W or not?
On the side of this being a W recession is Ambrose Evans-Pritchard at the Telegraph:
"Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP.
"Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP.
The share of the US working-age population with jobs in June actually fell from 58.7pc to 58.5pc. This is the real stress indicator. The ratio was 63pc three years ago. Eight million jobs have been lost."
And then there is Brian Wesbury, of First Trust, who to his credit is one of the most accurate when it comes to projecting economic activity. Watch his interview with Fox News' Stuart Varney here .
Interesting subject, but it's hard to pull a conclusion out of the conversation. The data that they use to come up with the numbers is convoluted, so the reporting will be too.
Claiming that unemployment is dropping when people are simply falling off the unemployment rolls with no employment is a good example of meaningless numbers. Those multitudes are going to either go on welfare or take $10/hr jobs and still be on assistance. They're going to lose a home and they're going to quit paying for the services to support a home. That cascades upwards and equals more unemployment and less taxes received from a person that was previously employed at a real family-supporting job.
The interesting number that I want to know more about is the productivity rate. Are people working like crazy for fear that they're next on the chopping block or is technology really the driving factor?
I think the technology he refers to is Indian labor cranking out shaky software at 1/10th the cost. This type of "technology" is a short term fix and a long-term nightmare that will catch up with a company later.
I believe that the solutions being tried now, at least what I see, will stretch this recession out over at least another 4 years or more. I say this because everything being tried is a short term desperate grab instead of a sensible long term solution.
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