GDP Tell-Tale Jersey Shore.
The GDP report this news cycle -- plus 2.4% for the 2nd Quarter at an annualized seasonally adjusted rate -- confirms the lackluster economy and the new normal. The recession of '08-'09 (see below) is now identified as worse than we thought -- the 2nd Quarter '09 was negative 7% -- and this explains the crushing job loss. GDP for the second quarter of 2010 is subpar at 2.4% growth, which translates into weak demand, weak consumer spending and the present corporate strategy of cutting overhead (jobs) and boosting profits, and banking the profits, all reinforced by the numbers. Paul Vigna, DowJones, speaks to a continuing drift lower of the general economy because of the weak consumer spending. We are saving money. The fancy way of saying this is that we are de-leveraging. The continued joblessness is the new normal. It is not possible at this time to see what will reengage the growth engine. Green jobs? Wrong answer. The growth now consists of financial restitution and exports of the remaining manufacturing base, with the restocking of inventory shelves. The consumer is 70% of the GDP. But these days the consumer has backed off to as low as 67%. Folk do not trust their job security and are cautious to spend, grow, move, change anything significant. Also, mention that the education costs for a family are crushing and constant, and without growth, everything goes to schools and housing. Corresponding with Paul Vigna, my measure of the markets now is that the traders can put the money back into T-Bills and go on vacation until January. Paul Vigna recommends vacation at the Jersey shore, not Paris this year. Even living large can be right-sized large.
My neighbor and his family are currently away, vacationing in Japan. They are expected back this weekend. They will be here for approximately a week and then they’re off to sunny France for an additional two weeks. Both he and his wife are immigrants. He works for Google.
Look, education costs are crushing alright. I know; I put two kids through college. Both turned out alright and have jobs, thank God. But higher education in America has ceased being education in the classical sense. Instead, it has become a ticket for entry into the upper classes. The basics are no longer stressed. What is critical is that one conforms to and shows promise in advancing a specific ideology. The lower grades have essentially become day care and engines of social engineering.
Education in America has become pure fluff. This is why we require foreigners to innovate, build, and maintain whatever remains of our industrial and financial base. In this we have already been overtaken by what we condescendingly refer to as the Third World (primarily Asia). Since fluff, like financial derivatives, can be priced at whatever the gullible are prepared to bear, education has become a toxic investment.
It has come to my attention that major American colleges and universities are looking to open up campuses in India. Will these be having American teachers? I doubt it. Perhaps there’s a strategy emerging here. It has been said that the best way to bring about the downfall of a nation is to export liberalism to it. Let no one claim that American universities are not doing their part.
http://peterkoelliker.blogspot.com/
http://pkoelliker.blogspot.com/
Any time the government becomes a significant underwriter of an economic sector, like education, you can be sure of two things: declinging quality and rising prices. Health care sector, take note! Auto industry, take note! Unions, take note! Banking industry, take note!
If I recall correctly, the politicians and economists promised us late in the last century that free trade and mass immigration would have brought us unheard-of prosperity by now. You know the drill: comparative advantage, diversity is strength, and so on.
Mr. Theory, meet Mr. Practice.
Larry Kudlow reported the additional federal spending created a 0.2 percent growth in GDP!
Those numbers are insane! It would have been better to cut taxes.
Marxists do not believe in lowering taxes to stimulate growth. Their only belief is in achieving power by any means necessary.