Three Signs The Economy Is Still In the Dumps
By Henry Meier
Have you ever gone to bed at night slapping yourself on the back for a job well done only to wake up the next morning to a reminder that your dog isn’t quite housetrained yet, the realization that your account balance shouldn’t be quite so high if all the bills were paid, and a nagging suspicion that you didn’t close the car door after taking out the last of the groceries? That’s the way we should all feel about the economy this morning. Yesterday provided several reminders that while the worst of the Great Recession is over and the economy is no longer in intensive care, it is far from healthy and will remain in the doldrums for quite some time.
First, the Labor Department reported that the GDP actually shrunk in the fourth quarter, the first such contraction in three years. The experts are pointing out that the contraction was caused, in part, by economic disruptions resulting from Hurricane Sandy. Still, there’s plenty to fret about. For instance, the Wall Street Journal, which is as determined to point out flaws in the Obama Administration’s economic policies as Keith Leggett is to point out the foibles of credit unions, notes in an editorial today that while the storm undoubtedly hurt the economy, it also benefitted from a rush of tax revenue as taxpayers cashed in before being hit by higher tax rates. Combine this with the fact that it is becoming more and more likely that sequestration will take place, resulting in a sharp and sudden decrease in government spending and there is reason to think that the economy isn’t quite a strong as anyone thought it was. (By the way, sequestration sounds an awful lot like what they did to my dog last week. Sorry, boy, it had to be done.)continue reading »