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« Sweetheart, just tell them I'm a professional beggar! | Main | Why Do Good in a Hopeless World? »


Republicans Maintain Mantra: 'No, we're not in a recession!'

By Denise Cassells
December 15, 2008

Still in denial and needing scapegoats, some Republicans opt to blame the ‘Liberal media hype,’ and naturally the Democratic base (the realist). Fred Thompson in Oct:

I think there is no reason to believe that we're headed for a recession. We're enjoying 22 quarters of successive economic growth that started in 2001, and then further in 2003 with the tax cuts that we put in place. We're enjoying low inflation. We're enjoying low unemployment. The stock market seems to be doing pretty well. I see no reason to believe we're headed for… for an economic downturn.
Mitt Romney:
It's everybody's job. It's inexcusable that Michigan is undergoing a one-state recession, that the rest of the country is growing and seeing low levels of unemployment, but Michigan is seeing ongoing high levels of unemployment, almost twice the national rate. Industry is shrinking here, jobs are going away.
Gov. Granholm says that not bailing out the auto makers is “un American,” thus putting the shoe on the other foot for a change.

Spin, my friends. Why do Republicans continually live in the past?

If they had their way, we would all just wither in the wind and blow away, with the exception of the top one percent money makers.

Not true you say? News flash - Republicans said, “They’re shopping on Black Friday, which proves there won't be a recession." Too late, once again you have one foot in the past because according to a private, nonprofit research organization, the National Bureau of Economic Research (NBER) reported its group of academic economists who determine business cycles met and decided unequivocally that the U.S. economy has been in a recession since December 2007. A whole year now, and still some Republicans just refuse to accept facts.

Here it is, please try really hard to understand: A recession occurs by one benchmark, when the gross domestic product, the total output of goods and services, declines for two consecutive quarters. The GDP turned negative in the July-September quarter of this year, and many economists believe it is falling in the current quarter at an even sharper rate.

The current recession has already lasted longer than the 10-month average for recessions in the post World War II period; just the facts. Here are a few more facts: (Maybe these will convince you.)

  • The United States economy shed 533,000 jobs in November, marking the largest monthly job loss since 1974, during the recession triggered by the first oil shock in 1973.
  • Downward revisions to the September and October employment reports pushed the tally of job cuts to 1.2 million over the three-month period, so it would appear that job losses have taken a giant leap since the beginning of 2008.

This development cannot be good. You see, the US economy has sharply declined during the last few months. Look at it this way: Businesses are closing – creating jobs loss; and corporations are downsizing, creating a lot of job loss.

Construction and manufacturing jobs dominated the monthly employment survey for the first part of the year, so optimists (not realist), could ignore the construction job losses as part of a normal balance.
Whew! Next, the bursting housing bubble, and the manufacturing job losses were seen as part of a long-term, structural change in the US economy, with manufacturing done more efficiently overseas. Oh yea, and a whole lot cheaper too! Thank you NAFTA!

It gets worse, in November, 82,000 construction job losses and 85,000 manufacturing job losses were joined by a steep 370,000 fall in service-related jobs.

Still not recession convinced eh? ... Seems the services sector accounts for a large chunk, like 85% of the U.S. economy, so even some of you non-believing, high maintenance economists still couldn’t admit that the American economy is officially in recession, one would naturally assume the November employment report would have given a warm body a pretty good wake-up call, that yes, the recession is real.

Need more proof? Employers expecting a not so happy holiday have reduced the total number of retail jobs by 91,000 and the total number of leisure and hospitality jobs by 76,000.

Yet retailer’s traditionally profitable season beginning with “Black Friday” are still posting signs that scream “SALES,” and “BIG VALUES.” That definitely does not indicate the usual holiday intake. Of course people are still purchasing; everything is constantly “On Sale,” or “Up to 90 percent off,” (the case for JoAnnes), what? You think we don’t notice these kinds of sales?

Maybe these numbers will help enlighten dim bulbs. According to the NPD group (formerly National Purchase Diary), only 35 percent of consumers have not changed their spending habits. As for the other 65 percent, they are cutting down on dining out (57%), clothes (54%), entertainment (50%), beauty products and music (44%), movies (43%), toys (39%) and video games (35%). But wise retailers will find ways to encourage consumers to buy. I.E. coupon use has risen from 23% to 27% just since the beginning of the year, and the number of people who are shopping at sales only, has increased to 28% from 25%. Those statistics might have something to do with consumer sales touting.

Shoppers are trading down to save money and locating one-stop shopping sources, online retailers and stores closer to home to save time and fuel. Of course mark down and value stores are pushing back the high-end retailers. Store brands are gaining at the expense of national brands. Even online retailers are showing symptoms of impending doom. According to ComScore, sales growth rate of 6-10% for the holiday season is "shockingly low compared to recent years".

Retail sales have sharply dropped for three consecutive months, and their future doesn’t look very rosy for the moment. However, the National Retail Federation predicts holiday sales will increase just 2.2% this year (that’s good, right?)— Wrong, that’s the lowest growth rate since 2002 — while research group NPD predicts flat or declining sales for the season, many Republican’s are marching to a totally different tune then the drum beat of the band.

Come on, don’t you think it’s time to remove those rose-colored glasses?


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