Will Recovery Pick Up Steam . . . or Peter Out?
Over at the Wall Street Journal, the editors finds Americans “underwhelmed by the economic recovery“. Growth, at 2.4%, is just not where it normally is this soon after a recession:
A robust recovery would be building momentum, especially with historically easy monetary policy continuing. Instead this one is plodding along at a rate that won’t create enough new jobs to sharply reduce the 9.5% unemployment rate. The Obama Administration, in its Keynesian confusion, is simultaneously saying the economy is so weak it needs more spending “stimulus” but also strong enough to absorb a huge tax increase.
The message of 2.4% second quarter growth is closer to the opposite: The epic government stimulus has failed to produce the robust expansion the White House promised, and the prospect of higher taxes and more regulation is inhibiting the private animal spirits needed for growth to accelerate. Americans may have to wait for November for Washington to get that message.
If anything, the “stimulus” has slowed down — or delayed — the traditional pattern of recovery. Instead of looking to policies that failed as they seek to address this problem, White House officials should consider just why private employers aren’t hiring new employees and expanding their operations.
UPDATE: Via Jennifer Rubin:
The Obama economy isn’t getting better anytime soon: “The U.S. economic recovery will remain slow deep into next year, held back by shoppers reluctant to spend and employers hesitant to hire, according to an Associated Press survey of leading economists. The latest quarterly AP Economy Survey shows economists have turned gloomier in the past three months. They foresee weaker growth and higher unemployment than they did before.”
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The ObamaCare deficit reduction numbers were based on a growth factor of at least 5% per year for the next 10 years. I imagine the people at the CBO laughed out loud at those assumptions. Given this anemic rate of growth so far this year, the deficit is only going to get larger.
Comment by TnnsNe1 — July 31, 2010 @ 2:45 pm - July 31, 2010
They also admitted that Tax Cuts improve the economy. They WH said their numbers assume the Bush Cuts, so demonized by 0bama and the rest “For Getting Us Into This Mess” , are not going to be repealed, so that is why their numbers are so much higher than the CBO numbers.
They also disregard that the slowdown from “Stimulus” is still ongoing, so that will hurt the recovery well into the next decade. It was by design a long term slow bleed.
Comment by JP — July 31, 2010 @ 2:52 pm - July 31, 2010
With punishing taxes & other horrible nasties in ObamaCare, the experiation of the Bush Tax Cuts, & the Dodd-Frank Bank Takeover Law alone is enough to atrophy private job growth for the foreseeable future. All of these must be REPEALED ASAP or our economy will continue to sputter. Obama & the Obama Democrats have not done himself any favors signing such punishing legislation.
Comment by Sebastian Shaw — July 31, 2010 @ 5:11 pm - July 31, 2010
[...] Will Recovery Pick Up Steam . . . or Peter Out? – Gay Patriot [...]
Pingback by Saturday Afternoon – Watching The Driveway Melt – Laundry Time , An Ol’ Broad’s Ramblings — July 31, 2010 @ 6:39 pm - July 31, 2010
A friend owns a Ford franchise and had his long standing Jeep franchise unceremoniously ripped out from underneath him. This was just after he had completed an entirely dedicated Jeep facility next to his Ford facility.
Now he is trying to guess what his health care costs will be, what will happen to him tax-wise and what to do about car sales in a deep recession.
To put it mildly, he does not see any light at the end of the tunnel. He was a major mover and shaker in Democrat politics for years, but he is full bore TEA Party now.
He has cut his recent hires and cut back hours on his old employees just to try to balance the books. He converted the new ex-Jeep facility into a used car store and he is pushing it with all his might. Ford is still holding his feet to the old floor plan levels and he is moving those units at a loss just to stay even when the recession lifts.
The banks have cut way back on floor plan financing and the customers in his used car store are having more trouble getting financing.
No, the recovery has not hit the small business man, unless you are one of chosen Obama green windows people.
Comment by heliotrope — August 1, 2010 @ 12:17 pm - August 1, 2010
No sane, rational human being is going to wager ANY amount of money on starting/expanding a business, making unnecessary purchases not make any decisions past the next month given the uncertainty of the current administrations policies. When all you read, hear and understand about what they plan to do to your probable future earnings, investments, etc… you’d need a padded cell to invest in the future. To have the average savings rate in this country jump above 6% tells you that Americans are battening down the hatches and trying the best to keep as low a profile as possible. How that can square with all the happy talk coming from Washington about a recovery is delusional at best. Americans will begin to ‘risk’ their capital when the smoke clears and this Administrations policies are a distant speck in the rear view mirror.
Comment by Delusional Bill — August 1, 2010 @ 2:32 pm - August 1, 2010