Here it is – December 1, 2008 – and here’s the straight scoop from the Associated Press:
“It’s official: US economy in a recession”
“WASHINGTON – The U.S. economy has been in a recession since December 2007, the National Bureau of Economic Research said Monday.
The NBER – a private, non-profit research organization – said its group of academic economists who determine business cycles met and decided that the U.S. recession began last December.
“The White House commented on the news that a second downturn has officially begun on George Bush’s watch without ever actually using the word ‘recession’, a term the president and his aides have repeatedly avoided. Instead, spokesman Tony Fratto remarked upon the fact that NBER ‘determines the start and end dates of business cycles’.
“‘What’s important is what’s being done about it,’ Fratto said. ‘The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that’s where we’ll continue to focus’…
“In a news release, the NBER said its cycle dating committee held a telephone conference call on Friday and made the determination on when the recession began. Founded in 1920, the NBER has more than 1,000 university professors and researchers who act as bureau associates, studying how the economy works.”
Such rubbish! There are about 200 million U.S. residents who know all about this recession because they’ve been suffering through it, yet the bigwigs in academia, after a conference call, are just getting around to acknowledging the crisis. What’ll you bet that on December 1st, 2009 they’ll issue an announcement advising us that we’ve been in a recession since December 1st, 2008?
What’s even worse is the attitude in the nation’s capital. “What’s important is what’s being done about it,” the White House spokesman said. Even though the normal operations of the “financial and credit markets” are the cause of this international catastrophe, the White House states that more of the same will somehow reverse things. [That would be like advising a driver to step on the accelerator when his vehicle is heading toward a concrete abutment.] And “to continue to make progress in housing”? What “progress”? The so-called “progress” has been a catastrophic downward spiral for the housing industry, but “that’s where we’ll continue to focus”, he says.
Neither the NBER announcement nor the White House response mentions unemployment, and this omission leads one to think that joblessness and the consequent loss of buying power are the farthest things from their minds when they’re discussing the nation’s economic slump. Either these experts are in a fog or they’re ignoring the issue because they don’t know how to get us out of this mess.
To be sure, they’re not in a fog. They know the score. They just don’t know how to resuscitate our drowning economy, and time is not on our side.
Last week, an international political analyst provided a Bloomberg reporter with a disheartening assessment of this nation’s economic predicament. He began by saying that the economic turmoil in the U.S. has confirmed his long-held view that the U.S. is heading for a collapse. This dire prediction, first given at an international conference in Australia 10 years ago at a time when our economy appeared strong, has been given more credence by this year’s tragic events.
“The dollar is not secured by anything”, he said in the interview. “The country’s foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction”, he went on, “it had exceeded $ 2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse.”
When asked when the U.S. economy would collapse, the foreign analyst said, “It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world’s financial regulator.”
When asked who would replace the U.S. in regulating the world markets, he said: “Two countries would assume this role: China, with its vast reserves, and Russia, which could play the role of a regulator in Eurasia.”
When asked the reasons for this country’s collapse, he said: “A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work a miracle. But by spring, it will be clear that there are no miracles.”
With all due respect, we beg to differ. A miracle is possible. The incoming administration gurus are talking about creating jobs by rebuilding the nation’s “infrastructure”. But why revive the unproductive “make-work” WPA of NRA days? That isn’t the answer. The make-work, subsidized, warship construction program is proof of that. The only way to bring about an economic miracle is to produce money-making merchant vessels in labor-intensive shipyards. In happier times, remember, it was our enormous merchant fleet that enabled us to become an economic superpower.
Stephen Leeb, the president of Leeb Capital management, has stated: “I think we’re in one of the most threatening crises in our history, and it’s going to take a Manhattan Project to figure out what to do … Washington needs to actively take charge if we want to turn this situation around.”
We have the manpower. We have Title XI. We have our exclusive patented shipboard systems. And we have only ourselves to blame if that political analyst turns out to be prophetic.