February 28, 2008 Leave a comment
“I’m concerned about the economy,” he said. “I don’t think we’re headed to recession. But no question, we’re in a slowdown.”
Wondering whether this means we are already IN a recession, I did what any intrepid internet user might do and headed on over to Wikipedia:
An alternative, less accepted definition of recession is a downward trend in the rate of actual GDP growth as promoted by the business-cycle dating committee of the National Bureau of Economic Research. That private organization defines a recession more ambiguously as “a significant slowdown in economic activity spread across the economy, lasting more than a few months.”
A recession may involve simultaneous declines in coincident measures of overall economic activity such as employment, investment, and corporate profits. Recessions may be associated with falling prices (deflation), or, alternatively, sharply rising prices (inflation) in a process known as stagflation.
Hmm. I am not an economist, but unlike the President, I do read the papers and I must say, they have been talking about this for a while.
I realize the President is a busy man and has many miles to jog and brush to clear and all, but you think someone would have mentioned this to him, if not an economic adviser, one of his oilman buddies bragging about his new boat or private island or something…
On one issue particularly worrisome to American consumers, there are indications that paying $4 for a gallon of gasoline is not out of the question once the summer driving season arrives. Asked about that, Bush said “That’s interesting. I hadn’t heard that. … I know it’s high now.”
I also noticed this from the Feb. 21 leading economic indicators press release:
• The leading index declined for the fourth straight month in January. Stock prices were the largest negative contributor to the index this month, followed by housing permits. Money supply (real M2), index of consumer expectations, and initial claims for unemployment insurance (inverted) made positive contributions to the index.
With this month’s decline, the leading index has fallen 2.0 percent (a decline of 4.0 percent annual rate) from July 2007 to January 2008, the largest six-month decline in the index since early 2001. In addition, the weaknesses among its components have been more widespread than the strengths in recent months.
• The leading index has continued to decline since its most recent highest value reached in July 2007, and the weakness among the leading indicators has become more widespread. However, the coincident index has mostly increased during this period, although its growth rate has slowed considerably in recent months.
At the same time, real GDP growth decreased to 0.6 percent in the fourth quarter of 2007, down from an average of about a 2.2 percent annual rate in the first half of 2007 and a 4.9 percent annual rate in the third quarter.
Taken together, the current behavior of the composite indexes suggests increasing risks for further economic weakness, and that sluggish economic growth will likely continue in the near term.
One has to think that’s something someone should tell the President…
Unless this is all part of his plan. Because it is starting to sound familiar. Think about it, no real idea of what he was getting into, assertions by the government that were not true, a President in over his head promising to exhaust all options before taking the country into something. It almost seems as if he meant to do this.
I’ll also bet the President has no exit strategy to get out of this recession, because that would be letting the recession win.
The enemies of capitalism want us to pull out of this recession so they can step in and fill the void. We will be in this recession as long as it takes to secure victory, even if it means 100 years…
Apparently the Kiwi is not the only one confused by the president’s statement on the price of gas and it became one of the major topics at today’s White House News briefing, according to the New York Times:
By Friday morning, the White House was backpedaling, as reporters asked spokesman Gordon Johndroe whether the president really had no clue that some economists were predicting $4-a-gallon gas. His reply sounded almost like the White House of the Reagan years, when his press secretaries constantly found themselves clarifying “what the president meant to say.”
Mr. Bush, Mr. Johndroe said, realizes that the high price of gasoline is a hardship for many Americans. “But the President’s point,’’ he said, “was that neither his advisors nor Energy Department analysts are at this point forecasting $4 a gallon gasoline.’’
Apparently word hasn’t gotten to Mr. Bush’s White House that in California, $4-a-gallon gas is already here.