The Economy: A True Recovery Or Just A Pause?

On more than one occasion, Glenn Beck has described our economy as being in the eye of the hurricane; giving a false indication of recovery prior to getting slammed again after passing through the back end of the eye wall., I agree.

Yesterday, the stock market was ecstatic over the fact that retail sales jumped by 1.8% in March. The Dow Jones industrial average was up by more than 100 points. But, the reality is that you can't declare the economy to be recovered on just that simple number. More often than not, retail sales is forced to go up on the simple fact that the consumer needs to buy because things break and their kids grow out of their clothes. But, we need to remember that this economy has come way down from where it was in 2007 before the housing bust. The fact that retail sales went up is like saying we've fallen 50 floors in a 100 story building and we've moved back up to 51st floor. We still have 49 floors to get back to where we were in 2007.

However, today's stories paint a more troubled economic picture that is ahead of us.

First, we had RealyTrac release it's quarterly foreclosure numbers and they were horrible. In the first quarter of this year, foreclosures jumped by 35%; the biggest jump since this recession started. Worse than that, March posted a one-month jump of 19%. Certainly, the continuation of high unemployment and underemployment is at the heart of this number; and, Obama wasted a whole year on health care when he should have been focused, instead, on jobs. I predicted this in July of last year with my blog entry: The Worst Is Yet To Come for Foreclosures.

The other bad news that we got today was that the unemployment insurance claims jumped again for the second week in a row. The latest number was 484,000 new claims; meaning that we are again closing in on the 500,000 newly unemployed per week number. The lame excuse that this Administration's economists gave for this number is that jobless insurance claims are always volatile around Easter. Of course that's true; but, not in the way these numbers played out. Traditionally, the number of claims falls during Easter week because of the unemployment offices being closed that Friday and because potential claimants have family, out-of-town, commitments that preclude them from filing claims prior to Easter. But, instead of the normal fall in claims before Easter, the numbers actually jumped during Easter week. So, in reality, Obama's minions are taking today's number out of context.

There is nothing that the Obama Administration has done to improve the employment situation in this country. In fact, he and the Democrats have done just the opposite. The per-employee mandates of ObamaCare only make companies recoil from hiring any new people; and, in fact, probably causes them to consider laying off more employees.

As part of the health care bill, Obama took over student loans in America. Immediately, Student Loan Marketing (aka Sallie-Mae) -- the largest student loan agency in America -- announced that they would eliminate 2200 jobs because they won't be handling student loans anymore. I'm quite sure that banks and other lending agencies that were also involved in student loan activity will follow Sallie-Mae's lead.

Additionally, the elimination of the Bush tax cuts, is going to force many small business that make more than $200,000 to rethink their employment levels; resulting in more layoffs. If Cap and Trade is passed or if the EPA imposes punitive penalties on any businesses for producing high levels of carbon dioxide, you can expect more jobs being cut from the economy. If some kind of Value Added Tax or national sales taxes are imposed, more people will lose jobs as a result of the expected slow-down in retail sales. Today, for example, his decision to kill the manned space program will probably result in numerous lay offs from NASA. And, God only know what this Congress and this President will cook up next to kill jobs in America. I think we are seriously looking at foreclosures and consistently higher unemployment rates to continue for many years as a result of the policies of Obama.