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Obama, Dems Finally Give Us A Recession

From an overjoyed Associated Press:

Economy shrinks at 3.8 percent pace in 4Q

Friday January 30, 2009
By Jeannine Aversa, AP Economics Writer

Economy shrinks at 3.8 percent pace in fourth quarter, worst showing in quarter-century

WASHINGTON (AP) — The economy shrank at a 3.8 percent pace at the end of 2008, the worst showing in a quarter-century, as the deepening recession forced consumers and businesses to throttle back spending.

Although the initial result was better than economists expected, the figure is likely to be revised even lower in the months ahead and some believe the economy is contracting in the current quarter at a pace of around 5 percent. The current January-March period, they said, will probably turn out to be the worst quarter for the recession.

American consumers and businesses cut back everywhere in the final three months of 2008. Shoppers chopped spending on cars, furniture, appliances, clothes and other items. Businesses dropped the ax on equipment and software, home building and commercial construction. And overseas sales of U.S.-made goods and services tanked as foreign buyers grappled with their own economic woes.

"The downturn is intensifying. The fourth quarter is worse than it looks," said Mark Zandi, chief economist at Moody’s Economy.com.

The new figure, released Friday by the Commerce Department, showed the economy sinking at a much faster clip in the October-December period than the 0.5 percent decline logged in prior quarter.

The report tallies gross domestic product, the value of all goods and services produced within the United States. It is considered the broadest barometer of the country’s economic health.

A build-up in business inventories — which in calculating GDP adds to economic activity — masked the fourth-quarter’s true weakness. When inventories are stripped out, the economy would have contracted at a 5.1 percent pace in the fourth quarter, closer to the 5.4 percent drop that economists expected. Businesses couldn’t cut production fast enough in response to waning customer demand and got stuck with excess inventories, economists explained.

On Wall Street, stocks dipped. The Dow Jones industrial average slid more than 60 points in morning trading, and broader indexes also fell.

Still, the fourth quarter was by far the weakest three-month period in 2008, and the 3.8 percent figure is likely to be revised even lower as the government makes new estimates based on more complete data. The economy will stay very weak for much of this year, analysts predict.

A massive pullback by consumers played a prominent role in the economy’s worsening backslide. They are cutting back on spending as jobs disappear and major investments — homes, stocks, retirement accounts — tank in value. Businesses are retrenching, too, as profits shrivel and demand wanes from customers in the U.S. and overseas.

Battered consumers slashed spending at a 3.5 percent pace at the end of 2008, following a bigger 3.8 percent annualized cutback in the third quarter. The last time consumers chopped spending for two straight quarters was in the closing quarter of 1990 and the opening quarter of 1991…

The report provided clear evidence of the economy’s rapid deterioration as the housing, credit and financial crises — the worst since the 1930s — feed on each other. It’s a vicious cycle that has proven difficult for Washington policymakers to break.

The 3.8 percent annualized drop marked the weakest quarterly showing since a 6.4 percent annualized plunge in the first quarter of 1982, when the country was suffering through a severe recession.

For all of 2008, the economy grew by just 1.3 percent. That was down from a 2 percent gain in 2007 and marked the slowest growth since the last recession in 2001

If these figures hold up, then we will finally have two consecutive quarters of a decline in the Gross Domestic Product, and so we will at long last be in an actual recession.

Thank you Mr. Obama and Harry Reid and Nancy Pelosi, and of course your minions in the media.

It was a hard fought struggle, but at last you have achieved your goal ever since the Iraq War turned sour for you.

Congratulations.

We hope America will long remember your pyrrhic victory.

This article was posted by Steve on Friday, January 30th, 2009. Comments are currently closed.

6 Responses to “Obama, Dems Finally Give Us A Recession”

  1. proreason says:

    We need more Recession. Rush Limbaugh must be defeated.

    Plus…..does anybody else notice a trend in the numbers related to the 2008 election. Didn’t the campaign really kick into gear in Q3 2007? And weren’t the Democrats considered a shoo-in from the beginning? The trend line from then until now is striking.

    But of course it must be coincidental…..after all the country has supreme confidence in the Democrats ability to manage the economy.

    Really, there are so many amazing coincidences about that election. I guess an 8% drop in national output amounting to $1.1 Trillion in annual lost income for the country is least among them. After all, what are printing presses for?

  2. Colonel1961 says:

    Yea! We’re finally in a recession! I’ve been hearing about this for over two years and wondering when the f*ck it would finally occur. Self-fulfilling prophecy or normal business cycle – you tell me. (I know the answer, but I don’t want to piss-off Opie.)

    Oh, and the economy grew at 1.3% last year? Not too bad…

  3. pdsand says:

    Unspecific change cannot possibly be blamed for inspiring a lack of investor and consumer confidence among people who have real money on the line. This 3.8% decline in the GDP must somehow be the result of people being fed up with the government allowing them to keep more of their own money all this time?!?

  4. Reality Bytes says:

    Last time I checked, there isn’t a space program that blasts money into outer space. It’s all here still here. It’s just a matter of whether it’s frozen (non-liquid) or liquid. You just need to go get it.

    PS – I’ll be firing up an Arturo Fuente during half time* this Sunday – a special bonding gesture for our pal, Rush. Go get ’em Tiger.

    *RB may be from Jersey, but he’s not necessarily a Springstein fan.

  5. Alice L. says:

    The Demos have controlled congress since 2006 – and yet the public foolishly blamed the GOP and voted in more Demos. I hope they are happy with what they have done! Note: Zero talks down economy and blames Bush. This is what he will do for at least two years.

    • proreason says:

      The lies about this are endless. Here is the official GDP data year by year:
      2001 .8 (Clinton recession, 9/11)
      2002 1.6
      2003 2.5
      2004 3.6
      2005 2.9
      2006 2.8
      2007 2.0 Democratic Congress
      2008 1.3 Democratic Congress
      2009 anybody think it will be positive?

      Spot any trends there?

      To be fair, the average during Clinton’s years was 3.7. (3.9 with a Republican congress, 3.4 with a Democratic congress). But Clinton didn’t have the War on Terror, the dot-com crash, or Katrina to deal with, and he also benefitted from the fall of Communism and relatively stable oil prices.


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