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Wednesday, June 22, 2022

The crash is coming. 10% unemployment possible

Clinton's last treasury secretary, Larry Summers, made it official on Sunday. Appearing on Meet the Press, he said the Biden Recession is upon us.

Given that the economy contracted 1.5% in the first quarter, the recession likely is already here.

He said, "Look, nothing is certain and all economic forecasts have uncertainty. My best guess is that a recession is ahead. I base that on the fact that we haven't had a situation like the present with inflation above 4% and unemployment beyond 4% without a recession following within a year or two. 

"And so I think the likelihood is that in order to do what's necessary to stop inflation the Fed is going to raise interest rates enough that the economy will slip into recession. And I think that view, which was not a common view a couple months ago, is now the view of a number of statistical models and the view of a range of forecasters, and I think will increasingly become a consensus view."

Bravo for admitting what no one else in DC seems willing to admit: Biden's spending-palooza wrecked the most prosperous economy in 50 years.

But Summers is an economist and a president emeritus of Harvard, which greatly diminishes his understanding of what needs to be done.

He wants to cut the tariffs in half, which of course would hurt American manufacturing and it would be a godsend to Red China.

He also wants to kneecap Trump's tax cuts, which created the best economy since the Archies sang Sugar, Sugar.

And while saying we need to up production of "fossil fuels' (there is no evidence that oil comes from dinosaurs, sorry), Summers pushed renewables, which liberals have pushed for decades and which will never replace oil and natural gas.

Summers did a better job speaking in London on Monday when he admitted the only known cure for double-digit inflation is a recession.

He said, "We need five years of unemployment above 5% to contain inflation—in other words, we need two years of 7.5% unemployment or five years of 6% unemployment or one year of 10% unemployment."

I don't think we get a choice. I believe we will get five years of 10% unemployment.

I hope I am wrong.

Meanwhile, Sugar, Sugar wasn't that bad a song if you mute the sound when you watch the video.

31 comments:

  1. I believe we will get five years of 10% unemployment."
    I agree.

    ReplyDelete
    Replies
    1. I disagree. I think we will have a couple of years of 10% unemployment which will then increase close to 15% unemployment during the 2025-26 depression. If your depression-era grandparent is still alive, speak to him or her about how to make do. Or, buy books on the subject matter.

      Delete
    2. Nah, the WH will lose the ability to spend, spend, spend starting Jan 2023.

      Delete
  2. Has anything changed in the policies that generated a 1st quarter 1.5% contraction? So what exactly leads Summers to believe that the second quarter will not be an even greater contraction? How are those 401Ks doing? Too bad about 10% unemployment. I wouldn't want to be black or hispanic or a new college grad looking for a job.

    ReplyDelete
    Replies
    1. The contraction has been happening for the last 2 1/2 quarters. GDP is not measured on units, it is measured by dollars. 3 $5 units is the same net as 5 $3 units. Demand is plummeting as prices skyrocket. Just that the rate of inflation has covered up the dropping rate of demand.
      We are in much worse shape than the GDP numbers.

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  3. Shameful. The Biden administration, along with help from COVID, destroyed a perfectly good economy. But don't worry, there's never any repercussions for the protected class. But, hey voters, just stop rewarding them. (Stop the cheating, too.)

    ReplyDelete
  4. Very few smiles among the girls dancing.

    ReplyDelete
  5. Only God and Donald Trump (in that order) can save us now. I keep tellling my 88 year old mom-in-law that the shortages are only gonna get worse. Secretly, I think she thinks I’m pulling a fast one on her. She’s rounded the bend into BidenLand too, I’m afraid.

    ReplyDelete
  6. You will be amazed how fast the economy turns around in the spring of 2025 when we restart the oil and gas drilling.

    ReplyDelete
  7. Goofy to act as if this is some cyclical phenomenon and not a direct result of replacing Trump's successful policies with more China First, American Penance agenda. The economy will tart to recover when the policies change, and economic indicators will reflect that after a few months lag.

    ReplyDelete
  8. 46* would realize fixing the economy is easier than falling off a bicycle if he just undid everything he's done since usurping...er...taking office.
    -LG

    ReplyDelete
    Replies
    1. His handlers would rather have him fall of his bike.

      Delete
  9. Listen to Wilson Picket's version of Sugar Sugar. Much better!

    ReplyDelete
  10. I don't know why the White House, Dems and their media lackies are still pushing recession out for years in their talking points. You nailed it. We are in a recession. Just this past March they were saying Q1 GDP would be 1% to 1.5%. It came in at -1.4%. Nothing has improved in Q2. If anything, all of the GDP indicators have gotten worse since last quarter. I can see the huge "SUPRISE!" headlines three weeks from now. "Nobody saw this coming!" "The majority of economists were predicting 1% to 1.5% GDP. What happened." And then old Joe, "I'm as surprised as you are...But Putin... But Trump.... But greedy corporations..."

    ReplyDelete
    Replies
    1. Unexpected. The experts are trying to figure it out.

      Delete
    2. "Unexpected" was used every month during the "Obama" scam.

      Delete
  11. Companeros of the plow
    Tired and starved and dirty
    There's but one road to follow now
    So grab your 30-30

    ReplyDelete
    Replies
    1. Yup. They smell blood in the water so they're not going to stop. It's inevitable. There's going to be a shot heard 'round the world.

      Delete
  12. If we measured unemployment honestly, it will be 5 years of 25-35% unemployment.

    ReplyDelete
    Replies
    1. Agreed, if the feds didn't keep playing with the stats and reported it honestly we're already over 20% unemployment.

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  13. summers is tool of the obama group,,, it s now ok to trash witless joe on TV , obama setting the stage for Kammy as president

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  14. OK Don... guess I gotta 'school' ya.. the term 'fossil' fuels has nothing to do with dinosaurs...crude oil comes from the sedimentary deposits of ancient shallow seas...so the ancient sea critter bodies (fossils) squeezed from earth's heat and pressure are the source of 'hydrocarbons' which is petroleum. Natural gas comes from the same sediments and is often found with petroleum. Coal comes from the remains of ancient forests, and the earths heat and pressure concentrates the carbon in the plant material into coal seams. (Love your blogsite tho'- I usually comment as 'Riverdixie' but I am on a different computer)

    ReplyDelete
    Replies
    1. Actually, that is only a theory--it has never really been proven. Russia and maybe some other nations prefer a different theory--that oil and gas are generated deeper in the earth by chemical processes. That could mean oil fields thought depleted could regenerate. Not sure if that has been proven to happen. But they are both only theories.

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    2. I know that when they drilled my well they encountered traces of oil all the way down through the limestone and shale. Simplest explanation is this is the result of the decayed material trapped during the flood recorded in Genesis. Like the water also in those rocks, it is slowly filtering toward pools and veins.
      While dinosaurs are a part of it, the masses of vegetation present at the time accounts for the vast majority of it. We know that there was tar present only sixteen hundred years after creation, that is recorded in Genesis.
      If you can imagine what it is like when a small region experiences a sudden flood, magnified to global scale, you have Genesis. The entire earth was a sea floor. The top soil was ripped up by the waters. This wasn't filling a bath tub, this was cataclysmic.
      We can convert biomass into fuel, the technology is not perfect but improving. Right now we can convert it to electricity with ease. But why give up on oil and coal? All that carbon once made this earth a lush and productive planet.

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  15. The big money Elitist are buying up cheap shares of stock right now. The greedy live for times like this!

    ReplyDelete
    Replies
    1. We're all greedy. When you buy a house or car, do you try to pay as little as possible? When you sell your house or car, do you try to get as much as you can for it?

      Delete
  16. What happens to all of the H1B immigrants here "to do jobs Americans won't do" when unemployment hits 10%.

    Are the Utah Senators and corporations exploiting this program ready for the backlash if John Q. Public gets laid off and H1B visa holders don't?

    ReplyDelete
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