Barely making the Grade

One can look at this table, and convince oneself that the economic scene is not too bad, except many Customers have yet to make the adjustment in Retail, still worried about style and appearance. It does not help, though, that the first place to conserve is Dining and big-Ticket items which have been already curtailed for a while. Michael Mandel would suggest that productivity growth was functionally illusionary over the last decade. I would basically agree there was minimal growth anywhere but Immigration and untaxed Business Profits. Oh, I forgot the foreign debt We were able to arrange, which may be more difficult in the future. The real Saving Grace of the last decade may be the fact that Labor Incomes did not rise significantly, and therefore, cannot drop too drastically; remember, the real losses recorded comes in the Profits recorded and the excess Retail outlets constructed from untaxed Profits to maintain that non-tax continuance.

Calculated Risk tries to give Us some idea of how bad the economy actually is, with an Intro remembrance by me that all this stuff be very much affected by a decline in GDP; all that glitters is mostly a Movie Set glamor. The last graph may be the most important, its decline alongside a dropping GDP suggests that the Unemployment picture may not improve readily, no matter what hype and funds are put into the Obama Recovery Plan. I was thinking to discuss the Chinese Stimulus Plan today, but decided I knew to little about it, though I like Jeff Macky ask Why there is a need for Stimulus in an economy purportedly growing at 7%. I have the suspicion that the future will destroy the power of both Tax Cut economic growth and Keynesian partnership of Government with Business. We may just need for economies to react normally, without any Stimulus at all!

I found something for the hopelessly Wonkish by Menzie Chinn. Univariate v. bivariate arguments will always surrender in the final analysis to Unknowns (specifically what is the impact of Demand Shocks, whether they are causal or respondent). I would like to believe in Brad DeLong’s assessment that sharper increases in unemployment presage more rapid GDP growth, but will state that without a decrease in relative Pricing with that increase, GDP will trend to previous levels. I know that constant trend rates in GDP depend far more on Inflationary pressures, than on a real-life growth in real product. Stripping out the Inflation from the matrix, it is only a statement that Business firms assure themselves of a Profit margin if at all possible. It is a mess, and I have been artificially Intellectual sufficiently for today! lgl