Posted on 02/19/2008 9:38:02 AM PST by jdm
Glass half empty:
Former Federal Reserve Chairman Alan Greenspan said Thursday there’s at least a 50% chance the United States will slip into recession, and that the storm clouds over the economy won’t clear until home prices bottom out.
Glass half full: (from October)
Former Federal Reserve chairman Alan Greenspan has said the rate of US economic growth was slowing, but the odds of a recession are less than 50 percent.
Mr Greenspan also said in an interview on CNN’s “Late Edition with Wolf Blitzer” that the turmoil caused by the subprime mortgage crisis was easing and financial markets were beginning to go back to normal.
Or is it the same damn thing just spun different? 50 percent recession, 50 percent no recession…..yup, same damn thing.
Meanwhile Larry Kudlow wrote an excellent article on the state of our economy:
A number of economists on and off Wall Street are ringing the recession bell, as they have so many times in recent years. But the Goldilocks economy has proven to be more durable and resilient than her critics appreciate.
Goldilocks dodged two potentially recessionary bullets this week. While modest gains in retail sales and industrial production suggest temporarily slower growth for the U.S. economy, these indicators are not signaling recession. In particular, Friday’s 0.1 percent production increase — which comes to 2.4 percent at an annual rate over the past 3 months and 2.3 percent over the past 12 months — removes the recession scenario. It’s slow growth, but it’s growth nonetheless.
To get a true recession reading, the production index would have to fall for 4 to 6 months in a row. That’s not happening. Despite some monthly declines over the past half year, the production reading for January was 114.2 — exactly where it was in July and September of last year. Looking inside the January index, there was a 0.3 percent increase for consumer-goods production and a 0.4 percent rise for business equipment. Both are solid numbers.
Meanwhile, the just-released January retail sales report defied the recessionistas with a better-than-expected 0.3 percent gain. Retail sales are climbing at a 2.7 percent annual rate over the past 3 months and a 3.9 percent rate over the past year.
Trade exports also continue strong, with the new December number showing a huge $144 billion gain. Out on the campaign trail, Hill-Bama mutters protectionism at every stop. But export trade has grown by nearly 50 percent — or 9 percent yearly after inflation — for the past four years. The real export sector now accounts for nearly one-third of U.S. gross domestic product, yet more proof that the global economic boom is alive and well.
There seems to be too much angst over various credit problems in the banking system — such as defaulting sub-prime loans, leveraged corporate-buyout paper, unhealthy bond insurers, and, more recently, a clog up in short-term municipal bonds. All these credit issues have yet to be fully worked out. But there is so far no evidence they have dragged the economy into a contraction.
It’s also noteworthy that the Bush tax cuts remain in place for investment. And while the newly signed rebate package is a wet noodle, it does call for temporary cash expensing to promote business investment. This could ultimately do some good.
Critically, the Federal Reserve’s easing moves — going back to last September and including January’s “shock and awe” 125 basis point rate cut — are beginning to impact the economy and should deliver more pronounced effects later this winter and in the spring. An easier Fed and low tax rates may not only keep us out of recession, they could move the economy up from 1 percent growth this winter to 3 percent growth in the second half of the year — perhaps as early as the second quarter. I’m keeping my fingers crossed. But free-market capitalism on the supply-side is weathering the credit storm better than most folks think.
The challenge now is to ensure that free-market capitalism on the supply-side continues.
Ensuring that can only be accomplished by keeping the Socialist twins out of office. If Hillary or Obama get in then we can be ensured of one thing, tax tax and more tax. Tax businesses and the rich. Creating new whole bureaucracies for the “common good.” We’ve seen how well the entitlement bureaucracies work now, why not throw a few more in the mix?
Sen. Clinton singled out oil, credit-card, insurance, pharmaceutical, investment, and student-loan firms in a massive attack on business. She’s attacking corporations that employ 23 million people and, by the way, pay higher than average wages. In other words, Clinton is attacking 23 million jobs. This is the forgotten middle-class. And they know that if politicians curb or confiscate the profits of their companies, it is they, the workers, who will be harmed.
This is what Hill-Bama fails to understand. This is why Hill-Bama policy would be so damaging to the economy. Corporations are profitable, sure. But wage earners get 70 percent of the profits; investors share the remaining 30 percent.
And these companies pay a colossal fortune in taxes. Exxon Mobil is a perfect example. Over the last three years, Exxon Mobil has paid an average of $27 billion annually in taxes. $27 billion! As my friend, economist Mark Perry, points out, while corporate profits receive a lot of media attention, the corporate taxes paid on these corporate profits are largely overlooked. Dr. Perry also points out that Exxon Mobil pays as much in taxes annually as the entire bottom 50 percent of individual taxpayers — a full 65,000,000 people.
Either of those two get in and its back to 1976. Does anybody really ever look back at those years and think “those were the years?” I mean disco man! Disco!
The economy is not in a recession, its actually rebounding quite well from this housing slump, and the last thing we need is more spending, more taxing, more regulating and more bureaucracies.
Posted Mon Oct 8, 2007
Alan Greenspan says the US market is recovering from the subprime crisis.
Former Federal Reserve chairman Alan Greenspan has said the rate of US economic growth was slowing, but the odds of a recession are less than 50 percent.
Mr Greenspan also said in an interview on CNN’s “Late Edition with Wolf Blitzer” that the turmoil caused by the subprime mortgage crisis was easing and financial markets were beginning to go back to normal.
Mr Greenspan said Americans should be “cautious” about the economy, but not necessarily nervous.
Half Full "or" Half Empty is not that difficult of a concept to deal with.
If you are filling the glass, it is half full; if you are emptying the glass, it is half empty. This can be applied to almost any condition, including economics.
If the glass is in a static condition, 50% water, 50% air, it's 100% full, half air, half water.
Just playing.
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