The United States has once again lowered its GDP growth expectations for 2013 and 2014 to almost what I’d consider a margin for error, meaning, anywhere from zero growth to just over 2%, either way, that’s not going to do us any favors for job expansion, and it’s certainly not going to help our government prevent outrageous budget deficits. Some contend that the FED, Federal Government and our self-proclaimed important political leaders are doing everything they can to improve the job outlook.
Unfortunately, it has never been the Federal Reserve’s job to create jobs, nor are they very good at it. We already know that politicians are not good at creating jobs, as most have never run a business in their lives, they are just good at spending other people’s money – our money, the taxpayers. Of course, none of these facts keeps politicians, central bankers, or our government from tooting their own horn at the slight inkling of good news on the economic front.
There was an interesting article in the Wall Street Journal on August 19, 2013 titled; “Manufactures Gain Ground – Narrower Trade Gap Is Sign of a New Competitive Edge on US Factory Floor,” by James R. Hagerty. As I read that nicely written piece, I wondered how that title was created because the increase was so very slight as to be within the margin of error, even the chart in the article showed such.
Thus, the gains are “insignificant” in my view, and certainly not worth bragging about – well, unless you have a political propaganda machine – then it makes sense to promote the positive numbers regardless of how small. Further, much of the manufacturing gains are due to the automotive sector which is once again making “easy loans” to less than qualified car buyers. You see, I thought everyone in that industry learned their lessons before selling $50,000 SUVs on leases with return guarantees of 50% of value.
You’d have thought that all Americans would have learned their lessons after the big housing crisis, with those ARM loans, and the banks peddling BS paper and bundling nonsensical CDOs. But no, because here we go again with record auto sales figures boosting the need to replenish dealership with more cars, thus more manufacturing – now then, as much as I despise that term “unsustainable” these recent manufacturing figures are just that. Indeed, I hope you will please consider all this and think on it – it’s time for another wake-up call.