CBS NEWS: Let’s face it — the U.S. economy is going nowhere fast…. It took until now to face that?
They are two of the scariest words in the English language, often heard as the engine room is starting to flood or the parachute fails to deploy: “Don’t panic.” And that was the message among economists trying to make sense of how it is, exactly, that the U.S. could be slowing, when most forecasters had expected it to be speeding up by now.
Time to lower the lifeboats? Not quite. But the economic seas are starting to look ominously rough. Let’s consider why the situation is worrying.
First, it is clear that the economy is much weaker than we thought. As Deutsche Bank economists note, over the past four quarters the non-consumer portion of the economy, notably businesses (you know, the ones that hire people), has grown at a rate of -0.2 percent. That’s recession territory.
A number of economists are now also ratcheting back their forecasts for full-year growth to less than 2 percent, or what many experts think is the economy’s “stall speed.”
Second, history shows that a downturn that starts on the “production” side of the economy, such as business investment, almost always ends in tears for consumers. Economist Charles Gave of investment advisory firm Gavekal notes that only once since 1958 (in 2012) has the non-consumer part of the economy contracted without that period later being understood to have been part of an official recession.
Amazingly (not!), no mention whatsoever of Barry or his Administration’s policies over the last 7 years!! Can you imagine in your wildest dreams a negative financial report from CBS during the Bush or Reagan eras without casting blame directly on the President?