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Friday, May 29, 2015

Why they lie about the economy

New York Times on April 29, 2015: "U.S. Economy Grew at 0.2% Rate in First Quarter."

Market Watch on May 29, 2015: "U.S. economy shrinks by 0.7% in first quarter."
Meanwhile, the New York Times tried to spin this return to the disaster that was 2008:
WASHINGTON — Another first quarter of the year. Another reversal for the U.S. economy. Another expectation of a rebound to come.
On Friday, the government will likely estimate that the economy shrank in the January-March quarter for a second straight year, depressed by brutal weather, a reeling energy sector and an export slump caused by a higher-valued dollar.
Yet few will see any cause for panic.
Steady job gains are widely expected to propel modestly healthy growth for the rest of 2015. A harsh winter is gone. So is a labor dispute that slowed trade at West Coast ports. Home sales and construction are rebounding. Business investment is picking up.
Many economists also suspect that the government's calculations have tended to underestimate growth in the first quarter of each year.
Some sectors of the economy do remain subpar. Energy drillers, for example, have been damaged by persistently low energy prices and are still cutting jobs and slowing production. The rise in the dollar is still making U.S. manufactured goods pricier overseas.
Yet the outlook has brightened considerably since winter. Most economists expect lower gas prices eventually to accelerate consumer spending, the main fuel for the economy.
Reminds me of the Soviets spinning their five-year plans in Pravda.

Liberals fear an economic retribution and rebuke from voters next year, and with good reason. The economists the New York Times cited are the proponents of a centrally planned economy -- communism -- politely called Keynesian -- which fails because it comes from the top down. The government planners overlooked basic demographics. While they look at race, they overlook age.

Baby boomers are retiring. I'm 61. A boss 20 years my junior fired me last fall because Daily Kos and Think Progress complained about something I wrote online. Eh. I accepted it. I retired. Technically, I am out of work. I had the money to do so. A record 92 million Americans are. So what? They either take care of themselves (kids, maximize your 401-k and invest in small cap value stocks) or flop on government, They remain consumers. The American economy does not need as many workers because it is efficient.

Here is where everyone missed the boat: Obamacare's scare. Many retiring baby boomers have money. They are scared to death of outliving their money. They are resisting tapping into their retirement savings, which means they are staying in stocks and bonds, and not buying cars.

Their drop in consumption is natural, but Obamacare exacerbated it. Many people who could afford cruises are staying home. With housing prices stymied -- thanks in large part to student loan debt, which has led to a sub-nation of renters -- home repairs down nationally.

You cannot sell me a car. I have a red Mustang GT convertible. It will last 15 to 20 years. I'll be too old to drive. Health is my concern. I am saving for a robot yet to be designed that will be my caretaker.

Obama blew it. That stimulus could have calmed fears about one's health had he invested in hospitals and medical research. Instead it went to crony capitalism, and upended the health system. Expenditures on health would have settled fears of rising health prices. Instead, who knows what the heck will happen?

Which is why liberal sphincters are so small these days.

Which is why they lie about the economy.


4 comments:

  1. Sure they lie, but another stark fact is that they know so little about the economy. The Fed promises to act before the next recession" but the plain fact is that they do not even know when a recession started until one year after it happened. That shows the folly of central planning - they just have too little understanding of the economy to have any business planning it.

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  2. I think we are still in the Great Recession. Two "harsh winters" have led to negative growth? Huh? We have winters every year. And how can we be having "harsh winters" if we are experiencing global warming?

    The unemployment figures are phony since they don't count the number of people who have given up looking for a job or the part time workers who want a full time job. Many of the part time workers used to be full time workers but were cut back to part time due to Obummercare. This administration has been a disaster for America but ain't it cool to have the first black president? I've seen how affirmative action affects business. Now, those of us who have been paying attention, have seen how it affects government.

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    1. The US has a total population of 320M. 185M of those people are between 20 and 64 y/o in age and are expected to be economically active. Currently there are 148M people in US who are working and have paying jobs. The true employment rate for the country is thus 148/185 = 80%. The true unemployment rate is thus currently 100-80 = 20%. That unemployment rate is twice the official U6 unemployment rate of just over 10%. U6, however, doesn't take into account the people of employment age who've stopped looking for jobs and are no longer participating in the labor force. In turn, the U6 rate is almost twice the more commonly cited unemployment rate, called U3. U3 is currently 5.5%. 20% or 5.5% unemployment, take your pick.

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  3. Get your tickets NOW for the SEVENTH annual tour of The Summer Of Recovery!

    ReplyDelete