Breaking the Mold

THE BE YOUR OWN ECONOMIST ® BLOG Yesterday the Conference Board reported (http://www.conference-board.org/economics/ConsumerConfidence.cfm) that March consumer confidence fell to 64.5, just a tad above its 61.4 low of five years earlier. You can update the chart below in your mind’s eye with the most recent figure. Notice that confidence had begun to recover following the 2001 recession. Then came the Enron-induced stock-market slump and the Iraq invasion. That reduced confidence to its 2003 low point. As soon as Saddam fell, the index and the economy rebounded. Now the economy and the index have fallen again. If confidence drops below 60, Continue reading

What Do They Know That We Don’t?

THE BE YOUR OWN ECONOMIST ® BLOG The stock market is up but the economy is down. Why? The customary explanation: The economy in general, and corporate earnings in particular, are set to rebound in the second half of this year because the good news – in the form of falling interest rates, tax rebates and surging exports – will more than offset the bad news – in the form of weak housing and rising gasoline prices. Maybe so, but today’s Wall Street Journal, in an article by Kelly Evans, (http://online.wsj.com/article/SB120874691199830457.html?mod=todays_us_page_one) entitled “Firms ‘Notably Downbeat’ on Economy,” provides reason for Continue reading

Remember the Recession?

THE BE YOUR OWN ECONOMIST ® BLOG Yesterday the stock market retreated because General Electric reported disappointing earnings as well as disappointing prospects for the remainder of the year. Investors thought GE’s diversification had insulated it from the business cycle and guaranteed strong profit growth regardless of the economy’s ups and downs. GE’s poor results brought them back to earth. If GE can’t make it, maybe this recession is worth our attention. Good point. We have focused so heavily on the financial crisis that we seem to have forgotten about the real-economy contraction that continues to threaten us. That’s a Continue reading

Taxpayers’ Money

THE BE YOUR OWN ECONOMIST ® BLOG When it comes to the housing crisis, many folks – especially in Congress – have become very careful about not wasting taxpayers’ money. In an article by John D. McKinnon and Damian Paletta, under the headline “Bush to Expand Help on Mortgages,” today’s Wall Street Journal (http://online.wsj.com/article/SB120769266029299359.html?mod=todays_us_page_one) reported that President Bush will issue a directive to the Federal Housing Administration that will, “…expand a government program that helps struggling borrowers keep their homes…” The article went on to say: “The proposal stands as the White House’s version of a concept Democrats also have Continue reading

The Lost Highway

THE BE YOUR OWN ECONOMIST ® BLOG Hank Williams sang about “The Lost Highway,” and warned us to stay off it. Yesterday’s New York Times, in an article by David Leonhardt and Marjorie Connolly, reported that “81% in Poll Say Nation Is Headed on Wrong Track.” (http://www.nytimes.com/2008/04/04/us/04poll.html?_r=1&sq=marjorie%20connelly&st=nyt&adxnnl=1&oref=slogin&scp=2&adxnnlx=1207436746-L/Mp4o6GRtqc2dktyyRRig) The article said: “Americans are more dissatisfied with the country’s direction than at any time since the New York Times/CBS News poll began asking about the subject in the early 1990s, according to the latest poll…… “The dissatisfaction is especially striking because public opinion usually hits its low point only in the months Continue reading