Wednesday, April 30, 2008

Economy Still Growing???

What??? You mean the economy is still growing??? We still aren't even at the beginning of a recession which is 2 straight quarters of economic decline??? No way...this can't be true...we've seen all the headlines and heard all the stories of recession by the trusted MSM!

Well, no surprise, they are wrong again. The figures just released shows the economy grew (also incomes rose and inflation was not as high as expected) again last quarter. Don't worry though, the MSM media will keep banging the recession drum until they force it to be a reality. As they say even a broken clock is right twice a day.


Rob N. said...

Whats up Shane? Hope you're doing well...

The Fed lowered interest rates yet again yesterday continuing its easy-money ways... which will continue to kill the middle-class.

I don't know exactly how they calculate inflation.. but I believe the lower than expected inflation calculation did not include food or energy prices. However, the average consumer still needs to buy food & put gas in the tank...

Granted... the Dow is up today as the dollar has strengthened a little bit, due to the Fed telegraphing that the rate-cutting madness is coming to an end... However, our Fed's easy money ways have already been killing the value of the dollar and making us pay through the roof for gas, oil, food, & other commodities...

Just look at a few headlines from today's WSJ

Copper Caper: Thieves Nab Art To Sell for Scrap
"Manhole covers, pipes and wiring have already been targeted for theft in many cities, thanks to copper prices that have risen to about $4 a pound from $3.50 a year ago and $1.50 three years ago."

As Food Prices Rise,
Shoppers Stock Up

"The Department of Agriculture predicts a 4% to 5% increase in food prices this year, nearly twice the rate for 2005. The largest increases are forecast for fats and oils, estimated to rise 8% to 9%, and cereals and bakery products, projected to jump 7.5% to 8.5%. That's on top of existing increases: A dozen large eggs cost $2.20 in March, up from $1.63 a year earlier. White bread now costs $1.35 a pound, compared with $1.16 a year ago."

Opinion: The Big Easy
"American consumers will have the privilege of paying $4 a gallon for gas and $2.20 for a dozen eggs (versus $1.63 a year ago). This price spike across nearly all commodities has socked American pocketbooks just when greater consumer spending is supposed to reignite the recovery. The federal tax-rebate checks are beginning to arrive in the mail, and much of the cash will go to fill up the family SUV. If Republicans want to know why consumer confidence is down, and why voters are aching for "change," this is a big part of the reason."

I really don't understand why the folks in DC and the media don't put things together...?

Shane, imho, if McCain ignores the job losses that have occurred in the mid-west, or the rising price of gas & food (due to inflation), he will have zero chance of winning in November.

Cajun Tiger said...

hey bud...yep all is good here...starting to get hot again, but I'll be home in less than 4 months!!! =)

The main point of my post was to point out the media bias in constantly drumming that we are in a recession. We aren't. The definition of a recession is that the economy shrinks for two straight quarters. Yet, once again the economy not only didn't shrink it grew again.

That is not to say we don't have some major issues to deal with, but we are as of not still not in a recession.

On gas prices, I contend that the major reason they continue to rise and will continue is b/c of the policies of the Dems and their enviro-allies that have not allowed a new refinery to be built in over 30 years. So supply has stayed the same (actually it has dropped due to many repairs not being allowed either) yet population continues to grow thus increasing demand.

Increase in fuel prices is the major cause for food prices going up as well due to transportation costing more then when you throw on top of that the shortages being caused by the global warming hypers and ethanol again Dems and enviros hold major blame.

The other big part that the media continues to try and point to is the mortgage "crisis" Less than 1% of mortgages are being foreclosed where near crisis level as in the 80s it was over 10%. And the majority of those are not the fault of the economy but b/c people were trying to buy more than they could afford or got busted in the real estate flipping schemes now that the market is correcting itself as it always does periodically when prices rise too fast.

Like I said, there are areas of concern (government spending, deficit, debt, social security, medicare), but it doesn't help when the media continues to drum the false information as if they almost are wanting it to be a reality b/c it would hurt the current Admin.

Rob N. said...

Hey bro...

I agree w/ your points. I just wonder if we need a small recession? My understanding is that markets are supposed to be cyclical and that small recessions are healthy in the long-run. It appears to me that the Fed has a strategy of lowering interest rates (easy money) in order to stop recessions from occurring.

But you're right, the MSM is all about drumming up doom & gloom to aide their boy Obama, all the while, refusing to investigate legitimate issues with Obama's candidacy.

I agree that the lack of refineries, the ethanol/bio-fuel craze, and other global warming tactics have contributed to these high prices. But my contention is that the devaluation of the dollar is the major culprit... Just look at dollar valuation charts against price of oil charts or price of other commodities.... On this issue, Ron Paul has it right.

I also agree w/ your point about the mortgage "crisis", although the politicians can not ignore it. But you're right, it is mostly because people were speculating that real estate prices would continue to escalate (also caused by fed easy-money policies.) It should not be the federal gov't's responsibility to bail out people who got themselves in bad loans.

One last thing... I'll caveat this statement by saying that if I had to vote all over again in 2000 or 2004, I would still place my vote w/ Bush (as in my mind there is no legitimate alternative), but I have been very discouraged by this administration's lack of fiscally conservative policy, and his lack of using the veto to reign in spending.

This economic stimulus hoax is a perfect example of zero fiscal restraint.

Sorry for my long-winded blog posts in your comments...

Mike's America said...

You get a "small recession" and the next thing you know Dems will be shouting "worst economy in 50 years" as they did in 1992 against George H. W. Bush.

They are already trying to say that despite the fact that the current conditions are not a recession, things suck.

When have Dems ever said things are good?

Oh, yeah... I remember. They only think things are going well when THEY are in charge.

Cajun Tiger said... apology necessary =)

I don't know that markets "have" to be cylical or they just "are" cylical. I would tend to lean more towards to "are" b/c during the good times we tend to be less responsible so their is a correction. I contend if we kept good policies in the good times we wouldn't "have" to have a bad time.

Reports from last month showed the dollar rose for first time in 3 years and that it is starting to rebound and the unemployment rate dropped again...again not signs of a weak economy.

I agree that that has been one of my biggest dissapointment with Bush and Repub congress and was the bigger reason for '06 loses than Iraq war.

I used my refund towards debt =)

Mike...yep...they are cheering for bad economy...lose in Iraq...hard being a Dem lately.

Rob N. said...

It was passionately argued by Joseph Schumpeter in his 1942 book Capitalism, Socialism and Democracy that recessions are a necessary evil in capitalist societies.

"The "job" of a recession is to clean the "fat" out of the system, mop up excess, and pave the way for the next expansion. Until that process is complete, there isn't much from which a legitimate expansion can arise.

Recessions put weak companies out of business. In so doing, resources (skilled workers, capital) are freed up to be deployed more efficiently elsewhere. For example, Wall Street analysts who touted bankrupt Internet stocks are redeployed at local fast food restaurants to serve people in a capacity for which they are much better suited.

Stronger businesses that have used the contraction to firm up their bottom lines and grow more efficient are able to take advantage of these resources during the ensuing expansion. The economy emerges from a recession leaner, more efficient and in good shape for the next wave of growth and progress."

With our bubble economy being fueled by easy money... I do feel that a recession (or correction) is a good thing, long-term, for the economy. Granted, that is without thinking about politics. Of course, it is not good for the repubs for a recession to occur right now...

Hopefully, the Fed will eventually begin to raise rates and the dollar will continue to gain strength...

Cajun Tiger said...

That does make a lot of sense and I guess due to human nature that is ultimately what needs to happen to make corrections but I still think, however idealistic it may be, that if we didn't create the fat in the first place by being greedy and always employed sound business principles then the excess and "fat" would be minimal and not need cleaning. But I know that is asking a lot, so I see his point and agree.

But as you said politically the MSM and Dems would never portray it in that light and thus what is just normal market corrections is shouted to the high hills that it is all the Repubs fault.

I don't fully understand all the rate stuff, so I'll trust you in that =)