Recession Here We Come



Hattip to Ed Morrissey at Hot Air.  Orders for durable goods dropped a calamitous 13.2% in August, the worst decrease since 2009.

New orders for manufactured durable goods in August decreased $30.1 billion or 13.2 percent to $198.5 billion, the U.S. Census Bureau announced today. This decrease, down following three consecutive monthly increases, was the largest decrease since January 2009 and followed a 3.3 percent July increase. Excluding transportation, new orders decreased 1.6 percent. Excluding defense, new orders decreased 12.4 percent. Transportation equipment, down following four consecutive monthly increases, had the largest decrease, $27.8 billion or 34.9 percent to $51.9 billion.

What was laughingly called a Recovery is at an end.  The long awaited double dip Recession is here.  Buckle your seat belts, this is going to be a bad ride.

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Donald R. McClarey

Cradle Catholic. Active in the pro-life movement since 1973. Father of three and happily married for 35 years. Small town lawyer and amateur historian. Former president of the board of directors of the local crisis pregnancy center for a decade.


  1. I know! Let’s print some more dollars and more and more,more,more,…..we will call it..Stupidulus!
    Yeah…that’s the ticket. Here’s your stimulus coming back at you Burn-naki.

  2. PWP is absolutely correct.

    Everywhere they tried this crappola the same thing (economic ruin) occurred.

    Chavez rings in 2010 by state rationing of electricity.

    Chávez appears to have huge support from the poor: The Venezuelan poor seem to love Chávez’s nanny state, and his extremely succesful public relations gimmicks. Fidel Castro is Chávez mentor in many ways, and Castro’s pupil is exceeding his master. Sadly, as Revista Veja shows, things are a lot worse since Chávez took power:

    ——————————— -Before Chávez— Now
    People below poverty level——-43%————54%
    Income per capita—————-$4,650——–$4,190
    Number of industries————11,000———5,000
    Foreign investment————$2 billion——$1 billion
    Public debt——————$27.5 billion—$44.8 billion

    The (Nicaragua devolution into marxism) economic figures are depressing. From 1950-1975 under the dictator Somoza (whose departure was the one good thing the Sandinistas helped achieve) economic growth was the highest in Latin America: 6.8% per year. Per capita GNP in 1977, just before the Communists took over, was $2500 per person. In 1990, when the Sandinista regime fell, per capita GNP was $500 per person. That was the great achievement of liberation theology in Nicaragua.

    That is what liberation theology would have done to the rest of Latin America. That it couldn’t, that it was shut down, was the work of Joseph Ratzinger.

  3. At http://www.kitco.com: Comex gold pops higher following fresh batch of weak US economic data. Thank you, Ben!!!

    Liberal Logic 101:

    Picture the Titanic. If the Captain had called for “full speed ahead” and rammed the iceberg a second time, not only would the ship not have sunk, it would have become more efficient and more luxurious!

    Geithner and the Bernank are stealing your savings as we click-clack.

  4. Absolutely not, Ted. It rather proves that corporate socialism which has dominated much of the 20th and this the beginning of the 21st century does not work. We have not had a truly free market economic system. rather, we have had a system over-regulated by the Federal Government which rewards businesses that it likes, and penalizes those which it doesn’t like. This is particularly true in e energy industry where coal and nuclear power plants are penalized, but useless solar and wind energy subsidized while natural gas reaps profit hand over fist. If the regulatory playing field were leveled, and fossil fuel, nuclear power, solar and wind generators were held to the same standards of cleanliness and emissions (yes, solar and wind pollute tons of heavy metals to the environment) without any government subsidy, nuclear would win hands down because one eraser sized pellet of uranium equals tons of coal and tens of thousands of cubic feet of natural gas. But Government interferes. So you’re 100% incorrect on this score. We do NOT have a free market system.

  5. PM: That is a difficult question.

    The Fed and “financial repression”: running inflation higher than interest rates to reduce government debt loads. It papers over debt-burdened economy. The Fed gravely fears deflation. Connection between expanding monetary base (printing money) and employment growth is tenuous. Inflation incentivizes buying before more dollar value drops. Not so sure about it fostering capital investment and hiring. Now they try unlimited QEternity.

    With a $16 trillion national debt, the Fed cannot allow rates to rise. Each percentage point up is $150 bilion in US interest expense.

    There is no free market. The stock and bond markets are puppets dancing on the Fed’s strings.

    “Treasuries Aren’t Safe, What Is?” Matt Phillips, WSJ. Physical assets, e.g., gold, which has little industrial use. Gold is primarily a financial asset: price rises with inflation expectations and economic, market, and political uncertainty (up $24 today). Triple-A German sovereign debt, conservative issuer. US corporate bonds could be safe haven, but if rates rise, prices fall. Non-interest deposits with unlimited FDIC insurance (ending soon). Short term UST’s purcased at discount.

    I don’t know. I have some gold: about 10% of net financial assets. Farm land (already inflated) may be a safety valve investment.

    This all plays into the Fed’s hand of getting asset prices higher, with no rise in interest rates.

    They got us right where they want us: at the end of the rope.

  6. “There is no free market.  The stock and bond markets are puppets dancing on the Fed’s strings.”

    That’s why whenever anyone claims that unfettered Capitalism caused this, I just want to scream! We are NOT a Capitalist society, but a Corporate Socialist one and have been for at least the last few decades if not past century since FDR’s New Deal.

  7. PWP: Truth, God help us.

    It will be 100 years in 2013: Federal Reserve Act and Internal Revenue Code (income tax) both around 1913. The Founding Fathers knew. They had to amend the Constitution for the income tax.

  8. That little part about fdic ending soon is very not little. Then, what to do? Be like a the squirrels?

    After trying to understand, for a long time, statements like “Oh, Patty, we’re not in business to make money.”, this may be it. Corp. socialism v Capitalism. Is it?
    Would that be a something a well compensated corp. socialist would say when looking at the loss on a tax return? Is it that individual responsibility for a business is removed to corporate oblivion?

    I have ever failed to understand how anything but pure capitalism works. Profit and wise husbandry are the purest motive of business. Time and money driving out waste of either are the marks of a business that works – sort of on par with good household budgets.

    It seems to a bookkeeping cash flow brain that the corp. socialist format is susceptible to varieties of grave dishonesty and theft. So, the .gov is both of and for well paid mismanagement specialists with no responsiblity to we the taxpayers or to we the people in its care because it’s so complicated that they get away with it?!.

  9. Mike Flynn at “Big Government.”

    “Make no mistake, the deteriorating economic situation is the result of Obama’s policies. Since the end of the recession we’ve had massive stimulus, auto bailouts, cash for clunkers, ObamaCare, Dodd Frank and a host of new regulations. We have also been promised a huge tax increase should Obama win reelection. If you were intentionally trying to trigger a recession, you’d be hard pressed to come up with more effective policies.

    “Obama’s reelection campaign is predicated on the myth that the economy, while weak, is steadily improving. It isn’t–at all. Come November, Obama ought to take his rightful place in the unemployment line.”

  10. Curious. I agree with just about all of the above, yet . . .

    A week or two ago I suggested, on another thread, that you quit reviling Ayn Rand, and accept her good ideas and I was answered with derision. She promoted laissez-faire capitalism, but remember:

    1) The amazing thing about our capitalism in the US is that it works as well as it does, given our constant interference.

    2) Nobody ever said life was fair. Christ and his commandments, first, love God, second, love your neighbor, are the the best mitigation of that unfortunate lack of fairness.

    3) Remember we’ve never seen “socialism” our experience is with “dialectal materialism”, which almost by definition excludes the possibility of God, and it is not clear to me that what we are being pushed towards is anything new. If you want pure socialism, go become a Benedictine, though they are less than pure socialist as well.

    4) Pure economics is without morality (and to me that also means godless), whether it is pure capitalism or pure socialism. And the line between pure capitalism and pure socialism is a continuum. The only thing we argue about is where on that line we should be at any point in time.

    I’m glad I don’t have to make the “right” decisions. What is clear to me is that the federal government is way off track. They are taking over charitable acts, presumably to be fair, but the recipients of those acts are not fair, whatever that means, and it is in the nature of man to distort those gifts into rights and demand more. Of necessity that coerces me to forfeit some fruits of my labor and denies me the opportunity to practice Christian Charity.

    Fr. Charles VanDoren, my Neuman Chaplin in college, told me in about 1967 that one of the greatest hardships that could ever be imposed on a Christian was to deny him the opportunity to practice Christian Charity. Obviously the import of his statement is indicated by the fact that here, 45 years later I can quote it.

    Wonder what Obama’s “great society” will leave me when all is said and done.

  11. “Pure economics is without morality (and to me that also means godless), whether it is pure capitalism or pure socialism. And the line between pure capitalism and pure socialism is a continuum. The only thing we argue about is where on that line we should be at any point in time. ”

    In Quod Apostolici Muneris, Pope Leo XIII was very clear about where on that line we should be:


  12. SYWink:

    Agree with most of what you write.

    But, holy cow! You are about as old as I am.

    In any case, when I studied economics, in the late 1960’s and early 1970’s, seemed it was about how relatively scarce resources/supplies/goods are distributed among relatively unlimited demands/wants/needs; and the acts in the market of rational, typically motivated buyers and sellers acting in their own best interests with usual and customary terms of exchange and financing, i.e., the seller tries to get the best price he possibly can and the buyer pays the least price he/she can obtain.

    I don’t think “rational” means being immoral or even, I could argue, amoral.

    Adam Smith and the classical economists, I think, observed the economy and tried to explain its workings.

    My issues with 21st century economists include (but are not limited to): one, they seem to be attempting to create (out of air and with government compunction) economics, policies and national programs as they think they should be, and two, they appear to be ideologues intent on advancing “dull and illogical” agendas such as income/wealth redistribution and the liberal nightmare that technocrats know better than the free market how to bring supply, demand, and price into equilibrium and bring about peace and prosperity. This despite the fact they failed every time they tried. See Einstein’s definition of “insanity.”

    In conclusion, until the Second Coming of Christ, my advice is “Don’t fight the Fed.”

  13. Wwell this blogpostarticle wasn’t hyperbbolic,filled with any hyperbole now was it?

    Editor’s Note: As an act of charity I will continue to help edit some of our guest’s comments – for educational purposes only.

  14. Donald, singular facts out of a portfolio is not an effective story

    Paul, grow up – I didn’t know this was a child’s site. Feel free to delete my account

  15. This may be insane – that is submitting a note for the 5th time and expecting a different result. I don’t suppose it was Einstein who said something like “this could be a hole with no bottom,” but I feel compelled to answer Paul WP, Mac (as I see you called), T Shaw (yes, I just turned 65) and add a note to my prior comments:

    1) I studied economics as a science at The George Washington University. Science is amoral (as is God’s universe). I think you can check with Galileo on that. Ayn Rand promoted laissez-faire economics, which is not real world, but is a science. She may have overstated her case, but who doesn’t in today’s day and age when that is what it takes to make your point.

    Consider that if you are going to do an experiment to test the result of radiating some organic compound, you can’t throw a handful of carbon on the compound in the middle of the experiment or you corrupt your science.

    Same with economics. If you are going to make what is in your wallet your ration book you can’t throw guilt or conscience or compassion into the middle of the transaction and use it as some form of payment. Forget feelings, you can’t even inject an Arab oil embargo, such as we had in the 1970s, and expect valid scientific results.

    2) I learned economics as a philosophy (amongst a bunch of liberals who I respected immensely – their social attitudes didn’t impact their economics) at the Bureau of Economic Analysis (BEA) using matrix algebra to forecast the US economy. I studied the US economy in several hundred pieces and tried to forecast the interaction of those several hundred pieces with each other. An example of two among those hundreds of numbers might be the buy/sell statistics of the auto industry with the steel industry. This was the advent of computers and the accurate mathematics was simply impossible before it could be programmed into a mainframe. Vassily Leontief got the Nobel Prize in 1973 for coming up with the idea. I grooved on that stuff for several years! But got my comeuppetance when the Arabs embargoed oil. After all exogenous variables cannot be forecast, and an arbitrary stoppage of a major import/export defines exogenous.

    I’m not advocating anything. I’m just pointing out that the economic poligy decisions are not simple. There probably isn’t any “right” answer. As for Leo XIII, I have a backlog or JP II’s encyclocials, so I haven’t read too many of Pope Leo’s lately. I suspect he was not too specific on where on the continuum between pure capitalism and pure socialism we should be. I believe he was condemning Marxism and government control of “production, distribution and exchange.” (ah – John McKendrick would be proud that I remembered that definition). The solution of course comes from Christ – “. . . love God with your whole heart and your whole soul and your whole being . . . love your neighbor as yourself. . .” I don’t think of that as ambiguous, but go ahead and try to be specific about where that falls on the continuum and then repeat that it isn’t ambiguous. It seems He, with a capital, wants us to figure it out.

    Getting back to Obama and his worshipers: as an trained economitrician, i. e. economist specializing in statistical methods, (former – or should I say archaic), as an entrepreneur (former) as a small business owner (former), as an employee (21 years) of a fortune 100 company (retired), as a landlord of low income property (sold in 2009), as an investor (current); as the wearer of many hats over half a century I truly believe that job creation by people in all of the above enumerated positions are what we need today and that won’t happen until the people in those positions, whether at your local ice cream parlor or at Coke, can forecast what their liabilities are in creation of those jobs. “Trust me” as repetitively uttered by Obama doesn’t do the trick.

    Well I might advocate something. Back at BEA when our econometric models didn’t give us the results we expected we always looked for what we were missing; what we didn’t understand, or hadn’t included. We constantly teased about getting the “correct” results by simply including “Phaniglier’s variable constant.” If we simply added, subtracted multiplied or divided by it we always came out perfect (a smile is solicited!) That is what we see in politics today, included in EVERY statistic, and it isn’t even limited to the politics of economics!. I think of it more simply as lying.

    Anybody ever read “The Begatting of the President”? — It was a take off of the bible. Chapter 1, Verse 1: “In the beginning LBJ created the Great Society.” (but I’m old, I could be wrong). Wish I still had a copy but it got lost in a move somewhere. There was a good line about Eisenhower and his propensity to play golf. The essence was that sometimes it is about what presidents (and even more so the congress) don’t do, such as screw with the economy, which are important, not what they do. It also had a line about Humphrey being “defeated by the jawbone of an ass.” Hope Mitt doesn’t meet the same fate.

    Thanks for letting me vent.

  16. SYWink: “It seems He, with a capital, wants us to figure it out.”

    He, with a capital, wants us to listen to His Words and put them into practice, but first we must listen to hear the answer to our prayers. And the answers may be all different and come together as a community of LOVE and compassion.

    “LBJ created the Great Society” The Great Society was great until this society removed the only innocent Person from their midst, separating themselves from the great commandments to love God and each other.

    “Eisenhower and his propensity to play golf.”

    Eisenhower deserved to relax playing golf. Eisenhower saved the freedom of the world from Hitler. Eisenhower risked his life for his people. Eisenhower’s presidency came before the Person of God was removed from the public square and with the removal of God, the removal of the soul of man as a human being. Obama never did anything but exercise “Phaniglier’s variable constant.” the lying. Obama risks the lives of the infants who survive abortion, and the conscience freedom of every citizen. Obama worshippers believe that they are spared the contempt inflicted by the removal of freedom from the citizens. Obama worshippers are now citizens without freedom of conscience.

    “Science is amoral (as is God’s universe). I think you can check with Galileo on that.”

    An atheistic science is amoral as is an atheistic universe. Galileo taught that science could be found in the bible. Again, one must listen to the Word of God in one’s heart to know God’s will.

    “If you are going to make what is in your wallet your ration book you can’t throw guilt or conscience or compassion into the middle of the transaction and use it as some form of payment.”

    If it is my wallet, my guilt, my conscience and my compassion, especially my compassion, I am free to do so. What is not free to do is for another, even a representative, to remove my guilt, my conscience, and especially my compassion from my transaction without my consent. Money is a transmogrified form of man’s labor. The word “dollar” comes from the German word “thaylor” which means “work”. Money belongs to the worker even as it is administered by the administration.

    “accurate mathematics was simply impossible before it could be programmed into a mainframe.”

    The God factor, known as “Divine Providence” in The Declaration of Independence was overlooked and not programmed into the equation. The American economy now has to wade through the parting of the RED SEA, the human blood of 55 million babies aborted and the cost of vice instead of the construct of virtue.

    Thank you for letting me vent

  17. Mary De Voe, read Daniel chapter 4. Nebuchadnezzer was called by God to deport the rebellious children of Judah into exile for their sins. But he filled with pride and as chapter 4 explains was made to eat grass like an oxen for 7 years, himself for that period exiled from his own throne, until he repented and acknowledged the supremacy of the Lord God Almighty. We have a God who does not change and who always does the right thing in the right way every time. What happened to arrogant Nebuchadnezzer can happen equally well to Barack Hussein Obama. God will not allow arrogance to go unchecked forever.

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