"Double Dippers" warnings could become self-fulfilling prophecies

[DCBob]

source AP..

WASHINGTON — They're a minority, but a vocal one, and they're hovering like storm clouds over a brittle recovery. They're the Double Dippers — the politicians, economists and analysts who foresee back-to-back recessions. Their warnings could become self-fulfilling prophecies if they frighten enough people into holding tightly onto their wallets. With consumer spending accounting for two-thirds of economic activity, anything that further rattles consumers can undercut recovery hopes.

/../

Most mainstream economists agree the recovery road will be long and bumpy, but probably without leading into double-dip territory. But there are plenty of other voices warning of grimmer times ahead.

Nobel Prize-winning economist Paul Krugman of Princeton University argues in his New York Times columns that the U.S. already may have fallen into the early stages of a long, deep depression such as Japan's "lost decade." He claims that President Barack Obama and Congress have failed to provide enough stimulus spending.

To University of Maryland business economist Peter Morici, "signs abound that the economic recovery is faltering." Washington-area financial adviser Randy Beeman tells listeners to his weekly radio show that chances of a double-dip recession are now about 75 percent.

Yale University economist Robert Shiller, a leading expert on the housing market and author of "Irrational Exuberance," a 2000 book that foretold the coming crash of the tech stock bubble, sees more than a 50-50 chance of a double dip. "I actually expect it," he says.

Former Federal Reserve Chairman Alan Greenspan told CNBC a double-dip recession can't be ruled out. "Of course, there's a possibility," he said.

Are double dippers becoming recovery party poopers? "If consumers are hearing a lot of bad economic news and they're already scared, they might pull back some more," said Nigel Gault, chief U.S. economist for IHS Global Insight.

There are 15 million people unemployed. "Employers might be willing to hire more if consumer spending was doing better," Gault said. "But then maybe consumer spending won't start doing better until employers start to hire."

http://www.msnbc.msn.com/id/38507261/ns/politics

I think this is true. People keep hearing the "gloom and doom" from "experts" and are frightened into a "hunker down" mentality... which just makes matters worse.

[hamerfan]

1. Maybe...

Maybe people keep hearing the "gloom and doom" because there is a fair bit of truth to it?
I don't know, and I have no answers. I do think it's going to get a lot worse before it gets better. Best of luck to us all!
hamerfan

[DCBob]

2. No doubt there is a "fair bit of truth to it".. but I think some are hyping it to make headlines or

to score political points.

[bluestateguy]

4. Some people want America to fail

Including a few on this board.

[DCBob]

7. it would appear so.

sad to say.

[BootinUp]

20. It couldn't be because they are trying to

talk some sense into the politicians and other government policy advisors.

[Hansel]

35. Delete. nt

[Oregone]

38. And some may be glossing it over to make political points

The entire purpose of this OP seems to be about shifting responsibility for declining economic activity from those in power to those who analyze policy & economics.

And if thats not intended to score political points, I don't know what is.

[DCBob]

47. The purpose is exactly what the OP says.. fearmongering can make a bad enonomy even worse.

is that clear enough?

[Oregone]

50. So can refusing to stimulate the economy plagued with deficient demand

But hey, you attack who you think is most important to get this thing around. To each their own

[DCBob]

52. well clearly more needs to be done to stimulate the economy, but ..

in the mean time, its not a good idea for people to be screaming about an imminent recession/depression.

[Oregone]

53. Well, it comes down to perception I guess

You think screaming (analysis and advocation) is a self-fulfilling prophecy leading to failure, while others think it is inline with Obama's plea: "Go Out and Make Me Do It!"

Honestly, I think you are calling the chicken an egg. There is reason people are "doomsaying" and there is a lot of good that can be accomplish by *listening* to them. That said, if no one was talking and no one was acting, the economy can be just as much in danger.

If you REALLY want people to stop talking about a double-dip, you would get out there and force Obama to stimulate the economy. Then, you kill two birds with one stone (economy fixed and nothing to complain about).

[bluestateguy]

3. There's really a very simple solution to this

Just have the government engage in a massive dump of fake economic data (unemployment, GDP, durable goods orders, etc.), all of which would be highly positive. That would juice up the markets, generate positive news coverage for months, and consumer spending would improve.

[hobbit709]

5. This consumer isn't spending because he has nothing to spend.

If it isn't a necessity, I ain't buying.

[DCBob]

9. Even those that have money arent spending..

A recent survey by Deloitte and Harrison Group shows that 80% of Americans surveyed are focused on cutting back. Of that group, 55% say they haven't been directly affected by the recession but have changed their spending habits nonetheless. The survey further shows Americans are:

-- Delaying gratification (and purchases, especially of big-ticket items.)
-- Buying generics and "private label" vs. better-known (and more expensive) brands.
-- Cooking from scratch instead of eating out or buying prepared meals. Rather than keeping the pantry stocked, Americans are also only buying what's necessary, as results from grocer SuperValu this week attest. (SuperValu's net-income fell 40% from a year ago and its CEO said: "We are not optimistic that somehow the economic environment turns the corner any time soon.")
-- Cutting costs with "extreme couponing" -- CouponMom.com now has 2.5 million users, for example -- and the use of loyalty programs at various retailers.

http://finance.yahoo.com/tech-ticker/the-new-normal-americans-cutting-back-%E2%80%94-even-if-they-don%E2%80%99t-have-to-535276.html?tickers=SVU,XRT,RTH,WMT,%5EDJI,%5EGSPC&sec=topStories&pos=9&asset=&ccode=&cmtnav=/mwphucmtgetnojspage/headcontent/main/535276//date/desc/11/s28419

[unapatriciated]

21. First we are chastised for spending beyond our means

now those of us who are fortunate to still be employed are at fault for spending too little.
You site this program as being one of the reasons income has fallen for Grocery Retailers.

Cutting costs with "extreme couponing" -- CouponMom.com now has 2.5 million users, for example -- and the use of loyalty programs at various retailers. t

I find this very amusing, since they created this as a marketing tool to gather information on their customers buying habits. One of the ways they used this data was for sale circulars. I have worked in Retail Grocery since 1996. One of my jobs was price changes. What a joke thousands of price changes a week just to fool the customer.
When we saw prices slowly increasing on various items, we knew those items would be in the next big add. Sure enough the company would drop those item a penny or two below the original price and call it a SALE.
Many including myself hate this marketing gimmick.

So again dropping profits is all our fault and we need to spend more dollars so the CEO's annual income won't take a hit.
The working class has had pay and benefits cut. Many more have lost their jobs completely and once again it's all our fault.

hmm, have the CEO's taken cuts in pay?

Safeway Steve Burd (union busting a-hole)
http://people.forbes.com/profile/steven-a-burd/47678

Kroger (engaged in illegal hiring practices during the California Grocery Strike 2003)
http://finance.yahoo.com/q/pr?s=KR

SuperValu (herkert doesn't seem to be hurting)
http://blog.taragana.com/business/2010/04/23/supervalu-ceo-herkerts-gets-pay-package-valued-at-108-million-in-his-first-year-53692/

I saved the best of the worst for last....
Wally World (yum tainted food from china, slave labor and you always know what their latest class action suit is by listening to their damage control adds)
http://abcnews.go.com/Business/walmart-ceo-pay-hour-workers-year/story?id=11067470
http://jonathanturley.org/2010/07/03/walmart-ceo-makes-average-workers-annual-salary-every-hour/

CEO of Wally World did have to take a pay cut this year. Duke is on the edge of poverty with a cut from 35 mil to a mere 19.2 mil.
http://blog.taragana.com/business/2010/04/19/wal-mart-ceo-mike-duke-gets-192-million-in-fiscal-2010-down-34-percent-from-the-prior-year-51636/

[DCBob]

22. I didnt write that article nor am I advocating to do those things.

just responding to the post above. I agree with you.. we get blamed for spending too much and for spending too little. It makes your head spin.

[unapatriciated]

26. I realize you didn't write either of the articles you linked to.

but some of your responses on this thread gave me the impression you agreed more than you disagreed. This one in particular bothers the hell out of me.

CBob (1000+ posts) Sun Aug-01-10 07:40 AM
Response to Reply #3
6. Ha! They have probably considered this.
funny but it could actually work.

We do have a real employment crisis and most of us understand it better than some on this board. We see our family, friends and neighbors losing jobs and homes almost on a daily basis. Those of us who have a little extra are having to use it to help our extended familis and friends weather this storm. We do not enjoy the gloom and doom, we endure it.

I apologize if I misunderstood but it seems you are trying to play both sides.

[DCBob]

33. you misunderstood..

no apologies necessary.

[laughingliberal]

30. Only those at the top have anything left to spend. Their needs are, basically, met.

They are not going to spend. They're throwing a tantrum about their precious tax cuts. A recovery at the top only (which is what we have now) is not really a recovery.

Three decades of waiting for prosperity to trickle down should be enough evidence about the scam 'supply side' is and always was.

[unapatriciated]

32. I agree and suspect this is more about b* tax cuts than us spending too little.

Corporations do not want to see these expire.

[DCBob]

6. Ha! They have probably considered this.

funny but it could actually work.

[unapatriciated]

11. so you are advocating the administration lie to us?

so much for transparency.

[laughingliberal]

34. Seems that way. And, for those of us who are suffering, we should 'pretend' to have jobs & money.

After all, where are our priorities. How can we expect to win the midterms if we all keep telling the truth about being broke, unemployed, hungry? Selfish.

[Oregone]

37. Its easier than actually stimulating the economy

Fool everyone into thinking demand is rising, rather than forcing it to do so.

Keeps more powder dry

[fasttense]

8. Jobless recovery, historical bankruptcy rates, historical long-term unemployment,

huge foreclosure rates matched only by the beginning of the 1st RepubliCON Great Depression, Detroit's population of 2 million decreased in 2 years to 800,000; historical bank closure rates (so much so that more money was needed for the FDIC); poverty rate increases, food stamps programs and food banks overwhelmed; massive teacher, firefighters and police layoffs and on and on.....

But it's all your mind.

[DCBob]

10. That's all basically true but to dismiss all positve news and say we are heading into a depression..

is hype.. imo.

[Turbineguy]

12. Double dip.

Do we want Obama to fail? Then we want one.

It's one of the tools in the fail toolbox.

[Oregone]

39. He is choosing to fail by not bringing a case for further stimulus to the public

For fuck's sake...this is insanity. Now we can't criticize the president's economic policy, in light of the current environment, because it might cause a double-dip? That's what critics often are trying to prevent in the first place! He asked us to make him do it...you can't make shit happen when you refuse to speak (so you don't create self-fulfilling prophecies).

People here need to seriously evaluate if they are now shaping their perception of reality to cover for their leader. This thread and responses are very troubling indeed.

[Warren Stupidity]

13. no jobs bob

our corporate masters have decided to hold their cash rather than hire more workers. You can blame that on Krugman or whatever, but without a jobs recovery we will continue with either anemic growth or another recession.

[DCBob]

17. I agree mostly with that... but I suspect if companies dont hire we will just keep puttering along..

with "anemic growth". But no reason to assume we will head into a recession or depression.

[jaxx]

14. Our 24 hour news cycle is 10% real news and 90% hype.

This is what we are seeing. The media ghouls are right there cherry picking a word of the day and running with it. Bad word...what could be better for them? The country is going to hell....hooray, that'll sell or get clicks. Good word...not so much, it won't carry over as doom and gloom to come.

If you pay attention, nothing this administration does is really "good enough" in the eyes of the doomers. He gets health care done....it's not good enough. He gets financial reform done...it's not good enough. Whatever it is, it's not good enough and the naysayers run it into the ground as if nothing was done and no one will ever benefit. It's like the country has gone all red, and wants nothing more than for the Obama administration to fail....and then they could sit back with a smirk on their faces and say "I told you so".

Obviously they're wrong. Which is why we go through this BS daily. They are furiously seeking the big one, the one that will stick and maybe come true. They scream doom and gloom, they scream it's not good enough and they wail that the sky is going to fall tomorrow if Obama doesn't do this or do that because they know it all.

But then we're part of the problem too if we believe them and their scenarios. Thankfully most of the Democratic Party knows bullshit when we see it.

edit>> ps...K&R

[DCBob]

18. +1

so true.

[Exilednight]

15. It's not a self fulfulling prophecy for anyone between the ............

middle to the lower classes.

The reality is, the economy is run by a handful of people. The average person is trying hard enough to just get by. Personally, I've been dealing with rising prices over the past two years, but in those same two years I haven't seen a pay raise.

My savings has declined, and so has my ability to spend money on extras.

On the flip side of the coin, my company has had a pretty good year thus and my CEO made his past two quarterly bonuses. We've also had the money to add two new VIce Presidents, one in marketing and one in product design, at nice salaries.

So, to be honest, I have no choice but to "hunker down" while the rich get richer and the poor get poorer.

[GoCubsGo]

16. And, no doubt your CEO is avoiding hiring anyone in lower positions until after the election

...in hopes that the continued high unemployment rate will help his buddies will regain control of one or both houses of Congress.

This all reminds me of the early days of Shitboy's misadministration, when he first started driving the economy into the ground. The media and the repukes claimed the Democrats were "talking down the economy", yet here they are...

[Exilednight]

19. We've actually let lower positions (hourly employees) go. We've gone to hiring temps at lower ....

wages to fill those slots during the peak season to fill those slots.

I work for a fairly small company. We use to have around 50 full time employees, now we are down to 36 full time employees. Out of those 36, one is the CEO, one is the CFO, and three are VPs.

[lunatica]

23. Creating jobs would put a stop to the gloom and doom

Instead of giving tax breaks based on income so the richest get the most, how about giving those tax breaks to businesses for every new job they create? Every new worker is also a new consumer who shares in the real recovery.

[dkf]

24. Everyone knows that it is all about jobs jobs jobs.

You want us to spend money when we are at risk and will need to postpone retirement even further? Cutting back on spending isn't a reasonable reaction to the dismal jobless recovery we are in? The stimulus wasn't big enough or fast enough and there were minimal new jobs created. Most of the jobs that the administration touts were government employees that kept their jobs, not unemployed who found jobs created by the stimulus.

With that money we could have created the backbone for a new economy but we didn't do much there. Instead we decided to use our money to train people for jobs that didn't materialize. What a loser of a policy.

[Bluenorthwest]

25. So you think people are under the mistaken impression that

they are broke, when in fact they are not? People just think they are unemployed or underemployed, but they are actually well employed, but confused by media reports that say otherwise? All the foreclosed homes, those are not really foreclosed, people just think that they lost their homes, because they read it in the paper?
If only.

[Jakes Progress]

27. +++++

Just eat the shit and say it's ice cream.

[unapatriciated]

28. ....

:rofl:

I have a sinking feeling later this year we will be bombarded with how well the economy is doing. In order for us to continue on the road to recovery we will need to extend B* tax cuts so that "small" businesses will be able to create more jobs.

[Jakes Progress]

45. Oh, you know it.

My friend's out-of-work-for-two-years son is blaming Obama and the Democrat's high taxes for making companies not hire him. He's drawn two years of unemployment waiting for a job worth his huge intellect, sitting around at the pub with his other disgruntled x-gen buddies grousing about ow the boomers stole his life and how the Democrats keep giving money to welfare. He is very irony challenged.

In other words, there are plenty of dim-wits out there to buy the message you wrote about.

[treestar]

29. True. Makes one wonder why the media seems so invested

in keeping the economy down.

Oh wait . . . .

[laughingliberal]

31. I don't know about the media but you won't find anyone in my state who thinks there's a recovery.

Unemployment of 14% and still climbing feels pretty drastic, here.

[Oregone]

36. Ridiculous

Assigning blame to those skeptical of the "recovery", rather than a government who is failing to provide the additional necessary stimulus to feed a "recovery".

Wow....

Blame those who are providing information based on the lack of further economic aid, rather than those who could potentially provide needed economic aid.

Way to leave cover for your chosen leaders

[TheKentuckian]

40. Thou shalt not speak ill of the economy

I guess this means we have fully subscribed to the national secular religion.

For joy!

[Kurt_and_Hunter]

41. Grotesque

[Greyhound]

42. So your answer is that we should all pretend that everything is just fine and this is nothing more

than a temporary aberration?

This clearly demonstrates why the cult of personality is so damaging. This is not a simple recession, it is a global catastrophe that made the most hard-core, supply side, free marketeers blanch with terror. Now that we've slapped a $10T patch on it and the illusion of "normalcy" is propped up, they hope that another Bush (41, 1987) con will pull enough suckers back into the game so the people that matter can have another few years of looting.
:kick: & U

[DCBob]

49. Everything is not fine but that does not mean we are heading for recession or depression..

thats probably not the "answer" you were looking for.

[Greyhound]

57. No, the huge foundational flaws that were exposed to everybody a couple

of years ago combined with the convergence of at least three, and as many as six, economic collapses do. This is not "another market adjustment" or "normal cycle". The system broke, badly, and we need to prepare for the large, inevitable, changes.

[DCBob]

60. I agree with that.. our economy has huge flaws and it will likely collapse.. eventually..

But fixing those problems will take major fundamental changes and dont think that's likely to happen in our lifetime. Meanwhile we have to live and make the best of this f'kd system we all depend on.

[Greyhound]

61. OK. What I don't understand and maybe you can help me with, is how do you imagine

that pouring every dollar we have and every dollar we can borrow into this broken, corrupt system will constitute making the best of it? From over here that just looks desperately crazy.

[DCBob]

62. yeah, it does sound crazy to me too but seems there aren't any other good alternatives..

that are feasible in our current political and economic situation.

[Greyhound]

63. Don't take this the wrong way, but that doesn't help. n/t

:kick:

[DCBob]

64. I didnt expect it would.

[Spheric]

43. Absurd beyond description.

If we could just put blinders on everyone, things would be just fine.

Makes me want to puke.

[xxqqqzme]

44. Maybe but you have to have

money to spend it. Since most of the consuming public is credit card maxed out, I don't see much moving and/or improving. The rethugs are getting what they wanted, dimson's shit economy extended so they can blame it on the Democrats.

[Aramchek]

46. many of the "Double Dippers" will be let down when it doesn't happen

[DCBob]

48. Indeed.. and I hope we at least get an apology.

somehow I doubt it.

[TheKentuckian]

51. When is the first dip going to end? No, not that one the one that started in about 2002?

If that one is too much to grapple with then go ahead and let me know when the 2008 "dip" ended at least.

[depakid]

54. Yes- all is great- fundamentals are fine- problems have been solved!

It's all the economists' and critical thinkers' faults!

While obviously there are psychological components to markets and economic behavior, they had little to do with April/May's wake up call(s).

[hamerfan]

55. I think I have it now,

But it's already been said:

"WAR IS PEACE, FREEDOM IS SLAVERY, and IGNORANCE IS STRENGTH."
:tinfoilhat:

[Safetykitten]

56. Doubledippy the economic happiness fairy. It's about as true.

They want us to buy into the Doubledip fantasy because that implies things got "better".

[MadHound]

58. They don't have to frighten sixteen percent of the working population, namely the unemployed

And we're holding onto our wallets not due to perceived threats, but real ones, ya know, like not having a job.

You take that kind of money out of circulation and you're not going to have any kind of real recovery, and a good chance that the paper recovery that is going on now will fold like a wet paper towel.

No need for scare tactics, the threat is real, ongoing and sustained.

[Spheric]

59. The "jobless recovery" would work if only all those people without a job would just STFU.

Bizarre beyond belief.