The second quarter GDP numbers are in or rather a preliminary guess at the numbers is being widely reported. It was not a good number and worse than economists had predicted. There was growth but only from increased imports and from business buying more equipment and software. Consumer spending continues to sag with declining wages and increased job losses.
Increased business investment sounds good but they have no intention of hiring but rather they are intent on squeezing more out of their employees and they need new and different equipment to handle the increased level of imports. The only bright spot in employment is from Detroit where they have skipped the usual summer layoffs and are hiring, in fact the last time they had a year this good Bill Clinton was President. Indeed the unemployment numbers would be dismal if they didn’t have these people working to rebuild inventory.
The Republicans are still claiming Obama’s rescue of Detroit was a huge mistake since taxpayers will never see their money. The truth is that GM and even Chrysler are on track to pay back Obama’s $60B loan package provided the Republicans don’t sink the economy completely. There is a small portion of truth in the conservatives otherwise disingenuous claims as the automakers have no intention of repaying the $17 billion, no strings attached “gift” that Bush made to them on his way out the door and Obama doesn’t intend to require it of them.
Indeed most US companies are doing well and most are hiring but most of that hiring is going on overseas. The fact that they are doing so well has much to do with the fact that a large portion of the trade deficit is US companies doing business with their own off shore divisions and thereby off-shoring their profits and dodging US taxes.
The Republicans have the fix for that however and that’s to eliminate all corporate taxes and on the rich too (to stimulate investment don‘t you know). Of course there would still be no incentive for them to return jobs to the US since no matter how low they drive down wages here, they can do the same work cheaper overseas. Besides with Americans’ wages heading toward the floor there will be no market in the US anyway. www.prairie2.com