Read The Numb3rs

Unless you live at 1600 Pennsylvania Avenue, Washington, D.C., you are probably aware of the fact that the domestic economy of the United States is headed in the direction of a recession and has been for several months. For many Americans the recession is already upon them. One man is waiting for the two consecutive quarters of negative economic growth before he concedes that fact, and he lives in The White House at 1600 Pennsylvania Avenue.

Numbers are important, but it is the direction or trend of the numbers that speaks the loudest. Coupled with direction or trend is the speed of the direction that numbers are increasing or decreasing. For example, the Labor Department announced today that employers slashed 80,000 jobs in the month of March. This number standing alone by itself tells us a little. The number is significant because of its size alone. But, when you add the 80,000 lost jobs in March to 76,000 lost jobs in January and another 76,000 lost jobs in February, you have a very meaningful number. The total number of jobs lost since the beginning of the new year stands at 232,000 jobs. This does not include the jobs lost in the fourth quarter of 2007 as a result of the housing crisis. You don’t need to be an economist to see the significance of such large jobs lost numbers. The domestic economy is in serious trouble.

Given the employment situation in the United States today, it would have been even more disastrous if the Fed had sat on their hands and done nothing in the face of a bankruptcy by Bear Stearns. (See Thursday’s posting for more about that.)

It is important to look at the big picture. Our economy is made up of many facets, sectors, industries and spread over a wide geographical area. Not to view the effect a particular crisis has on the rest of the economy is just plain stupid and irresponsible.

A case can be made that the planned breakdown of regulations and their enforcement as they pertain to the financial sector lead in part to the economic crisis today. Certainly the financial sector's crisis if nothing else. That fact along with the fact that fuel costs, gas and diesel, have been rising so rapidly during the last 12 to 18 months, and taking purchasing power out of the hands of the consumer, all this has caused our economy to falter. (See previous postings on oil.)

I am going to give it a rest here for the week. Tomorrow is Saturday, and Saturday is for art. There are so many things that need to be fixed to repair our domestic economy, let’s hope that some people with good minds will be listened to. Stay tuned.