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Subscribe to RSSThe U.S. economy still has a heartbeat, although you have to listen really closely to hear it.
Amid signs that a global economic slowdown could bring on another recession, the Commerce Department Wednesday reported that companies boosted orders in August for equipment such as computers, machinery and other goods that keep their factories humming.
"It shows that we're not falling off a cliff, which helps," said Wayne Kaufman, chief market analyst at John Thomas Financial. "This is a sigh of relief."
Overall, new orders for durable goods dipped 0.1 percent in August, largely because demand for new cars was weak. But while consumers are holding back on spending, businesses continue to buy new equipment.
Bottom Line: Stocks tumble, ending three-day rally
Business investment in computers, software, telecommunications and other equipment has been of the few sources of growth for the U.S. economy since the recession officially ended in mid-2009. That's helped pick up the slack from weak demand from consumers, who have been struggling with a stubbornly weak job market, stalled wages and rising gasoline and food prices. The ongoing recession in the housing market has also cut deeply into sales of furniture and appliances.
Orders for aircraft, one of the largest U.S. exports, surged 23.5 percent last month as Boeing was getting set to deliver its first new 787 model, which flew to its new owner Tuesday. Boeing received 127 orders for new planes, up from 115 in July.
Demand remained relatively strong for a variety of other factory goods intended to last three years or more. Orders for machinery edged up 0.1 percent, while computers and electronic products rose 1.3 percent. Demand for capital goods increased 4.2 percent and electrical equipment and appliances rose 1.3 percent.
"The numbers portray a manufacturing sector that at worst, is treading water, and at best, slowly moving forward," said Patrick Newport, an economist at IHS Global Insight.
With overall economic growth slowing, the fear is that businesses may pull back on investment in equipment if they see demand for their products and services begin to dry up. Those fears have been heightened by the turmoil in Europe, which has slowed demand there for exports from U.S. factories.
Economists have been paring back their growth estimates as other data have pointed to an economic recovery that's running out of steam. After a pickup in hiring this year, job growth ground to a halt last month as heavy layoffs by state and local governments offset weak hiring by the private sector.
A panel of economists with the National Association for Business Economics earlier this month cut its forecast for economic growth this year to 1.7 percent, down from a May estimate of 2.8 percent growth. That would be just about half the 3 percent growth seen in 2010. The group sees growth picking up only slightly next year to an increase of 2.3 percent, down from a May estimate of 3.2 percent growth in 2012.
Tuesday's report helped support those forecasts showing the economy dodging another recession.
"(The report) should give some support to third quarter gross domestic product estimates," said David Sloan, an economist with IFR Economics. "If anything, (it) reduces worries over the health of the U.S. manufacturing sector."
Other recent surveys have pointed to weakening demand for manufactured goods. Regional Fed surveys found that manufacturing in September continued to slow in the Northeast and Mid-Atlantic regions.
Jordan Kotick, Barclays Capital, shares his bearish view on the markets.
Leave a Comment:
"Global economic slowdown could bring on another recession"?
We never got out of the last one!
To have a pulse is good but an erratic pulse can be deadly.
What a dumb article! This goes on the pretense that our economy is doing better because companies are spending money. What it doesn't address is that the majority of that money is being spent overseas.
More income leaving the United States and this is an indication of an improving situation?
The economy will never recover until Americans are put back to work, getting that paycheck and going out to buy goods and services (hopefully here in USA).
I agree with Joe, the money is not being spent here.
I have been out of work since February and take contract jobs when I can.
The company I contract for is in India. When I go to the customer and they said they expected me to have an accent, I say, no I'm American, you bought your services from India.
Still a tiny heartbeat does not mean more jobs for people who need them.
Actually the electrical end is a lot more complicated, with jobs and equipment USA. It in all the components, rooms, control centers and optics. Lead times on these type of installations can be in the years, to get it up and running smoothly. Many time it goes all the way to the manufacturing floor and equipment controllers. Anytime a company chooses these upgrades it is good for employment, good for the health of the business, good period.
it has a pulse , it is just in a coma.
Groverlipscomb
your right go Obama , only you didn't tell him where to go.
A faint pulse from a faint government.
It's simple. If the corporations that have been reaping all the financial rewards of tax breaks would hire--people could spend--but, hopefully, they won't spend themselves in a hole this time. Let the youth uprisings be a fair warning to corporations. It will spread.
You are spot on onejulia. But Americans are not going back to work until they accept the fact that the job market has changed drastically, and they they have to adapt.
Lots of employers are looking to hire, but cannot find qualified applicants. Low skill manufacturing jobs are pretty much gone, and simply knowing how to operate a computer will no longer get you much; employers are looking for medical, electronic, engineering, and other non-computer related tech skills. A college degree is not always necessary, but an associates degree in the right area will get you hired.
The extended unemployment benies are boosting the economy! I feel a "fall of recovery" coming on!
Spider, That is not entirely true. What has happened is that nearly all jobs are being done in Asia where labor (and everything else) is much cheaper. I've been a software engineer for 40 years. The last company I worked for has eliminated most of it's US software talent and hired people in Hanoi Vietnam and Russia (St. Petersburg to be exact.) Even if you have an engineering degree and 40 years of experience you don't measure up to someone who makes 1/5th of what you do, someone you don't have to pay SS for, someone you don't have to pay medical for and someone who has no chance of suing you or unionizing.
We in the US are down to 10% manufacturing and that is not enough to sustain us. More services, like medical are not the answer because they do no generate wealth. Manufacturing does.
The jobs will never come back without protection from imports or limitations place on "outsourcing".
sandtrich do you work for that son of a bitch hoffa or maybe a michael moore troll
Hmmmm, why are we all worrying?
We just need mmore "Green Initiative" investments like Solyndra.
I understand they had special showers in the corporate executive areas and robots that whistled Disney tunes.
I just can't understand how a company that was so frugal with OUR FU**ING MONEY could go bankrupt.
NO MORE SUBSIDIES TO ANY INDUSTRIES!!!!!
LET THE PRIVATE SECTOR TAKE THE RISKS, NOT MY TAX DOLLARS!
toomany - yes, it sucks to be old, but merely emphasizes the need to either show the employer you still have value to the company or to take the risk and be self-employed.
Manufacturing will never come back unless we can produce the product or service at the same level of profit as can be done overseas. We need to also develop a product or service that can be exported at a price that both domestic and foriegn buyers will pay.
spider quite right, each recession creates its own form of market change and those unemployed need to find a way to adapt.
Has anyone else heard that now the gov't is going to regulate shower heads, they can't spray more more than 21/2 gallons per minute.
True store, tell me obama isn't on the job.
Vote this idiot out!!!!!!
Yet, they use Boeing as an indicator? Yea, time I traded in my old Boeing 747, for the new 787 model. Wonder who is buying them, Chinese CEOs? Sigh...
american-2051576
Fortunately most of us are standing on thet very product.
Energy. We are the most energy resource rich nation in the world. Why the hell are we building a pipeline from Canada to buy THEIR shale-oil rather than using our own? Why aren't we exporting the hell out of our coal and natural gas and using it right here to decrease our utility costs? We have more shale-oil reserves than all the OPEC criminals combined.
Our energy policy based on this ridiculous "Green Initiative" is still decades away from affordability and efficiency. If we want to be competitive in the global markets or industries we need energy now. So do all the emerging markets. We need to be capitalizing on this NOW.
In the meantime we need to reform our entire criminal progressive tax code, reform regulations, eliminate all dysfunctional Trade Agreements and demand the goonions become industry supportive rather than destructive. America doesn't have, and wont have for quite some time, the intellectual workforce needed to be competitive in many of the new technologies. We need to return as many of the simple labor industries back to our shores.
We were most productive in the 60's-80's when we had 53% of our economy based on domestic exportable manufacturing. Today it is 9%. This is a travesty to the nation that once was the biggest creditor nation, the leading exporter and produced the best products in the world. If we can become even marginally competitive by reforming the above economic issues we can excel again based on Made in America has always been better than anything made abroad.
John_Doe_Jr
Not to worry John. If the NLRB keeps sticking their noses in Boeings expansion business plans they'll just move their plants to China and the CEO's can save a flight here to pick their planes out.
We may have a pulse, but we are in life support...Soon all the machines could be turned off.
Gary K-2697770
Damn Gary. This could be really bad. We're going to have to wash longer after we break a Compact Fluorescent Light bulb to get all that mercury that it contains off of us now.
I'm glad the government is really looking out for us.
(sarcasm intended)
Correct, but more aptly described, currently brain dead. November of 2012 will start the recovery.
This is not news to anyone in the the manufacturing sector like me. Used machinery is scarce, and delivery on new CNC equipment is several months. A machine I bought for $136k two years ago now costs over $200k because demand is so high. And try to hire skilled workers? Forget it! In my market good people are like hen's teeth. For that reason I prize them highly and pay as much as I can.
The talking heads on the east coast seem to be mystified by this because they think the economy is the fricking banking and housing industry. The real powerhouse that drives wealth is in extractive industries like oil, farming, and mining or in manufacturing, where actual wealth is generated by adding value to the things God gives us for free. But somehow the myth that wealth is created by simply trading intrinsically worthless paper back and forth is perpetuated and bought into. But in the end trading is just a zero-sum game.
Mark my words, a renaissance of manufacturing will take hold here, and will be the shining thing that revives the middle class. Manufacturing makes money the old fashioned way. We earn it.
The recovery is coming, but it isn't due to the dunces in Washington or the crooks on wall street. It's because small businesses like me are finally tired of waiting and are taking some chances.
Considering you have to be an American based company to get DoD contracts, I don't think Boeing's civilian side of the house is making enough to enjoy that luxury - watch what you ask for ;)
praise Adonai, for the united states have focused on economical growth to the piont that manufacturers can conceed to what the government can offer when the percentages are evaluated across the board. i think some of these companies are beginning to understand the value of profit as the formula for new jobs are commendable. the only thing that mindboggels me is if the united states can assist hospitals in the same respect. after all the trillion cut based on weapons defense deemed god and country attend to cyber security because its what the budget can afford. remember, it is the who, what, where and when, that is to blame in what illustartes this recession. not just why....... your friend : little blu envelope
Aw hell! Them crazy bastards are counting what I bought. I purchased a lawn mower, a calculator, 200 feet of rope and some mill bastards. Bet when I get new soles put on my shoes they'll count that too. Geeez.
Now, Gary, ya didn't have to get personal. I would type "@!$%# you", but have decided against it, for it would be a violation of the CoH, as was calling me a troll.
Yet, they use Boeing as an indicator? Yea, time I traded in my old Boeing 747, for the new 787 model, sigh...
Yet, they use Boeing as an indicator? Yea, time I traded in my old Boeing 747, for the new 787 model, sigh...
Yet, they use Boeing as an indicator? Yea, time I traded in my old Boeing 747, for the new 787 model, sigh...
Wow, now that was messed up....
MSNBC, do everybody a favor.STOP GRABBING FOR STRAWS.People can see through all this CRAP!We're not blind nor are we Stupid.
The only reason businesses are investing in machinery and computers is to get the tax writeoffs ready. Any IDIOT, knows that this is common practice in businesses each fall.
radical - it is also common practise for the government as well. Only difference is that business will likely use it productively and the government only to show that they spent the amount budgeted to them.
A friend retired from the USDA told me this. You either spent what was budgeted or next year your budget would be reduced and he couldn't carry the surplus over into next year. Spend it or lose it was the motto.
Buy better equipment hire less thats what is happening. Equipment is replacing people, plain and sad!
gloria fabiaschi
You took the words right out of my mouth.
The media is pouncing on 'Hope' and Not addressing the 'Change' that is needed.
Just wait until 2014, and when Obamacare kicks-in.
Actually radical, you may have hit that one on the head. This tax year is the Section 179 tax deduction for business...allowing them to deduct 100% devaluation in one tax year.
Radical,
Don't know your background but I'm guessing you don't do much purchasing of capital equipment. Unless your business is ponderously heavy with both cash and profit buying machinery just to get the depreciation write-off isn't usually smart. And even then I would question the wisdom of buying a piece of equipment you don't need just for the tax break. You buy capital equipment to either improve productivity or expand capability or capacity. Sometimes EH&S or support, but there is always some actual need for the equipment.
I only bought about $30k of equipment last year because I just didn't need it. So far this year I've spent about the same, but probably will jump into another $150k for a machine I really need. Yes the write-off will be nice as we wound up a fair distance in the black, but the primary motivation is to expand capability, modernize, hire a couple more folks, and improve the long-term profit.
Respectfully, I think you're oversimplifying.
The American economy is still falling. The global economy is not an indicator of whats happening in this country. Which is why all this hype about the stock market is overblown. Wall Street is nothing but a casino for the elite.
Technially we did, but my guess is when you take the fact we are truly living in a global economy driven by technology in an information age the US may never see unemployment get down below 7.5% for decades.
With leaders like Obama, Pelosi and Reid...we will only see high and protracted unemployment. Isn't it interesting that that idiot Bush maintained an average UE rate of 5.27% for his 8 year term. Obama would consider repealing his Health Care legislation if he thought it would give him such a rate. Ironically, that's exactly what he should do.
ceo,
Why have you conveniently omitted GOP/TP names? Don't pretend that they have tried to do anything to help Americans. Its amusing how the hardliners on both sides always blame the other side as opposed to stating the truth--which is that both sides are ridiculously wrong as well as in the pockets of corporate America.
rightly, drop the rhetoric on corporate America. I agree that politicians L or R share equally in blame but so does the American public and many loan originators. Their greed fueled the housing bubble as did easy access to credit. Business and banks only took the money they <consumer> wanted to spend.
Rightly concerned; If you owned a big company and was sitting on this "pile of cash" you say corporations are sitting on, would you go out and hire people when you have no need to? What kind of CEO would just throw away all the money the company earned to hire people he didn't need? And who do you think would hire him once he did that? And what about all those people whose 401k's are depending on those corporations. How would you explain to them where the money went? Do you have even a clue how business works?
rowdy yates, how is wishbone doing? lol!
Our local station is currently playing reruns of "Rawhide"
Al,
I never said any of that. I did say--be I right or wrong--that "whether Rep or Dem they are in the pockets of Corporate America". In many cases this is entirely true, but I can acknowledge that I was stereo-typing. As it happens stereo-types come from some measure of proven track records.
Co.'s funding Dem's are more than happy to give amnesty to illegal immigrants because it gives those companies cheap labor and increased profits for them. While co.'s funding the GOP are happy to have Rep's deny climate change because they profit off the continuance of pumping out GHG's and avoidance of developing clean energy alternatives. Obviously there are many other issues either side fights for, these are just two I could quickly point to.
It is clear that a substantial portion of elected officials do not have the best interests of Americans nor America at heart. Rather they have the best interets of those who would fund their campaigns or those who drop a few coins in their pockets with a nudge and a wink to vote their way or to write up a bill which said benefactor would stand to gain from.
If I'm mistaken on any of this I'm sure you or someone will come around to put me in my place.
The economy is in a depression and has been since 2008. Until the denial stops, the debt falls, big oil is leased, jobs come back to the US from slaver nations, the depression will continue and deepen.
Gee, why aren't the Democrats pushing Obama's bill?
I guess they don't love him.....
by the time the results for the "economic indicators" make it to the mainstream media they are so outdated they do not truly indicate the current state of the economy. The economy has for a fact been growing every quarter for the past 26 consecutive months since June 2009. The current US GDP is $15trillion, the highest the US GDP has ever been. There has been steady growth in every area of the economy except hiring. The failed "job creators" have been given every benefit imaginable yet they fail miserably at their only task. The fat cats have failed! Give them tax breaks for a decade and they fail to create jobs as they said they would. Give them deregulation in every industry for more than a decade and they still fail to create jobs. Give them mega-bonuses worth hundreds of billions of dollars so they can create jobs yet they still fail. Give the big shots all the inside information in the world and all the breaks and almost all the money and they say they will create jobs yet still they fail. Time to do it differently. We need to raise taxes on these failures and then watch and see them spend the trillions in money they're sitting on. When taxes are low people are willing to sit on their money because they can take profit without much tax liability, if any. When tax rates are high the companies spend money to create their beloved tax write-offs. When a company spends on a new hire or on new trucks or equipment or desks or computers or new buildings or any investment in the business, etc...they "create" deductions from their income. When their income is reduced they pay less of the higher taxes and they stimulate the economy by hiring and spending. In other words, the more the company spends the less the company pays in taxes. When a CEO or Board of Directors decides how the company allocates its assets they must do what is best for the stock holders because they have a fiduciary duty to do so. Therefore, if taxes are low and the stock holders benefit from taking profits and hoarding cash then that is what the CEO and the Board must/will do. If the threat of higher taxes "persuades" the CEO or Board that it is in the best interest of the stock holders that the company reinvest some of the profit to expand business and to avoid taxes then that is what they must/will do. Henry Ford is rolling over in his grave at the failures of the modern CEO. The modern CEO cuts their nose off to spite their face by cutting wages and hiring. Henry Ford paid his employees 10 times what the competitors paid their employees and in doing so he created jobs and consumers.
G-9 - "There has been steady growth in every area of the economy except hiring." Really...you might want to check with the National Association of Home Builders....a major component used in measuring the health of the U.S. economy. New home sales have been on a downward or flat trend for several years and most recently, for several quarters now. So this refutes the nonsense of your argument. The balance of your comments are even more inane and not worth the time to rebut.
the national association of home builders indexes are precisely the type of stale and outdated "economic indicators" of which I write. Take a drive through your neighborhood, your city and the rural communities near you and see for yourself the number of homes, condos and farms with "SOLD" signs. The "economic indicators" won't show the increase until way late. Same as the economic indicators failed to signal the need to cut back on housing sales and to take some of the steam out of the housing bubble. The housing market continued red hot for two years from the time in 2006 when the US GDP began it';s decline under the failed reign of King George II, and his Iago Dick Cheney. The numbers of new housing permits continues to increase every month. You can think what you want and blame whom you want to blame but the reality is that the economy is and has been growing and the type of growth is more solid, organic and stable than the false, inflated growth of the periods where most everybody stripped all the equity out of their homes to buy unnecessary and frivolous items and services.
Here's just a small blurb from an article authored by Alan Zibel and Jeff Bater of the WSJ on Sept. 20, 2011....I'm guessing you'll claim they are out of touch with reality also. While existing home sales have shown an uptick recently...the more important end of the business, that accounts for a good majority of the construction and other affiliated jobs, is still mired in a slump...and no amount of delusional rationalization on your behalf will change that.
"U.S. home construction fell more than expected in August to the lowest level in three months as the faltering industry remained one of the weakest parts of the sluggish economy.
Construction of homes and apartments last month decreased 5.0% from a month earlier to a seasonally adjusted annual rate of 571,000, the Commerce Department said Tuesday. The month's results were pulled down by a nearly 30% drop in the Northeastern states.
Compared with the same month a year earlier, new-home construction in August was down 5.8%. Figures for July were revised downward to an annualized pace of 601,000."
new construction permits increase month to month for the third consecutive month. Just because the builders in the Northeast had a brief hiatus during the flooding caused by Irene doesn't mean the economy is wrecked. I agree that the housing market is not as white hot as it was during the bubble blowing up. But the growth that our economy has experienced in the past two years is nothing short of remarkable in that there were such significant head winds. Additionally, the growth our Nation has seen recently is more solid than the days of stealing from your home equity to buy frivolous things. IMO Bush handed the steering wheel to Obama just after all four wheels fell off the car and he missed his turn sending us off the cliff. President Obama and Sec. Geithner and Mr. Bernanke have somehow salvaged a lost decade for the US and its citizens unlike Japan suffered in the 1990s and 2000s. The Great Depression took 15 years with all the resources of the federal and state governments devoted to recovery and this has been a mere three years. In short, I don't disagree that the previous collapse of the housing market hurt the overall US economy and has hurt consumer confidence and reduced consumer spending but I believe that the Nation is pulling out of the tailspin Bush put us in and we are gaining altitude everyday. I do appreciate your cite to facts because that is much more convincing than some who resort to insulting some body who has a different opinion, so for that I thank you.
take out government spending and I guarantee the economy isnt growing. Additionally, factor in how unemployment and inflation is calculated compared to 20 years ago and the us is in a recession right now. The fact that some duche bag economics professor comes up with some new way to measure things doesn't change the fact that things are not all that good in the marketplace.
G-9 - go sell your BS to my Brother-in-Law who is a contractor. He has not built one house in 2 1/2 years. Luckily my sister works for the school district, otherwise he would be pan handling.
G-9 Hard to convince anyone (except the government) that hiring someone to do nothing does anything but add to the cost of the goods or service that the company provides. At least you seem to have no problem in paying more for what you buy.
G-9: We all see more "FORECLSURE" and "FOR SALE" signs than anything. Your information is inaccurate and mis-leading. Its obvious from your posts that you are reciting from the liberal handbook. By the way, when you drive past a mall that was active and thriving 4 years ago and is now vacant and desolate, how does that equate to an improved economy?
G9, thank you for stating the facts. Many people refuse to acknowledge them and are content to stay in the dark. Perhaps they would like to go back to 750,000 jobs being lost each month which is what was happening during the last year of the Bush administration.
G9, A typical gov't union troll, no wonder she's happy!!!!
My economy looks great this year. Started a six figure job after not working for over a year. The economy tanked in 2008 after the Bush administration sucked the last dollar out of the refinancing party. Gee who would have thought that would happen...duh. Hiring is under way but the U.S can't stand much more subsidising of the wealthy tax cuts. The cuts Bush handed out were paid for with borrowed money at a rate of 50% our national debt per year. The so called surplus Bush was more than happy to dole out to the wealthiest 1%. Now 2 wars later with no plan of how it would be paid for we are financing the Bush tax cuts. Corporate tax alone pays for the defense budget, income tax goes almost 100% to pay interest on bonds. It's not rocket science that those Bush cuts have to end in order to bring stability back to the system. It certainly isn't unfair to ask the wealthiest 1% to pay even a percentage of tax close to what I have to pay. Anyone with a brain larger than a walnut knows that the wealthy take most of their income in dividends which are taxable at 15% and after all the expenses and write offs that adds up to less than 15%. So John Doe earning 50.000 will pay 29% in income tax and Warren Buffet will pay a combined rate of 15.1% Tax rates for the wealthy are the lowest in history and it doesn't create a single job. In fact it destroys jobs by shifting the tax burden onto the already over taxed middle class or into corporate tax which makes every consumer(and there are far more consumers in the middle class than in the upper class) pay more for goods and services. SO the mantra of lower taxes simple is a myth that some greedy over paid idiots would like to sell. The key is a balanced tax system. Very simple...if you take most of the pie you pay most of the tax because when you eat it you use most of the services needed to get rid of the poop! Lower corporate tax will make the U.S. more competitive while lower rates for the wealthiest puts the burden on John Doe.
G-9 has got it right!If you think that an empty mall and all the bad economic conditions today were the result of what has been done in the last two and a half years ,you are all fools indeed and have no clue how any of this happened. GREED from douche bags in the financial industry like Morgan Stanley,J.P.Morgan and the worst of them all Goldman Sachs,with the help of the GWBUSH admin. and their buddies like DOUCHE BAG IN CHIEF, HANK PAULSON! There is where it all started ,convincing people who couldn't qualify for a 10K loan to buy a 600K house!
That would also come from the democratic controlled congress that was installed during the last two years of the bush administration, which is when jobs and the economy BEGAN to tank, and the first two years of the obama administration when he couldn't even get anything done with his own party in control. There is your truth. Again,G9 and all that have agreed with his posts have done so by order of the liberal handbook. The truth is what you see and experience. We see a failing economy and we experience the effects of it everyday. I dont see what you seem to think is so great about that other than what you have been told to think.
Jess-
Care to quantify your statement with some facts? Civilian employment was down 750k jobs only one month during Bush's last year (Jan '09 = 1.12 million), Nov '08 down 710k, Dec '08 down 744k. The remaining months were all below that level with the highest being 312k. In '08, net job loss was 2.9mm and '09 was 5.3mm.
Those, are facts. All found on the ultra-right wing website www.bls.gov and are publicly accessible. So, you lose your credit when you tout someone else's facts, but in the same sentence make false claims.
By no means am I saying that these employment levels are good during any of the past several years, but wanted to actually present 'facts'.
Of course it does...why do you think the Republicans are trying sooo hard to 'teabag' America?!
They are so afraid of the middle-class putting their collective foot down on all this plutocracy foolishness that they are trying to scare the majority of Americans in submission - nobles used to threaten the serfs living on their land by saying, "If you don't submit to our will, we can no longer protect you". However, Americans need to wake up and realize that these are type of people that they need protection FROM the most!
Higgi - Americans need to wake up and realize that these are type of people that they need protection FROM the most! They need to run screaming from Obama and the Dems that have caused this!
If Bush drove the economy into a ditch, then Obama and the Dems have driven it off a cliff!
The only thing true in Lynn W's post is that King George II did drive the economy into the ditch. True that the US GDP began to decline under Bush True that the housing market collapsed under Bush. True that the auto industry nearly went bankrupt under Bush. True that the banks nearly collapsed and Lehman Bros. did collapse under Bush. True that uneployment bloew up under Bush. True that banks quit lending under Bush. true that US tax revenues went down significantly under Bush and debt for our Nation increased significantly under Bush. However, even with all the problems that King George created it has been a mere three years to not only reach the bottom but to tack on 26 months of growth in the US GDP and to save the auto industry and the banking industry and to see the housing industry starting to breath again with new home construction permits increasing the last several months and existing home sale prices increasing the past three months. To halt the general downward spiral that Bush left in such a short amount of time while very successfully managing a very sophisticated foreign policy, including killing Bin ladin is nothing short of amazing. The Great Depression took 15 years to end. The fact is, there have been since June 2009 26 consecutive months of solid growth in the US GDP. The Corporations have made record earnings under the current economic conditions yet they complain! Inflation has not spiraled out of control as many of the chicken littles screamed for the last three years since President Obama has been in office. The more realistic pitfall all along was deflation and a downward deflationary spiral. The fed has reduced the risk of that occurring and has protected the value of the dollar. If we can get the fat cats off their duffs to start hiring then the whole sytem would continue to produce more jobs and more consumers and more tax base from which the government could draw. As of August 26, 2011 the US GDP is the highest it has ever been at nearly $15trillion. Bush did deplete the US GDP significantly but Prtesident Obama has managed to get it back on track. When you have a 2% growth of $15trillion that is quite a lot of growth! The type of growth our country is experiencing now is much healthier for the overall economy then when people were just depleting their equity in their homes under Bush and Clinton to some degree. Who do you think ended up with all the money that was taken out of peoples' home equity accounts?
G-9 I guess you aren't aware that Bush isn't President anymore and hasn't been for almost 3 years. Obama is an abysmal failure as a leader and as POTUS. If you really believe that Prtesident Obama has managed to get it back on track, you need to go back to your parents basement, adjust your tinfoil hat and take your meds, with some Kool aid because you are seriously delusional...
The truth is that Obama and the Dems have driven the economy off a cliff and it is now on life support
US GDP under President Obama grows for 26 consecutive months. Under Bush the US GDP shrank for the last two years of his second term. US GDP at an all-time high of $15 trillion but that is bad? I don't live in my parent's basement or have to take off any tinfoi. I would suggest you take off your pointy white hood and gown so you can see reality. Bush isn't president anymore and President Obama is responsible for the current state of the economy. We agree on that it seems. The difference in opinion is that the economy is growing wether you believe it or not. Do some research and see for yourself.. The bond traders know. US Treasury bonds are the safest investment in the world. Did you sell your gold yet? I guess you will when you realize that the US economy is growing and gold prices continue to drop like a rock.. Remeber gold has never been worth nothing.
G-9 and gdp growth under bush was what again from 2001 to 2007?
It doesn't really matter what total GDP currently is, unemployment is still over 9% and about 24 million people are either underemployed or unemployed and GDP growth has significantly slowed. Hang unto your thought that gdp is at an all time high. Within the next 12 years when America again has a recession I am sure that the total GDP will be even higher than today, still doesn't prove a thing if unemployment is up and jobs are hard to find.
I applaud your postive thinking on this small bit of fact, but it is little comfort to those seeking employment.
Lynn...If Bush drove the economy into a ditch, then Obama and the Dems have driven it off a cliff!
Well then, the repugs & baggers, smashed us into no return!
Sorry Laura, that one belongs to Obama too! The highest number of unemployed since the Depression in the '30s, the higest number of people at the poverty level, the highest number of peopl on welfare, the highest national debt -ever, the most debt added by one president (Obama) - you pick... All of these things are fact under Obama
GDP might be at an all time high but that hasn't translated into tangible gains for the average person. My personal GDP has been going down for the past 5 years. I see jobs paying less now than they did 10 years ago with less benefits to boot. The GDP means nothing when you have the Federal Reserve pumping it up with trillions of dollars worth of currency. It's an artificial high, you can't have real sustainable growth when the consumer's earning power keeps declining.
There is a difference between money wasted doing damage to the economy (Bush), and money spent trying to repair that damage (Obama). Dems will admit that not every cent was spent efficiently, if Pubs will admit that they did all the damage.
G9:At least Lynn HAS truth to her post unlike you.
The dems are to blame! No the repubs are to blame! I am so confused and don't know who to blame any more.
Maybe, I'll go with...both of the above and a little dab of sense of entitlement from Americans. Why can we all not support individual liberty and personal responsibility? Do we really need the government to provide for all our needs, regulate our behavior, and create program after program to save us from ourselves? Or, could we just go back to the document that established the federal government and limit the powers to the items contained in that document. No, we can't interpret any damned thing. Read it, live by it. If we want a mommy gov't, we can get it at the state level. Is it really that difficult to figure out?
Sir,
You are delusional. 26 quarters in a row? What planet are you from?
Beyond that nonsense, you obviously do not understand business or economics. I have degrees in both. Higher taxes mean companies spnd more so they can deduct the cost thus lower their taxes????
Question: If your taxes were raised would you 'celebrate' by buying a new & larger home. After all, taxes and interest are tax deductions. Therefore, just think of the money you wouold 'save' by buying a new, more expensive home! Jerk.
if you are going to be taxed do you just accept it and pay the man? No. You find ways to reduce your liability. You invest and you spend to create deductions. Ever heard of the Corporate jet write-off. Business expenses increas when you reinvest in your business by upgrading computers and so on. But you know this be cause you are an economist? You don't have to take my word for it. Our Nation has lived for the past decade with the "temporary Bush tax cuts" in place that were supposed to stimulate and grow the economy. They failed! We have been more than patient with trying it the Fat cat way. Facts are facts. Hiring under Bush was stagnant for nearly ten years creating zero net jobs! When there are low taxes, as there are today, then people and businesses have no incentive to invest money/profits into real investments in their business such as hiring people and buying new machines and investing in infrastructure such as new buildings and new more efficient trucks... You just stick your money in a fund and collect capital gains which are taxed very low. 15-18%. These types of "investments" don't help the economy grow but you already knew that because you're an economist?
Twenty-six MONTHS, not quarters. I am sure between your degree in business and your degree in economics, you learned that there are 3 months to a quarter and four quarters to a year.
Not sure what you are trying to say about taxes?
Nice comeback! You call me a jerk because I'm right and you can't refute facts. Just because the facts support my position and completely refute the ridiculous policies we followed under King George II (or as history will refer to him King George , the Inept) doesn't make me better than you. It just means your side is wrong and has been proven to be wrong as well. Wait. the personal insult did convinced me...Bush's policies really were good for our Nation and 26 months of consecutive GDP growth under President Obama's direction is a bad thing. Right?
G-9 - We generally agree. I'd note, however, 2% - although positive - is insufficient growth to have much impact on employment. I would think we'd have to double that to begin bring unemployment down. Bush did manage a housing bubble, that temporarily brought unemployment down to under 5% (4.6%?). You are right about "net jobs." If you subtract jobs lost from jobs created, he created the fewest jobs of any post WW II President. On GDP, I think he averaged around 2.5% and some economists have estimated the bubble was most of that. I think it is a reasonably safe bet that had there been no housing bubble, the Bush economy would have been worse (although, of course, the bubble led to the crash) and basically the dot.com recession may have evolved into a depression.
Oh yeah...my previous post was to "Chuck Case" regarding his post...not you...hope you caught that.
G9 - Do yourself a favor, seriously...try to refrain from conversation involving fiscal or economic issues....I'm reminded of the old saying from Abraham Lincoln. "It's better to remain silent and thought a fool...that to speak out and remove all doubt."
ceo - what is your criticism based on? I thought it was a reasonable explanation...overall.
stone - bush managed a housing bubble??? Consumers did that all on their own. Perhaps you have videos of bush saying go ahead buy a home with an ARM or go ahead and use your home like an ATM. Politicians (L & R) have always promoted home ownership as a means of wealth building and rightfully so. I purchased my home in the late 70's and took a hit on its value during the 80's farm crises and I took another hit on it in our current slow recovery. Even with the hits it is still 2x what I invested. Coulda, woulda, shouda been at least 3x though, but after all recessions happen every 7-12 years.
BTW - I thought about using my home as an ATM machine prior to 2006, but thought better of it.
Stone6 - While there are several to choose from, the following sentences are the most blatant example of his ignorance and misunderstanding of simple economic principles:
"When there are low taxes, as there are today, then people and businesses have no incentive to invest money/profits into real investments in their business such as hiring people and buying new machines and investing in infrastructure such as new buildings and new more efficient trucks... You just stick your money in a fund and collect capital gains which are taxed very low. 15-18%"
Now....perhaps you would like to either disagree or validate the above???
american - google Bush Atlanta speech June 2002. Wasn't just a passing reference...but a major program to build 5.5 million new homes for low income minorities over ten years. Or, google Roland Arnall, largest single individual contributor to the Bush 2004 re-election campaign and founder and CEO of Ameriquest, at the time the nation's largest subprime lender. Or, the top ten organizational contributors in 2004...virtually all of the Wall Street banks subsequently bailed out by Bush, and Wall Street usually gives the contribution edge to Democrats...not in 2004, when they went 2:1 in favor of Bush.
My theory is that Bush deliberately (and by "Bush" I mean his Administration, not Bush personally) used the housing bubble to show that Reaganomics was working, in regard to his tax cuts, because he did not feel he could ask Congress to repeal them after 9/11 due to his father's experience. Bush Senior raised taxes to pay for Gulf War I and many say it cost him a second term.
ceo - you are going by the Republican "theory" that tax cuts always lead to economic growth. He is challenging that. I think you will find that as globalization progressed from JFK's day to the present, the "rule" became more and more the exception. In a closed economic system...that might be true...because the additional disposable income had no where else to go...but it became less true with technology eliminating jobs (and consumers...making them more reliant on credit) and globalization...where money could be invested elsewhere for greater returns.
As the status quo "solidifies" it turns its capital from domestic expansion to international expansion and/or labor-reducing technology at home. This may produce a brief temporary bubble of additional revenue, but nothing sustainable. You may be making a few in the economy wealthy, but over the long haul are cutting your own throat in terms of total economic growth.
Not sure the argument stands on its own...but in connection with demand...no demand...the money goes elsewhere or in the bank...not to growth.
CEO you very right. That's not Lincoln's quote so heed your own advice!
"Even a fool is thought wise if he keeps silent, and discerning if he holds his tongue."? (Proverbs 17:28)
Stone6 - Sorry, but you have also failed to recognize the fallacy of G-9's statements...which is a bit disquieting. His claim that "When there are low taxes, as there are today, then people and businesses have no incentive to invest money/profits into real investments...." is utter hogwash. The existence of a 15% CG rate is the exact reason that people do invest their hard earned money in numerous investments....by the way, what's a "real investment anyway?" Recent history is replete with examples of strong economic activity being generated after a lowering of the CG rate...from Reagan to Clinton to Bush 43. G-9's problem is distinguishing between marginal income rates and capital gains...you're comparing apples to oranges.
Finally, G-9 then makes the comment that "You just stick your money in a fund and collect capital gains which are taxed very low. 15-18%". Once in that fund, what the hell does he think is being done with that money...being used to stuff a mattress?? This investment money, that had to be earned and then taxed as income in the first place, is now being placed at risk by being invested in a stock or bond or some other form of security...which in turn is then being used by the receiving entity for numerous reasons, to many to list, for such things as hiring, capital improvements, inventory, etc.. G-9 simply assumes that individual investments serve no purpose other than to line someones pocket...I wonder if he would agree that the government should cover any losses if the investment goes bad? He completely misses the role of the investment community.
Hey Squidword....the proverb has been attributed to and probably used by many people, like Mark Twain, Einstein and yes..Lincoln. The actual origin of the quote is not known...but is suspected to be from as far back as biblical times. I use Lincoln because he is as good as anyone else. So stuff it.
OK, so it has a pulse, it is still on life support...
Companies are buying new equiptment which they can take a depresiation on, otherwise they would have to pay taxes on their hoarded profits. There's no good news here.....
So far, I think Obama has done a "reasonable job" of keeping us out of a Great Depression. Remember that much of the so-called "strength" in our consumer based economy was based on debt...and loose credit.
I don't think we can expect that economy to just "come back." Most of the metrics used to gage such things have been trending in the wrong direction for almost a generation. Chronic trade deficits, increasing percentage of U.S. debt held by foreigners, stagnated middle class wages and benefits, with increasing concentration of income in the upper 2%, etc.
The low interest rates (thanks to Greenspan) and the loose credit (thanks to banks) gave our middle classes to illusion of material progress. Surprise...Surprise. Reminds me of a line from the book I read to my granddaughter, "Eloise At the Plaza." "Charge it please and thank you very much."
There are basic structural changes needed before a consumer economy returns...namely more exports, with well-paying middle class jobs slowly being built up to pay down past consumer debt, to build personal savings, to restore credit, and to create renewed demand. A long, tedious process...painful primarily for the low-skilled and under-educated.
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Seems to me the root cause of all the problems is that our economy can't really compete any more and relies on "bubbles" or stimulus spending to temporarily prop up the economy to keep it going. We need whole new things where we are competitive with the rest of the world. We can't rely on deficit spending to go on indefinitely as seems to be the case.
Looking at statistics under different presidents seems pretty silly to me , and a great deal may be all luck. I don't have any quick and dirty solutions but I really don't see much improvement in the short term.
Don - the problem is that people want quick solutions, but as you note there are none. Because of the way our election cycle works, whomever is in power gets the blame, so a bunch of new faces show up with the primary goal of finding a way to survive the next election. Obama is already in campaign mode with over a year to go before election day - incredible.
Even the Fed is now pushing on that same string as Greenspan, low interest rates for an extended period. As noted by stone6, that was a major factor in creating the financial crisis. Right now rates are so low that a large corporation with a good credit rating and a reasonable dividend can borrow money, use it to purchase company stock, and the savings for not having to pay dividends on that stock buyback more than covers the cost of the money borrowed to purchase the stock. That is crazy.
Hmmm...that's sort of like buying gold...taking working capital out of the economy. If they are doing that, they are probably not thinking of expanding or hiring anytime soon. It would be interesting to know if that is, in fact, a trend. I believe Microsoft just recently upped its dividends.
Hmmm? What else would that do? That would increase the value of the remaining shares...and the wealth of those holding the remaining shares, making it more difficult for the less wealthy investor to play in the market.
All that really means is Obama Bin Lyin has failed once again...he hasn't totally killed the economy!
MSNBC will report anything and everything to make it sound like the economy is recovering to help Obama. Fact is, the economy is getting worse, not better, and most analysts know it. How many of these computers were for existing office space replacing dated computers for example? MSNBC makes it sound like manufacturing is taking off when in fact it isn't. Anything to help Obama get re-elected right MSNBC?
MSNBC's Matthews, O'Donnell, Schultz and Sharpton Still Haven't Reported Solyndra
By Noel Sheppard | September 28, 2011
Read more: http://newsbusters.org/blogs/noel-sheppard/2011/09/28/msnbcs-matthews-odonnell-schultz-and-sharpton-have-not-yet-mentioned-#ixzz1ZHYQTQrL
Chuck....take a reading lesson. He stated 26 consecutive MONTHS of GDP growth, not 26 quarters. AND he is correct.
Unlike Obama. NO MO Obama.
I wish things were looking up.
Uh oh..Obamas in.
We have a problem with debt. Fiscal insolvency is heading our way. Those who believe you can frun the record deficits this nation carries indefinitely are out of their minds.
We must rein in spending. Throw Obama out and install fiscal responsibility.
Two ways to solve debt...stop spending and take in more money through taxation.
Yeah,like the fiscally responsible Bush admin. going into two wars and cutting taxes for the wealthy at the same time! Whoa,that is what you call fiscal conservatives,YEAH!
Spend and not pay for it as you go,just pass it on to the next gen.,who cares?
The msnbc crowd is a propaganda department not a news organization.
Go back to Faux news and suck up some more of their bull.
Another b.s. article from DNCBC to try and give O'Failure some cover.
Just wait, next month or at the end of this month another article will come out.
"Economists baffled as unemployment ticks up to 9.2%"
O'Jobkiller is toast.
These companies continue to spend money ... on equipment which is often in dire need of an industry upgrade, especially in terms of input technology (such as coming up with specialized keyboards which provide definitive functions) How can spending on outmoded standards be seen as bettering the economy?
It will improve productivity and therefore the financial strength of the companies doing it. Unfortunately, that may end up costing jobs no longer needed.
This is going to be a single dip depression. Stock market has head and shoulders pattern. 2000 is left shoulder, 2007 is head, 2010 is right shoulder. Stocks can go down lower than you can imagine. Get out while you can. Nothing has been fixed. We have borrowed and spent on consumer debt. We are not increasing our productive capacity or competitive edge. Borrowing from China to consume more Chinese products is not going to be a recovery. This is a dead end.
www.tradingstocks.net/html/latest_opinion.html
Cash is the place to be for a while. Soon your USD will buy more stocks, more homes, more oil, more gold. Deflationary crash is coming.
Franku,
Sadly you are mostly right. We have dug ourselves a hole that most people do not understand how to dig out of. The problems is jobs, and the problem is consumer spending, but not the way most people think.
When America had nearly total dominance of productive capacity, we could afford to create a consumer driven society because there were not very many goods that American's wanted from overseas, but with the development of the rest of the world, a balance in the exchange of goods between nations must be established.
If we as a nation consume more than we produce, it also must follow that we are withdrawing savings and sending them to a foreign nation in order to pay for the net excess in consumption. We are sending the jobs overseas whenever we decide to spend more than we are making.
The converse is also true. If we as a nation produce more than we consume, then we will be taking unspent income and saving it. This is the reason that savings are valuable and critical to economic recovery, and necessary to reverse the outsourcing of American jobs. The government can do many things to increase savings, but will not do it because they continue to believe in a consumption based economy.
The way out of this quagmire is to save as a nation. It is government's responsibility to structure the taxation system to encourage savings. In truth, this is a relatively quick and painless fix to solve our current dilemmas. These problems can be solve by changing the structure of our taxation system. If anybody is interested, I can explain how to do this.
Yes cut corporate tax lower than other countries, raise taxes for the super wealthy and tax any dividends over a half a million as income. Wanna see how much reinvestment there will be all of a sudden?
Products will be less costly, services will be less costly and best of all the CEOs will actually have to pay their fair percentage of tax like everyone else! Banks will even be desparate to loan money out to get it off the books! Also as the economy picks up let inflation devalue the horders money so they have to invest it!