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Economy: The recession is over, having ended last summer as we predicted, and now both parties will talk up recovery for different reasons. But it's not that simple. The private sector is only now getting back on its feet.
In March 2009, we predicted an imminent recovery from the brutal recession the U.S. entered in December 2007. It wasn't a tough prediction to make: The Fed had basically started printing money, pushing short-term interest rates to zero in late 2008 and causing the yield curve to go steeply positive.
An upward-sloping yield curve is in fact the most reliable indicator of a coming rebound. Given that, a recovery in GDP was baked into the cake well before the new administration took office.
Which is why we can only shake our heads as President Obama, House Speaker Pelosi, Senate Majority Leader Reid and other Democrats congratulate themselves for the turnaround.
If anything, their $862 billion stimulus and $700 billion corporate bailout, not to mention the $10 trillion in deficits projected over the next decade, have blunted the sharp rebound that would have created hundreds of thousands more jobs than we have now.
Yet Harry Reid has the chutzpah to accuse Republicans of "making love to Wall Street," a laughable claim given that his own party took twice as much from big Wall Street firms as the GOP.
Then there's Nancy Pelosi, touting her party's policies: "It is all about a four-letter word: jobs, jobs, jobs, jobs. We are all about jobs." Really, Madame Speaker? Since Democrats took control of Congress and the White House, we have had one financial meltdown, one steep recession and the loss of 8 million jobs, half of them in the last year alone.
OK, but didn't the economy start to recover last summer? Yes. But which economy are we talking about? The public sector is expanding rapidly and adding jobs. But that's come at the expense of the private sector, the economy in which most Americans live.
Far from recovering last summer, the private economy is only now emerging from its downturn (see chart). It suffered six straight quarters of year-over-year decline — the longest such string since the Depression. In the first quarter, it grew at a modest 2.8% — the first gain since 2008's second period. Hardly rip-roaring.
For those who call this a "V-shaped" recovery, we agree only to a point. Yes, the overall economy has retraced lost ground. But, again, private sector GDP, as the chart shows, tells a different story. It remains well below its peak in the fourth quarter of 2007. Indeed, even after the first quarter's gain, private output is still $233 billion, or 2.1%, below its previous quarterly high.
Socialism: The left has falsely demonized Tea Party protests in the U.S. as violent. But it ignores real violence in Greece, where leftists and anarchists have rioted and even murdered to fight cuts in their welfare state. A week ago, the European Union and the U.S.-backed International ...
Health Care: The Democrats' overhaul was going to boost the number of insured Americans, wasn't it? And everyone who liked his own plan could keep it. Except for the 14 million who will lose their coverage at work. When Richard Foster, chief actuary of the Centers for Medicare and Medicaid ...
Subprime Scandal: Democrats blame "greedy" Wall Street for the financial crisis, but Democratic operatives lined their own pockets throughout the mess. Take Democrat Sen. Chris Dodd. The Senate Banking Committee chairman recently blew a gasket on the Senate floor over GOP opposition to his ...
America's homeland-security amnesia never ceases to amaze. In the aftermath of the botched Times Square terror attack over the weekend, Pakistani-born bombing suspect Faisal Shahzad's U.S. citizenship status caused a bit of shock and awe. The Atlantic magazine writer Jeffrey Goldberg's response was ...
Ever heard the one about the guy who hated government until a deregulated Wall Street crashed, an oil spill devastated the Gulf of Mexico, a coal mine collapsed, and some good police work stopped a terrorist attack? Rarely has the news of the day run so counter to the spin on the news of the day. ...
Posted By: antisocialist(375) on 5/5/2010 | 11:21 PM ET
Yeah, I thought the same thing when I read that. I do not see it. Easily 20% of construction workers are out of work nationally. What I predict is a long and painful recovery, punctuated by disastrous regulations and social programs to slow things down. And just when things really start to improve, look for our unresolved energy problems to bite us. You could call it a double dip, but it'll be more like from bad to worse.
Posted By: veryfedup(110) on 5/5/2010 | 9:54 PM ET
What have you been smoking? The recession ended last summer???????????? Where did that come from? Another dumbass writer.IBD allows idiots to place their crap on here.
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