Tag: Great Recession

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The failed recovery

Six and one half years after the end of the “Great Recession,” the U.S. economy remains in the doldrums. Legitimate questions about the economic policies of the White House, and the apparent waste of over $720 million in “stimulus” funds, as well as the near doubling of the national debt, abound.

According to data from the World Bank America’s GDP growth rate in 2014 was 2.4%. In 2013, the Council on Foreign Relations noted that the “recovery” from the 2007-2008 recession was “the weakest of the post–World War II era.”

The Wall Street Journal concurs. “During the postwar period up to the current recession (1947-2007), the average annual growth rate for the U.S. was 3.4%. The last three decades have experienced somewhat slower growth than the earlier periods, but even in the period 1977-2007, the average growth rate was 3%… Contrast this weak growth with the recovery that followed the other large recession of recent decades. In the early 1980s, the economy experienced a double-dip recession, with contractions in both 1980 and ’82. But growth rates in the subsequent two years averaged almost 6%. The high growth that persisted throughout the 1980s brought the economy quickly back to the trend line. Unlike the current period, from 1983 on, the economy was in rapid catch-up mode and eventually regained all that had been lost during the early ’80s.

“Indeed, that was the expectation. As economist Victor Zarnowitz of the University of Chicago argued many years ago, the strength of the recovery is related to the depth of the recession. Big recessions are followed by robust recoveries, presumably because more idle resources are available to be tapped. Unfortunately, the current post-recession period has not followed the pattern.”

The Washington Post  has noted that “it took less than a year for America’s factory output to rebound from the 1991 recession. It took 3½ years to bounce back from the 2001 recession. Now, six years clear of the Great Recession, manufacturing output still hasn’t returned to the pre-crisis levels it reached in 2007, according to revised economic data from the Federal Reserve. The downward revisions highlight the persistent weakness in a sector that President Obama has long called crucial to the health of the U.S. economy and the fate of the middle class. They track with the continued disappointing employment numbers for manufacturing, which since January 2013 has added fewer than half of the 1 million jobs that Obama promised the sector would create in his second term. And they appear to reflect a deeper-than-previously-thought hit to defense and aerospace manufacturing as the result of Pentagon cuts and deficit-reduction measures Obama and Congress agreed to several years ago.”

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According to the Institute for Supply Management, (ISM)  Last month brought some disappointing statistics for the U.S. economy. In the Non-manufacturing business sector, activity decreased 4.8% in November. The New Orders Index fell 4.5 percentage points. The Employment Index decreased 4.2 percentage points. The Prices Index increased 1.2 percentage points.  Five industries reporting a reduction in employment in November, including: Mining; Utilities; Other Services; Construction; and Management of Companies & Support Services.

The New Export Orders Index for November registered 49.5 percent, which is 5 percentage points lower than October. The latest balance of trade figures from the U.S. Bureau of Economic Analysis,  released in September, disclosed that the goods and services deficit was $40.8 billion. Year-to-date, the goods and services deficit increased $14.9 billion, or 3.9 percent, from the same period in 2014. Exports decreased $66.3 billion or 3.8 percent. Imports decreased $51.3 billion or 2.4 percent.

The Institute for Supply Management  (ISM)  also reports that “Economic activity in the manufacturing sector contracted in November for the first time in 36 months, [decreasing] 1.5 percentage points from the October reading… The New Orders Index registered 48.9 percent, a decrease of 4 percentage points from the reading of 52.9 percent in October. The Production Index registered 49.2 percent, 3.7 percentage points below the October reading of 52.9 percent. The Employment Index registered 51.3 percent, 3.7 percentage points above the October reading of 47.6 percent. The Prices Index registered 35.5 percent, a decrease of 3.5 percentage points from the October reading of 39 percent, indicating lower raw materials prices for the 13th consecutive month. The New Export Orders Index registered 47.5 percent, unchanged from October, and the Imports Index registered 49 percent, up 2 percentage points from the October reading of 47 percent. Ten out of 18 manufacturing industries reported contraction in November, with lower new orders, production and raw materials inventories accounting for the overall softness in November…

“Of the 18 manufacturing industries, five are reporting growth in November in the following order: Printing & Related Support Activities; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Transportation Equipment. The 10 industries reporting contraction in November — listed in order — are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Machinery; Primary Metals; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Furniture & Related Products; Fabricated Metal Products; and Chemical Products.”

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New job numbers indicate poor recovery from recession

Yesterday’s job numbers from the Bureau of Labor Statistics demonstrate that America has yet to truly emerge from the Great Recession.

Despite White House claims, the nation still has not recovered from that greatest economic challenge since the Great Depression of the 1930’s. Government policy, which has hamstrung the free market, is largely to blame.

The White House continues to allege that much progress has been made, but a clear examination of key financial factors demonstrates otherwise.

EMPLOYMENT

The latest employment statistics from the Bureau of Labor Statistics (BLS)  indicates that less than half the monthly number of jobs that should have been created to truly lessen the recession’s impact was in fact created.  In addition, many of those jobs replacing those lost provided far lesser pay, and many went to immigrants as opposed to U.S. citizens who balked at the low pay levels. The percentage of people in the work force continues at near 40 year lows, and the number of long-term unemployed workers is at near historic highs.

The BLS released these notes yesterday: “Both the unemployment rate …and the number of unemployed persons … were essentially unchanged in October. Among the major worker groups, the unemployment rates…showed little or no change in October. The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged …These individuals accounted for 26.8 percent of the unemployed in October…The civilian labor force participation rate was unchanged at 62.4… The employment-population ratio, at 59.3 percent, changed little in October and has shown little movement over the past year…Among the marginally attached, there were 665,000 discouraged workers in October, little changed from a year earlier.”

Ian Murray of the Competitive Enterprise Institute (CEI)  provides a worrisome analysis of the BLS report:

“… the American economy remains on life support. The unemployment rate, number of long term unemployed, and labor force participation rate are all essentially unchanged. The recovery from the great recession has been anemic… The size of the hole we are in can be seen by comparing where we are now in terms of jobs from where we would have been had the post-recession recovery followed the trajectory of past recoveries. We are now 6 million jobs behind where we should be, according to Congress’ Joint Economic Committee. The economy would need to add 516,000 jobs a month to match the pace of the average recovery at this stage. So what is different this time?

“One answer that has gotten too little attention is that the rate of regulation over the economy has increased over the past decade, including since the great recession began. Regulation has its costs—CEI’s Wayne Crews estimates the total annual burden of regulation on the economy at about $1.9 trillion. That number could support a lot of jobs….Meanwhile… the Department of Labor and National Labor Relations Board are pursuing a policy of further restrictions on employment conditions…When the nation went into recession in the early 1980s, high taxes were the largest supply-side problem to creation of new jobs. President Reagan worked with Congress to cut taxes significantly, and the result was the Reagan boom. Clearly, overly burdensome regulation is the largest supply-side problem today. A responsible President who cares about employment prospects would be working with Congress to cut regulations significantly, not imposing more of them.”

If he feel shy asking about the medicine, he can go online to cheap viagra samples or any other medicine yet there are many things which you should know if a certain process fit your routine. Have you been thinking about using Sildenafil Citrate to cheapest generic levitra help with ED (erectile dysfunction) and as a tanning agent to help prevent skin cancer. Many order levitra without prescription online sites even have online experts to answer your queries related to particular diseases. As tadalafil cialis the researchers said, “A diagnosis of a hormonal imbalance confirmed. The Century Fund  outlines three reasons why the job market is actually worse than federal statistics indicate:

“The ratio of workers to non-workers is nearing an all-time low. Part of the drop in headline unemployment numbers is explained by the fact that many have just given up on looking for work entirely…

“The share of long-term unemployed…People who are out of work for more than twenty-six weeks can sometimes end up permanently unemployable…

“Many who are working are underemployed. The unemployment rate is silent on those who have part-time jobs but would prefer full-time jobs…”

Other factors demonstrate the failure to adequately emerge from the Great Recession. The Wall Street Journal (WSJ) reported last week that first-time home buyers, a significant indicator of a healthy economy, has “declined to the lowest level in almost three decades…the third straight annual decline.” WSJ also reports that the minimal 1.5% growth in the economy from July through September “marked a deceleration from the second quarter of 2015” indicating that the economy is heading in the wrong direction.

Rather than stimulate the private sector, the White House has pursued a path of heavy government spending, beginning with the failed “stimulus” package that cost taxpayers almost $800 billion but failed to make a significant dent in the economy’s pace.

CNS  reports  “The federal government took in a record of approximately $3,248,723,000,000 in taxes in fiscal 2015 …That equaled approximately $21,833 for every person in the country who had either a full-time or part-time job in September.” The increased revenue comes from additional taxes, not increased economic activity, and represents money taken from the private sector that could have been used to create jobs.

Despite that enormous sum removed from the private sector where it could have created employment, Washington remains mired in debt.  The Washington Times Notes that “…Mr. Obama’s spending agreement with Congress will suspend the nation’s debt limit and allow the Treasury to borrow another $1.5 trillion or so by the end of his presidency in 2017. Added to the current total national debt of more than $18.15 trillion, the red ink will likely be crowding the $20 trillion mark right around the time Mr. Obama leaves the White House. When Mr. Obama took over in January 2009, the total national debt stood at $10.6 trillion. That means the debt will have very nearly doubled during his eight years in office, and there is much more debt ahead with the abandonment of “sequestration” spending caps enacted in 2011.”

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The Beleaguered Middle Class

According to a recent Pew Research Center report federal data indicates that the typical wealth of middle-income families was basically unchanged in 2013, remaining at about $96,500.

Combined with Pew’s 2012 study,  in which 85% of self-described middle-class adults said it was more difficult than it was a decade ago for middle-class people to maintain their standard of living, it is clear that middle income Americans continue to face tough times. “Their downbeat,” notes Pew, “comes at the end of a decade in which, for the first time since the end of World War II, mean family incomes declined for Americans in all income tiers. But the middle-income tier—defined as all adults whose annual household income is two-thirds to double the national median —is the only one that also shrunk in size, a trend that has continued over the past four decades.”

It is not coincidental that throughout the past half-century, $22 trillion dollars (not including Social Security or Medicaid) have been taken out of the U.S. economy in the form of taxes for an unsuccessful War on Poverty. That’s more than three times the cost of all U.S. military wars since the American Revolution, according to the Heritage Foundation.
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WallStreetCheat.com  notes “The struggles of the middle class have been well documented and oft-reported. Faced with a tough economy — including hard fights for jobs, adequate pay, and adjustments to compensate for the Affordable Care Act — members of what is supposed to be America’s backbone are finding that the post-recession world is more difficult than many imagined…Jobs that were lost to the recession have returned, but are paying a fraction of what they were previously. Essentially, everyone has had to make sacrifices to return the country to economic prosperity. But the sacrifices have been levied on those in the working class almost exclusively.”

By de-emphasizing free enterprise growth in favor of government programs, the means with which generations of Americans from the earliest days of the nation’s history until the middle of the twentieth century pulled their way out of poverty and into the middle class was handicapped.