Perdido 03

Perdido 03

Friday, August 27, 2010

How's That Economic Data Looking, Obama?

Barack Obama has a data fetish.

Outside of smoking cigarettes and playing basketball with Arne Duncan, there is nothing in this world Barack Obama likes better than looking over some data.

There has been a lot of economic data released this week that shows how well or not-so-well Obama has been doing as a steward of the nation's economy.

Let's take a look at some of that data:

More bad news hit the U.S. economy Friday as the Commerce Department released a revised forecast of economic growth that shows a decline to 1.6%.

The second-quarter numbers were initially forecasted to be 2.4%.

The economy grew at 3.7% rate in the first quarter.

This comes as Wall Street closed below 10,000 Thursday, a first since the beginning of July.

The dismal data has led to fears the country is headed for another recession.

"The economy is going to limp along for the next few months," Gus Faucher, an economist at Moody's Analytics, told The Associated Press. "There's even a one in three chance it could slip back into recession," he said.

The outlook for the third quarter isn't much better with economists expecting just a 1.7% growth.

Also, the private sector is not adding enough jobs to dent the unemployment rate, which remains stuck at 9.5%.

The sagging housing market has also been a drag on economic growth. Earlier this week, new home sales sunk to a record low in July and existing homes sales fell 27%.

Consumer spending in the second quarter grew 2%, from 1.9% in the first quarter.

The somber news comes as Fed Chairman Ben Bernanke will give a key speech to bankers Friday that will be aimed at restoring confidence in the economy.

"While we don't expect the chairman to brace the nation for a 'double dip,' he may warn that near-term growth could be insufficient to promote a sustained reduction in the country's 9.5% unemployment rate," Neal Soss of Credit Suisse Group, told the Wall Street Journal.

Keep in mind that Ben Bernanke was wrong about the housing market, wrong about the '08 recession and wrong about pretty much everything else, so just because Ben Bernanke doesn't think the economy is heading for recession doesn't mean it isn't heading for recession.

Mark Zandi says there is now a 33% chance of recession. A few weeks ago he said the chance of recession was 20%.

Nouriel Roubini says the chance of recession is 40%.

And Robert Schiller says the chance of recession is greater than 50%.

Yeah, the "data" is bad.

And yet somehow, President Data Fetish, so happy to use data to fire teachers, close schools and shame people publicly, doesn't want to take responsibility for his own miserable record on the economy and the "proof" we have in the form of the data.

Let me repeat:

9.5% unemployment.

19% underemployment.

Both heading higher.

1.6% GDP for Q2.

There will be one more revision for this number, so it could go even lower.

The number of home foreclosures in July actually fell for the first time since 2006, but the number of homeowners behind on payments has increased, meaning foreclosures are likely to increase again in the coming months.

And now the problem is people with prime loans, not people with subprime or Alt-A loans.

See, when people are unemployed or underemployed, they can't pay their mortgages or spend money to buy things.

This would be bad for the overall health of the economy.

But President Data Fetish, on his sixth vacation this year, seems wholly unconcerned about the situation.

He did have a conference call with his economic advisers about the weak economic data, but they decided not to change course on any of their policies.

And of course the financial "reforms" Obama touted as a major accomplishment of his have been a sham.

Banks are engaging in the exact same risky ventures and bets they did before the '08 financial crisis.

So don't look to Wall Street to stabilize this mess.

If Obama was a teacher in the LA school system, he'd see his name in the paper on Sunday under the heading "Bad President."

And while I am NOT a fan of value-added analysis of teachers or of publicly naming names in the paper in order to shame people to quit their jobs, in Obama's case, I think both are warranted.

1 comment:

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