Thursday, July 01, 2010

Paul Krugman Is Wrong

New York Times columnist Paul Krugman is beating his drum, sounding the alarm that a "third depression" is upon us, an economic catastrophe similar to the Panic of 1873. I disagree. I think we are in the eye of a financial storm - experiencing the calm oasis that exists between the canyons of a "double dip" recession. In August 2008 the recession hit the U.S. like a jackhammer. You'll know the end when you see it: those who have buried their heads in the sand will finally come to grips with global digital and green technologies. There will be major changes in the auto industry (Ford and TaTa will lead by example) and newspapers will finally disappear.

While we undoubtedly WILL see deflation, I don't think it will reach the scale that Mr. Krugman anticipates. (At least, I HOPE it won't!)

U.S. private employers added just 13,000 jobs in June, according to a report published Wednesday that suggested expectations of a big drop in the government's upcoming nonfarm payrolls report were on target.

Out of Work

"It's all about the double dip," said David Dietze of Point View Financial in Summit, N.J. "The concern is that the fledgling, fragile economic recovery is going to backtrack and we're going to be back into the soup."

The ADP Employer Services report also said May's gain was revised marginally higher to 57,000 from the original estimate of 55,000.

That revision was basically the only good news, however, in a report that under-shot expectations of a rise of 60,000 private-sector jobs in June.

It also supported fears that the short and tepid recovery from the worst recession since the 1930s was fizzling.

The ADP report is often seen as a precursor to the Labor Department's big monthly jobs report due out Friday. ADP's data only includes jobs created by private companies so it can vary widely from the Labor Department data, which also includes government jobs.

In fact, Friday's government report is expected to show employers cut a total of 110,000 jobs in June.

Emerging-market stocks decreased after the U.S. Conference Board’s gauge of confidence among U.S. consumers fell to 52.9 this month from a revised 62.7 in May as Americans became pessimistic about the outlook for the labor market and the economy. The Standard & Poor’s 500 Index slid 3.1 percent yesterday, bringing the drop for the quarter to 11 percent. There's more disturbing international financial news...

Tags: ,

Show Comments: OR

No comments:

Post a Comment

Per comment rate: $2
Payable by either clicking the BitCoin "tip me" button or the PayPal "donate" button in the sidebar.

Because, like the fine publication Tablet, whom I borrowed this concept from, I too am committed to bringing you the best, smartest, most enlightening and entertaining reporting and writing I'm able to provide, all free of charge. I take pride in my loyal readership, and I'm thrilled that you choose to engage with me in a way that is both thoughtful and thought-provoking. But the Internet, for all of its wonders, poses challenges to civilized and constructive discussion, allowing vocal—and, often, anonymous—minorities to drag it down with invective (and worse).

I'm asking people who'd like to post comments on my blog to pay a nominal fee—less a paywall than a gesture of your own commitment to the cause of great conversation. All proceeds go to helping me bring you the provocative and/or entertaining articles that brought you here in the first place.

Readers can still interact with me FREE of charge via Facebook comments and Google+ comments! You can also reach me via Twitter @davelucas

I hope this new largely symbolic measure will help create a more pleasant and cultivated environment for all! Those of you who choose to contribute, thanks for your support.


Your comment will appear after you have made your donation.

All IP addresses are logged.

Your comment will not appear immediately as all messages are vetted before publication.

PS - Any more questions? Check out my Policy & Terms of Use FAQ!

Related Posts Plugin for WordPress, Blogger...
Web Analytics