Posted on 04/11/2010 4:13:41 AM PDT by expat_panama
Sometimes you have to take out your political lenses and look at the actual statistics to get a true picture of the health of the American economy. Right now, those statistics are saying a modest cyclical rebound following a very deep downturn could actually be turning into a full-fledged, V-shaped, recovery boom between now and year-end.
I'm aiming this thought especially at many of my conservative friends who seem to be trashing the improving economic outlook -- largely, it would appear, to discredit the Obama administration.
Don't do it folks. It's a mistake. The numbers are the numbers. And prosperity is a welcome development for a nation that has suffered mightily.
Credibility is at issue here. Conservative credibility. Capitalist credibility.
Now, I have written extensively about the tax-and-regulatory threats of the Obamanomics big-government assault. But most of that is in the future. The current reality is that a strong rebound in corporate profits (the greatest and truest stimulus of all), ultra-easy money from the Fed, and some small stimuli from government spending are working to generate a stronger-than-expected recovery in a basically free-market economy that is a lot more resilient than capitalist critics think.
Rather than blow their credibility over a cyclical rebound that is backed by the statistics, free-market conservatives should tell it like it is.
Let's begin with the March employment numbers recently released by the Labor Department. Those numbers were solid. People say small businesses are getting killed by taxes and regulations from Washington, but the reality is that the small-business household employment survey has produced 1.1 million new jobs in the first quarter of 2010, or 371,000 per month. If that continues, the unemployment rate will drop significantly.
Additionally, the corporate payroll number for March increased by 224,000 -- not 162,000 as some claim -- with the prior two months being revised up by 62,000. And this is being led by private-sector job creation.
And according to just-released data, retail chain-store sales for the year ending in March were up a blowout 10 percent. Ten percent. That's a V-shaped recovery. And the real-time ISM purchasing-managers reports for manufacturing and services indicate that the economy in the next few quarters could be much, much stronger than the consensus expects -- maybe 5 to 6 percent. Another V-shaped recovery.
Commodity charts, meanwhile, are roaring. All manner of raw industrial materials have been booming -- iron ore, steel, you name it. More V-shaped recovery. So with higher commodity prices running virtually across-the-board, there is every incentive for rapid inventory-rebuilding. (Inventory prices are going up as commodity prices go up.)
At this point it's impossible to project a long-lived economic boom, such as we had following the deep recession of the early 1980s. For one thing, tax rates will rise in 2011 for successful earners and investors, quite unlike the Reagan cuts of the 1980s. So it's possible that entrepreneurs and investors are bringing income, activity, and investment forward into 2010 in order to beat the tax man in 2011. This would artificially boost this year's economy, stealing from next year's economy.
Recall that when Hillary Clinton took her Rose Law Firm bonus in December 1992, rather than January 1993, she knew full well that her husband Bill would raise the top tax rate in 1993. So the fourth quarter of 1992 grew at nearly 4.5 percent, but the first quarter of 1993 saw less than 1 percent growth. The temporary growth spurt for all of 1992 was 4.3 percent, but activity dropped to 2.7 percent the following year.
It could happen again in 2010 and 2011. Although the Obamacons deny it, tax-rate incentives matter a lot.
And at some point, monetary policy will tighten, with higher interest rates on top of higher tax rates. That, too, could slow growth markedly next year. And then there's the dozen tax hikes in the Obamacare health takeover, and a possible VAT attack from Paul Volcker, all of which will work against growth in the out-years.
Clearly, we are not operating a supply-side, free-market model today. What I wish for is sound money and lower tax rates, which would promote sustainable economic growth. Instead, we're getting easier money and higher tax rates, which could mean a temporary boom today and disappointingly slow growth after that.
But then again, who knows? Maybe the tea-party revolution overturns the obstacles to future growth and the boom is sustained. Free-market populism and a return to Reaganism, along with an anti-federal-spending coalition that is the most powerful force in politics today, could right the economic ship.
That's the credible take.
\
--except we need to remember that our goal is truth and reality, and not some vain effort to convince those who're delusional by choice.
larry is a moron. He’s the type of person that gives capitalist a bad name. If you’re a believer of capitalism, theres no way you could believe any of the current policies can lead to prosperity. Capitalism is a economic philosophy. You either believe it or you don’t.
Let's begin with the March employment numbers recently released by the Labor Department. Those numbers were solid. People say small businesses are getting killed by taxes and regulations from Washington, but the reality is thatthe small-business household employment survey has produced 1.1 million new jobs in the first quarter of 2010, or 371,000 per month. If that continues, the unemployment rate will drop significantly.<./b>
THIS number from the BLS is completely made up. It is the BLS best GUESS. There is NO way to accurately measure this number. What Larry is arguing is "trust the Government". Sorry we know better. Given Obama's regimes past history of inflating the initial numbers then quietly adjusting them downward later in the month, it is utterly foolish to take any of their numbers at face value.
The great zero is claiming his policies are causing the improvement, such as it is.
His policies, in reality, are going to tank the economy in a big way. We’ve got to look past the end of our noses and see what’s coming if we allow the great zero and congress to persist in their economic folly.
Central economic planner do not work. Government can certainly mark alot of problems by printing ALOT of money which gives illussion of prosperity. Apparently Larry rather the illusion that reality. As long as Maddoff is conning ppl and they still believing they’re geting insane return, then all is fine. To Larry, the problem are ppl who’s trying to tell ppl Maddoff is not a conman. He rather live in the illusion
Of one other thing to ask Larry. Considering the billions of dollars being written down by corporations right now to pay for Obamacare, just how long does he think this “v shaped recovery” going to last?
True, and the point here is that we've got to be honest enough to see our noses first.
“my conservative friends who seem to be trashing the improving economic outlook — largely, it would appear, to discredit the Obama administration.”
****************
I heard him say this on his radio show last week. Quite frankly, it didn’t pass the sniff test or have the ring of truth then, and it doesn’t now, either.
great pic and very apt. You’ll be sent to room 101 for that thoughtcrime.
is that why so many businesses are closing, almost weekly, because we are headed to recovery?
I don’t know who this moron is, but he sure isn’t much of an economist. Obama butt bot is more appropriate.
Why do these creeps always come out of the wood work ...
By asking how long it will last, you're saying it exists. That's good.
What about default? If we can’t avoid default then it doesn’t matter what the shape of the recovery is right now.
its time to buy rice, ammo and toilet paper... Svckers rally... Yes, that’s a ‘v’ in suckers ;)
I see reading comprehensive is not one of your strengths. Try reading it again.
The slope of the right side is near flat. There is an upward trend but the slope value is small.
It is similar to a hockystick, not a v. :}
Every one goes off the rails from time to time. Writing delusional pieces is the way it happens. Most regimes send the media to the gulags to purify the species. Maybe this is how they try and avoid the the enviableness.
As the lies pile up, I read only the real data and reports, draw my own conclusions. It’s far easier to spot the lies that way. The books they are a cooking, and eventually the truth is not able to be hidden anymore.
yes, I know who Kudlow is ... And ignore him for the most part. Handing out fiat money to free loaders does not a sustainable economy make -— All the two bit tin pots who have gone before, have proved that point. And a short real video from Venezuela today, would show you in a few short minutes slavery still hasn’t been perfected.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.