Stupid Economist Tricks

Some times I feel like I spend a lot of time reading entrails or the lay of chicken bones.  I pour over numbers, announcements, and signs of momentum much like Marie Laveaux–that great voodoo priestess buried not all that far from my own house–would check for auspicious signs.  In academic terms, I’m analyzing the fundamentals for signs of bottoms or inflections looking for some hint about this downturn.  Some how, however, I still find myself relying on a lot on intuition in the end.  This still makes me feel less like a scientist and more like a modern voodoo priestess.

So, what do the fundamentals say right now?  There are several markets that might give us a glance at the entrails of the U.S. economy.  The first is what households (consumers) are planning to do.  The biggest component of US spending in the economy belongs to consumers.  They are responsible for about 70% of sales of all goods and services.  The last time consumer spending decreased was during 1991 during the post Gulf War 1 recession.  Most economists expect that they went negative some time this fall.  One of the measurements we check to see if this will become a trend is the Reuters/University of Michigan index of Consumer Sentiment.  This is basically and index that summarizes the results of a survey of how optimistic or pessimistic households are about their economic future.  If they are optimistic, they usually spend more. This blurb of bad news is from the Wall Street Journal.

After hitting its lowest level in nearly 30 years in June, the gauge had begun to improve as oil and gas prices fell from their record highs. But that improvement was wiped out this month as financial and economic conditions worsened.

Unfortunately, we just hit an all time record low on the measurement for this month.  That is not a good thing.  If you look at where the economy is soft, it is on those businesses that provide big item tickets to households.  This includes things like cars and washing machines.  Households are less likely to buy big ticket items when they feel unsure about their future.  Companies that have announced lay-offs and plant shut downs recently include GM and Whirlpool.  This confirms our suspicion that consumers are laying low.  Kraft, however, is doing well.  It posted a third quarter gain.  That’s because folks that tighten their belt eat a lot of those mac and cheese boxes.  This also is something that says we’re looking at a recession.  

The good news is that business orders of some of this big ticket items appears to be looking up.  This is good news because businesses tend to order these things if they see next year being better than this year.  Civilian aircraft orders appeared to be the mover in this statistic.  Also transportation equipment.  Durable goods orders by manufacturers are considered a ‘leading indicator’ of future economic health, compared to consumer sales which are considered a look into the current economic health.  This is because businesses buy based on what they expect to do next year.  This gives us slight hope that next year might be better than right now.

Another fundamental to watch for indications of a sluggish or recessionary economy is the job market.  Most economists follow a number of statistics here.  We usually don’t rely on the unemployment rate because it hides a lot of information.  Two of the big things it hides are folks that still want jobs but have given up on their job search and folks that are working part time jobs when they really want full time employment.  Here is some information on jobless claims from that same WSJ article.  That statistic is another indicator followed by economists.

Many economists more closely monitor the Labor Department’s weekly report on initial unemployment insurance claims, which measures the number of people filing for new unemployment benefits. A rule of thumb says that when claims stay above 400,000, the economy is slipping into recession. That started happening in July. The latest weekly claims figure is 478,000.

Unemployment tends to ‘lag’ or move behind a recession.  It will frequently increase even when the economy rebounds.  So, expect unemployment to be a problem for some time.

By following some of the statistics, economists get a good sense on how deep and long this downturn may be.  Again, it is a bit like Marie LaVeau reading entrails.  From some of the things we see so far, we expect this downturn to be longer and deeper than the last two which occurred in 2001 and 1991. However, because of little glimpses of hope, like the uptick in Manufacturer’s Durable good orders, most economist do not believe we’re about to see the Great Depression again.  Because economists have gotten better at reading the entrails, economic advisers on policy have gotten better at recommending policies to government to stymie the worst of possibilities.  So I’d just like to say again that you should act with prudence moving forward but not panic.  This is, after all, a very resilient country with an economy that has survived a lot worse things.

PS:  No chickens were  harmed in the writing of this thread.


Una Voz Dulce

I picked this off Jack Tapper’s blog because I found this woman’s voice to be authentic and touching.  Just thought I’d share it with you.

 Oct 28, 2008 2:32:38 PM

Hello to all Americans, my name is Gabriel and I live in Honduras, Central America. An Obama Presidency for me is very scary.

Ever since FDR every US President except Jimmy Carter has had a Super-Power Mentality about the role that the United States needs to play in the world. Jimmy Carter and Barack Obama believe that the USA should be an Equal-Power not a Super-Power in their relations with other countries. In a debate with Hillary Clinton, Barack Obama said that the problem with the Unietd States, is that the USA thinks they are above everyone else, and that the United States sgould be at the same level with everyone else.
I have to Strongly disagree with that Statement. The President of the United States, the Leader of the Free World, is not at the same level as corrupt, narco dictators such as Fidel Castro and Hugo Chavez.
The United States of America is a symbol of freedom and liberty throughout the world, and if the President of the United States meets with dictators such as Chavez without any preconditions, then that kills any HOPE that I have that it is going to be different here in Latin America. That one day we will be able to live in a democracy that works and where we are free to express our opinions about our leaders and our leaders without punishment or reprimand.
Hugo Chavez is trying to destroy the democracy which has been so difficult for us to mantain, and in which many people gave up their lives for the freedom that we are still trying to achieve, one of these people was grandfather.
If the President of the United States, meets with these dictators, then he legitimizes that everything that they are doing and everything that they have done, is justified in the eyes of the international community.
Since I have no say, I beg the people of the United States not to vote for Barack Obama. He will make that great country of yours, that country that represents hope and freedom throughout the world, the greatest country in the world, he would make it weak and equal to countries such as Iran, Venezuela and North Korea. Please do not kill the only hope that I have in my country’s struggling democracy. Hugo Chavez is spending millions of dollars trying to cause a civil war here in Central America, and for our countries to go to the left and become communist. I beg you, do not let Hugo Chavez win this fight. Let democracy and liberty prevail.
Thank you very much for your time…

 


The Truth that Dare Not Speak its Name

This is a suggestion posted in an earlier thread here and I think it’s a good one.  It also poses a great question.  Do you want to live in America where every one is afraid to speak their mind?

Perhaps people should conspire to run an ad about this chill. It could begin, “This election, why are so many people afraid to put up signs or talk politics with their family, friends, neighbors, or co-workers? [Video could cue on vandalized property and newspaper clippings on Oviolence such as the women attacked at the subway station.] Why are people behaving so uncivilly? [Video on photos of Sarah Palin is a C people, the Nailin' Palin porn video, and the Sarah Palin blow up love doll.] Do you want to live in an America where people are afraid to speak their mind?

I’m thinking out loud. What do you think?

For months, PUMAs have been discussing the personal attacks we’ve endured since the campaign.  We endured them as Hillary supporters in the primary.  We’ve discussed the vehement attacks and threats on Tavis Smiley and many blacks who either maintain a neutral or slightly critical view of Obama.  I read that Micheal Reagan, conservative commentator and son of one of my least favorite presidents, will not appear on MSNBC any more because of the number of death threats he gets.

Is this America or some kind of fascist state?

What happened to our right to dissent?  Where can we find that most American of Values–the right to free speech?  Why is it that some many of us have completely given up on putting bumper stickers on our cars, hanging out with old friends, or even showing an inkling of outrage for the misogyny directed at Sarah Palin?  What is going on here?

I think almost all of us, at one time or another, have talked about our reticence to mention that we’re not supporting Obama.  It is because we are attacked personally or we just get some kind of shrieking LALALA from friends and family who stick their fingers in their ears now when we come around with facts.  What is the deal with this?

So, ask yourself what Steve Mather asks:  Is this the kind of America we want to live in?

Then ask yourself this:  How can we stop the suppression of free speech and thought before it cannot be stopped?


Being a Democrat and a Puma: What does it Mean?

Several articles I’ve read recently have me questioning what being a Democrat means to me and why I have aligned myself with the party.  This election has me questioning if the party has left me or I should leave the party. I am still voting democrat from Senator on down.  To me, this says something about that question.

This process really started as I became increasingly dismayed at the tactics used by Democrats during this presidential election season.  Early in my blog posts, I see myself struggling with the concept of accepting the Democrat party as the party that is slightly less evil version of the Republican party.  They give lip service to many issues that I care about.  Chief among these are civil rights and liberties for all Americans regardless of sex, race, sexual orientation, religion, or social/economic class.  However, my emotional response to being a Democrat has always been based on the idea that we stand up for the underdog to ensure everyone can participate fully in this great experience.  To me, that is the nature of democracy and the nature of being a democrat.  As I continually experience the Chicago way of being a democrat, I see more of the bullying abuse of power I’ve seen overplayed by the Republican party and I find it extremely upsetting.

Unabashed Leftist Alexander Cockburn wrote a recent article for Counterpunch entitled ‘Obama, the First Rate Republican’.  This short essay distills much of my dismay at the current state of the DNC and their relentless bullying of those who do not see Senator Barack Obama as anything more than a second rate, junior Senator who does well when reading from a teleprompter.  He has put the meat to the bone.

After eight years of unrelenting assault on constitutional liberties by Bush and Cheney, public and judicial enthusiasm for tyranny has waned. Obama has preferred to stand with Bush and Cheney. In February, seeking a liberal profile in the primaries, Obama stood against warrantless wiretapping. His support for liberty did not survive for long. Five months later, he voted in favour and declared that “the ability to monitor and track individuals who want to attack the United States is a vital counter-terrorism tool”.

Every politician, good or bad, is an ambitious opportunist. But beneath this topsoil, the ones who make a constructive dent on history have some bedrock of fidelity to some central idea. In Obama’s case, this “idea” is the ultimate distillation of identity politics: the idea of his blackness. Those who claim that if he were white he would be cantering effortlessly into the White House do not understand that without his most salient physical characteristic Obama would be seen as a second-tier senator with unimpressive credentials.

As a political organiser of his own advancement, Obama is a wonder. But I have yet to identify a single uplifting intention to which he has remained constant if it has presented any risk to his progress.

His entire essay is reprinted here.

As my friends send me email after email of Neocons for Obama, I tripped across this line that gave me more than just a pause.

Obama has crooked the knee to bankers and Wall Street, to the oil companies, the coal companies, the nuclear lobby, the big agricultural combines. He is more popular with Pentagon contractors than McCain, and has been the most popular of the candidates with Washington lobbyists. He has been fearless in offending progressives, constant in appeasing the powerful.

The description of constant in appeasing the powerful, to me, is the most undemocratic thing you could say about a Democratic candidate for anything, let alone the presidency.  I am continually reminded of the number of democrats (Eleanor Roosevelt, Harry Truman, LBJ) that basically threw entire elections and states away to do the right thing for the little guy.  In this case, I am thinking Harry Truman who integrated the military, Eleanor Roosevelt who was a relentless champion of minorites and the poor, and LBJ whose great society programs are next to only Franklin Roosevelt in providing a basic safety net to the disenfranchised in our country.  What would they say to a democratic candidate, in the guise of change, appeases the powerful?

I read another articlein the New York Times today.  “Rethinking the Notion of Political Dominance” reviews many of the issues that drive a party with a seemlingly endless future into the wilderness.  This is also something I worry about as a Democrat in Exile.  This quote is from Bernadette Budde, a political strategist for theBusiness Industry Political Action Committee in Washington which the Times labels as a Republican-friendly Organization.

A new generation of voters, consuming political information in different ways than their forebears, is “very action-oriented, very issue-driven, very solutions-oriented,” Ms. Budde said. “It would be very foolhardy for either political party to think they could dominate the age politically.”

 

 

Does this imply that we should just do the expedient thing and remove the guise that democrats bring to the future what they valued in the past?  I hope not.  For me, being a democrat actually means something more than clicking the button next to some name with the D next to it on the ballot.  It means a certain set of issues and values that I support will be the priorities of the candidates I support.  I expect tolerance of differences and civil discourse.  I expect fair and just treatment of folks.  I expect fair play and justice for those who can’t buy it in the court system.  I expect that civil rights and liberties include all folks and not just those of the correct religion, proper social affiliations, or physiques.

Now is the time to discuss what it means to be a Democrat and what we expect the party to do.  It is not just about Bush bashing and change for the sake of change.  It is time to prioritize our values and to tell our officials that we expect them to follow them.  This means they should follow these values even if it means we loose a few states or seats in an election, a few recruits to the military, or a few religious folks to their own private pews. Democracy is not for the faint of heart and it is not a tool for the expedient opportunist who will say or do anythign to appease power.  The Democratic Party should look to empower the powerless.   Pumas must unite and remind the party that we are still essentially a movement from within the democratic party.  We are not faux Republicans or recent Republican converts.  We must make that clear if we are to have a voice and a future towards bring the party back to its roots and its values.


Alexander Cockburn: Obama, the first-rate Republican

Is there anything the front-runner will not say to become President? No progressive cause would have a chance with him in charge

Sunday, 26 October 2008

As a left-winger I might be expected to be supporting Barack Obama. And indeed, in these last days I’ve been scraping around, trying to muster a single positive reason to encourage a vote for Obama. Please note my accent on the positive, since the candidate himself has couched his appeal in this idiom. Why vote for Obama-Biden, as opposed to against the McCain-Palin ticket?

 

Obama invokes change. Yet never has the dead hand of the past had a “reform” candidate so firmly by the windpipe. Is it possible to confront America’s problems without talking about the arms budget? The Pentagon is spending more than at any point since the end of the Second World War. In “real dollars” – an optimistic concept these days – the $635bn (£400bn) appropriated in fiscal 2007 is 5 per cent above the previous all-time high, reached in 1952. Obama wants to enlarge the armed services by 90,000. He pledges to escalate the US war in Afghanistan; to attack Pakistan’s territory if it obstructs any unilateral US mission to kill Osama bin Laden; and to wage a war against terror in a hundred countries, creating a new international intelligence and law enforcement “infrastructure” to take down terrorist networks. A fresh start? Where does this differ from Bush’s commitment on 20 September 2001, to an ongoing “war on terror” against “every terrorist group of global reach” and “any nation that continues to harbour or support terrorism”?

Obama’s liberal defenders comfort themselves with the thought that “he had to say that to get elected”. He didn’t. After eight years of Bush, Americans are receptive to reassessing America’s imperial role. Obama has shunned this opportunity. If elected, he will be a prisoner of his promise that on his watch Afghanistan will not be lost, nor the white man’s burden shirked.

Whatever drawdown of troops in Iraq that does take place in the event of Obama’s victory will be a brief hiccup amid the blare and thunder of fresh “resolve”. In the event of Obama’s victory, the most immediate consequence overseas will most likely be brusque imperial reassertion. Already, Joe Biden, the shopworn poster boy for Israeli intransigence and Cold War hysteria, is yelping stridently about the new administration’s “mettle” being tested in the first six months by the Russians and their surrogates. Obama is far more hawkish than McCain on Iran.

After eight years of unrelenting assault on constitutional liberties by Bush and Cheney, public and judicial enthusiasm for tyranny has waned. Obama has preferred to stand with Bush and Cheney. In February, seeking a liberal profile in the primaries, Obama stood against warrantless wiretapping. His support for liberty did not survive for long. Five months later, he voted in favour and declared that “the ability to monitor and track individuals who want to attack the United States is a vital counter-terrorism tool”.

Every politician, good or bad, is an ambitious opportunist. But beneath this topsoil, the ones who make a constructive dent on history have some bedrock of fidelity to some central idea. In Obama’s case, this “idea” is the ultimate distillation of identity politics: the idea of his blackness. Those who claim that if he were white he would be cantering effortlessly into the White House do not understand that without his most salient physical characteristic Obama would be seen as a second-tier senator with unimpressive credentials.

As a political organiser of his own advancement, Obama is a wonder. But I have yet to identify a single uplifting intention to which he has remained constant if it has presented any risk to his progress. We could say that he has not yet had occasion to adjust his relatively decent stances on immigration and labour-law reform. And what of public funding of his campaign? Another commitment made becomes a commitment betrayed. His campaign treasury is a vast hogswallow that, if it had been amassed by a Republican, would be the topic of thunderous liberal complaint.

Obama’s run has been the negation of almost every decent progressive principle, with scarcely a bleat of protest from the progressives seeking to hold him to account. The Michael Moores stay silent. Obama has crooked the knee to bankers and Wall Street, to the oil companies, the coal companies, the nuclear lobby, the big agricultural combines. He is more popular with Pentagon contractors than McCain, and has been the most popular of the candidates with Washington lobbyists. He has been fearless in offending progressives, constant in appeasing the powerful.

So no, this is not an exciting or liberating moment in America’s politics. If you want a memento of what could be exciting, go to the website of the Nader-Gonzalez campaign and read its platform on popular participation and initiative. Or read the portions of Libertarian Party candidate Bob Barr’s platform on foreign policy and constitutional rights. The standard these days for what the left finds tolerable is awfully low. The more the left holds its tongue, the lower the standard will go.

Alexander Cockburn co-edits counterpunch.org, the US left-wing website, and is a columnist for ‘The Nation’ and ‘The First Post’ (alexandercockburn@asis.com)