Uh oh spaghetti-o’s folks!! Numbers for economic growth in the second quarter have been revised and show that the dismal 2.4% number reported last month would have been incredible compared to the actual numbers. The new figure – 1.6% reflects an economy that is fighting for its life with life support dwindling in its efficacy. The painful number reflects more than a 2.0 point drop from the first quarter where we posted a 3.7% growth figure and almost a 4.0 drop from the last quarter of 2009. Couple these numbers with reports from the housing sector – existing home sales at the lowest point in a decade and new home sales at the lowest point since figures began being reported 47 years ago – and talk of a double-dip recession doesn’t seem so crazy after all.
Economists are scrambling for the root of the problem and the administration is frantically looking for a new source of blame. Economic growth via government spending has now been fully exposed for the sham socialist trick shell game that it is, was, and always will be – yet again – and even the crafty Obama administration will struggle to call upon the successes of stimulus efforts when they are clearly failing in real time. 
The short of it is this… we have spent 18 months under this administration and at least four under the previous one trying to figure out how government was going to solve the problem of a dwindling economy. Through bailouts, stimuli, government intervention, regulation, and outright federal subjugation of private industries we have surely taken the long road straight to the bottom. Wouldn’t we have been better served cozying ourselves up in a nice firm beer keg and rolling that vessel straight over Niagra Falls?
This economic problem – just as many that have preceded it – is rooted in a lack of confidence. The stock market bulls and bears accordingly but “confidence” is not purely a problem for the investment world. Confidence is derivative of many things – confidence that you will have a job tomorrow, confidence that your taxes won’t go through the roof, confidence that your business won’t be punished by the unfair insertion of government into the risk reward scheme of the free market, confidence that regulation won’t make your products too expensive to sell, confidence that the actions of Congress passing health care legislation won’t force your premiums to rise or force you to drop insurance coverage altogher, and perhaps most importantly… confidence that your government has your best interest in mind.
It is that last prong that I believe is at the real source of this economic boondoggle. Americans have abandoned hope that the Federal Government has their best interest in mind. This administration and this Congress have put ideology and their dream for a Hope and Changed United States ahead of the well-being of the American People they serve. They have used this woeful period of time as a lab experiment for their misguided ideologies. Undoubtedly, even when facing these numbers and this reality, they will find another source of blame for their failures – Republicans and their party of no; unforeseen economic factors; and not enough spending will surely be at the top of the list. The brilliance of progressive/socialistic policies have simply been stifled and prevented from having their intended impact. Of course.
Fed Chairman Bernanke addressed the numbers from Jackson Hole Wyoming today… Here’s the Full Text of his speech…
To help sustain the economy, Mr. Bernanke gave his strongest indication yet that the Fed was ready to resume its large purchases of longer-term debt if the economy worsened, a move that would add to the Fed’s already substantial holdings.
“We have come a long way, but there is still some way to travel,” Mr. Bernanke said.
“I believe that additional purchases of longer-term securities, should the F.O.M.C. choose to take them, would be effective in further easing financial conditions,” Mr. Bernanke told a Fed policy symposium here. He was referring to the Federal Open Market Committee, the panel that sets interest rates, which Mr. Bernanke leads; some members have expressed unease over the prospect of the Fed pursuing any further monetary accommodation.
“Central bankers alone cannot solve the world’s economic problems,” he said.
While Mr. Bernanke emphasized that deflation was “not a significant risk for the United States at this time,” he said “the F.O.M.C. will strongly resist deviations from price stability in the downward direction.”
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So what will his boss – the Economist in Chief have to say about the state of the economy he has been presiding over for 18 months? Will he concede that his economic policies are bunk – THAT CENTRAL BANKERS ALONE CANNOT SOLVE THE WORLD’S ECONOMIC PROBLEMS? Will he blame Congress for its missteps? Will he shift blame to Republicans for stifling his brilliance? Or will he take the comfortable route that appears to be his wheelhouse and simply blame George W. Bush yet again for the horrible economy that he inherited?
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The nation’s gross domestic product — the broadest measure of the economy’s output — grew at a 1.6 percent annual rate in the April-to-June period, the Commerce Department saidFriday. That’s down from an initial estimate of 2.4 percent last month and much slower than the first quarter’s 3.7 percent pace.
A great point from Protein Wisdom
Germany rejected Obama’s Keynesian demands and followed a pattern of austerity and making some tough decisions. But don’t expect the Obamacrats to admit any errors …
Don Surber with a moment of brilliance of his own…
Even straight-news reporters are aware of how every report of bad economic news is unexpected. One would think experts would anticipate these things.
So I am switching from unexpectedly to …solid accomplishments.
From LD Jackson at Political Realities:
You got room in your barrel? The market rebounded today, but we are still royally screwed. It was like hearing that your day before the firing squad got delayed a week or two but also that you got news that you were still gonna get shot. Happy to know it wasn’t death by fire, but still disappointment to know they didn’t call off the squad.
I think people were just happy to know that the bad news was behind them – at least for a day – so I certainly agree with you. How these folks plan to stave off inflation is beyond me. I do believe it will be upon us before we know it without the warning of “unexpected” corrections to estimations.
Thanks for the link, T Christopher. This is bad news, indeed. I keep hoping the President’s economic team will realize the tactics they are using are not helping the economy and in fact, are hurting it. I haven’t seen any sign of that yet, but hey, a fella can always hope.
I don’t care if its Geithner, or Volcker, or Romer… they just keep missing the mark. I am beginning to come to the unfortunate conclusion that this President really will put ideology over results. I think he is prepared to take us to the absolute bottom just to bring us out on the other side reinvented in the image of the nation he has in his mind. That is not a good reality my friend.
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