Disconnect

How the economy is doing these days largely depends what data you want to look at. I’ve been saying that for quite a while now. More to the point, others share my opinion. Here’s Reality Based Educator. Here’s Tyler Cohen. Here’s the BondDad. They all boil down to “How can you say there’s no inflation when commodities are so high and food/fuel prices go up every time I turn around?” and “How can the GDP be so spectacular when the dollar is worth less than a loonie?” and “If everything is so wonderful, how come we have a ‘credit crunch’ and foreclosure crisis?”

And that’s just up until yesterday. Today we can add little data points like 47 million Americans without health insurance, including 3.4 million children who had coverage at the beginning of the Bush Administration. And we can add up to 12,000 pink slips at Chrysler. And in the same quarter that we had almost 4% GDP growth? We had 30% growth in foreclosures, almost double levels from last year. CNN tells us “More than 635,000 foreclosure filings were reported nationwide – one for every 196 households. The filings include everything from default notices to auction sale notices to actual bank repossessions.” Think about that. You live in a neighborhood of a couple hundred houses? Odds are really good you have a neighbor in foreclosure. Apparently the economy is great unless you are a human being.

Even Wall Street is having a rough time, since “Now that 307, or 61% of S&P 500 companies, have reported, the headline numbers are far from encouraging. Earnings have contracted 5.3% from a year ago, S&P says, the worst performance since the fourth quarter of 2001.” Oh but wait, if you don’t count a couple bad sectors, “Eight of the 10 sectors posted 8% or greater earnings growth; five were in the double digits.” And his analysts think next year could have profit growth — not revenue growth, actual profit growth — of anything between 6.5% and 15%. The low number is still more than 50% greater than the “good” GDP number announced yesterday, the highest one is almost 4 times higher. Oh no, the CEO might have to make do with a smaller yacht. Keeping in mind we still have a trade deficit, where the heck is the money to fuel these profits coming from?

In closing: don’t get me started again about vouchers; the New Company Towns; perhaps mining laws should be revisited more often than once every 135 years, “A House bill, the Hardrock Mining and Reclamation Act, would permanently bar the sale of federal lands to miners and would require them for the first time to pay royalties of up to 8 percent of gross income from mining, which would go to a fund to clean up abandoned mines. It would also establish new permitting and environmental rules”; and yes I know I put it in today’s Daily Three, but Schneier is right on again about how “unusual” is not the same thing as “criminal”.