One factor common to our elite’s failures is their utter and complete unwillingness to accept factual reality.
Eurozone on brink of double-dip recession as growth falls 0.2%
Graeme Wearden, The Guardian
Tuesday 14 August 2012
The eurozone is on the brink of following Britain into a double-dip recession after its economy shrank between April and June.
GDP across the 17-nation bloc fell by 0.2% in the second quarter of this year and economists believe the downturn is continuing. Better-than-expected figures from Germany and France were offset by sharp contractions elsewhere, with the Spanish, Italian, Finnish and Portuguese economies all shrinking. The wider European Union also suffered a 0.2% contraction.
The UK … shrank by 0.7%, according to last month’s preliminary estimate from the Office for National Statistics.
In Germany, there was some relief that the economy grew by 0.3%. Analysts, though, fear that Europe’s powerhouse could slide into recession soon.
With no growth in the last quarter, France has now been flatlining for the last nine months.
Portugal continued to be buffeted by the austerity programme now being implemented. Its GDP tumbled by 1.2% in the latest quarter and is 3.3% smaller than a year ago, while the unemployment rate crept up to a new record of 15%.
Greek Economy Shrank 6.2% in Second Quarter
By DAVID JOLLY, The New York Times
Published: August 13, 2012
(M)any economists were skeptical that the heavily indebted Greek state can cut its way out of crippling recession.
A shrinking economy creates pressure for further budget cuts, since the deficit and debt grow as a percentage of the overall economy.
Standard & Poor’s estimated last week that the Greek economy would shrink 10 percent to 11 percent cumulatively this year and next, compared with the 4 percent to 5 percent decline the European Union and International Monetary Fund assume.
“(W)e’ve long argued that that is a fantasy,” Mr. May (economist at Capital Economics) said. “Greece will have to go through a long recession if it’s going to remain in the euro zone.”
He said Greece needed a 30 percent to 40 percent decline in real wages to restore its competitiveness, a punishing prospect if accomplished as a member of the euro. He said the better alternative might be for Greece to leave the euro and accomplish the same goal with a devalued currency.
US economic recovery is weakest since World War II
By Paul Wiseman, Associated Press
1 hour 50 minutes ago
Economic growth has never been weaker in a postwar recovery. Consumer spending has never been so slack. Only once has job growth been slower.
Europe’s troubles have undermined consumer and business confidence on both sides of the Atlantic. And the deeply divided U.S. political system has delivered growth-chilling uncertainty.
America’s gross domestic product – the broadest measure of economic output – grew 6.8 percent from the April-June quarter of 2009 through the same quarter this year, the slowest in the first three years of a postwar recovery. GDP grew an average of 15.5 percent in the first three years of the eight other comebacks analyzed.
Government spending and investment at the federal, state and local levels was 4.5 percent lower in the second quarter than three years earlier.
Three years into previous postwar recoveries, government spending had risen an average 12.5 percent. In the first three years after the 1981-82 recession, during President Ronald Reagan’s first term, the economy got a jolt from a 15 percent increase in government spending and investment.
This time, state and local governments have been slashing spending – and jobs.
Since June 2009, governments at all levels have slashed 642,000 jobs, the only time government employment has fallen in the three years after a recession.
Consumer spending has grown just 6.5 percent since the recession ended, feeblest in a postwar recovery. In the first three years of previous recoveries, spending rose an average of nearly 14 percent.
The economy shed a staggering 8.8 million jobs during and shortly after the recession. Since employment hit bottom, the economy has created just over 4 million jobs. So the new hiring has replaced 46 percent of the lost jobs, by far the worst performance since World War II. In the previous eight recoveries, the economy had regained more than 350 percent of the jobs lost, on average.
Never before have so many Americans been unemployed for so long three years into a recovery. Nearly 5.2 million have been out of work for six months or more. The long-term unemployed account for 41 percent of the jobless; the highest mark in the other recoveries was 22 percent.
(P)ay raises haven’t kept up with even modest levels of inflation. Earnings for production and nonsupervisory workers – a category that covers about 80 percent of the private, nonfarm workforce – have risen just over 6.2 percent since June 2009. Consumer prices have risen nearly 7.2 percent. Adjusted for inflation, wages have fallen 0.8 percent. In the previous five recoveries -the records go back only to 1964 - real wages had gone up an average 1.5 percent at this point.
Washington isn’t doing much to help the economy. An impasse between Obama and congressional Republicans brought the U.S. to the brink of default on the federal debt last year -a confrontation that rattled financial markets and sapped consumer and business confidence.
Given the political divide, businesses and consumers don’t know what’s going to happen to taxes, government spending or regulation. Sharp tax increases and spending cuts are scheduled to kick in at year’s end unless Congress and the White House reach a budget deal.
In the meantime, it’s difficult for consumers to summon the confidence to spend and businesses the confidence to hire and expand. Never in the postwar period has there been so much uncertainty about what policymakers will do, says Steven Davis, an economist at the University of Chicago Booth School of Business: “No one is sure what will actually happen.”
Voodoo Supply Side Economics does not work. Period. It is faith based Mammon worship by the greedy and evil.