Over at TPM Cafe, this week Fareed Zakaria's new book, "The Post American World" is being discussed. In it, Zakaria repeats the theory of globalization's most toxic and unproven claim: that countries which participate in trade together do not make war upon one another. So if you want to prevent war, just participate in deep and interwoven trade with the other country and everything will be hunky-dory.
If you are wondering why the stock market has been soaring when we have a credit crunch, job layoffs, a housing crisis among other negative factors, you are not alone.
But...maybe there is an explanation. I call it the boa constrictor economy.
Events of the past two years have made food an increasingly worrisome item in household budgets and in the budgets of nations. In early 2008, food prices to the American consumer were 25 percent greater than two years earlier. This reflected dramatic increases in farm beef prices, while farm corn prices were double and wheat prices triple those of early 2006. Clearly something new has happened to a food market which has historically fed Americans well and for a uniquely small proportion of their income.
A series of events was associated with these price adjustments. In 2005 the U.S. dollar began to depreciate and a major realignment of international currencies set underway. (1) [A series of crop failures and poor harvests around the world magnified the food problem]. Finally, Congress adopted legislation that drastically altered the framework of American agriculture....
- Foreign Affairs (2)
"This economy is going to come on. I'm confident it will."
- President Bush
More than 3/4 of Americans think we are in a recession. Fortunately the Bush Administration has been able to prove the vast majority of Americans wrong this week, because all the numbers it released say that the economy is still growing.
Well, it is still growing as long as you don't look at the numbers too closely.
The headline number yesterday was Strong Consumer Spending. It was twice as high as market estimates.
Nonfarm payroll employment was little changed in April (-20,000), following job losses that totaled 240,000 in the first 3 months of the year, the bureau of Labor Statistics of the U.S. Department of Labor reported today. The unemployment rate, at 5.0 percent, also was little changed in April. Employment continued to decline in construction, manufacturing, and retail trade, while jobs were added in health care and in professional and technical services.
I was a little surprised at the total lack of coverage of the GDP report yesterday on the political blogs (the econ blogs had a few things to say). I suspect it was because most people expected GDP to be significantly negative (I sure did) and yet here was this positive number.
Some people will just say the numbers are cooked, but as I keep pointing out, as long as the bias is regular (like a clock that is always 10 minutes slow) the data gives a lot of information.
Recent comments