Ramblings of Sarge

The Unending Recession

The recession will, in my opinion, continue on for the foreseeable future. I'm talking years, not months as the "green chutes" seeing folks would have you believe. The work that springs up is short lived as money is being tightly held in most sectors. Wall Street numbers appear to be mainly investing firms movement and not the needed move of individual investors getting back in the game. The problem is the pipeline. Employers see sparse work and nothing coming down the line behind it. This lack of confidence prevents the rehiring of laid off workers even if the occasional overtime shifts are needed to handle an uptick in business. There is also a resistance for entrepreneurs to expand businesses that were started within the past few years. Where is their reasonable certainty for return on investment? The health care debate also puts the brakes on growth as small and midsized companies hear nightmare scenarios of what it could cost them to do business. Read more at: Truth DrivenLLC

Surprised Yet Again

I almost didn't post anything on this, but the redundancy shows how ridiculous this administration appears as it continues to refer to economic reports as unexpected. The unexpected numbers have appeared so often that one would think they would be expected by now.

WASHINGTON (Reuters) - The number of U.S. workers filing new applications for unemployment insurance unexpectedly surged last week, while producer prices increased sharply in January, raising potential hurdles for the economy's recovery.

This will continue on as inflation looms large on the horizon. The remaining stimulus money is due to be spent soon and the increased money supply chasing fewer goods on the shelves will result in inflationary pressures. Couple this with the difficulty the feds have selling our debt will likely produce higher interest rates, further putting the squeeze on businesses which will affect hiring and layoff decisions.

JOBS LAG RECOVERY The hard-hit labor market has lagged the economic recovery that started in the second half of 2009. Gross domestic product grew at a 5.7 percent annual rate in the fourth quarter, but still failed to ignite jobs growth. "Initial claims have been flat over the last three months. That means the improvement in the labor market is much slower than suggested by the headline GDP figure," said Harm Bandholz an economist at Unicredit Research in New York. "That shows GDP growth is artificially inflated by government stimulus and the inventory cycle rather than driven by final demand, which usually goes hand in hand with an improvement in the labor market." The economy has lost 8.4 million jobs since recession struck in December 2007.

Read more commentary at Hot Air.

Always Unexpected

I can't help but notice how this administration is often surprised as stats are released. The rise in jobless numbers is unexpected, etc, etc. Now their whole forecast seems to be off and the answer will most likely be that more tax dollars will be called for through new stimulus plans. The result will be more financial stress on employers and families which will prolong the problem  with expensive, if any, results from all the spending. Excerpt from Hot Air

WH: Unemployment will get worse in 2010

posted at 10:55 am on February 11, 2010 by Ed Morrissey

Thirteen months ago, Christina Romer and the aggregated economic advisers of Barack Obama claimed that the stimulus package they demanded from Congress would curtail unemployment by stimulating the economy, keeping the unemployment rate under 8% in 2009 and forcing in down throughout 2010.  Yesterday, Romer essentially admitted that her analysis had completely failed.  Now, even with the 2009 Porkulus and another stimulus bill Obama will push for Congressional approval, the US economy will only generate an anemic 95,000 jobs a month in 2010 — not enough to keep up with population growth:

The article shows more info on the subject and points to the lack of ability for politicians to predict the future. Central planning hasn't been able to predict economic results in the past and it can't do it today. On another note, do we remember this Obama pledge? “No family making less than $250,000 will see any form of tax increase. … not any of your taxes.” We  should have known, and many of us did, that this would never hold up.

Hope and Change: Obama open to tax hikes on middle class

posted at 4:37 pm on February 11, 2010 by Ed Morrissey

Jim Geraghty says that the expiration dates come too fast and furious to keep pace these days, but this one’s a doozy.  After having insisted all along that anyone suggesting his economic policies would require middle-class tax hikes was deliberately lying, Obama suddenly proclaims himself an “agnostic” on whether imposing higher taxes on people earning under $250,000 will be necessary: