Consumer optimism has been rising from the morose multi-year low in August and has reached levels not seen since, well, May. It whipped hope into a froth. Rising confidence would pump up consumer spending, which would pump up everything else. But the inexplicable American consumer, the toughest creature out there that no one has been able to subdue yet, had other plans.
For medium distances, high-speed rail is faster than flying. It’s hassle-free and comfortable. And it benefits the economy. But not the way California is doing it. The hullabaloo about funding the skyrocketing costs of linking LA and the Bay Area ignores a huge economic problem: once again, taxpayers are asked to create jobs overseas. Contenders: Germany, Japan, France, and China.
The US trade deficit with China will hit a record $300 billion for the year, a big hit to the economy. It’s politically convenient to blame China, particularly its yuan policy. But the driver is a broad strategy by US corporations to shift an increasing range of economic activities to China. And now a trade war has broken out. Politicians, have a word with your corporate sponsors!
An ominous trend picks up speed: the middle class is shriveling. In 1980, 60% of Californians lived in middle-income families. By 2010, only 47.9% did, according to a study by the Public Policy Institute of California. Main culprits: declining incomes and disappearing jobs. And where the heck is the recovery?
Consumer confidence indices have collapsed to levels not seen in years or even decades. Yet the toughest creature out there that no one has yet been able to beat down struck again. Consumer spending increased at an annual rate of 2.4% during the third quarter, though the mood has become outright morose since.
At $46 billion in August and a hair-raising $376 billion year to date, the trade deficit is a powerful descriptor of what’s wrong with the U.S. economy. By year end, it will amount to half a trillion. Economic activity gone overseas. The cause: an ancient and valid business principle that is now harming the overall 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.
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.
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?
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.