There will be no double-dip recession, in spite of the wild rumors and S&P downgrade of U.S. debt to AA-plus. So what are the markets worried about? It is the lack of political leadership, which means government support of jobs and other growth programs. With corporations' record profits over the past 2 years plus a $2 trillion cash hoard, and banks' $1 trillion in excess reserves, there is no way the U.S. economy can sink back into recession territory. No, but Republicans efforts to stymie further stimulus spending could slow growth enough to upset Obama in 2012.
In other words, that is why Republicans are blocking any new efforts to stimulate growth, period. They want the economy to fail, so that President Obama will fail. They hate Barack Hussein Obama so much, in other words, they are willing to blatantly lie about the effectiveness of government stimulus spending. Obama's problem is he doesn't welcome their hate, as did President Roosevelt, and thus hasn't unmasked their blatant hypocrisy.
It is not new news, unfortunately, that Republicans' words have not matched their actions. They love government stimulus when it is spent in their districts, and they even know it creates jobs -- in their districts, of course.
Rachel Maddow has been talking about this for some time, and Huffington Post's Sam Stein reported on leading Tea Partier Michelle Bachmann's many requests for some of the Obama stimulus $$ to be spent in her Minnesota district.
A Freedom of Information Act request filed by The Huffington Post with three separate federal agencies reveals that on at least 16 separate occasions, Bachmann petitioned the federal government for direct financial help or aid. A large chunk of those requests were for funds set aside through President Obama's stimulus program, which Bachmann once labeled "fantasy economics." Bachmann made two more of those requests to the Environmental Protection Agency, an institution that she has suggested she would eliminate if she were in the White House.
Rachel's 'They're Not Embarrassed Hall of Fame' includes 110 Republicans who have touted the success of the Obama stimulus spending in their districts in 2009-10, while saying publicly it wasn't a success. Her blog links to research by such as the Center For Public Integrity.
Individually, over half of the entire Republican caucus has hailed nearly every aspect of the stimulus as a success -- from infrastructure funds, to food programs, to education grants. But politically, admitting its success might harm the GOP's chances in November (2010). So with Republicans fixated on winning politically, they have focused on deceiving the public by calling the stimulus a failure, while pretending successful programs aren't stimulus funded.
Then, "Rep. Pete Sessions, the firebrand conservative from Dallas, Texas, who
has relentlessly assailed the Democratic-passed stimulus law as a wasteful "trillion dollar spending spree," said the Center For Public Integrity, didn't prevent him from asking for stimulus funds in 2010 that "...will create jobs, stimulate the economy, improve regional mobility and reduce pollution," in his district.
In fact, the list is huge. Those asking for money before the 2010 election included Tea Party favorites like freshman Massachusetts Sen. Scott Brown and Rep. Michele Bachmann, R-Minn., former presidential candidates Ron Paul and John McCain and Republican congressional leaders like Senate Minority Leader Mitch McConnell of Kentucky and Rep. Mike Pence of Indiana, said the Center for Public Integrity.
But the economy is in fact reviving, as lower initial jobless claims and the Labor Department's JOLT survey point to more hiring in the second half of 2011. For instance, bond trader Wrightson-ICAP said the June report on job openings and labor turnover (JOLTS) was a little less sluggish than expected. Total job openings climbed to 3.11 million, which is just below the March peak of 3.12 million.
The pace of new hires and separations both fell modestly in June, as expected, but did so from upwardly-revised May levels. While the labor market remains less dynamic in terms of gross worker flows than was the case prior to the recession, the data for May and June were not quite as soft as anticipated.
Wrightson ICAP has also taken issue, as has this reporter, with the recent downward revisions to GDP growth that were one of the causes for alarm that a double-dip was immanent. (The BEA had released revisions for GDP that showed the recession was significantly worse than originally estimated, mostly because consumers had cut back.) Hiring during the first 3 months of 2011 totaled more then 200,000 per month, with 1.96 million nonfarm private payroll jobs created in just the past 13 months. And 154,000 private payroll jobs were added in July, with expectations it will be revised upward. In fact, quarter GDP growth numbers are notoriously inaccurate. For instance, last year's Q2 growth was revised upward from 1.8 percent to 3.8 percent, largely due to the government stimulus spending.
But consumers aren't cutting back, as the Fed's consumer credit report cited a huge surge in consumer borrowing. Though personal consumption was reported to have contracted in June (a lagging indicator?), you'd never know it from June consumer credit data, which show a $15.5 billion surge for the largest gain in more than four years. This is in part because auto sales are surging again, as well as back to school sales.
The gain is led by a $10.3 billion surge for non-revolving credit, less of a surprise given June's strength in motor vehicle sales, says Econoday. But the best news may be revolving credit which rose $5.2 billion for a second straight solid gain.
The result is that retail sales have surged to more than 8 percent -- a number from the boom times. So look for higher GDP growth ahead, and no double-dip. The question is why haven't Democrats called the 'They're Not Embarrassed Hall of Famers' on their incredibly blatant hypocrisy that gained the Republicans so many seats in 2010? Why can't Democrats welcome the hate of their enemies?
Harlan Green © 2011
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