In August 2007- 21 months ago- I remarked to a friend that I believed that the U. S. economy was in a domestic recession- - that aside from exports, which were booming due to the then-weak dollar, the downturn in the key industries of housing and autos were severe enough that a recession had begun. Re production for export- OK, we need foreign exchange and all that, but it's not bringing goods and services to anyone in the U. S.
What has ensued is an unremarked-upon (by the Establishment) Depression in the U. S. economy. There is a conspiracy afoot to ignore it. Only a chart of the stock market gives the public a full taste of it.
Here is evidence, if not proof. Please read the entire linked Bloomberg.com article, then read the Commerce Department's writeup of the briefly-mentioned inventories report.
From Bloomberg: U.S. Economy: Retail Sales Unexpectedly Fell in April (Update1)
Here is the relevant passage from the article:
A separate report from Commerce showed inventories at U.S. businesses fell 1 percent in March, a seventh consecutive drop as slumping sales forced companies to pull back. The streak of decreases is the longest since 2001-2002.
Now, here is the actual summary from the Commerce Department. Note that immense drop in business sales, which Commerce to its credit does not try to hide:
Business inventories in March 2009 declined 1.0% from the prior month and decreased 4.8% from the prior year, to $1,404.1 billion. Sales declined 1.6% from February 2009 and decreased 15.6% from March 2008, to $971.7 billion. (Emph. added)
Here are some links to the site: http://www.census.gov/cgi-bin/briefroom/BriefRm, and
It is amazingly easy to receive economic reports directly from the Government, though not every release is available this way: sign up at http://www.economicindicators.gov/.
Where in the media did any outlet report this immense drop? The monthly sales of almost a trillion dollars, if annualized, basically comprise the entire economic output of the U. S.
Worse, this comparison is with a month about half a year into the Depression. The rate of change year to year is indeed dropping; the comparison was worse a few months ago. But so what? As T. S. Eliot said in the Four Quartets, "A people without history is not redeemed from time".
The salesmen and sales women in the MSM, Government, Wall Street, etc., having told the public at the onset of what was portrayed as a mild recession that it took a 10% drop in production to meet a common definition of a Depression, have forgotten to tell the public that the drop in perhaps the broadest measure of business was down close to 20% at the peak.
What they will trumpet is the inevitable upturn. They will distract the public with statistically meaningless month-to-month changes and when favorable with year on year changes, ignoring how bad matters have fallen.
As Meredith Whitney said in an interview this week on CNBC, the Government has done things recently re the banks that she never expected to see in her lifetime. In league with the financial press, they have hidden by far the worse economic downturn since the early 1930s from almost everyone, even financial professionals. Only the stock market really tells the tale, as it has tracked both better than and worse than the Great Depression when adjusted for inflation/deflation. Chart is from www.dshort.com; click on it to enlarge.
For about the past half year, the current stock downturn has played tag with the gray downturn from the Great Crash. The slopes of the downturns are similar, one to the other.
With unprecedented giveaways to the very perpetrators of the current fiasco, there can be no predictions of what the economy or the markets will do. Many people are worn out trying to keep up with this seemingly endless mess. I suspect that's in the Establishment's plan. That way, the ongoing disgrace of PPIP can be accomplished. As Mr. Geithner says, it's just a matter of willpower.
Illegitimi non carborundum.
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