Another Recession; More Of The Same
Readers suggested a topic on current economics. “Is the double-dip recession outside the realm of possibility at this point? I guess the answer depends heavily upon whom you ask. However, this statement is patently lame: ‘If we were going to have another recession, it would have been in the summer,’ when Congress was debating the debt ceiling amid the growing Greek debt crisis and market effects from Japan’s earthquake, she said. In fact, that might be exactly what happened. ‘They may revise figures and say we had a decline in the summer,’ Ms. Rossell said.”
“The problem, Ms. Rossell, is the labor market is an oil tanker, and oil tankers don’t exactly turn on a dime, as you suggest they do. And which ‘they’ is it she thinks causes recessions to either happen or not happen in the past?”
A reply, “Economists like to ignore the bottom line of the ledger. The economy is flatlined at best according to the Ministry of Truth. Debt continues to mount. The wealth of the nation continues to drop. Is there a limit to debt? Anywhere? The next financial ‘crisis’ will be when some significant entity somewhere refuses to issue or accept more debt. It will be ‘unexpected.’”
“Pelosi was right about saving life as we know it through debt. If the US Gov stops accumulating debt, or even stops accelerating, it’s Game Over.”
“If you recognize that the primary decline never ended, but was only masked by debt, then the question of ‘will there be another decline’ is kind of like asking if a burning house will catch fire again.”
The Gazette. “The Colorado Springs area economy will fall back into a recession with the rest of the nation next year as a result of European debt problems, according to a new forecast. A weak housing market that hasn’t recovered, a downturn in manufacturing and continued acrimony over the federal budget and deficit also will help trigger a double-dip recession, which is back-to-back downturns separated by a brief and tepid recovery, said Tom Zwirlein, director of the Southern Colorado Economic Forum.”
“When you add all of that to the bigger problems going on in Europe, it is not hard to see a recession coming,” Zwirlein said, who said in the forum’s written forecast that another recession is the ‘most probable scenario for both the national and local economies.’”
“Another local recession would seem like more of the same for many residents as the area’s economy has never really recovered from the downturn that began in 2008. Unemployment hit a record 10 percent earlier this year before drifting back to 9.6 percent in August. Payrolls rose slightly early in the year for a few months, but resumed a decline in April that began in 2008. Local housing prices were temporarily stabilized by a special federal tax credit last year, but resumed falling after the credit expired.”
“The area’s unemployment rate likely is closer to 15.5 percent when those who gave up looking for a work are included in the calculation, and the rate would be higher still if it included those working in jobs for which they are overqualified, Crowley said. The forum estimates in its written forecast that about 24,000 residents have given up looking for work.”
From Bloomberg. “Federal Reserve Bank of Dallas President Richard Fisher said that while too many Americans remain unable to find jobs, central bankers have done as much as possible to shore up the labor market without sparking inflation. ‘There are limits to what a central bank can do,’ Fisher said during a speech. ‘We can provide fuel, but we cannot provide incentives for those who create jobs’ to ’step on the gas pedal.’”
“The so-called Operation Twist is not an ‘effective way’ to deal with the economy right now and fiscal authorities, not the central bank, ‘are the problem,’ Fisher said in response to audience questions after his speech. He called lawmakers’ attitude toward U.S. fiscal issues ‘disgraceful,’ and said further monetary accommodation would only encourage Congress to do less.”
The New Zealand Herald. “In Japan they call them freeters, an amalgamation of “freelance” and the German word for workers arbeiter. The Tunisians opt for hittistes, a slang Arabic phrase which roughly translates as people who lean against walls. In Britain they prefer NEETs, the term used to describe the depressingly swelling ranks of our young who are not in education, employment or training.”
“‘The 1980s recession was a generational disaster and there is a major risk of it happening all over again,’ says Richard Exell, a labour market expert at the Trades Union Congress. ‘Whatever interpretation economists might have as far as ordinary people are concerned, we are already in a double dip recession and young people are clearly one of the groups bearing the brunt of it.’”
“One only needs to look south and east of the Mediterranean to see what the end result of endemic youth unemployment can be.”
“The revolutions that have swept the region were largely led by shabaab - self-identified youth movements who were fed up with their lack of prospects in an area of the world where unemployment for their age group rests at 24 per cent, according to the International Labour Organisation. Their anger, was exacerbated by the corrupt and despotic rule of their leaders.”
“Prime Minister David Cameron has insisted Britain’s recent riots had nothing to do with poverty. But numerous statistical analyses of the rioters have shown deprivation and a lack of hope played a key role.”
