Will 'Obamalaise' Create Another Downturn???
Today's choppy economic growth conjures up memories of the '70s, when another Democrat presidency reigned over a similar period of stagnation, dubbed the era of "malaise."
Like the Carter years, the Obama years so far are marked by anti-business policies and anemic business activity. This week's raft of gloomy economic reports confirm the zombie Obama recovery has hit another dangerous soft patch.
Among the bad news:
• Businesses last month slashed orders for autos and other durable goods by the largest amount in six months.
• Industrial output dropped the most in April for any month since the start of the recovery, indicating the manufacturing sector may be rolling over.
• Jobless claims last week unexpectedly shot up and topped 400,000 for the seventhstraight week, signaling that payroll growth remains soft — in fact, the pace of hiring may be slowing.
• April housing starts plunged 11%, confirming the housing industry remains moribund.
• Foreclosures last quarter accounted for 28% of all home sales — the highest share in a year and nearly six times above the normal rate.
• Consumer spending last quarter expanded just 2% after rising at a 4% clip in the fourth quarter.
• Net corporate profits last quarter fell 1% after rising 3% in the fourth quarter, and weaker earnings continue to act as a drag on stocks.
• The overall economy last quarter grew a lower-than-expected 1.8% vs. 3.1% in the fourth, showing gross domestic product growth is braking hard.
Yes, Japanese disasters slowed auto supplies, and record tornadoes hurt building in the South. But these one-off events don't explain the broader downtrend.
Manufacturing weakness was widespread across a number of industries. Excluding transportation, durable orders would have been down 1.5% in April after rising 2.5% in March. And reports from the Philly Fed, Richmond Fed and Chicago Fed all show slowing.
While higher pump prices have hurt spending, foreclosures have dampened consumer confidence. And it will take three years to clear the inventory of 2 million properties already in some stage of foreclosure.
Technically speaking, if the economy declines again, we'd have a triple dip. The last time we saw such choppiness was in the '70s.
Then as now, Washington held back economic growth. Heavy-handed government policies are breeding uncertainty in boardrooms across the country.
Businesses are bracing for a double tsunami of government red tape and massive new costs in the form of ObamaCare and sweeping financial industry changes.
They're also looking at a massive tax increase in two years. Obama extended Bush's small-business tax cuts, but last month said, "I refuse to renew them again."
Businesses are hard-pressed to expand in such an environment. It's just too risky.
"We've got a lot more to do to get businesses to invest and to hire," Obama recently lamented.
No, you've done quite enough already, Mr. President.
Re: obamo is a blessing to carter
Its great to see the working man get something from the government. Big business, etc can squeel all they like. The Blackfella will look after us. Farmers over there have been subsidised for years and now the table has turned. Onward christian soldiers and paradise awaits.
Re: Will 'Obamalaise' Create Another Downturn???
Kindly explain what he has done that has damaged the economy and what you would like him to do that you and yours would support?