And We All Feel the Claws
As most or all of you have read or heard by now, the economic news for the the last quarter of 2008 was quite bad
US economy suffers sharp nosedivefrom the BBC
The US economy shrank by 6.2% in the last three months of 2008, official figures have shown, a far sharper fall than had previously been reported.
Plunging exports and the biggest fall in consumer spending in 28 years dragged the annualised figure down from an earlier estimate of 3.8%.
Brutal February for Blue Chipsby Peter A. McKay at the Wall Street Journal
The Dow Jones Industrial Average dropped 119.15 points, or 1.7%, to end at 7062.93. The blue-chip benchmark ended down 937.93 points, or 11.72% on the month — the worst percentage drop for February since 1933, when it fell 15.62%. The Dow industrials have fallen six months in a row and are now more than 50% off their record highs hit in October of 2007.
Now the New York Times frets
Sharper Downturn Clouds Obama Spending Plansby Peter S. Goodman
The economy is spiraling down at an accelerating pace, threatening to undermine the Obama administration’s spending plans, which anticipate vigorous rates of growth in years to come.
I'm wondering whether it's merely the so-far unpassed budget that is under threat. As I noted earlier, the
stimulus bill is an enormous blow to the economy, and was passed only as a result of some combination of willful blindness, knavish exploitation of a crisis in which politicians did not actually believe, and desire to worsen things on the expectation that even greater expansion of state power could be achieved. In the case of all three of these motivations, one could expect some politicians to now regret what they have done in passing the bill; what seemed like a bearable amount of plunder may now seem like a grave miscalculation. I don't think that it's politically possible that the legislature would overtly repeal the stimulus bill, let alone that the Obama Administration would openly reverse itself. But subsequent legislation might implicitly pare some of the programmes, and a formula might even be found for the Administration to
suspend some programmes without legislative action.
Of course, the Administration and the Democrats in Congress know that, if they repealed a significant share of the
stimulus bill even obliquely, then their opponents would pounce on how this repeal demonstrated that it were not a stimulus bill. So those who supported the bill may have a tiger by the tail.