The economy recently has been full of stops and starts, ups and downs, good news and bad news.
Optimists will say that progress is being made, as we’ve moved beyond the all-bad-news days of 2007 and 2008. Those of us who are less than optimistic would instead ask why it’s taken five years to get to the current dismal economic state.
Recovery always seems to be just around the next corner. But the world is round and there is no next corner.
Zerohedge recently ran a series of 13 charts showing that any economic exuberance is irrational. The charts compare the current “recovery” with four previous recoveries. The trend lines in most cases are almost identical – except that the lines representing the current Keynesian-inspired recovery are well below the lines representing the previous four recoveries. They show that:
- Growth in gross domestic product is pitifully low. If it were a patient, GDP would be signing up for hospice care.
- The ISM Manufacturing Index has fallen significantly from two years ago.
- Business inventories have risen significantly, signaling that new orders will likely drop.
- Productivity is down, consumer spending is lackluster and housing starts, though improving, are nowhere near what they should be if the housing market were really recovering.
But cheer up … vehicle sales are up! The recovery must be just around the next corner, wherever that is.