A common excuse on Wall Street made by company management when their earnings disappoint is the weather. You hear it time after time offered up on conference calls to explain why the number came in a few pennies below the consensus estimate. The truth is there is always some abnormal occurrence in the world that can be used to deflect criticism of poor performance. Good companies don’t make these excuses. They tell the truth, take their lumps, and lay out their vision for the future. In the end, these companies have more credibility with the Street.
The truth is, the U.S. economy shrank last quarter. That is not a good thing. One more down quarter like that and we will officially be in a recession. Yes there were cuts in defense. But there are larger cuts to come here as well as in other domestic programs. The sequester is right around the corner and the talk in D.C. is that it’s going to happen. We also raised taxes at the turn of the new year and we haven’t seen the effects of this yet.
I have never in my lifetime seen an administration that refuses to take responsibility for its own actions and policies. It’s pathological, clinical. The basic fact here is that out of control government interference in the economy will dampen economic growth. Think about it. Why would you hire anyone if you are a CEO or owner of a small business? You have no idea what your health care costs are going to be. You have no idea what your energy costs are going to be. You have no idea what your taxes are going to be. Government uncertainty and interference are strangling the economy.
They even found a way to blame today’s data on the GOP. We are four years into the Obama Administration! I believe that quote today was, “This was the best contraction we have ever seen.” Sounds like, “I was for it before I voted against it.” Or,“Depends what the meaning of is, is.”
My goodness, who are these people?
Our openly political Federal Reserve is trying as hard as it can pushing on a string to lower unemployment. But, no one is dealing with nor will they acknowledge the real issue – government induced uncertainty.
The MSM crowed today about how much of a shock this slowdown was. They have been trying as hard as they can to push the narrative that the economy is recovering.
What are they going to say next quarter?
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- Federal Reserve Says U.S. Economy ‘Paused’ (albanytribune.com)
- U.S. economy shrank in final quarter of 2012, Commerce Department says (jacksonville.com)
- U.S. economy shrinks for first time in 3½ years (jsonline.com)
- US GDP unexpectedly shrinks, decline seen temporary – Reuters UK (uk.reuters.com)
- U.S. economy contracts for first time since recession (money.cnn.com)
- U.S. Economy Slowed in 4th Quarter (abcnews.go.com)
- GDP Shows Surprise Drop in Fourth Quarter (cnbc.com)
- U.S. Economy Shrinks by 0.1%, First GDP Contraction Since Recession Ended (dailyfinance.com)
- U.S. economy slips 0.1% in 4Q on lower military spending (newsday.com)
- Leading Economics Bloggers’ Outlook Steadily Declines, but They Believe Stimulus Package Helped Fight Unemployment (kauffman.org)