Man, I just really can’t believe how bad George W. Bush has screwed things up. Remember at the Democrat Convention when President Bill Clinton told us that no one could have turned around the mess W left us in? Well, that must be true, because things just don’t seem to be getting any better. The third reading on second quarter GDP just came out this week and the report was ugly. The growth number was revised down to 1.3 percent on an annualized basis. Economists expected the number to be unchanged at a meager 1.7 percent, but it was worse. According to the Bureau of Economic Analysis, “The third estimate of the second-quarter percent change in real GDP is 0.4 percentage point, or $16 billion, less than the second estimate issued last month, primarily reflecting downward revisions to private inventory investment, to personal consumption expenditures, and to exports,” Darn that W. Also last week, durable goods orders dropped the most since the beginning of the recession. Durable goods are things like toasters, washing machines, cars and airplanes – things that are expected to last at least three years. Orders for those types of things dived 13.2 percent during August, according to the U.S. Commerce Department. That’s the largest drop since January 2009, when the economy was in the throes of a recession. Orders for July were revised downward, too, to 3.3 percent from the previously reported 4.1 percent. In a story posted by Reuters, economists had predicted only a 5 percent drop in durable goods orders in August. The biggest loser was transportation, where orders fell 34.9 percent in August after racing ahead 13.1 percent in July. Consumer spending was revised down to a 1.5 percent gain in the quarter from a previously reported 1.7 percent improvement, as purchases of financial services and insurance were revised lower. Exports were revised down as well, and new data showed travel by foreigners was not as strong as prior readings. According to NASDAQ.com, a Federal Reserve Bank of Chicago report out earlier this week said U.S. industrial production dropped sharply in August. A separate Philadelphia Fed report last week said factory activity in the Mid-Atlantic region continued to contract this month, though at a slower pace than in August. The Commerce data out Thursday showed defense capital orders plummeted 40.1 percent in August. Unfilled orders, a sign of future demand, decreased 1.7 percent. Shipments of durable goods slid 3 percent, while inventories inched ahead by 0.6 percent. Darn that W. Meanwhile, the country is on pace over the last 3-1/2 years to have the worst jobs record since World War II, according to fact checkers at the Washington Post. Government spending was supposed to boost the economy, but that doesn’t appear to be happening. Nonetheless, the Federal Reserve announced this month that it would pump another $40 billion per month into the economy. Unemployment fell from 8.3 percent to 8.1 percent during August, but that was largely because some 580,000 people stopped looking for work and were not counted among the unemployed. In August, the economy created 96,000 jobs. Cool. But economists say that the economy would have to add an average of 377,000 jobs per month over the next three years to drop the unemployment rate to 6 percent. That kind of job growth would require GDP growth rates in the range of 4 to 5 percent. As you know, right now, GDP is slogging along at the aforementioned downward-adjusted 1.3 percent. Darn that W. Food stamp use in the U.S. achieved a record-high this summer, rising to 46.7 million Americans, according to the U.S. Agriculture Department. The Ag Dept. also reported that 18 million families struggled to feed themselves last year. That means 50 million people – or about one in six Americans – didn’t have enough food to feed themselves regularly.That was 700,000 more families than in 2010. Going hand-in-hand with the previous statistic, from June 2009 to June 2012, household income dropped 4.8 percent. There is a bright spot in the economy. The recovery in the U.S. housing market continues to strengthen. The National Association of Realtors reported this week that sales of existing homes were up 7.8 percent from July and 9.3 percent from a year ago. I read an article recently that said there is roughly $2 trillion in pent-up capital in the U.S. just waiting to be unleased. That’s $2 trillion of private-sector money that would create many jobs. But businesses are sitting on capital and squirreling away cash. Why? Largely because they are wary of lots of new government regulations and the uncertainty of the federal health care program going forward. If only we could somehow get away from all those big-government, anti-growth, anti-capitalist, anti-investment polices of George W. Bush.
