REO Capital - What Happened to the Economy
The
election year was dominated by talk about jobs and the economy, but neither the
administration nor Congress seems to have any grand ideas for jump-starting a
still sluggish recovery — and they're not even talking about it much.
President
Obama sought to turn attention back to economic issues with a speech last week
in Texas on manufacturing, but that's already long since been forgotten. A
cascade of scandals has driven the issue entirely off the Washington radar.
Even
before Benghazi, the IRS and the Department of Justice controversies started
heating up, the economy had consistently taken a back seat to issues such as
immigration and gun control.
"The
economy is by far the most important issue for voters," says Karlyn
Bowman, a polling expert at the American Enterprise Institute. "It's not
unusual for Washington preoccupations to be different than those of the
public."
She
says that the public is skeptical that Washington can provide economic answers
at this point. The two parties remain far apart on economic issues. The type of
debt reduction Republicans seek through overhauling entitlement programs is
gaining little traction among Democrats, while the GOP-controlled House will
never approve further stimulus of the type Democrats would like.
"We've
moved away from proposals for big changes and toward piddle policy," says
Stephen Weatherford, a political scientist at the University of California,
Santa Barbara. "My impression is both the president and the people around
him have ratcheted back their expectations, so they've ratcheted back what
they're willing to send to Congress."
The Economic Picture
If
you looked only at Wall Street, it would seem that happy days might be nearly
here again. The Dow Jones average passed a milestone last week, closing above
15,000 for the first time — nearly double its value at its trough early in the
Obama presidency.
Looking
at Main Street, however, the picture looks entirely different. "We're just
sort of worn down by this subpar recovery that continues but doesn't ever seem
to accelerate, and if so, not for very long," says Sean Snaith, director
of the University of Central Florida's Institute for Economic Competitiveness.
Wall
Street cheered last week's jobs report, which showed more people found work in
April than expected. But it was still far from enough to take up much slack in
the labor market.
"That
level of growth will not get us up to pre-recession levels of employment until
2020," says Heidi Shierholz, an economist at the Economic Policy institute.
"We are still in a massive crisis in the labor market."
REO Capital has been focusing on the
Economy with our Blog since the beginning of 2013. The general public has been
given a false sense of progress in this economy with the stock market rising
but, with no real positive economic news. Unemployment is still high, the job
market has shown little progress, Taxes both corporate and personal are
increasing, and the Feds are holding the Bond Market from falling
by purchasing over $85 billion in Treasuries per month and keeping
interest rates low.
But once the Federal government stops
supporting the Bond Market it will collapse and Interest Rates will rise and
the Dow Jones Industrial Average now over 15,000 will tumble back to the 10,000
to 12,000 range!!! Then when everyone's 401k and IRA's will tumble in value and
we will see that False sense of security disappear quickly and finally anger
with this current administration's policies will rise!
John Denes
CEO
REO Capital, LLC
johndenes at reocapitalllc.com
