Economy: Not Quite in 'Tailspin,' But...
There are growing concerns about the US private sector, to say the least. Investors seem to be finding more and more reasons everyday to head for the preverbal high ground. Just this week we've seen manufacturing numbers decline, open goods orders falling, and investor sentiment suffering as the near-term outlook grows increasingly dimmer.
This slowdown seems to have several roots, perhaps the biggest of which is slowing manufacturing that has been reflected in the Richmond Fed's May survey.
Also having an impact is the fact that unemployment has brought its decline to a snail's pace as businesses have slowed their hiring drastically. This lack of new jobs has kept consumer spending from continuing to recover, and has also led to another dramatic slowdown in the housing market, both existing sales and new constructions.
Unfortunately, it doesn't seem like anyone else knows exactly what to do. We haven't heard a word of guidance out of Washington; not good guidance, not bad guidance, but no guidance at all. Of course, we have some ideas of our own, but we haven't been able to gain an audience. [Note: if anyone in the Obama administration would like to hear them, they're welcome to call our office.]
That leads us to another development that is both interesting and somewhat perplexing; and that is the overall lack of meaningful news coming out of Washington.
Many will recall that mere weeks ago the debates raging over the federal deficit and the national debt ceiling were front page news. It's now been a matter of weeks since any insightful news came out on either topic.
Doesn't anyone remember? Last we heard, the government had run out of money. It was flat broke, and the United States was going to default on its national debt and the end of the dollar was nigh, and we were all going to be living in shacks and bartering for corn, which would have certainly lost its federal ethanol subsidies.
And now? Silence - from both parties. It seems all of DC is simply closing ranks.
In fact, it seems telling that over the past several weeks this country has seen news stories on almost everything BUT the national debt. First we get Osama bin Laden; then there's all the debate over releasing photos, etc. We've seen everything from Barack Obama exploring his Irish roots to his wife doing the dougie with grade-school kids, but absolutely NOTHING on the federal budget.
While obviously our perspective on the inner workings of national politics is somewhat limited, we suspect that there are quite a few closed-door meetings going on among Democrats desperately trying to distance themselves from Obama before the upcoming election.
Our only hope is that the silence from Republicans is because they are recalling and adhering to the valuable advice of Sun Tzu when he said "Never interfere with the enemy while he is destroying himself."