The rain is fierce here in DC, putting Econo-Girl in a wistful, romantic mood. Her thoughts turn to pork belly futures and gasoline. She taps Leisure Lad on the shoulder to whisper the latest job figures in his ear. It's not good news, but somehow that intensifies the love between us, the knowing that we are in it together, for and with each other.
What if the real estate market crashes? Forget that. It might even be fun to hear the gnashing of teeth from the non-savers. What if the job market crashes? That's more important. And the latest job numbers are not impressive.
This low employment trend has been going on for a while, which is important. As Econo-Girl has noted before, the US consumer has been spending far too much, but a slowdown in spending will trigger a recession.
Businesses are saving dramatically right now, and refraining from hiring and building more factilities. Does that mean they also have little confidence in the current system holding up over time and expect a downturn when it all hits the fan? US consumption of goods is based on borrowing too much. What will happen when that stops?
It has become fashionable now on CNN Money to predict a housing bubble. Copycats. Now every talking bean brain is doing it. But will it be cataclysmic, Econo-Girl asks. Depends on the reaction of business. If they continue to refrain from hiring and expanding, where are those jobs coming from?
One day our economics will be laughed at and used as an example of how lying about unemployment rates boosts consumer confidence and what a shallow fix that is. Remember the first Bush? He really thought if he just kept repeating that the economy was great, people would believe him and feel like spending. Didn't work. His son, W, is a chip off the old block. He believes that if we lie about unemployment by not including long-term unemployed, no one will notice it.