Why The Economy Is Worse Than You Think: Newsweek

Newsweek:

The forgettable first half of 2008 is stumbling to a close. On Friday, the Labor Department reported that American employers axed 49,000 jobs in May, the fifth straight month of job losses--an event that signals a recession sure as the glittery ball dropping on Times Square augurs a New Year. The report, which inspired a 394-point decline in the Dow Jones Industrial Average Friday, was the latest in a run of bad news. Auto sales, the largest retailing sector in the U.S., were off 10.7 percent in May from the year before. And housing? Ugh. Nationwide, according to the Case-Shiller Index, home prices in the first quarter fell 14 percent.

Yet hope springs eternal that the second half will be better than the first. Economists polled by the Federal Reserve Bank of Philadelphia in May believe the economy will grow at an annual rate of 1.7 percent and 1.8 percent in the third and fourth quarters, respectively. Lawrence Yun, chief economist at the National Association of Realtors, tells NEWSWEEK that "home sales and prices in most of the country will improve during the second half of 2008." (Yun is the Little Orphan Annie of forecasters. He's always sure the sun will come out tomorrow.) Last month, Treasury Secretary Henry Paulson said, "We expect to see a faster pace of economic growth before the end of the year."

Read the whole story: Newsweek

Comments

[loki]

Dont need much of an education to see this. But if your a Harvard Business School educated with a C average and a MBA, you will never recognize this.

[HotATL]

I just have one more thing to say since I’m in the mood. How are illegal aliens getting pass the reference checks? How are they getting pass the credit checks? I know that you can get a fake SSN but how are they getting pass the work history check? And I don’t want to hear this crap about how they will take a job that Americans don’t want. I know that there are jobs they will take that I don’t want. The problem is that they are also getting the jobs that I want. For example; all of the bilingual jobs that you see in the want ads, some high paying construction jobs. And although I don’t want some of the other jobs, I sure that a lot of our 20 year olds would take some of the jobs that I wouldn’t.

[HotATL]

You don’t have to tell me that the economy is bad. I have been looking for a job for three months now. Let me tell you what the last few people who had to decency to write me a letter told me.

You have experience in this and that but not this. And we really want people with experience in this.

You don’t have recent experience in this.

We are looking for a local candidate.

You should not have put that job on your resume. (So I took it off then I got).

You have too large a gap in your employment dates.

Your resume is too long. (So I took off the last job, then I got).

You don’t show any experience in this. And we really was looking for people with experience in this.


And they wonder why people stop looking.

[Chavez08]

It's absolutely incredible how illinformed the Establishment in this country really is.

The people in this country have been screaming for at least 5 years but the media elite wait until the wound has bled out to run for a bandage.

Suspicions confirmed: High academic achievement makes you an idiot. I listened to a (now 20K a year) construction worker who finitely and accurately laid out the systemic failures of this Neoliberal economic system in less than (5) minutes on CSPAN this morning.

This guy knew the score but makes $20K but "fellows" at Free Market "Think(??) Tanks" (CATO< Heritage) make well into 6-figures on average and they don't even know basic economics (and flat out lie about the concentration of wealth).

[marymansour]

When the Good Will store in my neighborhood is more crowded on Saturday than the grocery store, I know the economy sucks and sucks bad. Grocery shelves are no longer full due to trucking costs in gas; the major department stores are almost empty. These are bad times but let one incident happen in the Middle East and the GOP will have us right back in their arms using fear tactics. WE NEED CHANGE!

[EinChicago]

Frankly, anyone with two working neurons stopped reading this article or at least taking it seriously after this line: "And housing? Ugh. Nationwide, according to the Case-Shiller Index, home prices in the first quarter fell 14 percent."

Apart from the obvious problems with giving any credibility to the case-shill(er) spindex, Gross deliberately omits the fact that even the spindex for the Nutcases and Shills results were that home prices in the first quarter fell 3% for a total of 14.1% since the same time last year. Prices did not fall 14% in one quarter. If prices fell 14% in one quarter, there would have been panic on the streets.

The obvious problem we should all be pointing out is that people like Gross and Whitney are now carrying water for the republicans, by extending the time until recovery, they're laying the groundwork for a movement of the dates when this started so any real recession can be layed at Obama's feet if he wins. It's step one of a proven 3 step GOP strategy (step one, push teh dems into choosing a scaegoat candidate, step two, push all the economic problems to him, step three elect someone like Reagan in 4 years time)

[ddharder]

And no doubt it's a strategy that is likely to work. History repeats itself.

[WorkingClass]

After the election - THEN we will be in a recession. Except that kind of crap is losing its potency. Americans are finally beginning to know that they are being misled. Long before the demise of the old Soviet Union the people knew that Pravda was just government lies.

[MilwaukeeDan]

Yeah Einstein, "elect someone like Reagan in 4 years", that'll work, put a braindead, drooling idiot to run the greatest country(according to your kind) on earth. You must enjoy abuse, why else hang here?

[MetalCanuck]

Its the American dollar crashing NOT things getting more expensive. There is plenty of oil but the dollar that we are all forced to use is becoming worthless and we are all lowering interest rates (devaluing our currency) so we can trade with the US. This is allowing America to continue to inflate its money and spend for the war on freedom.

[WorkingClass]

The United States is the greatest country the world has ever known. And we are WINNING the war on freedom!

[MetalCanuck]

Of course your winning the war on freedom, you have already won actually.

[Mike169]

Its the American dollar crashing NOT things getting more expensive.

I think this is one of those distinction lost on the American public. We are talking about a public that has elected a moron twice.

[MetalCanuck]

Its a public that has been born in to propaganda and has never been taught to think critically. this is the problem.

[aristippe]

The economy is just shedding some skin, and it's twenty years overdue.

[ddharder]

Pt 2

Unfortunately, the Dems who take those seats are going to take this as a mandate to push their policies and instead of governing toward the middle, they are going to ram through their most extreme positions the same way the GOP did over the past 7 years when they also assumed they had a mandate (though with far less evidence for one).

The nation can't afford the current GOP policy, which is grinding the economy into dust, but at the same time, they also can't afford extreme Dem policy that includes protectionism and increased government social programs.

It's my hope, but certainly not my expectation, that the Dems will govern toward the center, work toward withdrawing from Iraq, work on cutting military spending, cutting farm subsidies, getting rid of corporate welfare, and setting stricter margin limits on oil and other commodities futures in order to bring prices back down to earth.

If they do this, they can enjoy not only a 4-year term in office, but an 8+ year term that leads to a stronger economy and a return of our constitutional freedoms that have been stripped since 911.

If they don't they are going to get a 4 and out like Carter did and we are going to repeat this downward spiral that has been going on since the 60s.

[JSquercia]

There is NOTHING wrong with PROTECTIONISM it gives Industries time to grow . The South Koreans used just that to encourage Hyundai and Samsung . They refused to buy into the idea of "Free Trade" .
Frankly we have to consider the value of an economy that produces SOMETHING and Doesn't shuffle papers and invent new Financial Instruments .The Financial Services Industry has become far too large and has given us only a series of Bubbles the latest being the Mortgage crisis .
I remember when we were the ARSENAL of Democracy and won the baltle of the North Atlantic by producing Liberty Ships faster than the Germans could sink them .

[ImmanuelGoldstein]

America came to industrial dominance behind the highest tariff barriers in the world. Properly applied , protectionism in fact can be a VERY good thing. NO modern economy developed using the WTO/World Bank , Pure Free Market dogma, which destroys virtually every economy it's imposed on.

[ddharder]

On Friday the jobs report indicated that unemployment had reached 20 year highs at 5.5%. The truth is, the number crunchers are measuring an entirely different metrics than they were 20 years ago. For example, in order to keep the public from knowing the real problems the economy is faced with, the BLS stopped including those who say they are no longer looking for jobs, such as grads who have decided to go on to grad school and people who have decided to stay home with the kids, all because they can't find jobs. According to John Mauldin, real unemployment numbers, using 1980s BLS methods, now reach almost 10%; or German recession levels.

Oil broke out on heavy volume Friday and isn't likely to pull back significantly any time soon.

By fall oil prices are likely to be significantly higher than they already are.

With a nation that now knows it was clearly lied to about Iraq and with oil prices causing a serious tax on the economy, this election is going to be a protest against the GOP causing a landslide of lost seats unlike the party has never seen.

[CarbondaleKid]

People in their 40's and 50's who have been laid-off from big companies or retired from the Military can't find full-time work. I can think of at least 6 of my friends who have been forced to become entrepreneurs in order to survive. In addition, furniture store owners, fast-food franchisees, small home builders and anyone else who does business with tapped-out homeowners struggle in this strange economy. Circumstances don't bode well for the middle and lower-middle classes, IMO. It seems neither political party is prepared to face the looming disaster. The concern is that we will get to the point where we can't afford to defend our interests anywhere on the globe. Like the Japanese in the 1980's, foreign companies and Governments will simply purchase our assets at fire-sale prices and treat us as their vassals.

[NeoStar9]

To add to this once you are off unemployment benefits/aid don't they simply stop counting you as well in the official numbers? I agree the real number is most likely a lot higher then they are reporting. Possibly a more then doubled what they are reporting.

[GreedyOldPsychopaths]

DD,

Your quoting statistics based on the unemployment rate. If we were to observe the raw data, May 2005 is the third all time highest increase in monthly unemployment since the data was first tracked by the BLS. In fact, it has been 33 years (January 1975) since the unemployment level increased more than May's 861,000. In January 1975, the increase was 865,000, and prior to 1975 it was 867,000 in October, 1948. There is a significant dropoff after that to 629,000 in April of 1980. Thus, May's jump was less than 6,000 from an all-time record increase of the number of unemployed in a single month. We have a long way to go to the increase in unemployment from 1980 thru 1982 (an increase in unemployment of more than 5,700,000), but this is clearly not a good trend.

[Blutus]

Amazing. The mass media gets kicked in the teeth except when they are
talking about how bad things are in America and then everyone starts to believe them.

Why is that folks?????

You don't believe them about Bush, Iraq, etc... but the minute they say the sky is falling in AMerica,
suddenly it's front page news!!

Hey boys and girls: they are the same incompetent buffoons that have always been there!

Grain of salt times, folks!

[Tator]

220-Fact is Liberals are Doom&Gloom kind of folks. They struggle to be successful in a competitive world. They are not very good at it so anything that socializes the world (take from the producers and give to the lazy) is a good thing.

Likewise since the statistics do not indicate a recession, they have to come up with any angle they can to try and see negative in the world. Hence, all things patriotic, capitalistic, military, competitive....are evil. Only things that bolster their wimpy, wussy and lack of self confidence matter. If they can convince themselves things are bad it covers up their own personal failure.

America is still the greatest country to start with nothing and work for a few decades saving your money and not blowing it on crap like iPods.....you can become rich. It takes time and discipline.

If Liberals spent half their time being productive (second job maybe-I worked two jobs for 20 years to retire rich) instead of always bitching about how tough their self induced miserable lives are they would understand....American's poorest are rich compared to the real poor in the world, but then that would require being thankful they were born in America...and that is something Liberals can not bring themselves to feel (notice I said feel not THINK).

[MajorKong]

So nice of Tator to show up again to remind us how he invented the work ethic.

[momofsonofwar]

Go weed your garden

[Vyvjala]

Another smug, self righteous,self indulgent conservative over-achiever on his high horse. Take some of that vast wealth your bloviating about and buy yourself a personality..............

[ddharder]

This would be all well and good if the facts were in your favor. As it stands, it just betrays an incredible amount of ignorance about the state of the economy and in fact the type of economic system that exists in the US. I'm pretty much a died in the wool free market capitalist. This is not what we have today.

What we have in America today is an economy that is subsidized, protected, manipulated, and socialized.

A huge chunk of the US economy comes from the military industrial complex. This is a huge social program. Despite the fact that money off the printing press is bid out, it is not bid out on a free market basis, it is wraught with old boys club rules, and under the current admin, FAR bidding regulations have been ignored in large part.

Farming makes up for another huge chunk of the economy, yet farm subsidies make up one of the larger slices of the government budget each round.

Money is printed and handed out to bail out banks and other bad players, creating inflation, which is a huge tax on the economy (I thought the GOP was anti tax).

If you don't believe we are experiencing inflation that is double or triple what is reported and jobs claims that are double or triple that reported, then I have a bridge I'd like to sell you.

[hypnotoad72]

Well, if nobody bought ipods, apple would be out of business. Our economy is based on making and selling goods to others and vice-versa. Previous generations could buy what they pleased, without credit, and could retire at 55. With the couple having two jobs, 1 for each, while the kid(s) stayed home.

Strike 1.

How did America become great in the first place? Did America of the 20th century become great due to offshoring everything? No, the working and middle classes built much of it. To summarily discount labor is a sad thing to do.

Strike 2.

Yes, there are real poor in the rest of the world. Look at their governments, regulations, and laws. Compare them to ours. Then note how offshoring is making a mockery of it all, in every corner of the world.

Strike 3.

Many liberals have no qualms in raising the quality of life for others. Even those who do wrong, such as being lazy (the lack of QC from items manufactured in certain countries is obvious), don't follow religion's advice and breed to their heart's content (are people of those countries liberal for enjoying sex THAT much?!) You can't have that both ways.

Strike 4.

I could go on regarding how the world is flat, how globalization isn't, what's relative and what isn't.

[darthdarcy]

For 60-80% of America it's a DEPRESSION..!

[yappnmutt]

the largest private employer in the USA is walmart with one million employees. that's not how to keep a wealthy middle class wealthy. a declining middle class indicates a declining economy. a declining economy indicates a declining nation. that is the real conclusion of the "decoupling" argument . yes, china, india, russia and brazil are growing at a blistering pace but the fact is the USA just doesn't matter as much anymore. think britain post WW2. we are witnessing the changing of the guard.( to asia?) like britain, the USA will experience a long difficult era of rebalancing(reversion to the mean) that will be marked by a significant decline in the peoples standard of living while the top 1% will be relatively unaffected.

[MilwaukeeDan]

ynm, I agree. We are still a military super power and we can still bribe 3rd world leaders to do as we please but the "changing of the guard" has started. America, the pain is coming.

[hypnotoad72]

Ah, but an economy is only as solid as what it sells.

So far, this BRIC you mention won't last very long at all unless massive change occurs and that's going to be too expensive, even for them.

[Gabrielle]

http://www.freepress.net/node/41309

watch the video and send it to all your friends and ennemies....

we are the one responsible to help turn the tide...it's almost too late
Bill Moyers urges us to react

Be a PATRIOT and do the right thing

SPREAD THE WORD!!!!

[willfarnaby]

... because Americans allowed themselves, their economy and their environment to be ruled by gangsters and psychopaths for these past 8 years...