The economic "recovery"??

So, tell me: do you think the recession is over? Do you think that our economy is beginning its recovery process? Further, do you think the so called “economic stimulus” package, which Barack Obama so highly touted in the first 100 days of his presidency, has anything to do with the positive economic signs we have seen lately?

Personally, I think the answers to these questions are all incomplete-as of right now that is.

The reason for the optimism is a result of several positive pieces of economic news to come out this week. Firstly, the DJIA had its best July ever (as a proportionate percentage of growth), going from just over 8000 points to over 9000 to start off August. Next came some better than expected news from the housing sector and losses, and earnings for that matter, which beat Wallstreet expectations. All this combined with a jobs report today which showed that, for the first time in a while now, the national unemployment rate went down-from 9.5 to 9.4%.

That whopping .1% may not seem like a whole lot to you (or me), but it is a huge improvement considering how many jobs that we, as a nation, have been shedding over the last 2 years or so. But, the real question here is, have we finally turned the corner on the recession? Are we finally working our way out of the worst economic crisis that our nation has faced since the great depression?

I happen to follow the global economy pretty closely, and what I see so far is promising, but not that promising and I surely wouldn’t go as far as the news media have been the last 2 days with it in saying that the recession is all but over with.

I think the best news that we have gotten out of the last week is that most of the world’s largest stock indexes are up for the year. Further is that the industrial economies of India and China continue to grow at healthy rates. These things, I think, are much more important than what is happening domestically as it relates to turning our economy around because our economy is tied too deeply into the global economy today to think that we, alone, could pull ourselves out of this recession.

That brings us to my 2^nd question: has the Obama stimulus package had any effect? To this I have to give a resounding no.

Barely 10% of the $100’s of billions which Obama promised have made it into our economy, and even that which did went into state public works projects which only provide temporary employment at best. In fact, many municipalities are wondering where the money is that Mr. Obama promised them. The most successful part of his stimulus package-the Cash for Clunkers program-is basically tapped out, and, for me, raises some serious concerns as to the future value of certain cars which we currently are driving. Beyond these 2 things, most of this money is sitting there, waiting to be spent-which is where I’d rather see it.

If all this money manages to make it out into our economy, then these positive signs we have seen lately will be nothing more than a brief lapse; a proverbial calm before the storm of what is to come within our domestic economy, because where is that money coming from? Literally, it is coming from no where. It is being printed based on nothing by the Fed. Therefore, releasing it all into our economy would do nothing but cause massive inflationary pressures that would in turn cause further company closures and job losses.

No, I for one am going to hold some reservations about this supposed “economic turnaround”. What we have seen this week are good things, and hopefully they will provide some temporary peace of mind and hope to many of those out there looking for work or worried about losing their jobs. However, until I see more realistic signs of the economy improving (brisk new home and durable goods sales, moderate but steady gains on Wallstreet and the other major indexes, and a steady lowering of the unemployment rate) then I’m only willing to so far as to say that this is a sign that perhaps the recession as bottomed out, but, nothing more.