Wednesday, January 31, 2007

The Car Crash In Slow Motion

President Bush is in my hometown to tout the economy (don't worry, Secret Service...I honor and respect the restraining order...):
In a speech Wednesday in New York City, Bush was expected to tout optimistic economic trends, part of a strategy this week to put pocketbook issues in the forefront of attention - if only briefly.

Bush is also likely to challenge corporate leaders to show responsibility, particularly in the area of executive pay. That's a nod to Americans who have grown disgusted with stories of enormous salaries and other perks for CEOs.

The president concedes that bitterness over the nearly four-year-old war in Iraq has overshadowed economic news of the day.

"People are working and wages are up," he said in an interview Tuesday with ABC News. "But we're in a time of war. And it's - war's unsettling. War's negative. And I understand that.
Um. Yea. Let's take a look at that, shall we?
Gross domestic product or GDP, the broadest measure of overall economic activity within U.S. borders, expanded at a 3.5 percent annual rate during the October-through-December quarter, the Commerce Department reported.

The strong reading on the final quarter of last year is the last piece of key data Federal Reserve policy-makers will weigh at their meeting on Wednesday. Economists are expecting the central bank will keep interest rates unchanged.

On the inflation front, the closely watched personal consumption expenditures price index declined 0.8 percent during the quarter, the biggest decline since the third quarter of 1954 when it dropped 1.2 percent. The quarterly decline reflected a huge drop in energy prices, a department official said, and was substantially lower than the 1.9 percent advance Wall Street economists were expecting.

That was also the first decline in this index since a 0.1 percent decrease in second quarter of 1961.
Hey, that really is good news! Kudos to President Bush and his economic policies! A 3.5% growth rate is sustainable without being inflationary! Good on you! And it doesn't matter that consumer spending dropped in the fourth quarter, you know, what with the War On Christmas and all, it's understandable people shied away from malls and stuff. Who knows when Al Qaeda will attack a Sears? The point is, they spent more than the less that was expected and it's been 40 years since the last quarterly drop in consumer spending!

But...hang on...what's this?
Spending on new home building declined at a 19.2 percent rate during the quarter, as the housing market continued to weaken. That was the biggest decline since a 21.7 percent decrease in the first three months of 1991. For the year, residential spending was down 4.2 percent, also the biggest decrease since 1991.
Oh. Wait.

That first quarter of 1991...that was during the Bush the Elder administration, wasn't it? That was smack dab in the middle of a recession (some folks call it a slingblade "recession," I calls it a kaiser blade "depression"), wasn't it?

So lemme see...the first quarterly drop in consumer spending in 45 1/2 years...largest drop in new home spending in 15 years...stock maket at all-time highs...and bankruptcies up, despite the new bankruptcy law which makes it pert near impossible to declare bankruptcy...

Yup. Bush is screwing up the economy again, as we watch!

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