EconomicCrisis.US

Business activity in the U.S. expanded in June for a ninth straight month, showing manufacturing is overcoming turmoil in financial markets.

Economies in developing countries are leading the recovery from the worst global recession in the post-World War II era, driving sales at companies including Deere & Co. The pace of manufacturing may start to cool in the absence of stronger employment gains needed to invigorate demand.

“The factory sector is showing some slowing but remains quite resilient,” said Richard DeKaser, chief economist at Woodley Park Research in Washington. “The slowdown in employment we’ve seen in bits and pieces is real and relatively broad-based.”
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It appears we are in for a grand and dangerous experiment. The stakes are high, and the outcome is unknown.

The industrial nations that met in Canada over the weekend determined that they would undertake a course of severe belt-tightening in response to the indebtedness that has plagued them as a result of the economic collapse. Britain’s new coalition government has announced a package of budget cuts and tax increases as severe as anything the nation has experienced since the Great Depression.

President Obama urged our allies to continue to stimulate their economies, but the demand for austerity is gaining momentum. Even Obama’s options are hedged in because of nervous members of Congress who are more focused on deficit reduction than on reducing joblessness and stimulating growth.
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If the financial reform bill passes, the bad Wall Street will win, the good Wall Street will not. And investors and American families will lose.

As I explained in my article, The Dodd “Financial Reform” Bill Lets Obama Off the Hook, the bad Wall Street consists of the hedge fund short sellers, the predators who loot investment capital and slow down economic growth.

New home sales have dropped by 33 percent. The unemployment picture is not improving. The stimulus bill did not work. What is happening to our economy?
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Analysts say the spill will reduce economic growth by only about one-half of 1 percentage point this quarter, and even less during the second half of the year. For an economy as large as the United States’ – $14.6 trillion – a $73 billion cut is barely a nick.

That is small comfort to residents of the Gulf Coast. There, the economic impact is severe. And experts say the spill is taking a psychological toll on people still dealing with the emotional aftermath of Hurricane Katrina five years ago.
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