Posts Tagged ‘Recession’

Greece is about the leave the Eurozone

The Greek government is limited in its abilities to use fiscal policy to stimulate its economy because Greece is attached to the euro. Germany governs how and when an expansion of the euro will take place, and the Germans are mostly worried about inflation, which is not a problem that Greece has. Attachment to the euro has created a disaster for Greece. Now the government there is preparing to leave the Eurozone. Staying in the eurozone redistributes income from Greek citizens to foreign bankers because the government needs to borrow money in order to stimulate the economy, and the terms of the borrowing has been onerous for the citizens of Greece since linkage to the euro has pushed the nation into a deep and long lasting recession since 2009.

Banks prepare for the return of the Greek drachma

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England has moved into a double-dip recession thanks to government budget cutting during a time of economic weakness, owing to the redistribution of income from working people to the one percent over the last thirty years. In other words, the corporate economic system of England may no longer be able to stand on its own. In other words, the economy of England is collapsing, slowly.

Austerity Policies Drive England into a Double Dip Recession

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New orders for durable goods fell 4.2 percent last month. Orders have dropped two out of the last three months. When the orders for durable goods drops, it can herald the beginning of the end of whatever business expansion we’re in. It’s the scary canary in the economic coal mine. However, falling orders for durable goods does not necessarily signal the beginning of the end, but it is always the first step.

Durable goods are those things that ordinarily last three or more years, like pipes, computers, cars, toilets, stereos and stuff like that.

We should keep an eye on financial events as they unfold because the next recession could come quickly and with savage intensity since the rich are getting an ever greater share of the total national income through their political power over Republicans and Democrats alike. The one percent heisted 93 percent of the total national income growth from 2009 to 2010, and it is likely their share is about the same for the 2010 to 2011 fiscal year. That means there’s less money among the 99 percent to demand the goods and services necessary to keep the economy floating and to increase the number of jobs, while the rich have more money and political clout to demand and get legislation that redistributes even more income into their already fat wallets.

So hold on to your jobs, because the recession could be coming soon. Oh, and by the way. We’re still in the Second Great Depression that began in December 2007.

Click here for the full durable goods story

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A few European governments tried to cut back on spending during the greatest economic crisis since the Great Depression. Now look at them. Europe is on the verge of another recession, and the entire Eurozone may crack up. There’s a ton of reasons why. One of them is that Italy, for example, redistributed income and wealth from working folks to the rich, so now the demand for goods and services is miniscule in that country. Much of the manufacturing base is in China and Vietnam. The same holds true for a ton of those European nations.

Click here for Paul Krugman's take on this issue

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President Obama has been lucky the weak American economy hasn’t gone back into recession, at least not so far. Under Obama’s watch, the economy has even managed to create jobs, although at a pace that any previous business expansion beats, except for the dismal record of George W. Bush. But can the so-called business recovery survive a global downturn and fiscal conservatism on Capitol Hill?

Click here for the answer

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Insight: US Economic Recovery at risk as Americans raid savings

(Reuters) – More than four years after the United States fell into recession, many Americans have resorted to raiding their savings to get them through the stop-start economic recovery.

Click here for the complete story

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Five Myths About President Obama’s Economic Recovery

There are a ton of myths about our economic recovery. One of the most obvious is that the economy is recovering from the recession that hit back in December 2007. It supposedly ended eighteen months later. But this is not a recovery because we are in a Great Depression. More on that later. However, below is an interesting point of view that does deal with myths of the recovery that hasn’t actually occurred. That’s one of the myths the author of the story fails to point out.

Click here for Five Myths of the Obama Recovery

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