Looking at rising numbers, but no

Because most measurements of our economy are measuring the wrong things, the economy still looks better than it is. If you read this Oct 29th Bloomberg article, you will see that the GDP grew 3.5 pecent in the third quarter after a yearlong contraction as government incentives spurred consumers to spend more. What is wrong with this picture is that they are still measuring consumption, as if consuming things will make us wealthy.


On the other hand, the Manufacturing Index rose above 50 for the third straight month Now that is an honest sign of recovery. Full report here. Hold your apploause, this, by its self, is not good news. (as you read past the nice headline, it doesn't say more people are working, only that those working are producing more. Still, that is good, at least in the "not too short" run.)


Here, Peggy Noonan gives a more complete picture of the problems facing America in the long run, titled "We Are Governed by Callous Children." Be sure to read both parts of her article.


Our Competition, China, may Add 11 Million Jobs as Recovery Gains Pace. This is why gas prices are going up.


Employment data is still dismal excerpt:

The Labor Department on Nov. 6 will report that the unemployment rate rose to
9.9 percent in October, from 9.8 percent the previous month, as companies cut
another 175,000 jobs, according to the median forecasts in Bloomberg News
surveys of economists. More Americans filed bankruptcy in October than any month
since changes to bankruptcy laws in 2005.

Oct. 2 (Bloomberg)

The U.S. jobless rate probably rose to a 26-year high in September as employers kept cutting staff, signaling consumers will not lead the recovery, economists said before a report today.

Unemployment likely climbed to 9.8 percent, the highest since 1983, from 9.7 percent in August, according to the median estimate of 81 economists surveyed by Bloomberg News. Payrolls probably fell by 175,000 workers...

And remember, the real rate, when you count all those not elegible for unemployment insurance payouts is about 7% higher.

As if the above isn't enough to show that Wall Street is out of touch with Main Street, Goldman Sachs is considering giving $1B to charity to mollifiy anger with their giving over $16B in executive compensation to reward those who helped run the economy off into the ditch. Or they might put the $1B into dividends. Ya'Think? The fact that they are only considering this as an altermative to funding their pet projects shows that corpratism is certainly not capitolism. (Update: They put the money into a fund to help small businesses. Still, profits should go to shareholders, not to corporate execs and their pet charities, even if I like their charities.)

So, there you have it. The recovery is underway - if you are a corporate exec or banker. If you used to turn a wrench or work in a factory, it will be quite a while longer for you. This stage of the recovery is for those who already have money.