Sorry Dems: Latest Economic News Shows Economy is NOT in Recession!

Here is more bad news for the Democrats. Their 47 million uninsured is done by some tricky math. The number of chronically uninsured (2 or more years) U.S. citizens making less than $50,000 is 8.2 million. That would still leave 10 million uninsured under Hillary’s plan because they aren’t U.S. citizens.
http://www.businessandmedia.org/articles/2007/20070718153509.aspx

Yes, according to the classic definition of recession that is true, but it’s awfully damn close to negative growth.

Those that follow this generally believe “[i]f the economy can escape the housing and credit crisis without sinking into a recession, the Fed may shift its focus back to promoting price stability instead of economic growth and raise rates back up quickly.”

But that’s easier said than done with yesterdays news casting more clouds over the housing and mortgage crisis:

About half of recent subprime and Alt-A borrowers may soon owe more on their mortgages than their houses are worth or hold minimal equity, putting $800 billion of debt at greater risk of default, according to Barclays Capital.

Subprime loans from 2006 and 2007 that exceed the value of the homes jumped 5 percentage points to 19.8 percent in the fourth quarter, and may reach 26 percent by midyear if prices drop at the same pace, Barclays analysts wrote in a report yesterday. Alt-A loans, a grade better than subprime, would grow to 23 percent from 16.3 percent.

Many of the loans are in areas where prices are falling faster than the U.S. average, so the size of the shift is underappreciated, New York-based analysts Ajay Rajadhyaksha and Derek Chen wrote. The odds that a borrower will default, saddling lenders and bond investors with losses, rises when a homeowner owes more on a property than it can sell for, they wrote.

“Mortgage loans are moving underwater at a very sharp pace, far more than suggested by aggregate home price data,” they wrote. Home mortgages held by households totaled $10.5 trillion on Dec. 31, according to Federal Reserve data.

That’s a huge amount of debt exposure. Therefore this economy isn’t going anywhere positive quickly. Furthermore, it’s a poor political indicator to trust what economists say about what’s happening in the economy when it’s really the voters that are really the primary agents in a political equation:

…
The economy is shaping up to be the defining issue when voters go to the polls in November. Bush doesn’t want his GOP to be the punching bag.

In an Associated Press-Ipsos poll this month, just 27 percent of the people questioned about Bush’s handling of the economy said they approved - his worst showing ever in the survey.

Bush continued yesterday to resist embracing the term recession to describe the current financial picture but came closer than he has before. He said the country is in “difficult” straits five times, that it’s “tough” three times and once called the situation “sour.” “Recession, slowdown - whatever you want to call it,” he said.

In the end, it doesn’t matter whether the technical definition of recession was avoided or not; what matters are the practical terms: is the public now squeezed, do they feel the recession? Practically speaking, the question, “are we in a recession,” is not a technical one, it is a political one and the public understands the distinction by experiencing it instead of knowing it.
—————
PS- still having posting problems. I took out the links this time, then it posted.

A CNN/Opinion Research Corp. survey released Thursday indicates that 71 percent of the American public disapprove of how Bush is handling his job as president.

“No president has ever had a higher disapproval rating in any CNN or Gallup Poll; in fact, this is the first time that any president’s disapproval rating has cracked the 70 percent mark,” said Keating Holland, CNN’s polling director.

“Bush’s approval rating, which stands at 28 percent in our new poll, remains better than the all-time lows set by Harry Truman and Richard Nixon [22 percent and 24 percent, respectively], but even those two presidents never got a disapproval rating in the 70s,” Holland said. “The previous all-time record in CNN or Gallup polling was set by Truman, 67 percent disapproval in January 1952.”

…

The poll also indicates that support for the war in Iraq has never been lower. Thirty percent of those questioned favored the war, while 68 percent opposed it.

…

The record-low support for the war in a CNN poll could be one reason behind the president’s unpopularity, but it probably is not the only one.

“Support for the war, the assessment of the economy and approval of Mr. Bush are all about the same — bad,” Schneider said.

McCain’s got a Wright-like albatross around his neck here.

Let’s see how those wonderful Europeans that some want to emulate are doing. Oops, what do you know, there was an NYT article yesterday on that. Hmm.. are they making up the news again or not, let’s find out:
http://www.nytimes.com/2008/05/01/business/worldbusiness/01middle.html?_r=1&oref=slogin

Ut oh, the headline isn’t sounding cheery:

“For Europe’s Middle-Class, Stagnant Wages Stunt Lifestyle ”

And, we’re going downhill fast…

“When their local bakery in this town south of Paris raised the price of a baguette for the third time in six months, Anne-Laure Renard and Guy Talpot bought a bread maker. When gasoline became their biggest single expense, they sold one of their two cars.”

Silly Frenchmen, you don’t need 2 cars. Maybe they should have slowed down 15 km/h or so.

“Their combined annual income of 40,000 euros, about $62,500, lands Ms. Renard, a teacher, and Mr. Talpot, a postal worker, smack in the middle of France’s middle class. And over the last year, prices in France have risen four times as fast as their salaries. ”

Looks like they are going to have to scale back on that cheese a wee bit. Here in America we give cheese away. :-/

At the end of every month, they blow past their bank account’s $900 overdraft limit, plunging themselves deeper into a spiral of greater resourcefulness and regret.

Ahh.. they learned something from us. Let’s live beyond our means! But they have healthcare. And culture. Ahh.. Angry youts that burn cars in the street.

“In France, when you can’t afford a baguette anymore, you know you’re in trouble,” Ms. Renard said one recent evening in her kitchen, as her partner measured powdered milk for their 13-month-old son, Vincent. “The French Revolution started with bread riots.”

Talkin’ ’bout a revolution….

“The European dream is under assault, as the wave of inflation sweeping the globe mixes with this continent’s long-stagnant wages. Families that once enjoyed Europe’s vaunted quality of life are pinching pennies to buy necessities, and cutting back on extras like movies and vacations abroad. ”

And we want to be just like yoooooou…

“Potentially more disturbing — especially to the political and social order — are the millions across the continent grappling with the realization that they may have lives worse, not better, than their parents. ”

Where have we heard this before? Was it in Germany? Hello, come in Germany!

“His concerns are well-founded. A study by the German Institute for Economic Research in Berlin found that the broad middle of the German work force, defined as workers making from 70 to 150 percent of the median income, shrunk to 54 percent of the population last year, from 62 percent in 2000.”

It’s those greedy bankers and rich people at the top. We haven’t had enough yet, we want more.

England! Brothers in Arms. Tell me things are better for you.

“That simmering concern turned into anger last week in Britain. Striking teachers closed schools for the first time in two decades, protesting pay packages that did not keep pace with the soaring cost of living. Proposed raises were about 2.5 percent, while food has risen 7 percent and oil costs have surged 20 percent in Britain since this time last year. ”

I’ll leave the rest for you to read.