Storm warnings: Why an economic double-dip isn't out of the question
(Seattle Times) -- by John Talton --
The nation's two-track economic recovery is now in danger precisely because of its dual nature.
Track one includes record corporate profits, record cash on hand in corporate treasuries, too-big-to-fail banks fully restored, CEO compensation back in the stratosphere.
Larger companies that survived the Great Recession are for the most part stronger than ever. Tech sectors are booming. Much of manufacturing had been recovering. Wall Street rallied. China, critically, rebounded strongly, helping trade.
But track two was a different journey: Housing collapse without end, real unemployment around 16 percent and poor levels of job creation, with stagnant or falling real wages.
Small businesses that had hung on through the worst of the downturn remain at a tipping point. A record number of Americans are on food stamps and other forms of government assistance. Community banks continue to struggle. State and local fiscal troubles mount.
Most productivity-enhancing infrastructure projects remain in the study phase. And most of the global imbalances involving debt and trade persist, instead of being worked out by the Great Recession. The economy has not reset in a healthy, sustainable way.
At some point, unless the persistent recessionary track healed and aligned with the recovery track, the whole thing was going to come off the rails.
Signs now are growing that this may be happening.
Housing has fallen into a double-dip downturn. Growth was ominously weak in the first quarter, with gross domestic product — the sum of all goods and services produced in a year — expanding at a rate of only 1.8 percent. A growing number of economists expect more of the same in the second — this means we lack the growth to create large numbers of jobs...
The political games over the federal debt ceiling aren't helping. But neither is the fact that the largest banks and the hedge-fund boyz are making most of their profits from trading and other risky Wall Street casino games, instead of deploying capital into productive, job-creating enterprises.
To make it real simple for the boyz cooking up their latest financial "innovations": no recovery of good jobs, no real recovery...MORE...LINK
Is Your Religion Your Financial Destiny?
(The New York Times) -- by DAVID LEONHARDT --
The economic differences among the country’s various religions are strikingly large, much larger than the differences among states and even larger than those among racial groups.
The most affluent of the major religions — including secularism — is Reform Judaism. Sixty-seven percent of Reform Jewish households made more than $75,000 a year at the time the Pew Forum on Religion and Public Life collected the data, compared with only 31 percent of the population as a whole...
On the other end are Pentecostals, Jehovah’s Witnesses and Baptists. In each case, 20 percent or fewer of followers made at least $75,000. Remarkably, the share of Baptist households making $40,000 or less is roughly the same as the share of Reform Jews making $100,000 or more. Overall, Protestants, who together are the country’s largest religious group, are poorer than average and poorer than Catholics. That stands in contrast to the long history, made famous by Max Weber, of Protestant nations generally being richer than Catholic nations...MORE...LINK