Wednesday, December 14, 2011

Recession, Recession, Recession?

Last week, Lakshman Acthulan of ECRI gave an interview in which he discussed the slow growth in the United States and how economic indicators show we are heading for recession if we are not already in recession.

Watch the interview here.

John Hussman asked last week if we have avoided recession and he found little evidence of any meaningful reduction in recession risks and underlying recessionary pressures are unchanged.

Last week, Jeremy Grantham decried the lack of growth in the United States as a lack of political will to provide jobs, to repair infrastructure, to stop the declining effectiveness of education and training, and government's unwillingness to confront long term issues as well as the drastic decline in income equality.  The negative is overwhelming the positive and it is not only framing attitudes, but it has substantially restructured the middle class according to Dan Little and has created a much larger class of unemployed than the official figures, because they are not counted and no longer exist for statistical purposes.

Given the recession in Europe, much less the growing economic crisis in which Europeans think fiscal union is balancing budgets and punishing deficit countries rather than having a common Treasury with taxing powers which enables a proper fiscal transfer mechanism which is economically necessary in any successful currency union and in which Europeans think eurobonds are shared liabilities rather than an issuance of a common Treasury with taxing powers, and the slowing growth in China, recession risks are emerging globally and the an implosion in Europe could drive the world into a depression.

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