Back To The Root Of Our Economic Troubles

The NY Times Business Section was filled with gloom in an article about the 'new normal':

U.S. Economic Recovery Looks Distant as Growth Stalls

By BINYAMIN APPELBAUM  JUNE 11, 2014

WASHINGTON — Recessions are always painful, but the Great Recession that ran from late 2007 to the middle of 2009 may have inflicted a new kind of pain: an era of slower growth.

 It has been five years since the official end of that severe economic downturn. The nation’s total annual output has moved substantially above the prerecession peak, but economic growth has averaged only about 2 percent a year, well below its historical average. Household incomes continue to stagnate, and millions of Americans still can’t find jobs. And a growing number of experts see evidence that the economy will never rebound completely. 

For more than a century, the pace of growth was reliably resilient, bouncing back after recessions like a car returning to its cruising speed after a roadblock. Even after the prolonged Great Depression of the 1930s, growth eventually returned to an average pace of more than 3 percent a year. But Treasury Secretary Jacob J. Lew, citing the Congressional Budget Office, said on Wednesday that the government now expected annual growth to average just 2.1 percent, about two-thirds of the previous pace.

Regular readers, especially those for whom mild OCD is a blessing rather than a curse (I know I am not alone here) know where this mighty freight train is headed. Was it really five years ago that Gregory Mankiw and Paul Krugman scuffled over unitary roots, the inevitability of an economic rebound, and the perils of economic forecasting? Yes it was!

Mankiw, in a nutshell, said that strong recoveries are not inevitable:

According to the conventional view of the business cycle, fluctuations in output represent temporary deviations from trend. The purpose of this paper is to question this conventional view. If fluctuations in output are dominated by temporary deviations from the natural rate of output, then an unexpected change in output today should not substantially change one's forecast of output in, say, five or ten years. Our examination of quarterly postwar United States data leads us to be skeptical about this implication. The data suggest that an unexpected change in real GNP of 1 percent should change one's forecast by over 1 percent over a long horizon.

Krugman, in his typically calm and well-reasoned fashion, explained that Mankiw was scum sucking vermin toadying up to his corporate paymasters. OK, I exaggerate slightly but his response did include "deliberate obtuseness" and "evil".

In any case, Mankiw proposed that Krugman bet on the Team Obama growth forecasts and Mankiw would take the other side. There is no 'man' in Krugman (unlike 'Mankiw'), so the bet was not taken up. Shrewd move - Team Obama had predicted an increase in real GDP of 15.6% from the end of 2008 to the end of 2013; the actual result was a real GDP increase (in chained 2009 dollars Gdplev, BEA, .xls) of, well, 6.3%. Ooops. Score one for evil obtuseness and the new normal.

SINCE YOU ASK: Yes, we had preemptively declared Mankiw the winner back in 2012, but we are spiking the ball again. Now ask me about Spurs-Heat.

Comments

[GMax]

Via Drudge

Amazon

Green Smoothie Cleanse toping Shrillary's tedious book...

[GMax]

I would much rather talk about the Spurs putting the freeze to the Heat than anything to do with that Enron advisor.

[Happy, happy, joy, joy Ignatz]

Economies don't exist in a vacuum. Government policies matter.
Bad policies = slow growth.
It's not that hard, unless you're a liar.....and not that smart.

[GMax]

Does anyone else see the similarities between Mario Chambers and Zero? Neither one of them can play this game!

[Comanche Voter]

Spike that ball in Krugman's ear! Spike it again--harder!

[**Bill in AZ**]

"U.S. Economic Recovery Looks Distant as Growth Stalls"

Wouldn't "growth" had had to actually start in order to stall?

[henry]

That's some doubleplusungood thinking there Bill.

[**Bill in AZ**]

Previous thread from CH (08:45)
Trey Gowdy should have fun with this head exploder:

http://therightscoop.com/walid-shoebat-infamous-muhammad-video-filmmaker-actually-a-muslim-agent-for-obama-admin/

Exact same playbook as Fast and Furious, and no surprise that miserable commie Hillary! is in the middle of both of them.

[George]

The Times has been trying to out Onion the Onion for a while. In this case with child-like wonderment that an economy is not mechanically "resilient" not matter what you do to the people who make it up. In other news, the Times reports "Tanks of Unknown Origin Enter Ukraine." I'm betting they are from San Marino.

[Janet - the districts lie fallow, while the Capitol gorges itself]

Look at these pictures - http://www.dailymail.co.uk/news/article-2656622/Caged-diseased-Shocking-pictures-child-illegal-immigrants-flooding-border-Joe-Biden-calls-unrelenting-stream-migrants.html

Lots of these citizens of OTHER COUNTRIES are not children either. Every single person should be shipped back to their home country immediately....not taken to another US city.
And everyone involved in this fiasco...that refuses to enforce our existing laws...should be FIRED or thrown out of office.

[derwill]

Catching up on the thread last night--Jane asked if I had any more info on the "imminent threat."

Just that the number of dicey characters that we've let in to this country during the Obama administration is in the 1000s not 100s. He mentioned that he was worried about coordinated attacks on our power grids, and specifically said blowing up our dams, but then here in Idaho a lot of our power is hydroelectric, so he could be thinking on a personal level that that would be the kind of terrorist attack his mom and our little community up here in the mountains of Idaho would be most vulnerable to. HIs mom, btw, is a prime example of the mama grizzlies we grow in Idaho. She is all of 5' 2" and probably weights 95 lbs soaking wet, yet she runs a 200-acre horse and cattle ranch all be herself, is a crack shot, and volunteers on the ski rescue patrol in the winter. If our economy collapsed and we were suddenly thrust back to living as they did in 19th century, I have no doubt she would survive just fine.

----

Matt, my heart goes out to you. May the Lord give you solace to see you through this difficult time.

[narciso]

policy choices never seems to enter 'this best of all possible worlds' does it,

[centralcal]

Sooooo - POTUS will "make a statement" at 11:50 AM about the situation in Iraq, but NOT about any US "action," before heading off to Palm Springs.

[Dublindave 2016]

Kevin McCarthy to be sworn in on Monday thank the Gods. McCarthy's a little more enthusiastic about immigration reform and raising the debt ceiling than Cantor was so at least we have an ally in the inner circle(thank you Laura).

Like Boehner, we need to give McCarthy room to play to the base.....do the whole i'm crazy and angry and theire tekkkinnnnarrrrjoooooobbbbs..routine.

Does Kevin play golf?

[centralcal]

Poor Thad Cochran...yesterday he was getting into trouble with his "animals" statement and today he not only didn't know Eric Cantor lost his race in Virgina, he doesn't seem terribly sure he know who Eric Cantor is!!!

[Dublindave 2016]

Has Kevin and his wife been to the White house?

[Happy, happy, joy, joy Ignatz]

The real problem is as Mankiw points out, the vast amount of wealth that a period of stagnation causes by lowering the baseline the economy grows from over decades.

Barry's revolting debt orgy is killing the goose that the lefties counted on for their golden entitlement eggs.

[Danube on iPad]

LA Times said the shrinks asked Sterling to count backwards by sevens from 100 and he had to stop at 93. Asked him to fill in the numbers on a clock face and he couldn't do it.

[Jeff Dobbs]

Stephanie, how'd bunko go last night?

Have I told you lately that I love you?

[Janet - the districts lie fallow, while the Capitol gorges itself]

http://dailycaller.com/2014/06/12/child-immigrant-facility-dog-and-pony-show-invite-comes-with-tons-of-rules/

"Sent to members of Congress and staff by Rose Hacking, of the office of the assistant secretary of legislation at HHS, the invitation comes with the following commands:

No recording devices will be allowed (We may ask you to leave your cellphone in our vehicle)
No questions will be allowed during the tour, but questions will be addressed later
No interacting with staff and children at the shelter
We will provide photos of the facility after the tour

During the tour, ”the tour guide will detail what goes on from room to room and the services youth are provided on a daily basis,” the email invitation reads."

This is like the Soviet Union or Nazi Germany...letting the press into areas for a staged 'show'. How can the MFMers not be outraged?

[DebinNC]

BOzo's "Mariel Boatlift" needs a similarly catchy name.

[Stephanie tortoise not the hare]

Lol, hit.

Got the prize for wiping out the most times last night.

And I'll have you know I shop Dollar Tree. Much more classy.

[Captain Hate]

Does anyone else see the similarities between Mario Chambers and Zero? Neither one of them can play this game!

I've never been a big Chalmers fan but he's had his moments on the two championship teams. There's no evidence 404 is any good at all, nor has he ever been. I've seen him shoot at shoot arounds and I don't think he's as good as I am; and I'm terrible.

[DebinNC]

"During the tour, ”the tour guide will detail what goes on from room to room and the services youth are provided on a daily basis,” the email invitation reads."

Sounds like that sham Nazi "Look how well the Jews are treated" show camp Goebbels set up while the ovens were working 24/7 elsewhere.

[Jane]

I don't know if this has been posted, but yesterday at 404's HS graduation speech in Worcester, he told the grads that he was too drunk to remember his own HS graduation.

What a leader! What a role model!

[Captain Hate]

Are you serious, Jane? Even by his debased standards that is disgusting.

[pagar]

From the Memeorandum column.

No lesson learned.

http://washingtonexaminer.com/the-absurdity-of-electing-kevin-mccarthy-to-replace-eric-cantor-as-house-majority-leader/article/2549689

" it would be beyond tone-deaf. It would be pure absurdity."

Unbelievable that we are even talking about McCarthy as house Majority leader.

[Rick B]

Those considering the magnificent 6.3% increase in real GDP over the six year course of the reign of BOzo I need to adjust the level of excitement by some reflection upon the fact population has grown 3.1% in the same period leaving actual growth at 3.2% or slightly more than one half per cent per annum.

Some consideration should also be given to the possibility the NBER inflation numbers may not be quite as accurate as one might wish in this best of all possible worlds.

IOW - the GDP increase may well be a per capita decrease which might account for a certain deficit in optimism here in reality.

[Jane]

Thanks Derwill, they've been practicing on the power grid so that would not surprise me. It would pretty much kill all of us, I guess.

Good thing we have such a strong leader. He will be devastated if he can't communicate with us regularly I supposed.

Bill, do you believe that story about the videographer?

[Happy, happy, joy, joy Ignatz]

--Bill, do you believe that story about the videographer?--

To me it looked very long on dot connecting and very short on actual dots.

[Janet - the districts lie fallow, while the Capitol gorges itself]

I think he took 3 questions. The MFMers have unleashed a tyrant.

At the very end Obama said something like we aren't going in to build a country with our blood & treasure, just to have them revert to their old ways. They have to want it.

What a concept. We destroy Bibles & don't let them hear or read any new ideas...& then wonder why nothing changes in the Middle East.

And how about we apply that same idea of no more blood & treasure to our own poverty/disfunctional families problems? What good does it do to give 'stuff' to people without demanding some behavioral changes?

[DebinNC]

"I'm just telling the truth here,", said BOzo to students about not remembering his graduation speaker or the party afterward. The immature comment seemed to be loaded on TOTUS and not in answer to a question.

[Tonto]

Shameless pitch.

[Exasperated]

This is like watching lemmings as they walk off a cliff.

[Captain Hate]

Thanks Deb; the part of not remembering who the graduation speaker was is ok because it was a long time ago and those are usually pretty unexceptional; although it also sends the message that those kids will remember him because everything is always about him. And we'll never be free of his self infatuation.

But the part about not remembering the party afterward is just pure 404 lowlife behavior.

[Beasts of England]

Kaymer is trying to lap the field at the US Open. He's at -10 with the nearest competitors at -2. Pinehurst No. 2 must really match his game. An impressive display so far...

[Rob Crawford]

Does anyone believe Zero was drunk at his HS graduation? Stoned, I'd believe -- drunk is too strait-laced and respectable.

[Captain Hate]

Definitely stoned, Rob.

[Stephanie tortoise not the hare]

Boat's docked!

Pinehurst got 1/2 inch of rain last night and if you can throw the ball up in the air, you can throw some darts.

We'll have to see if the wind coming up ahead of the pm showers hampers any challengers from the afternoon groups.

[Some Guy]

Does anyone believe Zero was drunk at his HS graduation? Stoned, I'd believe

I don't believe either. He was probably a dorky nervous virgin hoping not to trip over the stage, and he's just lying to pretend he was cooler than he was.

[lyle]

Both, Rob.

[NK(withnewsoftware)]

This TomM post and Ignatz's and RickB's comments are vitally important, and a grossly underdiscussed point. That 'missing' 9.3% of GDP growth? that means about $1.5TRILLION LESS of economic activity than Obummer's crew projected. Here's a point of agreement with the Progs-- that missing $1.5TRILLION from the USA economy is a big effin' deal. We want the economy bigger to create wealth and opportunity for our kids; the Progs want the extra $1.5TRILLION to tax (extra $400B of federal tax revenue--approx.) It's not there. We all know why it's not there-- Obummernomics. The Progs told us exactly what would happen in 2009-- pass the STIMULUS! ObummerCare, increase taxes on the rich, we'll have an $18TRILLION Economy at the end of 2013-- they GOT all that they demanded politically-- AND THEY WERE WRONG. The country has lost 5 years... we'll never get those back. We have to rubbish Obummernomics NOW so we don't lose anymore time. That ought to be the primary message for '14 elections, and the governing principle for the Repub Congress. Change now or fall further behind-- that's the winning message. Win-- then we can discuss what the Repub Congress ought to do in the Budget.

[Captain Hate]

He's definitely trying to be thought of as cool, Some Guy, but those Choom Gang photos were from high school, no? And this is Hawaii we're talking about. In the documentary "Beware of Mr Baker", Ginger wanted to relocate to try and break his heroin addiction and when he went to Hawaii he subsequently said it was the worst place in the world to try and get clean.

[NK(withnewsoftware)]

HS graduation: mine was in '75, at Carnegie Hall. I have no recollection of who the speaker was.

My Gift: I do remember that. a bag of high top '3 stripe' athletic socks and a 5-pack of FOTL underwear from modell's sporting goods. My parents were practical people (and working poor -- although I didn't realize that at the time.)

[lyle]

Way better men that preznit stoner died in Iraq for nothing. In a just world he'd be dragged out of the WH and dropped into Iraq with nothing but his "winning" smile to persuade the jihadis to cease and desist. Hairplugs could go with him. Ah, hell, Shrillary, Powers, Rice, Carney, Donilon, Rhoads, and The Dude should go along as well. The Evil Ferret, too.

[Stephanie tortoise not the hare]

Some guy nails it. Obama's too timid to do graduation in front of his grandparents drunk or stoned. After party? I'll bet my free play money at the casino next week he didn't get invited AT ALL.

[jimmyk]

well, 6.3%. Ooops.

If it's through 2013, that doesn't even reflect the negative growth in 2014, first quarter.

On the other hand, I think there is a good chance that Q2 will be a temporary positive blip--just a little bounceback from the awful Q1--which will be seized on as evidence of Zero's genius and trumpeted as long as possible till November. Unfortunately for the Dems, the Q3 data will be out by then.

[NK(withnewsoftware)]

NOT the Evil Ferret IMO. She should be locked away in Max Security solitary like Lecter in Silence of the Lambs.

[maryrose]

I posted this on the other thread but wanted to repeat it here.
I am so very grateful for the supportive comments of last evening. All of you help me each day more than you know.
Anonmanom: In the 60's a residential facilty,Marymount Hospital helped my mother recover and saved her life as well as the lives of my siblings and me.Sadly today there are temporary stay programs and out patient facilities.Southwest Hospital in Berea,Ohio is one.

[Stephanie tortoise not the hare]

Obama's whole life has been lived on the down low. Choom gang was on the down low. Chicago was on the down low. Hell, even his smoking today is on the down low. Barry isn't courageous enough to stand up to the women in his life much less give them pause to rail at him. All his thrills in life are vicariously down low driven to keep that machismo image of himself alive in his own mind. To do otherwise would burst his bubble.

[Extraneus]

he's just lying to pretend he was cooler than he was.

It's incredible to me that anyone ever considered this dweeb "cool." Really, amazing.

[Threadkiller]

amazing

Almost fabricated.

[Captain Hate]

If obama had a foreign policy, it would look like Trayvon Martin.

Posted by: Soothsayer of the Righteous And Harmonious Fists (-469 days left) at June 13, 2014 12:57 PM (4QkZq)

[jimmyk]

It's incredible to me that anyone ever considered this dweeb "cool."

When you think about the types of people who considered him cool (David Brooks, Ezra Klein, the people who came up with the pajama boy ad, just to name a few), it's considerably less surprising.

[Porchlight]

GOP House leadership may not have gotten the message (do they ever?), but the House members will have, including Dems.

I'd almost rather see amnesty go down to humiliating defeat then to have the leadership too scared to bring it to a vote...almost.

[Captain Hate]

Some of you people must have grown up in communities where they drowned geeks at an early age.

[Buckeye]

No, the Evil Ferret needs a date with Mitch Rapp. Someone might spring her from stir, can't risk that.

[NK(withnewsoftware)]

CaptH-- Hey...

did you mean 'geeks' or "GREEKS"?

[James D.]

Unfortunately for the Dems, the Q3 data will be out by then.

Will it? Q3 would end September 30th, right? When would the data be available for that?

Would anyone here be shocked it if were delayed? Or if it was unexpectedly positive, only to require a larger-than-usual correction downward, sometime in December or January?

[Buckeye]

CH @ 1:06

That's why I didn't hang out at the pool.

[Captain Hate]

Sorry to have used the squaredance phrase of "you people"; I'll try not to let it happen again. Speaking of our favorite doom and gloom legend in his own mind, where was he to celebrate the defeat of Cantor? I guess he only comes here to yell at us.

[NK(withnewsoftware)]

Jimmy/JamesD-- the economy stinks. Working people know that. 2Q/3Q won't move the needle.

[Some Guy]

@1:11pm = classic!

[Some Guy]

the economy stinks

Unexpectedly!

[Captain Hate]

NK, not the Greeks; all that olive oil kept you guys afloat.

[jimmyk]

JamesD, I think the first estimate of Q3 comes out the last week of October. Then it gets revised in November and December. How convenient.

[maryrose]

Some guy:
Unexpectedly and continuously.

[Captain Hate]

Who knew interviewing cartoon lizards paid so well?

http://freebeacon.com/culture/chelsea-clinton-paid-600k-for-work-as-nbc-news-special-correspondent/

[maryrose]

CH;
Chelsea was making more than Preezy. That must have made the Clintoons smile...

[NK(withnewsoftware)]

No... this isn't parody, the LA Times actually published this. Any conservative parody of a Prog Hollywooder wouldn't be this ridiculous: http://touch.latimes.com/#section/527/article/p2p-80489312/

[NK(withnewsoftware)]

CaptH-- oh now you're going with the olive oil jokes... what's next sponge fisherman?

[lyle]

In case no one has posted this:

http://pjmedia.com/michaelwalsh/2014/06/12/in-the-middle-east-the-end-of-the-beginning/2/

[GMax]

2nd Quarter is over in about 2 weeks. Anyone seeing anything on fire around them? Those numbers might be better than the 1st qtr since those were atrocious, but they will be tepid at best.

[Captain Hate]

NK, I was trying to make an ethnic joke in an unoffensive manner; my apology if I failed.

[NK(withnewsoftware)]

The Economy Stinks, The Jihadis are winning everywhere (except against the Mullahs), the muddle can see it all now plain as day. WWTMD? (What Will The Media Do?) I lived through this before with Dinkins' NYC, when we were so cool to elect a black mayor (I voted for him TWICE.-- I bet Maguire did too!!) Then the Media blamed... New York!! It was all our fault claimed New York Magazine in 1990; we were too dirty, too greedy, to violent... NYC was UNgovernable. Rudy G proved that lie. That will be next for the Prog Media, it's all America's fault.

[NK(withnewsoftware)]

CaptH-- chill! I never take offense at the olive oil or ouzo or any ethnic cracks. I watch 'Fat Greek Wedding' not as light ROCOM, I watch it as a documentary of my childhood. Just funnin'. OPA.

[lyle]

That will be next for the Prog Media, it's all America's fault.

Next, you say?

[Captain Hate]

Thanks, NK, I never know who might be offended by what.

[NK(withnewsoftware)]

Lyle-- it was all America's fault during Booosh the Media told us, it will be again DESPITE LightBringer. The accross the board Media Meme will be WE , AMERICA, failed LightBringer. LightBringer himself will of course blame OWP (old white people.)

[Porchlight]

NK's a great sport.

[lyle]

Clinton spawn pulls down 600 geezles from NBC but don't worry, they're a totally unbiased news source.

[maryrose]

Lyle: you are corret. It is happening right now.
The Tammy Bruce column is spot on today. Hil is raked over the coals for her those 5 guys are not a threat comment.

[NK(withnewsoftware)]

Porch, we try. Hey, it's better than going through life miserable as a grievance monger (see Holder, obummer, NOW, and cast of millions.)

[lyle]

I know, NK. We Americans just don't know how wonderful we have it with our political elites. If the country is turning to merde, well it's because we don't appreciate the brilliance of our betters. It would be sooo much easier for the ruling class if we do what we're told, pay our taxes and shut up.

[lyle]

LightBringer himself will of course blame OWP (old white people.)

Just "WP" will suffice for him. It has all his life.

[Jane]

It's incredible to me that anyone ever considered this dweeb "cool." Really, amazing.

I hate to break it to you, but he ran on, and got elected on "cool" and his entire point these days seems to be "hey the democrats are cool and the republicans are mean".

He just hopes no one ever finds out Harry Reid, Nancy Pelosi, DWS and about 100 other uncool people are his standard bearers.

The real question is how will Hillary convince people she is cool because that's what a great deal of the electorate now votes for.

[Threadkiller]

Speaking of our favorite doom and gloom legend in his own mind, where was he to celebrate the defeat of Cantor? I guess he only comes here to yell at us.

He is probably playing "ant" to others "grasshopper."

[Janet - the districts lie fallow, while the Capitol gorges itself]

"Border agents in Texas warned not to talk to media"

http://hosted.ap.org/dynamic/stories/U/US_IMMIGRATION_OVERLOAD_?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-13-13-49-36

Or what? Will this administration arrest them or shoot them if they talk to the media? Do we still have a free press?

[jimmyk]

2nd Quarter is over in about 2 weeks. Anyone seeing anything on fire around them?

Doesn't have to be on fire after a -1% or worse Q1. Even if it just gets to 2% above 2013Q4, that will be 3% for Q2. I would wager that will happen. It would still a crappy number (averaging 1% for 2014), but it would be trumpeted as great news by the JEF and his MSM.