Would someone please remove the banana from the economy's tail pipe?

Would someone please remove the banana from the economy's tail pipe?

Wall Street Journal:

After a disappointing first quarter, economists largely predicted the U.S. recovery would ramp back up as short-term disruptions such as higher gas prices, bad weather and supply problems in Japan subsided. But there's little indication that's happening. Manufacturing is cooling, the housing market is struggling and consumers are keeping a close eye on spending, meaning the U.S. economy might be on a slower path to full health than expected.

"It's very hard to generate a rapid recovery when rapid recoveries are historically driven by housing and the consumer," said Nigel Gault, an economist at IHS Global Insight. He expects an annualized, inflation-adjusted growth rate of less than 3% in coming quarters-better than the first-quarter's 1.8% rate, but too slow to make a meaningful dent in unemployment.

A growing number of forecasters are downgrading their second-quarter growth predictions. JPMorgan Chase & Co. economists revised down their estimate to a 2.5% rate from 3%, while Bank of America Merrill Lynch economists cut theirs to 2% from 2.8%. Deutsche Bank cut its forecast to 3.2% from 3.7%.

There are some pockets of recovery - Texas, for example - that is seeing fairly strong growth and lower unemployment.

But the Midwest is still largely a basket case. Most of the three million manufacturing jobs lost during the recession are not coming back - ever. This is different from past recessions as layoffs would occur, only to have the worker get back on the job once the recovery was underway. That can't happen when the company doesn't exist anymore.

To make matters worse, we have an administration that punishes success and makes it unprofitable to take risks. Hence, new businesses are being formed at a slower rate than after past recessions, further depressing the job market. 

The Obama administration is a banana in the tail pipe of the economy. Unfortunately, the damage done to the economy will be a long time mending.



Would someone please remove the banana from the economy's tail pipe?

Wall Street Journal:

After a disappointing first quarter, economists largely predicted the U.S. recovery would ramp back up as short-term disruptions such as higher gas prices, bad weather and supply problems in Japan subsided.

But there's little indication that's happening. Manufacturing is cooling, the housing market is struggling and consumers are keeping a close eye on spending, meaning the U.S. economy might be on a slower path to full health than expected.

"It's very hard to generate a rapid recovery when rapid recoveries are historically driven by housing and the consumer," said Nigel Gault, an economist at IHS Global Insight. He expects an annualized, inflation-adjusted growth rate of less than 3% in coming quarters-better than the first-quarter's 1.8% rate, but too slow to make a meaningful dent in unemployment.

A growing number of forecasters are downgrading their second-quarter growth predictions. JPMorgan Chase & Co. economists revised down their estimate to a 2.5% rate from 3%, while Bank of America Merrill Lynch economists cut theirs to 2% from 2.8%. Deutsche Bank cut its forecast to 3.2% from 3.7%.

There are some pockets of recovery - Texas, for example - that is seeing fairly strong growth and lower unemployment.

But the Midwest is still largely a basket case. Most of the three million manufacturing jobs lost during the recession are not coming back - ever. This is different from past recessions as layoffs would occur, only to have the worker get back on the job once the recovery was underway. That can't happen when the company doesn't exist anymore.

To make matters worse, we have an administration that punishes success and makes it unprofitable to take risks. Hence, new businesses are being formed at a slower rate than after past recessions, further depressing the job market. 

The Obama administration is a banana in the tail pipe of the economy. Unfortunately, the damage done to the economy will be a long time mending.



RECENT VIDEOS