[unlawflcombatnt]

SINKING ECONOMY vs. NEOCON-ARTIST SPIN

Today's GDP report showed the slowest quarterly growth since 2002. Consumer spending was the lowest since 2001. The NeoCon-Artist spin machine was immediately put in high gear following the report.

The immediate response by some was that the economy had just "hit a pothole." A more accurate statement would be it "fell off a cliff." The DECLINE in the Final Sales number to -0.3 from the previous +4.6 is especially worrisome. Also, the huge increase in inventories gives further indication that much of production contributing to GDP was unsold.

Below is a partial copy of today's GDP report from Briefing.com
http://i27.photobucket.com/albums/c190/unlawflcombatnt/1-27-06artGDPgrphT.gif

Here's a link to Briefing.com's GDP report: GDP (http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicReleases/gdp.htm)

Given that consumer spending is 2/3 of all economic activity, the 1.1% change gives further evidence that the economy is slowing down. Christmas spending would be expected to make 4th quarter spending higher, rather than lower. Had the 4th quarter not included Christmas, consumer spending would have been lower still.

With New Home prices declining sharply to a -3.4%, the source of home equity loan spending is also shrinking. Combined with a yearly decline in real hourly wages of 0.49 %, consumer spending can only be expected to decline further. (Wage information can be found at: BLS: Real Hourly Wages (http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=CES0500000049) )

In 2005, consumers spent 115% as much as they earned. The savings rate has declined to below 0. Can consumers continue to increase spending when their income is declining and the source of their borrowing is declining in value? Will production continue to increase if consumers' ability to purchase that production decreases? Will capital investment increase if purchase of the production it facilitates decreases?

unlawflcombatnt

EconomicPopulistCommentary (http://www.unlawflcombatnt.blogspot.com/)

Economic Patriot Forum (http://www.unlawflcombatnt.proboards84.com/)

[FDRfollower]

Hello unlawflcombatnt.

You realize, that GDP is a worthless means of measuring an economy? We've been in a collapse since the 70's.

You're right that the economy is in terrible shape, and even faked figures like the Fed and CBO puts out reflect that. But, you'll never even come close to figuring the true state of the economy from inside the hall of mirrors type of way of coming up with the numbers. A good rule of thumb is, that they want to massage the numbers to reflect what they want to state as "the economy".

Remember, they can't differentiate between prostitution and steel making, as far as where the money is coming from, even though sense would tell you, that steel making is better for the economy than prostitution.

If you're thinking of housing for instance, how many of the sales were from speculators buying houses, to then resell, versus buying one to live in it? Were the prices reflecting the state of the house, for instance, is a house that esentially a tar paper shack with fancy hollywood covering and gold faucets really worth a half mil+?

There's more to say, but I have to give up the computer.:o

[Jane of Arc]

Excellent post unlawflcombatnt!

Here are more facts pertaining to the Neocon Economic Destruction of America. This is an excellent site with endless references and access to government records.http://www.epi.org/content.cfm/pm110

What's wrong with the economy?

1. Profits are up, but the wages and the incomes of average Americans are down.

2. More and more people are deeper and deeper in debt.

3. Job creation has not kept up with population growth, and the employment rate has fallen sharply.

4. Poverty is on the rise.

5. Rising health care costs are eroding families' already declining income.

The indebtedness of U.S. households, after adjusting for inflation, has risen 35.7% over the last four years.

The level of debt as a percent of after-tax income is the highest ever measured in our history.

Mortgage and consumer debt is now 115% of after-tax income, twice the level of 30 years ago.

The debt-service ratio (the percent of after-tax income that goes to pay off debts) is at an all-time high of 13.6%.

The personal savings rate is negative for the first time since WWII.

[FDRfollower]

Thinking on the coming destruction of the entire US auto industry by Wall St., and the statement of W to let the free-market take care of it, I decided to invite two Republicans to comment on the situation. Could you come up here Mr. Thaddeus Stevens?

1."The gentleman from Massachusetts [Mr. Rantoul] supports these grants to railroad companies on the principles of free trade. It is not my intention to discuss at much length the doctrine of free trade. That has been so amply done of late, both orally and in writing, as to become tedious.
But although the theory has been much discussed, it has never been reduced to practice, except among barbarian tribes. I think gentlemen cannot point to a single highly-civilized commercial and manufacturing nation capable of producing the raw material, that has ever adopted it. Every highly-cultivated nation has made the protection of domestic industry the special care of Government. It has been found by the experience of more than twenty centuries that the protection of domestic manufactures by prohibitions, discriminating duties, and commercial regulations, has been, and is, the true, natural, and wise policy of nations, or all history is a lie. It is a mistake to suppose that the elevation of one national interest is the depression of others, as is more than insinuated by the Baltimore platform [platform of the Democratic Party--ed.], which is intended, not only for all kinds of men, but for every fowl of the air, fish of the sea, four-footed beasts, and especially for every creeping thing to stand upon. All classes of national industry, like the arts and sciences, are bound together by one common band. All flourish or languish together."

Woah! Pretty strong statement there Mr. Stevens. Our president is a barbarian! My my. Our next guest, is a former president, and he would like to say something about the situation.

2."They say 'everything would be so cheap,' if we only had free trade. Well, everything would be cheap and everybody would be cheap. I do not prize the word 'cheap.' It is not a word of hope; it is not a word of comfort; it is not a word of cheer; it is not a word of inspiration! It is the badge of poverty; it is the signal of distress; and there is not a man in the audience, not a white-haired man, who, if he will let his memory go back, will not recall, that when things were the cheapest, men were the poorest... Cheap? Why, cheap merchandise means cheap men, and cheap men mean a cheap country; and that is not the kind of Government our fathers founded, and it is not the kind their sons mean to maintain. If you want cheap things, go where you can get them... We want labor to be well paid."

Well Mr. Bush, are you disagreeing with a president who led the nation out of an economic crisis?

1."FREE TRADE IS FOR BARBARIAN TRIBES" -- Speech Given During the Tariff Debates of 1852 by Congressman Thaddeus Stevens

2. Pres. William McKinley speech at the University of Pennsylvania

[unlawflcombatnt]

Hello unlawflcombatnt.

You realize, that GDP is a worthless means of measuring an economy? We've been in a collapse since the 70's.

You're right that the economy is in terrible shape, and even faked figures like the Fed and CBO puts out reflect that. But, you'll never even come close to figuring the true state of the economy from inside the hall of mirrors type of way of coming up with the numbers. A good rule of thumb is, that they want to massage the numbers to reflect what they want to state as "the economy".

I completely agree that GDP is a poor, if not worthless measure of the economy. I've actually posted on that very subject in the past. The government simply manipulates numbers to get a desirable result. In this most recent case, they couldn't even manipulate the numbers enough to raise the GDP. So they came out of the starting blocks claiming the numbers were wrong, and ( like you and I have been saying all along) that it's not representative of our economy. It's amazing how "un-representative" it becomes when the numbers don't look good, and how completely "representative" it's supposed to be when the numbers look better.

EconomicPopulistCommentary (http://www.unlawflcombatnt.blogspot.com/)

Economic Patriot Forum (http://www.unlawflcombatnt.proboards84.com/)

_________________
The economy needs balance between the "means of production" & "means of consumption."

[FDRfollower]

Ok, unlawflcombatnt. Now is the $600,000,000,000 question.

What are you going to do to FIX the economy :)