised almost ALL the historic gains previously reported DOWN, some by as much as 1/2 to a full point.
IE, the % of gain for this report is now using a baseline of LOWER numbers.
There are two ways to make a number look like a gain… either have a higher end number… or lower the number you use to are comparing it to.
Romeo13 on July 31, 2008 at 12:19 PM
No you weren’t. Gotcha dumbass.
fogw on July 31, 2008 at 12:20 PM
That’s clssic, even in what should be the easiest attack he is so wrong…he gives you the links and then accuses you of Googling.
Classic liberal…gives you the information, then attacks you for using it…just classic.
right2bright on July 31, 2008 at 12:22 PM
Hey gals and guys…
We’re due for some severe weather here. If my satellite goes down I won’t be able to respond in a timely manner.
I’m certain you will be able to contain your disappointment?
OK ok, I know…
J_Gocht on July 31, 2008 at 12:23 PM
Sorry, it IS spending, but if its BORROWED money, it is not an indication of a growing economy, just more debt which someday will have to be paid back
They try to point to GDP growing as a HEALTHY economy… going into more debt is NOT healthy.
Romeo13 on July 31, 2008 at 12:23 PM
That’s even more funny, he actually is now trying to back out of his diss by saying he was giving you credit.
I am telling you this is classic liberal thinking, I have tears in my eyes…this is so typical.
right2bright on July 31, 2008 at 12:24 PM
“She who must be obeyed” says the same thing on occasion.
J_Gocht on July 31, 2008 at 12:26 PM
Someone actually married you?
fogw on July 31, 2008 at 12:29 PM
When the economy slows, there are only four ways for the gov’t to get money to try and stimulate it:
-Borrow, raise taxes, lower taxes, print.
We wanted the gov’t to respond in the face of a slowing economy, and tax cuts are politically impossible. Raising taxes makes no sense when stimulation is the goal. That leaves borrow and/or print.
A slow economy doesn’t necessarily mean it’s unhealthy–it can be part of a normal cycle. But it might be an indication of something fundamentally unhealthy.
At the moment, we have the mortgage debt problem and it’s effects on banks and brokerage houses, high commodity prices, paying for our int’l commitments, and maintaining our welfare state. I think it’s hard to say that at this particular moment that our economy is “healthy.”
JiangxiDad on July 31, 2008 at 12:31 PM
Batten down the hatches and stay safe.
RushBaby on July 31, 2008 at 12:32 PM
I think right now, that would be the best thing for you…and for me, I can hardly type I was laughing so hard, fogw was great.
You are classic, I hope you stay around in other posts, I don’t run into a classic liberal like you that often. You don’t seem to be embarrassed by your posts at all. It’s almost like a complete disconnect from reality, really interesting.
right2bright on July 31, 2008 at 12:32 PM
Satellite back up…!
Yeah, it boggles my mind too!
J_Gocht on July 31, 2008 at 12:40 PM
I think you’re conflating economic and political issues here.
Despite the burden straining our economy, placed upon it by our witless gubmint, the fundamental economic processes work better here than anywhere else. Economically-speaking, we’re in fine shape – I would argue that contractions are just as ‘healthy’ as expansions, as they are both symptoms of a functional economy.
Where we are ailing, as you correctly highlight, are the various institutions that have been artificially warped by bad gubmint policy, as well as the endless list of bad gubmint spending practices.
So there are two things to pay attention to – the beast that is our economy, and the way in which our gubmint whips and kicks it.
LimeyGeek on July 31, 2008 at 12:42 PM
Fair enough. Agree with you, as usual. Keep up the good work :)
JiangxiDad on July 31, 2008 at 12:50 PM
Actualy, because we now have a worldwide bank system, not a closed system like we essentialy used to have, the mortgage debt problem is because overseas investors no longer see America as a good investment.
The reason they don’t see it as an investment is because of the devaluation of the dollar.
The reason the Dollar has been devalued is that the FED keeps pumping more dollars out, because they have to support both an economy which is exporting wealth (oil) and a government who is creating more debt.
Freddie Mac and Fannie May were created to put more money into the loan system by buying loans. Problem is that this took the RISK out of loaning money to a bad credit risk, because you could take a small profit off it, then sell it to Freddie or Fannie… leaving them, and thus the Government, with the risk. This chicken has now come home to roost. Government created problem with predictable results combined with human nature.
As to the devalued dollar? The more the Government goes into debt, the more others will devalue the dollar. We paid 430 Billion last year just on INTEREST on the debt… it will be higher this year…
Foreigners know when we have poor economic fundamentals, and are no longer supporting the great American Economy house of cards the Dems and Reps created.
Romeo13 on July 31, 2008 at 12:56 PM
“gubmint”
Interesting, I’ve been using “govmint”.
I especially like the “mint” part.
J_Gocht on July 31, 2008 at 12:59 PM
As long as the folk measuring these things use the bogus new inflation numbers, they are fooling no one. Real, Carter administration measured inflation is double digit. Miniscule growth in the economy below this double digit real measure of inflation finds us well into a recession, where we have been for months.
JIMV on July 31, 2008 at 1:03 PM
In my julep, or on my new potatoes.
LimeyGeek on July 31, 2008 at 1:08 PM
Bloomberg gives the increase GDP a one-line blurb and then quickly introduces unemployment figures.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aW9BoDQLVQ9I&refer=home
craig on July 31, 2008 at 1:14 PM
Romeo-
I also agree with most of what you say, (and not only just now), but I can quibble about some of the details of your post.
Foreign banks are into our CDO’s big-time. They did not think American investments were bad. They thought just the opposite. Also, the rapid dollar devaluation has put American hard assets on sale for Europeans–especially our real estate which they should be and are buying.
I don’t disagree with you at all about Freddy/Fanny, etc. or the wrongheaded moves that have devalued our currency so much.
Nevertheless, I don’t yet see any inability on the part of the Fed to sell Treasuries, even with our too low interest rates. I surely do understand though that that day can come.
As for gov’t debt, what is too high? I don’t believe our debt/gdp ratio is any higher than during the Clinton years, although they are both prob. higher than historical, (although not for war years).
What’s the right amount of debt for an individual or a country? The answer isn’t zero. Debt is necessary to finance investments. (Yep, it is bad for paying entitlements.)
Overall, I agree with you, but I think we have essentially a political problem in our economy, but not necessarily a systemic one. The system works, if we stop using it for social engineering. I think this is what LimeyGeek was trying to make clear.
JiangxiDad on July 31, 2008 at 1:16 PM
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