Calculated Risk, Paul Krugman, and the Republicans are trying to find bad news in the 5.7 percent increase in the size of the economy last quarter. Certainly much of the growth is in restocking, but that’s restocking that did not take place a year ago, and restocking is good because it means that businesses are anticipating selling what they’re restocking. And the restocking only applies to 3.4 percent, which means there was 2.3 percent growth beyond that. And yes, much of it is the result of the stimulus and cash for clunkers programs, and yes, the rate of increase will probably drop this quarter. But there’s only so much bad news you can find in a 5.7 increase following two years of recession. Things are looking up.
If only Obama wasn’t caving to Republican ideology and planning to actually take money out of the economy with ill-advised discretionary spending freezes, I’d be very optimistic about an end to the recession this year.
Addendum: It looks like the expansion may have been global.
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January 29, 2010 at 9:44 am
Anonymous
Actually Eric if Obama had this data earlier in the week when he announced the policy it may have been justified. A fast growing economy can result in inflation and he still has a lot of stimulus money going out there and a new jobs spending bill. The deficit reduction policy would actually give him a tool to control inflation. Crazy like a fox.
January 29, 2010 at 9:49 am
Eric Kirk
Uh, I think if he had any idea this report would have come out, it would have been mentioned in the SOTU. And I just don’t think inflation’s going to be an issue for some time to come.
God, I hope Bernenke agrees with me!
January 29, 2010 at 1:18 pm
moviedad
Now that the corps know they can loot our treasury any time they need to, they have eliminated risk.
Remember when “Bailing Out” an organization was a new concept? New York, Chrysler, or was it GM. Anyway, they took the money and kept it. this is the new method of getting corporate welfare payments.
The infrastructure is being starved at such a devastating rate, it won’t be intact much longer. Then, of course; it will be blamed on the failure of government. And we’ll need to be saved by the heroic privatization of everything from Social Security to Safety inspection.
Who is there to protect our country from these domestic enemies?
January 29, 2010 at 5:27 pm
Anonymous
The problem is that new homes are not being built and credit is still tight. Those issues have to be resolved before there’s any job growth and without job growth there’s no real recovery.
January 30, 2010 at 9:38 am
moviedad
They control the “Economy” by controlling the credit.
January 30, 2010 at 4:13 pm
Tom Sebourn
Pull what money you have out of the big banks and move it to a regional bank, local bank or credit union. These institutions lend money locally and can have a real impact on the local economy. Besides, why reward the large banks with your money? You have already done that with your tax dollars, don’t enable them any further.
January 31, 2010 at 9:34 am
unanonymous
Put your money where you get the best deal, many local banks sell loans to national chains after closing.
While you may not think inflation will be a problem for some time…..history shows inflation will be a real threat following recession, especially with a weak dollar. Debt reduction (dollar strengthening) is probably one of the most important things government can tackle to make any recovery sustainable.
January 31, 2010 at 1:55 pm
Anonymous
I do not think that either of the local credit unions will be closing any time soon. They are a safe local option.
February 1, 2010 at 9:18 am
Eric Kirk
While you may not think inflation will be a problem for some time…..history shows inflation will be a real threat following recession, especially with a weak dollar. Debt reduction (dollar strengthening) is probably one of the most important things government can tackle to make any recovery sustainable
When the unemployment rate drops a few points, then maybe you can get me concerned about budget deficits and inflation rates. But until consumers actually have money to spend, there won’t be much inflation.
February 5, 2010 at 4:41 pm
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