I’ve been watching a new GDP data set from the Federal Reserve, Atlanta. There was another update today. According to the real time data 1st quarter GDP is running at a 0.3% annual clip. This result is miles from what was ‘supposed’ to be happening.
I think the strong dollar and weak energy prices are the main culprits for the slow down. Consumers saved a bundle with low gas, but they did not spend those savings – they paid off CCs.
Tomorrow the Fed will confirm that they intend to raise % rates in 90 days. II sure feels like a speed bump is forming. Or is this just another of those head fakes that result in above trend growth in the next quarter?
New economic/political angle on right-to-work: If Wisconsin and others weaken labor’s ability to bargain — Wisconsin and friends will lower the amount of income extracted by their state from the other 49 states! Dumb. If that notion gets around we may never see another right-to-work state.
Got to work on this.
* * * * * * * * * *
COMMENT I LEFT AT NAKED CAPITALISM THIS MORNING:
Don’t despair yet.
First: if an employer and a mob union boss were to conspire to fire any worker who roused any objections about said phoney deal among co-workers — that sounds like fair game for RICO and the Hobbs act to me.
Now: what legal difference with that if an employer and union busting “consultants” conspire to fire any worker who tries to rally the troops to stage a federally prescribed process to establish collective bargaining? FYI, It fits the legal definition of extortion if an employee lets on to a customer that they will only get the full service they are paying for if a little extra money moves under the table to the employee — that’s all it takes to fit.
It’s at least very arguable that union busting employers and “consultants” are violating RICO/Hobbs. It took the FBI about ten years to get around to hitting the mob with RICO. Eventually the gov got around to hitting prolife sit-in demonstrators with RICO — got off only because prolfe wasn’t seeking monetary gain. A dissenting judge (Breyer?) thought that prolife had in fact “taken” control of the providers’ businesses to “own” it for themselves. The union busters are for certain taking control of the employees’ labor market processes (we might say by process of elimination) — with unquestionably monetary motives.
Not looking to jail half the businessman and all the “consultants” in the land — just trying to get them to lay off — if only for a while. 😉 Here’s how we can hope it will work: when the first RICO/Hobbs cases initiate: all the union busters should head for the hills until the cases work their way through the various circuits and up to the USSC.– not wanting to make themselves liable to whatever fines or jail or law suits while the issues hang.
Meantime, we can organize the country right out from under them. Hopefully, by that time, whatever decision comes down it will be too late — the country will be organized anyway.
Krasting that is a lot of deduction from a single data point taken before the quarter is even over. For a number that gets regularly revised, often fairly dramatically over the next two quarters.
You look at that number and draw the deduction “strong energy prices” while I might look at that number and say “17% drop in new housing starts in February”. And then we could argue whether those energy price numbers or housing starts were transient spikes/dips or actually beginnings/ends of trends.
But nobody in their right minds would take either of us seriously. After all clearly we would be cherry picking data to support/deny some preconceived narrative. That is I look at you and say “Cassandra” and you look at me and say “Pollyanna” while sensible folks are just laughing at us from the sidelines.
The only difference is that I am willing to self-mock.
Webb – If you’d asked me in January what I thought the 1st Q might be I would have said 2.5%. Right in line with the Blue Chip forecast. So I had it wrong – by a mile. In my book (and apparently others) this is coming as a surprise.
I had a bunch of question marks in my comment. I was asking for other opinions. I pointed to the Fed’s report and you call me a Cassandra. It’s not my report, so why the label?
My question was raised in the context that the Fed is about to commit to a rate increase in the next 3 months. This is a topic that has been hashed out numerous times the past few weeks at AB.
You don’t see the inconsistency? Fed Atlanta raises a red flag while the DC Fed moves to tighten monetary policy? This has shades of 1938 to it.
PS The report I linked has a downloadable spread sheet. You can enter your own numbers to simulate GDP outcomes. I found it interesting, You might as well.
Funny I am looking for question marks and just find assertions:
“I think the strong dollar and weak energy prices are the main culprits for the slow down. Consumers saved a bundle with low gas, but they did not spend those savings – they paid off CCs.
Tomorrow the Fed will confirm that they intend to raise % rates in 90 days. II sure feels like a speed bump is forming.”
You are reporting your thoughts and conclusions and then following up with a firm prediction about the Fed. Not a lot of questioning hesitation there.
As to the Cassandra/Pollyanna thing you are constantly accusing me of being too optimistic while ignoring evidence which seems significant to you. i.e. Pollyanna-ish. Meanwhile you constantly emulate Cassandra – whose curse was not that she was always predicting disaster but that nobody would ever take her seriously.
Again I am curious to ask. Exactly how accurate can GDP data on a national scale really be? I always see references to such data, but it is never accompanied by any reference to a measure of potential error. Given the way that corporations have been recording their sales and costs, etc. how can GDP data be relied upon to tell us anything significant about the direction of the entire economy?
it’s worse than that. the GDP can’t tell, by design, whether the “product” is good for us or not, or just good for the criminal rich, or just good for repairing the damage caused by other “product.”
it can’t tell us if we are better off, because it takes the philosophy that if someone pays for it, it is a “good.”
I’ve been watching a new GDP data set from the Federal Reserve, Atlanta. There was another update today. According to the real time data 1st quarter GDP is running at a 0.3% annual clip. This result is miles from what was ‘supposed’ to be happening.
I think the strong dollar and weak energy prices are the main culprits for the slow down. Consumers saved a bundle with low gas, but they did not spend those savings – they paid off CCs.
Tomorrow the Fed will confirm that they intend to raise % rates in 90 days. II sure feels like a speed bump is forming. Or is this just another of those head fakes that result in above trend growth in the next quarter?
Are we going up, down or sideways?
The Atlanta Fed report:
https://www.frbatlanta.org/cqer/researchcq/gdpnow.aspx
New economic/political angle on right-to-work: If Wisconsin and others weaken labor’s ability to bargain — Wisconsin and friends will lower the amount of income extracted by their state from the other 49 states! Dumb. If that notion gets around we may never see another right-to-work state.
Got to work on this.
* * * * * * * * * *
COMMENT I LEFT AT NAKED CAPITALISM THIS MORNING:
Don’t despair yet.
First: if an employer and a mob union boss were to conspire to fire any worker who roused any objections about said phoney deal among co-workers — that sounds like fair game for RICO and the Hobbs act to me.
Now: what legal difference with that if an employer and union busting “consultants” conspire to fire any worker who tries to rally the troops to stage a federally prescribed process to establish collective bargaining? FYI, It fits the legal definition of extortion if an employee lets on to a customer that they will only get the full service they are paying for if a little extra money moves under the table to the employee — that’s all it takes to fit.
It’s at least very arguable that union busting employers and “consultants” are violating RICO/Hobbs. It took the FBI about ten years to get around to hitting the mob with RICO. Eventually the gov got around to hitting prolife sit-in demonstrators with RICO — got off only because prolfe wasn’t seeking monetary gain. A dissenting judge (Breyer?) thought that prolife had in fact “taken” control of the providers’ businesses to “own” it for themselves. The union busters are for certain taking control of the employees’ labor market processes (we might say by process of elimination) — with unquestionably monetary motives.
Not looking to jail half the businessman and all the “consultants” in the land — just trying to get them to lay off — if only for a while. 😉 Here’s how we can hope it will work: when the first RICO/Hobbs cases initiate: all the union busters should head for the hills until the cases work their way through the various circuits and up to the USSC.– not wanting to make themselves liable to whatever fines or jail or law suits while the issues hang.
Meantime, we can organize the country right out from under them. Hopefully, by that time, whatever decision comes down it will be too late — the country will be organized anyway.
Krasting that is a lot of deduction from a single data point taken before the quarter is even over. For a number that gets regularly revised, often fairly dramatically over the next two quarters.
You look at that number and draw the deduction “strong energy prices” while I might look at that number and say “17% drop in new housing starts in February”. And then we could argue whether those energy price numbers or housing starts were transient spikes/dips or actually beginnings/ends of trends.
But nobody in their right minds would take either of us seriously. After all clearly we would be cherry picking data to support/deny some preconceived narrative. That is I look at you and say “Cassandra” and you look at me and say “Pollyanna” while sensible folks are just laughing at us from the sidelines.
The only difference is that I am willing to self-mock.
Webb – If you’d asked me in January what I thought the 1st Q might be I would have said 2.5%. Right in line with the Blue Chip forecast. So I had it wrong – by a mile. In my book (and apparently others) this is coming as a surprise.
I had a bunch of question marks in my comment. I was asking for other opinions. I pointed to the Fed’s report and you call me a Cassandra. It’s not my report, so why the label?
My question was raised in the context that the Fed is about to commit to a rate increase in the next 3 months. This is a topic that has been hashed out numerous times the past few weeks at AB.
You don’t see the inconsistency? Fed Atlanta raises a red flag while the DC Fed moves to tighten monetary policy? This has shades of 1938 to it.
PS The report I linked has a downloadable spread sheet. You can enter your own numbers to simulate GDP outcomes. I found it interesting, You might as well.
Funny I am looking for question marks and just find assertions:
“I think the strong dollar and weak energy prices are the main culprits for the slow down. Consumers saved a bundle with low gas, but they did not spend those savings – they paid off CCs.
Tomorrow the Fed will confirm that they intend to raise % rates in 90 days. II sure feels like a speed bump is forming.”
You are reporting your thoughts and conclusions and then following up with a firm prediction about the Fed. Not a lot of questioning hesitation there.
As to the Cassandra/Pollyanna thing you are constantly accusing me of being too optimistic while ignoring evidence which seems significant to you. i.e. Pollyanna-ish. Meanwhile you constantly emulate Cassandra – whose curse was not that she was always predicting disaster but that nobody would ever take her seriously.
You need to reed up on the Classics here.
Again I am curious to ask. Exactly how accurate can GDP data on a national scale really be? I always see references to such data, but it is never accompanied by any reference to a measure of potential error. Given the way that corporations have been recording their sales and costs, etc. how can GDP data be relied upon to tell us anything significant about the direction of the entire economy?
Jack
it’s worse than that. the GDP can’t tell, by design, whether the “product” is good for us or not, or just good for the criminal rich, or just good for repairing the damage caused by other “product.”
it can’t tell us if we are better off, because it takes the philosophy that if someone pays for it, it is a “good.”