Research Briefing

“IT’S STARTING TO FEEL LIKE ANOTHER RECESSION”

The Associated Press: “It's Starting To Feel Like Another Recession. Businesses Are Ordering Fewer Goods. Home Sales Are The Slowest In Decades. Jobs Are Scarce, And Unemployment Claims Are Rising.” (Daniel Wagner And Alan Zibel, “Bad News On Homes, Goods Adds To Air Of Recession,” The Associated Press, 8/25/10)

Moody’s Chief Economist, Mark Zandi, Says The Chances Of A Double-Dip Recession Are “Uncomfortably High.” “’The odds of a double-dip are rising and uncomfortably high,’ said Mark Zandi, chief economist at Moody's Analytics, referring to the possibility that the nation will tip back into recession. ‘Nothing else can go wrong. There is no cushion left.’” (Daniel Wagner And Alan Zibel, “Bad News On Homes, Goods Adds To Air Of Recession,” The Associated Press, 8/25/10)

This Week Has Brought A Bevy Of Grim Economic Indicators That Signal The Economy Is Stuck In A Rut. “On Wednesday, the government offered the latest dose of grim news about the economic recovery: Companies cut back last month on their investments in equipment and machines. And Americans bought new homes at the weakest pace in nearly half a century. Earlier this week came news that sales of previously occupied homes fell last month to the lowest level in 15 years. Unemployment remains near double digits because job growth in the private sector has slowed.” (Daniel Wagner And Alan Zibel, “Bad News On Homes, Goods Adds To Air Of Recession,” The Associated Press, 8/25/10)

Bloomberg: “Orders For Durable Goods In The U.S. Increased Less Than Forecast In July And Sales Of New Homes Unexpectedly Dropped, Increasing The Risk Of A Renewed Recession In The World’s Largest Economy.” (Timothy R. Homan and Courtney Schlisserman, “U.S. Recession Risk Rises On Home Sales, Durables Data,” Bloomberg, 8/25/10)

Intel CEO Says Unless Government Policies Change, “Jobs Will Not Be Created Here.” “Intel chief executive Paul Otellini offered a depressing set of observations about the economy and the Obama administration Monday evening, coupled with a dark commentary on the future of the technology industry if nothing changes. Otellini's remarks during dinner at the Technology Policy Institute's Aspen Forum here amounted to a warning to the administration officials and assorted Capitol Hill aides in the audience: unless government policies are altered, he predicted, ‘the next big thing will not be invented here. Jobs will not be created here.’”  (Declan McCullagh, “Intel CEO: U.S. Faces Looming Tech Decline,” CNET, 8/24/10)

• Otellini On Democrats: “This Group Does Not Understand What It Takes To Create Jobs.” “Otellini singled out the political state of affairs in Democrat-dominated Washington, saying: ‘I think this group does not understand what it takes to create jobs. And I think they're flummoxed by their experiment in Keynesian economics not working.’” (Declan McCullagh, “Intel CEO: U.S. Faces Looming Tech Decline,” CNET, 8/24/10)

“Jim Tisch, Chief Executive Officer Of Loews Corp., Whose Operations Include Offshore Drilling, Hotels And Insurance, Said Economic Growth Will Remain Sluggish In Part Because Executives Lack Confidence In The Obama Administration’s Policies.”  (Andrew Frye and Katherine Burton, “Tisch Says Lack of Confidence In Obama Hurts Growth,” Bloomberg, 8/26/10)

• “Tisch, 57, Said President Barack Obama’s Health Care Reform, Financial Regulation And Moratorium On Offshore Drilling Are Keeping Businesses From Spending Money To Expand.” (Andrew Frye and Katherine Burton, “Tisch Says Lack of Confidence In Obama Hurts Growth,” Bloomberg, 8/26/10)

MEANWHILE, THE WHITE HOUSE HAS A ROSY VIEW OF THE ECONOMY

VP Joe Biden Refers To The Recovery Act Spending Intended To Spur American Innovation As “The Fun Stuff.” “But in the words of Vice President Joe Biden, Obama's effusive Recovery Act point man, ‘Now the fun stuff starts!’ The ‘fun stuff,’ about one-sixth of the total cost, is an all-out effort to exploit the crisis to make green energy, green building and green transportation real; launch green manufacturing industries; computerize a pen-and-paper health system; promote data-driven school reforms; and ramp up the research of the future. ‘This is a chance to do something big, man!’ Biden said during a 90-minute interview with TIME.” (Michael Grunwald, “How the Stimulus Is Changing America,” Time Magazine, 8/26/10)

But An AP Fact Check Found That Many Of These Initiatives Would Likely Fall Far Short Of The Administration’s Intended Results. “The Obama administration claimed this week that $100 billion invested in innovative technologies under the economic stimulus law is ‘transforming the American economy’ by putting the nation on track for technological breakthroughs in health care, energy and transportation.” (Frederic J. Frommer, “FACT CHECK: Stimulus Assessments Overly Optimistic,” The Associated Press, 8/26/10)

• “But An Examination Of Details In The 50-Page Report Unveiled Tuesday By Vice President Joe Biden Reveals Something A Bit Different: A Collection Of Rosy Projections That Ignore Many Of The Challenges, Pitfalls And Economic Realities In All Those Areas.” (Frederic J. Frommer, “FACT CHECK: Stimulus Assessments Overly Optimistic,” The Associated Press, 8/26/10)

CNBC’s Jim Cramer: “They send out Joe Biden.  Joe Biden says, ‘hey, the stimulus is working.’ And it's like, guys, come on. I mean, like, don't be this tone deaf. Step out of Washington and realize what's happening in this country. But they seem to be very wedded to Washington.”  (CNBC’s “Street Signs” 8/25/10)

WHICH IS WHY DEMS ARE STARTING TO CONCEDE DEFEAT AND RUN AWAY FROM DEM LEADERSHIP

“Little By Little, We're Starting To See More House Dems Running Ads Distancing Them From President Obama And Nancy Pelosi -- And Even Directly Taking Them On.” (Greg Sargent, “More House Dems Fleeing (And Bashing) Obama And Pelosi,” The Washington Post “Plum Line” Blog, 8/25/10)

“Top Democrats Are Growing Markedly More Pessimistic About Holding The House, Privately Conceding The Summertime Economic And Political Recovery They Were Banking On Will Not Likely Materialize By Election Day.” (Jim VandeHei, Alex Isenstadt and Mike Allen, “Democrats Privately Fear House Prospects Worsening,” Politico, 8/25/10)

“They No Longer Believe The Jobs And Housing Markets Will Recover – Or That Anything Resembling The White House’s Promise Of A “Recovery Summer” Is Under Way.” (Jim VandeHei, Alex Isenstadt and Mike Allen, “Democrats Privately Fear House Prospects Worsening,” Politico, 8/25/10)

Dems Are “Increasingly Alarmed About The Economic And Polling Data” That Has Come Out Recently. “In conversations with more than two dozen party insiders, most of whom requested anonymity to speak candidly about the state of play, Democrats in and out of Washington say they are increasingly alarmed about the economic and polling data they have seen in recent weeks.” (Jim VandeHei, Alex Isenstadt and Mike Allen, “Democrats Privately Fear House Prospects Worsening,” Politico, 8/25/10)

• “Thirty-Four Percent Now Say The Economy Is Getting Worse, Up From 26 Percent Last Month. Only 20 Percent Now Say The Economy Is Getting Better, According To The Poll, Conducted Aug. 20 - 24. The Last Time Views Were This Pessimistic Was April Of 2009.” (“Poll: Americans Growing More Pessimistic about the Economy,” CBS News, 8/26/10)
• “Additionally, Americans' Overall Rating Of The Economy Has Been Stagnant This Summer. Over Eight In 10 Say The Economy Is In Bad Shape, And That Negativity Hasn't Budged. Just 17 Percent Of Americans Describe The Nation's Economy As Being In Good Shape.” (“Poll: Americans Growing More Pessimistic about the Economy,” CBS News, 8/26/10)