In May of 2009, it became my focus to rail against what I the aptly named the “hill-top screamers.” I noticed then, and over time it has become reinforced, a corps of folks had become ground zero for basically creating and perpetuating the idea that the US and global economy was doomed. The apocalypse was coming – too much debt, too much stimulus, too much Fed, hyper-inflation, no jobs, no wage growth, imminent market collapse, gold going to $5,000, and Obamacare. There are more esoteric reasons that have been screamed about how things will go wrong and our economic world will come to an end, but these are the obvious ones.
Funny thing, though, after all these years of doing what I do, I came across an article this morning (What Might Go Right in the Economy) that not only supports my contention that this cadre of doomsayers has been and is wrong, but it introduced me to a new phrase to describe these purveyors of negativity – “recession porn.” Here is an excerpt.
- The preoccupation with all of the things that could possibly go wrong has been a persistent characteristic of this economic recovery. It was termed recession porn in 2009. It has been a focus of websites, pundits and, of course, goldbugs. When an economist picks up the nickname “Dr. Doom,” it suggests an obsession with the negative.
Yup, Dr. Doom has been quiet for a while now, but I am sure he is still fomenting ideas about the coming collapse, a collapse, I might add, that is not coming because the US economy is not falling apart.
- When companies such as Wal-Mart and Target raise their minimum wages, they aren’t doing it because they are nice guys. They need employees to keep the shelves stocked.
In a nutshell, the persistent flow of government-delivered, economic data can be problematic. Those numbers fluctuate, are revised and, most importantly, they are lagging. Often, the best indicators of future economic activity are the underlying news stories, the ones that never get much play because they just don’t sell.
- Being forced to increase wages for unskilled labor is a sign of increased demand.
The above is a reality, and it is an important reality, one so important that the breadth of the US economy depends on it – people working and people making money when they are working.
- Quit rates — when someone voluntarily leaves a job, often to take another position — are rising. Wages are ticking up. And more jobs are going unfilled and listings are increasing.
So, plain and simple, the very foundation of the US economy is getting stronger, as more folks go to work, more folks make more money, more folks quit a job to take a higher paying job or their employers pay them more money to stay.
This is how the economic cycle works, and, short of outside catastrophic events, such as the financial collapse in 2008 or a major war, the fact that folks are working and making money means unequivocally the economy will keep moving forward, despite the unevenness of the lagging economic data.
The reality is that when folks are working and making money, they buy things from Walmart and Target for sure, but even better than that, they buy or build things of a proportionately higher order – houses and businesses.
- Housing starts jumped 20.2 percent to a 1.14 million annualized rate, the most since November 2007, from a 944,000 pace in March, a Commerce Department report showed Tuesday in Washington.
- The number of women-owned firms has increased by 21% since 2007, close to the 20% increase in the 2002 – 2007 period and up from only 7% between 2007 and 2012.
People are working, people are building houses, and people building businesses. And just to give you an idea of how much business building is going on, take a look at this leading stat.
- As of 2015, it is estimated that there are just over 9.4 million women-owned businesses in the United States, generating nearly $1.5 trillion in revenues and employing more than 7.9 million people.
Now tell me the US economy is on the verge of recession or collapse when the future is about building expensive homes and building costly businesses.
Oh, and keep in mind, the stats above about building businesses in the US are for women only. It is not like the industrious men in the US are sitting around twiddling their thumbs.
Wait! If the market looks 6-9 months out, maybe it is not so off at the now, new, again record highs. Just a thought.
Trade in the day; invest in your life …
