June 25, 2014 — The final GDP numbers have just come out for the 1st quarter. It was predicted that they would be up nearly 3 percent, but guess what? They were down almost 3 percent.
At the beginning of the year it was said that the 1st quarter GDP figures would be up 2.6 percent, so they’ve only missed it by about 5 percent. But don’t worry, because those same individuals who made the predictions in January are now saying, “Well, this doesn’t mean anything. It’s all because it snowed and it was icy in certain parts of the country and that explains it. The 2nd quarter is going to be fantastic.”
And the 2nd quarter may be better. Who knows. But since they haven’t been right before, and they’ve always been wrong on recessions, I would suggest that they quite possibly will be wrong on this.
Their explanation was that consumer spending was down and there was not enough confidence to spend money. Of course, that’s the Keynesian argument: the consumers have to spend money. If they don’t they cause recession. It’s never the Fed’s fault at all.
The other thing that is totally ignored by this is the fact that half of the country is in depression already. They don’t have jobs and they are suffering the consequence. The other half is thriving and Wall Street is doing quite well. So whether or not we are going into the next recession is probably just academic.
You know, at least the markets didn’t respond in a negative way. Just the fact that they missed the prediction for economic growth for the 1st quarter by 5 percent, you’d think this would dampen the markets. But the stock markets, as a response to this report, didn’t hardly change at all. So it’s one of those things that, you know, when the momentum is there and stock are being boosted by Federal Reserve action, the responses there won’t make as much sense.
I believe that the country is in serious trouble. Half of the country is in recession and depression, and it’s going to get a lot worse. They won’t be able to fool all the people all the time, which they try to do. Right now they’re fooling about half of the people half of the time. In spite of what might happen in the 2nd quarter, it’s not going to change the long-term events. This country is getting poorer. The middle class is getting wiped out. It’s a predictable event and the sooner the people wake up to realize that this is related to Federal Reserve policy, the better.
The bad news we got today on the GDP is not bad news for Wall Street, but it’s continued bad news, I believe, for the middle class and for the poor people of this country who are unemployed.