economic growth

Euro-zone falls back into recession

Austerity protest

Plagued by seemingly perpetual debt problems due to large welfare states, the Euro-zone, the 17 countries that make up the European Union, has fallen into a recession for the second time since 2009:

The euro zone debt crisis dragged the bloc into its second recession since 2009 in the third quarter despite modest growth in Germany and France, data showed on Thursday.

The French and German economies both managed 0.2 percent growth in the July-to-September period but their resilience could not save the 17-nation bloc from contraction as the likes of The Netherlands, Spain, Italy and Austria shrank.

Economic output in the euro zone fell 0.1 percent in the quarter, following a 0.2 percent drop in the second quarter.

Those two quarters of contraction put the euro zone’s 9.4 trillion euro ($12 trillion) economy back into recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression.

A rebound in Europe is still far off. The debt crisis that began in Greece in late 2009 is still reverberating around the globe and holding back a lasting recovery.

Analysts said even the euro zone’s top two economies were likely to succumb in the final three months of the year.

Another dismal jobs report

The Bureau of Labor Statistics (BLS) dropped a bomb this morning. Yesterday, there were some positive signals that job growth was increasing compared to recent months. The ADP estimate for August came in at 201,000, which was much higher than the 140,000 estimate.

But the official job report for August was nowhere near expectations. According to the BLS, the economy created 96,000 jobs in August with estimates for June and July being revised downward:

U.S. employers added 96,000 jobs last month, a weak figure that could slow any momentum President Barack Obama hoped to gain from his speech to the Democratic National Convention.

The unemployment rate fell to 8.1 percent from 8.3 percent in July, but only because more people gave up looking for work. The government only counts people as unemployed if they are actively searching.

The Labor Department also says 41,000 fewer jobs were created in July and June than first estimated. The economy has added just 139,000 jobs a month since the beginning of the year, below 2011’s average of 153,000.

That’s not good at all, folks. Remember that the economy needs to create 150,000 jobs each month just to keep up with population growth. So while the spin will be that this is positive, but the economy is still experiencing essentially a net-zero job growth and more people are giving up hope of finding work. Futhermore, James Pethokoukis notes that “[i]f labor force rate had just stayed same as last month, [the]unemployment rate would be 8.4%.”

Despite economic struggles, Democrats place emphasis on social issues

DNC debt cartoon

Over the last couple of years, libertarians have complained about the emphasis conservatives, particularly the Rick Santorums and Mike Huckabees their movement, have placed on social issues. We’ve noted that conservatives should focus their message on issues where they can attract agreement — such as repealing ObamaCare, lessening regulation on businesses, cutting spending, and reducing taxes.

While I support same-sex marriage and have grown increasingly pro-choice within reason, the Republican National Convention was a largely a breath of fresh air from this perspective . That’s not to say that I agree with everything said on the budget, economy or foreign policy, but the discussion of social issues was relatively mild with Republicans choosing instead to place a heavy focus on the economic record of President Barack Obama.

But watching the Democratic National Convention off-and-on for a couple of days, one can’t help but notice the heavy emphasis on social issues. There is certainly a discussion and defense of President Obama’s economic record, but abortion, same-sex marriage, and labor unions been featured heavily.

Of course, this is really isn’t surprising. Democrats have tried to change the narrative at several points since the beginning of the year; usually by complaining that there is some supposed “war” being waged against a segment of the American public.

CBO issues another “fiscal cliff” warning

Back in May, the Congressional Budget Office (CBO) issued a stark warning to Congress that tax hikes scheduled to happen at the beginning of the year could trigger another recession. Since that time President Barack Obama and Senate Democrats have refused to act on extension of all current tax rates, which is the position of House Republicans. Instead, they’ve only pushed for one-year extension for individuals making $200,000 and families bringing in $250,000.

But yesterday, the CBO once again stressed that the looming tax hikes could hurt the economy if the stalemate doesn’t end:

In a fresh warning about the so-called “fiscal cliff,” the nonpartisan CBO reiterated that the U.S. economy will go into a recession next year if the Bush-era tax cuts expire and automatic spending cuts take effect. Read the CBO report.

In its latest report, the CBO predicts that the U.S. economy will grow at a 2.1% clip in 2012, but fall by 0.5% between the fourth quarter of 2012 and the fourth quarter of 2013 under the fiscal cliff scenario.

Previously, the CBO said growth would be 0.5% in 2013 under the fiscal cliff. In its new report it said the “underlying strength” of the economy is weaker.
[…]
The CBO said unemployment would jump to around 9% in the second half of 2013 from its current 8.3% if the tax increases and spending cuts play out.

International Data on Living Standards Show that the United States Should Not Become More Like Europe

Written by Daniel J. Mitchell, a senior fellow at the Cato Institute. Posted with permission from Cato @ Liberty.

I’m not a big fan on international bureaucracies, particularly the Paris-based Organization for Economic Cooperation and Development. The OECD, funded by American tax dollars, has become infamous for its support of statist pro-Obama policies.

Economy barely growing, Obama still pushing tax hikes

If you were hoping that the recent economic report would bring a change in direction from the White House on taxes, you were no doubt let down. The Commerce Department reported on Friday that gross domestic product (GDP) grew by only 1.5% in the second quarter of the year and consumer spending was down, once again showing the weakness of the economic recovery.

When pressed on whether or not the weak economic growth would bring a change in direction from President Obama, who is trying pushing tax hike proposal through Congress, White House Press Secretary Jay Carney insisted that tax hikes during a slow economy weren’t a bad idea. Alan Krueger, President Obama’s top economic adviser, also said that the reason the economy was lagging was because state governments need more stimulus spending.

It seems, however, that not only will the White House push more stimulus gimmicks, they are going to continue to push a tax hike that will have anywhere from a 1.3% to 2.9% contraction in the economy.

But Keynesians pushing a tax hike during tough economy times is question, one that would probably earn the ire of the man himself. Christina Romer, who served as an economic adviser to President Obama, once noted that tax hikes hurt the economy:

CBO: Deficit to exceed $1 trillion in 2012

On the campaign trail and during the third presidential debate with Sen. John McCain (R-AZ) in 2008, then-candidate Barack Obama promised that Americans would see a “net-spending cut” during his presidency.

The claim was met with a boatload of skepticism given that Obama was proposing massive expansions in healthcare and non-defense discretionary spending; however, we all crossed our fingers that he would follow through, but we didn’t hold our breath.

The skepticism proved to be justified. Just a couple of months after coming into office, President Barack Obama told Americans that under his budget that there would be trillion dollar deficits as far as the eye can see.

He wasn’t kidding. The Congressional Budget Office released its budget report for this current fiscal year yesterday, predicting yet another trillion dollar budget deficit and unemployment hovering around 9%:

The Congressional Budget Office on Tuesday predicted the deficit will rise to $1.08 trillion in 2012.

The office also projected the jobless rate would rise to 8.9 percent by the end of 2012, and to 9.2 percent in 2013.

These are much dimmer forecasts than in CBO’s last report in August, when the office projected a $973 billion deficit. The report reflects weaker corporate tax revenue and the extension for two months of the payroll tax holiday.
[…]
If the CBO estimate is correct, it would mean that the United States recorded a deficit of more than $1 trillion for every year of Obama’s first term.

Barack Obama hates America — that’s the only conclusion you can draw after nearly six years of terrible economic policies

This is pretty douchetastic. In an Independence Day eve speech at the DC-based tech firm 1776, President Barack Obama — the worst president since World War II — suggested that Republicans don’t have enough “economic patriotism” to work with him to get the economy moving again:

“[W]e can make even more progress if Congress is willing to work with my administration and to set politics aside, at least occasionally, which I know is what the American people are urgently looking for,” Obama said Thursday at 1776. “It’s a sort of economic patriotism where you say to yourself, how is it that we can start rebuilding this country to make sure that all of the young people who are here but their kids and their grandkids are going to be able to enjoy the same incredible opportunities that this country offers as we have. That’s our job. That’s what we should be focused on. And it’s worth remembering as we go into Independence Day.”

What. The. Actual. Fuck.

Sorry, but this is ridiculous. President Barack Obama’s idea of working with Republicans is for them to do what he wants without asking questions. He doesn’t view Congress as a coequal branch of government, but rather a minor inconvenience that he can go around pretty much whenever he wants.

What’s more, if President Obama wants to start throwing around the term “economic patriotism” so loosely, then his own record should be open for discussion. The most recent recession, for example, officially ended six years ago, in June 2008.

No, Barack Obama, the United States should not be more like France

President Barack Obama has an idea, you guys. In his latest pivot on the economy, because everything else his administration is doing failing so spectacularly, he said the United States should offer the same sort of benefits that France requires businesses to offer their workers:

Extolling the business virtues of helping workers balance family and employment demands, including providing paid time off for the birth of a child, Obama said that if France can provide the benefits, so can the United States.

“Other countries know how to do this,” Obama said. “If France can figure this out, we can figure it out.”
[…]
Obama made the comment at the first White House summit for working families, which sought to amplify issues like paid maternity leave and the ability to take paid leave to take care of elderly loved ones.

“Many women can’t even get a paid day off to give birth,” Obama said. “There is only one developed country in the world that does not offer paid maternity leave, and that is us. And that is not a list you want to be on, by your lonesome.”

The White House hosted the summit jointly with the Center for American Progress, a liberal think tank, and it served in part as a campaign pep rally focused on turning women voters out in November.

Today in Liberty: Obama’s approval rating tanks, Kerry deals with “apartheid” fallout

“Your mountains are breathtaking, your coffee is fair trade, and everywhere you go you hear the sound of f**king ukuleles. That’s all very charming until you waste tens of millions of dollars of taxpayer money on a website that doesn’t work.”John Oliver on Oregon’s Obamacare website

— WaPo/ABC poll brings bad news for Obama: A new Washington Post/ABC News poll released this morning finds that President Obama’s approval rating has taken a nosedive. “The poll shows Obama’s approval rating is down to 41 percent, a point below its previous low of 42 percent, in November,” the Washington Post reports. “The president’s disapproval rating is at 52 percent, three points lower than the previous high. Six percent have no opinion on Obama.” #PANIC #DOOM

— Yeah, that Obamacare “boost” is gone: the WaPo/ABC News poll also found that the boost President Obama got from the Obamacare enrollment numbers is gone, just a couple weeks after he spiked the football at a White House press conference. “Following some rare good news about the law — including meeting its sign-ups goal despite a rough launch— 44 percent of voters approved of his handling of it. That number is now down to 37 percent, with 57 percent disapproving,” the paper explains. “Views of Obamacare overall have also dropped after a slight boost. While 49 percent approved of the law last month, 44 percent approve of it this month — the lowest that number has been since November. Forty-eight percent of Americans disapprove of the law.”

 


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