ANOTHER Recession??????

And the whole world walked off a cliff…

Anyone else get the feeling the “experts” don’t have a clue how the economy actually works?

U.S. Economy Tipping into Recession

Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off.

ECRI’s recession call isn’t based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down – before the Arab Spring and Japanese earthquake – to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes. In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not “soft landings.”

Last year, amid the double-dip hysteria, we definitively ruled out an imminent recession based on leading indexes that began to turn up before QE2 was announced. Today, the key is that cyclical weakness is spreading widely from economic indicator to indicator in a telltale recessionary fashion.

Why should ECRI’s recession call be heeded? Perhaps because, as The Economist has noted, we’ve correctly called three recessions without any false alarms in-between. In contrast, most of those who’ve accurately predicted a recession or two have also been guilty of crying wolf – in 2010, 2005, 2003, 1998, 1995, or 1987.

A new recession isn’t simply a statistical event. It’s a vicious cycle that, once started, must run its course. Under certain circumstances, a drop in sales, for instance, lowers production, which results in declining employment and income, which in turn weakens sales further, all the while spreading like wildfire from industry to industry, region to region, and indicator to indicator. That’s what a recession is all about.

But how can we have a new recession just a couple of years after the last one officially ended? Isn’t this too short for an economic expansion?

More than three years ago, before the Lehman debacle, we were already warning of a longstanding pattern of slowing growth: at least since the 1970s, the pace of U.S. growth – especially in GDP and jobs – has been stair-stepping down in successive economic expansions. We expected this pattern to persist in the new economic expansion after the recession ended, and it certainly did. We also pointed out – months before the recession ended – that because the “Great Moderation” of business cycles (from about 1985 to 2007) was now history, the resulting combination of higher cyclical volatility and lower trend growth would virtually dictate an era of more frequent recessions.

So it comes as no surprise to us that, with the latest expansion only a couple of years old, we’re already facing a new recession. Actually, such short expansions are hardly unheard of. From 1799 to 1929, nearly 90% of U.S. expansions lasted three years or less, as did two of the three expansions between 1970 and 1981. In other words, such short expansions are unusual only with respect to recent decades…

“A Sugar Coated Satan Sandwich”

Hopefully, they will shoot this bill down today…

Debt Deal Emerging With Rightward Tilt

President Barack Obama’s rightward lurch to reach a $3 trillion deficit reduction deal with no guarantee of additional revenues had liberals fuming and Republicans all but declaring victory Sunday afternoon.

Rep. Emanuel Cleaver, chairman of the Congressional Black Caucus, said early reports of the new deal appeared to be “a sugar-coated Satan sandwich.” The Missouri Democrat said the CBC hadn’t yet made a formal declaration that the group would oppose it, “but this is a shady bill.”

“This deal trades people’s livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it,” ripped Rep. Raúl Grijalva (D-Ariz.), co-chairman of the Congressional Progressive Caucus, before House Democrats had even been briefed. “The lesson today is that Republicans can hold their breath long enough to get what they want.”

The President Surrenders

For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.

Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse. On one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little to reduce future interest costs. On the other side, making the economy weaker now will also hurt its long-run prospects, which will in turn reduce future revenue. So those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker.

And then there are the reported terms of the deal, which amount to an abject surrender on the part of the president. First, there will be big spending cuts, with no increase in revenue. Then a panel will make recommendations for further deficit reduction — and if these recommendations aren’t accepted, there will be more spending cuts.

 

Take Back the Land

Recently departed Jazz Musician Gill Scott Heron’s seminal piece was a song called “Winter in America”. I think Gill Scott saw the destruction of the American Dream years before it reached the crisis point.

Something is really, really wrong here – and other than a few intrepid groups like “Take Back the Land” – there doesn’t seem to be anyone in power doing a damn thing about it.

The right wing in this country is spending a lot of time defending the banks, the major corporations, and the rich by foisting one Trojan Horse issue after another upon the public airwaves.

A $15 a year tax break isn’t going to save you from being foreclosed on your house.

Protesters ‘Liberate’ Foreclosed Homes

protesters foreclosuresWhen Virginia Henry bought her boarded-up and abandoned Rochester, N.Y., home in December 2007, she saw potential where others were blind to it. The house, a short sale, became her home to live in and care for, she said. She plopped down her $20,000 and filed her paperwork for a loan program that would pay the balance — $43,000 — to rehabilitate the property.

But what followed was a series of unanswered calls and letters to Bank of America, Henry says, eventually culminating in her arrest Friday for a charge of trespassing on her own front lawn. The arrest, like much of this story, is the source of a dispute. Henry asserts police officers shoved her to the ground during the arrest, police claim she fainted from the intense heat. She has a court date for the trespassing charge July 28.

The facts of the short sale are also at issue. The bank has told Henry that the short sale never closed and that the house at 5 Appleton St. — with all her worldly possessions trapped inside — is no longer hers. A Bank of America spokeswoman, Jumana Bauwens, said she would investigate the claims.

“This is my home,” Henry told AOL Real Estate in a phone interview after the arrest. “How can I be trespassing in my own home?”

Protesters Step In
Continue reading

Poverty in America Moves to the ‘Burbs

That stereotype of poverty being solely an inner city phenomenum just blew up – if it ever was really true at all. Seems there more “po'” folks in the ‘burbs than ever before. Indeed, there is now more poverty in the ‘burbs, than in urban areas.

What this means for the country is another harbinger of a disaster, brought on by disastrous legislative and economic policies. The modern poor include a lot of folks who pushed all the right buttons, and jumped all the right hurdles in life – working hard, getting an education…

Who are now jobless, and increasingly homeless.

A Modern Ghost Town

Poverty surging in U.S. suburbs

Poverty is rising all over the United States, but it is especially pronounced in the suburbs, which were once regarded as a haven from the ills of the inner cities.

According to the Center for American Progress (CAP), a progressive public policy research and advocacy organization, one-third of the nation’s poor now reside in the suburbs.

CAP explained that the last decade set in motion this shift in the map of poverty, but the recession exacerbated key economic trends that rapidly increased the growth rate of suburban poverty to more than double that of central cities.

According to data from the Brookings Institute, as of 2009, 13.7-million poor people lived in the suburbs, a 37 percent increase since 2000 (compared with a 26.5 percent growth for the nation as a whole). In fact, it is now estimated that the number of poor people living in suburbia exceeds the number in the inner cities by about 1.6-million.

For example, poverty in the suburbs surrounding Chicago has climbed by 50 percent between 2000 and 2009 (while, ironically, the city’s poverty rate actually declined by 0.9 percent). Continue reading

No Longer Just Jose on the Corner Anymore…

Competition at the curbside…

Pinched Workers Seek Out Day Labor

High Joblessness Forces More People From Desk Jobs to Curb-Side Hiring Sites; a Bank Teller Takes Up Housecleaning

The face of day labor appears to be changing, with more women, non-Latinos and former white-collar workers taking up manual labor.

Amid continued high joblessness, employers say they are seeing more workers at curbside hiring sites, or seeking work through less traditional routes such as Craigslist, who before the downturn might have had full-time jobs.

Many lost desk jobs in the hard-hit auto, construction and financial industries. Some see manual labor such as housecleaning or hauling debris, where people are hired and paid per diem, as the only way to survive when jobs in their prior fields have become scarce.

How Conservatives Killed The American Dream

Folks who have been reading my blog for a while know that it is my position that the most destructive force in America the last 50 years or so has been conservatism. Especially that brand of conservatism evinced since Raygun, which for all intents and purposes has gutted the American Economy and destroyed the American Dream.Republican intransigence, lunacy, and ignorance may well have doomed the US to a repeat of the Great Depression.

relativemobilityinternational.jpg

Upward Mobility. The US now lags much of Europe.

Source here.

Almost all of that precipitous fall has occurred, beginning on Raygun’s watch. Finally – a Republican ‘fesses up -

Reagan insider: ‘GOP destroyed U.S. economy’

Reagan Republican: the GOP should file for bankruptcy

Stockman rushes into the ring swinging like a boxer: “If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt … will soon reach $18 trillion.” It screams “out for austerity and sacrifice.” But instead, the GOP insists “that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.”

In the past 40 years Republican ideology has gone from solid principles to hype and slogans. Stockman says: “Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses too.”

No more. Today there’s a “new catechism” that’s “little more than money printing and deficit finance, vulgar Keynesianism robed in the ideological vestments of the prosperous classes” making a mockery of GOP ideals. Worse, it has resulted in “serial financial bubbles and Wall Street depredations that have crippled our economy.” Yes, GOP ideals backfired, crippling our economy.

Stockman’s indictment warns that the Republican party’s “new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one:” Continue reading

America Joins the 3rd World

This looks like something I’ve seen in Haiti…

30,000 queue for housing assistance in Atlanta

Some 30,000 people lined up outside a local shopping centre in Atlanta, Georgia, on Wednesday in the hope of receiving public housing assistance. The authorities were unprepared for the throng, which was unruly at times. Amid sweltering conditions, 62 people were hurt and 20 needed hospital care. Only 455 rent assistance vouchers and 200 public housing spaces were on offer – while 13,000 applications were taken.

Some had lined up since Sunday for the possibility of discounted rent.

It was the first time in eight years that the housing authority in East Point, a municipality in south-west Atlanta, had accepted applications for public housing and rent subsidies, known as Section 8 vouchers. Authorities estimate it will be six months before any vacancies become available for the small number of successful applicants. Most of the 16 other local housing authorities in Atlanta have closed their waiting lists. But Section 8 vouchers are portable, so people flocked from across the city for a chance to receive housing aid.

Atlanta is an economically polarized city: it has the fastest growing number of millionaires in the US but also has the third-highest proportion of people living below 50% of the poverty line.

“People are desperate. They are really willing to do whatever it takes to get into housing,” James Fraser, a public housing expert at Vanderbilt University, told the BBC.

Welcome to America after 30 years of conservatism. One of the favorite stitch’s of a black conservative buckdancer from Atlanta is to berate the City of Detroit. The line goes that Liberalism and Unions killed manufacturing in the North, as companies sought lower wage Continue reading

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