Sunday, December 19, 2010

Expecting better than expected GDP

Well, it looks like GDP numbers are going to be better than expected (who woulda thunk it?) and consumer spending is approaching pre-recessionary levels. The recession is over, it's all good, the good times are here, etc. I'm ecstatic. So much so that I could just shit.

Here's the thing(s). Last time I checked, the UE was moving the wrong way (currently 9.8% or around 17% for the U-6), the long term unemployed numbers are worse than ever, and nearly 43 million folks on food stamps (SNAP) and climbing. Add to this states in perilous deficit situations and public unions that are catastrophically underfunded. Not a pretty picture, at least not to me.

Only two scenarios as I see it. Either I and most other doomers are full of crap, or the cheerleaders are looking at the wrong things. Maybe millions haven't filed for bankruptcy, lost homes, had to take government "welfare", needed food stamps, or known the despair of long term joblessness. Maybe there really aren't thousands of Americans living in tent cities or worse. Maybe we really aren't about to set a record for number of months with the UE rate above 9%- since the Great Depression of course.

Maybe all that matters is that retail spending is supposedly back nearly to 2007 levels. That is a tough stat for me to get a grip on. After all, it seems that consumer spending is increasing WHILE employment is worsening. I still believe that a lot of the job "growth" will later be identified as part-time, seasonal employment which will end after the holidays. Even if I am wrong, it appears that those of us who are not spending- for whatever reason- aren't really needed after all. Or is it that most of us are simply paying more for necessities like food and fuel?

Or is it that the "rich" are spending like crazy and skewing the numbers. Most of the "rich" that I have known over the years are rich precisely because they DON'T spend like idiots, but they do in general spend more than an average blue collar guy like me- A LOT MORE.

Whatever the reason for the return of retail spending and better GDP numbers, most doomers, myself included, feel that conditions are worsening and the middle class is dying, You can see our rationale for this belief in many blogs like Decline of the Empire and others. Many of us believe we are headed for a two class society. The elites and the rest of us. Maybe we the doomers are simply wrong. Maybe there won't be a collapse into extreme poverty. Maybe there is no such thing as Peak Oil. Maybe nothing is as bad as we think it is.

Government spending is driving GDP growth, but what will drive job growth? Another housing bubble? Doubtful. An internet revolution? Already done that. So where will all of the real, full-time, good paying jobs come from?

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