Good thing to do, because the one that started in 2007 kind of sneaked up on us in 2008, right? Well, my bet is that the renewed (double-dip) recession began in April or May of this year and rather than wait until 2012 when it is plain as a pikestaff, why not dig around for the indicators that its already here? The bad news here is that I’m not skilled enough to do that – but Tony Pallotta over at Zero Hedge, is:
The consumer driven recession has begun. Keeping it very simple of the four GDP components (consumer, fixed investment, government and net trade) the consumer has simply rolled over. In Q1 2011 the consumer contributed 1.46% to the 0.4% total GDP. In other words if it was not for consumer growth or even if .5% of that growth was removed the economy contracted in Q1 2011.
Fast forward to Q2 where the consumer component is now 0.3%. In other words the trend of the consumer is deteriorating. Representing roughly 70% of total GDP the consumer is the economy. Confidence drives the consumer, the consumer drives demand and demand drives the economy…
Which is why, by the way, we need to shift our economy from consumerism to wealth creation. We have used debt to finance consumer spending – and now the debts are too high and the consumer is tapped out. There is no way for consumer spending to lead us out of recession. Rather than buying gadgets from China and calling that “growth”, we need an economy which will make things here in the United States. The reality is that the only things of genuine economic value are things which are made, mined and grown…if what you’re doing doesn’t do or facilitate such actions, then it just isn’t that important to the economy. Doesn’t mean it shouldn’t happen but it is just not something we need to be concentrating on.
The trouble is that our current government doesn’t recognize this. Obama and Co (and quite a few Republicans, too) figure that we can some how, some way, keep things going as they have been for the last 30 years (and especially the last 20). The thinking is that we can re-inflate asset bubbles, give people a sensation of being rich and convince them to plunge even further in to debt to buy things increasingly made overseas but which generate profits here in the United States. Sorry to say, but it just can’t work like that any more…ultimately, if you want to buy something from a foreign country, you have to exchange wealth for it…the way we’ve been paying for the stuff we get is to sell off, as it were, our capacity to make, mine and grow things. Essentially, in return for that cool cell phone, you gave China a factory, Mexico a farm and Chile a mine. But now you’ve got no more mines, farms and factories to hand over to them…so how do you pay for your next cell phone? That, essentially, is the problem we have.
A course of balanced budgets, regulatory relief, corporate reform (Big Corporation is nearly as bad as Big Government…such corporations tend to work for a restraint of trade nearly as much as unions do…and we need to figure out a system which ensures that small and mid-sized players can compete against the big boys), tax adjustments to ensure no foreign enterprise has a tax advantage over us and a general insistence that work replace welfare will fix what is wrong with us. Not overnight. It took many years to get in to this mess and it will take quite a while to get out of it. The good news is that we can still fix it – there is still enough genuine American spirit in the United States to overcome the debt and the laziness and the consumerism of the past. The bad news is that the window of opportunity is closing fast…if we don’t get our house in order soon then we will condemn ourselves to permanent decline.
2012 is that important – who we choose to give power to next year will determine, for good, the fate of our nation. We’ll either do what is right and restore American greatness, or we’ll slink away in a cowardly surrender and insist upon a Big Government shroud for our national funeral. We’ll see how we choose.