New recession begins next year, Shilling says

[marmar]

By Howard Gold


NEW YORK (MarketWatch) — Rough patch or double dip?

That’s the debate going on these days from executive offices to the local malls. Business owners, workers and, yes, even economists are trying to decide whether the U.S. economy has hit a speed bump or is heading for a collision.

.....(snip).....

Housing remains critical, so I looked up one of the few people who saw the housing bust and financial crisis coming years before they happened: Gary Shilling, economist and author of “The Age of Deleveraging.” While his steadfast bearishness didn’t surprise me, his blunt assessment did.

“I’m predicting another recession next year,” he told me.

Not a double dip, he emphasized, because we’re already two years from the end of the last recession and 3 ½ years from the business cycle’s previous peak, in December 2007. Historically, he said, economic expansions last about three years, especially in long down cycles of the kind he thinks we’ve been in since 2000. ..............(more)

The complete piece is at: http://www.marketwatch.com/story/new-recession-begins-next-year-shilling-says-2011-06-24?link=home_carousel

[dkf]

1. This is a pretty good assessment...

The economy, he says, is like a four-cylinder engine, and a recovery usually requires all four to be firing. They are consumer spending, employment, housing and the reversal of the inventory cycle.

Shilling thinks only the last is really recovering — i.e., companies that brutally liquidated inventories during the recession have had to rebuild them through boosting production and some additional hiring as demand bounced off its lows.

But consumer spending has made only a partial comeback, concentrated among more-affluent buyers. Everyone else has been weighed down by weak job and income growth and the continued housing catastrophe.

We have seen some improvement in employment, albeit slow of late, and it’s nowhere near what we’ve had in past recoveries. Mostly employers have just stopped laying people off, and when they hire, it’s often on a part-time or temporary basis.

[LiberalEsto]

2. When did the old one end?

Still unemployed. 2 years, 7 months.

[Still Sensible]

3. Duh. The republicans are doing everything they can

to make this happen so they have a shot at denying the president a second term.

[girl gone mad]

5. Interesting spin.

Democrats were warned, loudly and often, that any recovery would be weak without sufficient stimulus and solid banking reforms. Their response was to attack the progressives who were sounding the warnings.

[ixion]

6. exactly. And further, they rewarded the bankers for causing the mess.

and told Main St. to take a hike.

[BOG PERSON]

4. In his "Le siècle"

Alain Badiou conceives as a sign of the political regression that occurred towards the end of the XXth century the shift from "humanism AND terror" to "humanism OR terror." In 1946, Maurice Merleau-Ponty wrote Humanism and Terror, his defense of the Soviet Communism as involving a kind of Pascalean wager that announces the topic of what Bernard Williams later developed as "moral luck": the present terror will be retroactively justified if the society that will emerge from it will be truly human; today, such a conjunction of terror and humanism is properly unthinkable, the predominant liberal view replaces AND with OR: either humanism or terror... More precisely, there are four variations on this motif: humanism AND terror, humanism OR terror, each either in a "positive" or in a "negative" sense. "Humanism and terror" in a positive sense is what Merleau-Ponty elaborated, it sustains Stalinism (the forceful - "terrorist" - engendering of the New Man), and is already clearly discernible in the French Revolution, in the guise of Robespierre's conjunction of virtue and terror. This conjunction can be negated in two ways. It can involve the choice "humanism OR terror," i.e., the liberal-humanist project in all its versions, from the dissident anti-Stalinist humanism up to today's neo-Habermasians (Luc Ferry & Alain Renault in France) and other defenders of human rights AGAINST (totalitarian, fundamentalist) terror. Or it can retain the conjunction "humanism AND terror," but in a negative mode: all those philosophical and ideological orientations, from Heidegger and conservative Christians to partisans of Oriental spirituality and Deep Ecology, who perceive terror as the truth - the ultimate consequence - of the humanist project itself, of its hubris.