Another Slump Ahead The True State of the U.S. Economy

[xchrom]

http://www.counterpunch.org/2013/10/04/the-state-of-the-economy/

“Slumping asset prices show a recession is probably on its way. … Stocks tend to fall more frequently and further than property values, so they are better recession-predictors.” - IMF research paper by economists John C. Bluedorn, Joerg Decressin and Marco E. Terrones.

The fact that stock prices have been drifting lower, doesn’t prove that the economy is headed for recession. Nor does political dysfunction (government shutdown), droopy home sales, plunging confidence, chronic high unemployment, rising levels of extreme poverty, unprecedented public dependence of food stamps, weak personal consumption, stagnant wages, falling middle class incomes, or gaping inequality. They may show a country that is on the wrong track and has its priorities mixed-up, but they don’t show that another recession is immanent. Even so, it’s easy to wonder how bad things have to get before the economy more closely reflects the mood of the country which is relentlessly pessimistic. To say that no one believes in Obama’s recovery would be a gross understatement. Obama supporters feel duped, misled, and despondent. Obama is not the agent of change they’d hoped for. He’s expanded the wars, slashed vital safety net programs, exonerated Wall Street criminals, and continued the vicious attack on civil liberties. He’s done everything in his power to boost the profits of the big corporations and banks, but hasn’t lifted a finger to help ordinary working people. And his efforts have paid off, too. Just look at this from Huffington Post:

“Corporate profits have increased by 18.6 percent over the past year…. In fact, corporate earnings now represent a larger share of GDP than during any other period in history…

Real wages have declined by nearly seven percent in the past seven years, according to data collected by the compensation research company Payscale. In other words, U.S. workers have less buying power now than they did before the financial crisis…

Payscale’s findings are just the latest in a slew of research that indicates the sluggish economic recovery has not been beneficial for most of us. Income inequality in the U.S. is at a new high as skyrocketing income gains for the top one percent are met by stagnating wages for practically everyone else.” (“Corporate Profits Are Soaring, But You’re Not Feeling It“, Huffington Post)

[LuvNewcastle]

1. I roll my eyes every time I watch the news and they talk about

what a great day the stock market had. I see the stock market as completely divorced from reality. They're making these insane profits while so many people can't even find a real full-time job, if they can find a job at all. Those stock traders might as well be aliens gambling in a casino on Neptune; that's how relevant it seems to my life.