Why everyone is depressed about the economy.

[Soul Crusher]

Why everyone is depressed about the economy
By JOHN CRUDELE

Last Updated: 2:38 AM, October 27, 2009

Posted: 1:33 AM, October 27, 2009
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Later this week the government will announce that the US economy grew in the third quarter, maybe by as much as 3.2 percent.

So why does everyone still feel so freakin' miserable?

When the nation's gross domestic product comes out Thursday morning, it'll show the first quarterly improvement since the April, May, June period of 2008.

But I dare you to try telling your family or acquaintances that the recession is over.

So, what's going on?

Have we simply become a nation of complainers? Or have the financial problems of the past few years forever changed Americans' attitudes toward money?

Clearly the so-called "wealth effect" has become ineffective.

That refers to the notion propagated over the past decade that if people felt rich because their stock portfolios were rising and the value of their home increasing they'd thoughtlessly spend more money.

But that's not all of it. Here are some things I believe are occurring.

1.) During last year's election former President Bush's goons, as well as candidate Barack Obama and his financial thugs, were very convincing in arguing that the financial system was at the cliff's edge and about to go over.

The major result of that election wasn't that one party won and the other didn't. The most important thing was that Americans, for once, listened -- and became very, very worried.

Once you've convinced people that they are living a nightmare it's hard to snap them out of it.

2.) Even the least sophisticated person realizes that one positive GDP report is meaningless.

For one thing, Thursday's number will be helped greatly by the Cash for Clunkers car program -- now defunct.

Remember, the GDP turned positive in the second quarter of 2008 and that was followed by four quarters of devastating declines. People understand that it could happen again.

3.) Aside from special programs that helped growth, a 3.2 percent rise in GDP isn't so great anyway.

That figure is what they call "annualized," meaning that the economy would have to grow at the same rate for three more quarters to achieve that 3.2 percent growth rate for the full year.

To find out the actual third-quarter growth, divide whatever figure is announced Thursday by four quarters. So, 3.2 percent growth, divided by four is just 0.8 percent.

Growth of 0.8 percent really isn't so special.

4.) It's become trendy to take part in this recession.

Admit it, you always look at a car wreck when you are passing on the highway.

And even if you have a secure job, lots of money in the bank and live at the intersection of Fat Street and Prosperous Lane, you at least want to rubberneck this historic economic downturn.

Someday you'll be telling the grandkids hard-time stories.

5.) Americans are confused about what they should be doing. They are getting mixed messages.

It's downright patriotic to spend money right now to help the economy, but saving money is the better long-term strategy. This is the same message being sent out about the federal budget deficit.

Since Americans have a pretty good standard of living even if they have to make due with last year's Xbox, frugality wins out.

Companies are confused too.

They are told to get their financial houses in order. But they are encouraged to hire some workers, even if they really don't need them. When messages are mixed, advice gets ignored.

5.) The latest stock market bubble is also causing problems on the labor front.

How? Companies understand the true health of their businesses better than anyone else. And they can only keep profits up if they get expenses -- including head count -- down.

Stocks took off last March and since then companies have been rewarded by Wall Street for better earnings.

Executives, whose own compensation is tied to their companies' stock performance, aren't likely to raise costs by hiring people.

Gotta' keep Wall Street happy.

But there's something worse that could happen here.

If by the end of the year, companies are falling short of Wall Street's elevated expectations, they might make accounting moves to hide the bad results.

Firing workers and taking so-called one-time extraordinary charges -- including those for layoffs -- is an accounting trick behind which execs can hide.

6.) Americans don't trust anyone. And why should they? Ever since the Great Recession began, Washington has seemed more concerned about the financial health of Wall Street than the average person.

This has been a trickle-down rescue -- help the big folks and the little guy, hopefully, will benefit.

A big financial firm sniffles and Washington is immediately dabbing its nose.

Americans all over the country are lying on the ground hemorrhaging and Washington is still dab bing Wall Street's nose.

Nobody will be singing "Happy Days Are Here Again" after Thursday's number comes out. But someone ought to start humming that tune to snap this country out of its funk.

Just from a purely technical point of view, the recession will end when the National Bureau of Economic Research says so. That's the non-partisan private research organization that has taken it upon itself to judge the duration of economic downturns.

And, like the refs at a pro football game, the NBER has never been in a hurry to make a decision without extensive review of the replay monitor. john.crudele@nypost.com


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good article. 

[Hedgehog]

You seem to have become quite the progressive radical these days 336.
typical Manhattan eh?

[Soul Crusher]

You seem to have become quite the progressive radical these days 336.
typical Manhattan eh?

You know what hedge - I have lived and worked in NYC, Westchester, Greenwich, Bronx, my whole life.  I have seen weslth that few ever will witness, poverty, etc.  The crazy thing about this area is that its all never more than 30 minutes away.  Greenwich is only 30 minutes away from Harlem and the South Bronx. 
As a kid I worked in Greenwich for a fence company and we used to go to homes of these wall streeters that make the WH look like an outhouse. 

At the same time, if you drive around parts of Brooklyn or the Bronx, its like being in a third world country.

I have been around wall streeters, left wing academics, etc.  I know the deal on all these types.  im sort of like Michael Savage in that respect. 

I am a small business guy just trying to do my best in the main street economy, although I do deal with the wall streeters from time to time as well. 

What has gotten me enraged so much is that the wall streets and the govt are exactly the same and both are destroying the ability of regular normal working people to survive and stay in the middle class.  The massive taxes we have to pay, the bailouts and stimulus bill, the ridiculous govt programs that always fail, are driving us into a depression.  You have people around here still blind to reality and applauding this garbage because their Dear Leader has a smile on his face and is not Bush.     

Here is a perfect example, during the last years of the wall street and housing boom, the local govts jacked up spending so high, the taxes went through the freaking roof.  The criminals in the govt justified the tax hikes based on tax receipts they were getting from wall street and home transactions.  However, now that everything went into the toilet, the taxes are still insane and driving middle clas speople from their homes.  There are many people who pay far more in taxes each month than their freaking mortgage!  On my building alone, the taxes went up 2ok last year!  Most of the people in our building are barely making it and cant afford this nonsense.  At the same time, not one govt worker has been asked to take a pay cut, not one wall streeter thrown on the street,  just increasing taxes and a worsening economy.

Who benefits from all this insanity:  Govt workers and Wall Streeters.  The rest of us peeons have to deal with higher taxes, a worsening economy, and a complete disconnect from all these duisgusting assholes in govt and wall street.  There are two groups lately that need to be tossed on the street, most Govt employees and most wall streeters.  I know cops who make 185k a year and will retire for life at 45 y/o with a pension of over 100k for life, plus health, etc.   

These two groups are destroying the ability of the economy to throw off enough wealth to provide jobs for middle class people to survive.  I see it everyday.  Young people in NY are leaving in droves.  I posted an article yesterday about it.  Both the govt and wall street are vampires sucking all the life blood out of the economy and refuse to adjust to the new reality of where we are. 

I am not the radical in this.  To me, those who support wall street bailouts, too big to fail, more govt intrusion into our lives, more govt programs, etc, are the real radicals. 

       

[Hedgehog]

I watched "American Graffiti" the other night.

You know the old George Lucas movie with Ron Howard in it. Wolfman Jack, racing in the streets, all that good stuff.

A totally different kind of America that was.

It was an America that had hope.

And there were no sorrow. Only positives.

And I mean that, ONLY POSITIVES.

It's like day and night compared to what you see today.

Perhaps it's time to go back to basics.

And I think that's what USA is doing right now.


Things are never as good as you think they are.

And never quite as bad as they look.

[Soul Crusher]

I watched "American Graffiti" the other night.

You know the old George Lucas movie with Ron Howard in it. Wolfman Jack, racing in the streets, all that good stuff.

A totally different kind of America that was.

It was an America that had hope.

And there were no sorrow. Only positives.

And I mean that, ONLY POSITIVES.

It's like day and night compared to what you see today.

Perhaps it's time to go back to basics.

And I think that's what USA is doing right now.


Things are never as good as you think they are.

And never quite as bad as they look.

Good point, but things are getting far worse around here. 

I remember as a kid around 16 y/o -21 y/o we could go into bars, strip clubs, race the cars, have paintball fights in the streets, and there were never any problems.  no one got killed or busted, we had fun. 

Now, if a kid has a beer, the DA gets involved.  if a kid has a bb gun, he gets a misdeanor or felony.  Its ridiculous. 

I hate the nanny state more than anything.  They are literally robbing kids of a childhood with all this heavy handed nonsense. 

[Hedgehog]

Good point, but things are getting far worse around here. 

I remember as a kid around 16 y/o -21 y/o we could go into bars, strip clubs, race the cars, have paintball fights in the streets, and there were never any problems.  no one got killed or busted, we had fun. 

Now, if a kid has a beer, the DA gets involved.  if a kid has a bb gun, he gets a misdeanor or felony.  Its ridiculous. 

I hate the nanny state more than anything.  They are literally robbing kids of a childhood with all this heavy handed nonsense. 

Like a rollback on sentencing is ever gonna happen.

It's one of the most popular issues for both democrats and republicans to run with in elections: "tough on crime".

Effects like that ex-cons can't work in hospitals and stuff like that, and that if you get caught as a minor, it will show up on record, and you have to mention it when applying for job, or you're committing a felony...

It's a total nanny state, Big brother state.

Where's the trust in your fellow man? 

I dunno. We've sorta become these anxious people. Looking over our shoulders.