Have the Double-Dippers Been Dipping Too Much?I like Dean Baker. He is clever and really quite good at seeing the internal contradictions of those big shots who get all the limelight and hold the seat at the high table which divvies up the world and allots us the crumbs.
The Commerce Department just released data showing that real consumption spending rose by 0.5 percent in July. This makes it highly unlikely that growth will turn negative in the current quarter. Consumption is 70 percent of GDP and this figure implies a 6.0 percent annual growth rate.
Of course consumption is not really growing that fast, more likely it is increasing at near a 2.0 percent annual rate, but maybe this number will shut up the arithmetic challenged economists who keep talking about a double-dip recession.
The economy's problem is pathetically slow growth. We should be seeing growth of 5-7 percent as the economy rebounds from the worst downturn of the post-war period. Instead, we will be lucky if growth just keep pace with the growth of the labor force, preventing unemployment rate from rising further.
The implication is that tens of millions of people will remain unemployed or underemployed because of the Wall Street sleazes and the incompetent economists who could not see an $8 trillion housing bubble and still don't know a damn thing about the economy. It's a crime that they still have their jobs.
The above reminds me of my school days. The same "golden people" ruled the roost and took all the glory. They weren't particularly smart. They weren't always the most beautiful. But they were definitely the ones born with a silver spoon in their mouth. They were born to rule and rule they did. I found it funny how many people paid such close attention to these "trend setters". Lemmings over the cliff.
The nice thing about Dean Baker is that he does his own thinking. He even does the basic calculations and uses the tools of economics to evaluate the claims of the talking heads, the media, and the pundits of power.