Tag: economy

It’s Worse Than Anyone Wants to Admit

The news on July 28 was entirely consumed in the throes of another definition change. What everyone understood is that what it means to be in a recession has been suddenly changed by government edict. It’s not a recession, they say.

Everything is going just great, they say, unless you are among the troglodytes who desire plentiful and low-priced energy, food, housing, and overall human thriving. Once you understand the beautiful world on the other side of the “transition”—to use the favorite word of the White House—you would see this suffering as actually beneficial in the long run.

These broken eggs are making omelets.

We can argue all day about the definition of recession, but it doesn’t take us to the intellectual place we need to be. The bottom line is that what we are experiencing now includes anomalies from previous downturns precisely because it is much worse. Only a few months ago, many worried that we were going back to the 1970s. That box has been checked. Then, we worried we were going back to the 1930s. My fear is that we might wish that were true.

The White House talks about the low technical rate of unemployment without referencing the falling labor participation rates that never recovered from lockdowns because so many people just left the workforce. Millions of previously employed Americans are living off legacy largesse from families or tapping plentiful unemployment benefits just to get by month to month. Real wages and salaries have been slammed, savings rates are sinking, and credit card debt is exploding.

It’s all hard to put in a picture but we can try, nowhere more saliently expressed than the change in real wages and savings, versus savings as a percent of personal income. The stable public data here go back to 1960 and here we see just how shocking these times truly are. Personal savings is half what it typically was from the 1960s through the 1990s, and even as recently as 2012. Real disposable personal income is falling dramatically.

You get a picture of a once-thriving nation being pummeled by pillaging public managers.

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BANK OF AMERICA MEMO, REVEALED: “WE HOPE” CONDITIONS FOR AMERICAN WORKERS WILL GET WORSE

A BANK OF AMERICA executive stated that “we hope” working Americans will lose leverage in the labor market in a recent private memo obtained by The Intercept. Making predictions for clients about the U.S. economy over the next several years, the memo also noted that changes in the percentage of Americans seeking jobs “should help push up the unemployment rate.”

The memo, a “Mid-year review” from June 17, was written by Ethan Harris, the head of global economics research for the corporation’s investment banking arm, Bank of America Securities. Its specific aspiration: “By the end of next year, we hope the ratio of job openings to unemployed is down to the more normal highs of the last business cycle.”

The memo comes amid a push by the Federal Reserve to “cool down” the economy, informed by much of the same rationale — that high wages are driving inflation. This year, the Fed has increased interest rates for the first time since 2018. Historically, this has often caused recessions, and that is exactly what appears to be happening now: The Commerce Department reported Thursday that the gross domestic product has fallen for the second quarter in a row, indicating that a recession may have already begun.

Parts of the mid-year review, in particular its emphasis on a looming recession, received press coverage at the time of the memo’s release to clients. This is the first publication of the document in full.

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Wikipedia’s ‘Recession’ Page Shows 41 Edits In One Week, Attempts At Changing Definition

A Wikipedia administrator has placed a pause on edits to Wikipedia’s “Recession” page by unregistered users until early August to stop “vandalism” and “malicious” content after the page was edited 41 times in the past seven days with repeated attempts to alter the historical definition of a recession.

On Thursday, the U.S. Bureau of Economic Analysis (BEA) estimated that the U.S. economy shrank for the second straight quarter at a 0.9 annualized rate. In recent weeks, the Biden administration had argued that there is no agreed-upon definition of a recession, despite economists consistently saying a recession can be signaled by two consecutive quarters of negative economic growth. The plethora of Wikipedia revisions come as the Biden administration attempts to go around the commonly held definition of the term.

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Biden’s plan to boost inflation

And they say liberals have no sense of humor. Faced with record inflation and terrible poll numbers, Democratic leaders say they’ve reached a deal for even more taxes and spending. Get this, they’re calling it the Inflation Reduction Act. Ha! 

We can only imagine that Sen. Joe Manchin said yes because he thought it was a joke. Certainly the American people won’t be laughing. The bill would increase taxes through various so-called “reforms” and “loophole” closures — which really means more IRS audits on the little guy.

The spending will go to subsidies for ObamaCare, which has proven it can’t survive without them. And hundreds of millions in subsidies for solar and wind power, which also can’t survive without them. 

They call it a bill to fight climate change. It’s transferring taxpayer money to Democratic-backed companies that would otherwise fail.

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