Economy

When False Premises Become Economic Policy

by Wolf Richter •  • Comments Off on When False Premises Become Economic Policy

“A shame that we can’t see Japan because of the marine layer” is an old joke in San Francisco. The premise that the fog over the Pacific keeps you from seeing Japan is just as false as the premise that running up huge deficits and printing trillions of dollars can create a healthy economy. Yet, that’s the line propagated by the status-quo media and its economists.

The Ugly World Of Auto Sales

by Wolf Richter •  • Comments Off on The Ugly World Of Auto Sales

The media giddily reported the September auto sales numbers—though there was little to be giddy about. They were still 20% lower than September 2006. Toyota and Honda got slammed, but don’t blame post-earthquake inventory shortages. They have been resolved. It’s a shift in the market.

Deflation In Japan and its Chances in the US

by Wolf Richter •  • Comments Off on Deflation In Japan and its Chances in the US

Deflation phobia broke out again. Fed governor Bullard grumbled about inflation expectations being too low and threatened to print more money, while deflationistas paint the Japanese “deflation spiral” as sheer horror. So here is my experience with that horror.

Alas, in one category, deflation has hounded us for 10 years.

Inflation As Solution: Hosing The Middle Class

by Wolf Richter •  • Comments Off on Inflation As Solution: Hosing The Middle Class

The FOMC’s often and clearly stated policy of creating sufficient inflation has been effective: up 36% from January 2000. But there are victims: the middle class and ultimately the economy.

Cutting The Deficit: A Bipartisan Joke

by Wolf Richter •  • 6 Comments

President Obama’s proposal to cut the deficit by x trillion dollars is another punch line in the serial joke that our political machinery has been telling us for too long: that deficits will be “cut” in ten years, while the opposite (the jobs bill, for example) is needed immediately.

The scary graph of our gross national debt will look even scarier.

Snapshot Of Our Calamity Economy

by Wolf Richter •  • Comments Off on Snapshot Of Our Calamity Economy

The economy is going back to hell, but stock markets are surging. Nothing new. It always ends in tears. But this time, the Fed’s money-printing strategy will make things only worse. Today’s horrid numbers show us why.

Obama: Gut Social Security Now, Don’t Wait Till The Election

by Wolf Richter •  • Comments Off on Obama: Gut Social Security Now, Don’t Wait Till The Election

Incredible that a Democrat would propose that our Social Security system should be gutted starting immediately to get an up-tick in GDP just before the election. But President Obama’s proposal to cut payroll taxes in half will do just that.

Remember him? Went after Social Security too.

Let’s Just Raid Social Security

by Wolf Richter •  • Comments Off on Let’s Just Raid Social Security

Out of one side of its mouth, our political system talks about reforming Social Security to preserve it for a few more years, and out of the other side of its mouth, it proposes to expedite its demise. Where’s the duct tape?

In the Bowels the Jobs Report: 15.4 Million Missing Jobs

by Wolf Richter •  • Comments Off on In the Bowels the Jobs Report: 15.4 Million Missing Jobs

The long-term problem in the horrendous jobs report is the strangely inconspicuous “Employment-Population Ratio” that has been nosediving for over a decade. It’s the definition of a comatose economy.

The inexplicable American Consumer

by Wolf Richter •  • Comments Off on The inexplicable American Consumer

Consumer confidence fell off a cliff and hit levels not seen since April 2009, and yet, consumers spent with abandon and made up the difference by piling on debt, at least for now. What gives?