Thursday, September 04, 2008
Now That The Rhetoric Is Mostly Over
It will be interesting to see how the candidates address our real economic slump. I know quarterly GDP just came in over 3% annualized, but the underlying details aren't very good. The domestic corporate finance/other ratio isn't redressing at all, corporate profits are weaker than all heck, and PCE growth had a huge boost from those checks the government (meaning you) sent out. Those checks are not a freebie; they are a withdrawal from the future or a borrowing, so it's not a tactic than can be repeated.
The manufacturing rise has just about worn out its ability to overcome the rest of the economy. The slump in the ROW is not going to help the US either; we can continue to drop imports, but growing exports is becoming more difficult. The only reason we look good is because a lot of ROW looks even worse, but that is no foundation for blithe optimism.
I'd hope (but I doubt) that the rest of this campaign would be used by the candidates to address real policy questions. We need a viable energy policy, we need to work on our fiscal problems without aggravating the slump, we need to deal with the Social Security/Medicare deficits, and we need to figure out how to address the problem of an increasing number of lower income households which are taking a terrible drubbing from their effective CPI, which has run over 10% for several years now.
The irony here is that except for energy, most of these are areas which would normally be considered Democratic strengths. Lately the Democratic leadership seems to have abandoned its historical role. Can the Republicans step in, and if they do, what happens to their historical role?
I have been lurking for some time and really like your analysis you put out. But as a novice I am learning the acronyms slowly but this latest post is cryptic for me as I cannot find the FUT which is some future related report, and the ROW which has to do with manufacturing I assume.
Can you point to a glossary of terms and acronyms for us/me to help with economic illiteracy.
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