Here is the story from the Economist on the "Recovering Markets in the U.S."
"The world’s largest economy shrank at an annual rate of 1% in the second quarter. At least as of June 30th, America’s economy was still contracting, thus the country's deepest post-war recession was not over.
But the news has been greeted with something approaching relief. For one thing, the decline was smaller than many economists had predicted, and a lot less than the dramatic 6.4% annual rate of contraction of the previous three-month period. For another, there are reasons to hope that conditions improved in July. And some newly released data about earlier months give reasons to cheer too."
No this isn't good enough. This is cruel and unusual punishment imposed unfairly on the American people for two reasons.
1. But the fact is that the economy is still in the dumps because it has been a synthetic recovery courtesy of "financial engineering", not a natural one produced by demand from healthy economic markets. A recovery in the labor market is the only way to get that natural demand up.
2. The GDP numbers go up with inflation. Bernanke has been printing in fear of much needed deflation. But prices for goods (except gas) have gone up. The price of gas has gone down last year which enabled Americans to spend that money elsewhere so that wouldn't necessarily drop the GDP.
The good news is that China is starting to buying from us. The good news is that Ron Kirk is addressing the WTO on China's trade war against the U.S. This will produce a flow of non-interest costing US Dollars back into circulation in the US economy.
The bad news is that our government is trying to talk the economy up. You can't do that when A LOT of money (between $600-$700 billion worth) is out of circulation and talking won't fix that. I'm still pointing fingers at the trade deficit, offshoring and outsourcing. That money is better in circulation than the multiplier effect because that non-interest, non-inflation creating owing money is much better than printing dollars for our economy.
“It’s important to put it in perspective,” Christina Romer, who chairs the White House Council of Economic Advisers, said in a Bloomberg Television interview. “We are seeing some sign the consumer is stabilizing and, of course, the tax cut that was included in the recovery act I think is going to help consumers feel more confident.”
To make things even worse, the cost of labor has gone up.
The Labor Department reported separately today that employment costs -- a measure that includes wages, salaries and benefits -- rose 1.8 percent in the second quarter from a year before, the smallest gain in figures dating to 1982.
GDP contracted a revised 1.9 percent in the fourth quarter of 2008 from the same time the prior year, compared with the 0.8 percent drop previously on the books.
The GDP report is the first for the quarter and will be revised in August and September as more information becomes available.
The economy has lost 6.5 million jobs since the recession began in December 2007, and economists surveyed by Bloomberg this month forecast the jobless rate will exceed 10 percent by early 2010.
The CIT fiasco would've made another disaster if they couldn't produce loans to smaller companies.
This is no recovery. This isn't a way to keep businesses profitable. This isn't a way to increase consumer demand. And we all know that until Obama cans the CFTC and we get to jail the criminals who traded fraudulent credit defaults; the derivatives are obviously back on the market.
America is way too good for this. We have innovated, we've created, we've put labor in. And all the government does is take it away from us on behalf of bribes from a few bureaucrats. They're just companies, they don't deserve that much power from the government nor does the rest of the business world need to suffer from it.