Friday, August 28, 2009

A counter point to the U of M Sentiment Report

Or, How bait and switch takes its toll on confidence...

Cynicism: The commentary in the core of the U of M report has some elements that are a bit brighter but it also contains some really dark observations, conclusions and worst of all extrapolations. It is my own conclusion arrived at by looking at the responses to these surveys in the business cycle that they do not always turn up very sharply when economic conditions begin to improve. While people do know their own communities very well, when the news is bleak people tend to be skeptical. Sometimes even good trends are not to be believed.

Extrapolation: In the U of M commentary Richard Curtin Director of the Reuters/Uof M Surveys of Consumers refers to a ray of hope accompanied by the grimmest assessment by consumers of their personal finances since the 'Great Depression'. Thanks for that DICK. Has U of M really been polling people continuously for that long, or was that hyperbole?

Counterpoint on Depression: What can we make of Curtin's remark? First in the weekly ABC consumer comfort poll we can note that the personal finance index is up strongly over the last eight weeks and while it is not by any means in 'great shape' that personal finance index resides in the bottom 15 percentile of its range, a range that does not include the Great Depression but extends back to 1986. To the ABC survey this is not the worst personal financial environment since the Great Depression; it's improving and its not even the worst since 1986.

Unemployment yet to peak: REALLY? -- Next Curtin noted that consumers did see fewer layoffs and thought that unemployment was stabilizing but that it still would peak at over 10%. Man, I wonder what sort of macro-models these men-in-the street are using? 500 equations? 1,000 equations? How would they even know this crap unless they gleaned it from the press, a press that has been predisposed to feature news reports each more pessimistic than the last. So is this question really about what is being reported or what people can parrot back? AWK... Polly want a job AWKK!

NO INCOME GAINS!! Only one in four consumers anticipated any income gains at all in the year ahead. Even with 'low inflation' just 13% anticipated any inflation- adjusted income gains during the year ahead.

Wait one minute! Reality check! This is a curious result to me. Consider this: while municipalities and states are under pressure government workers are generally protected from inflation. Municipal unions are strong and 17% of workers are employed by state, local or the Federal government. That's nearly one-in-five. Next there are retirees whose Social Security payments are indexed by the CPI. And then there is everybody else. Do those numbers make much sense with that survey result?
Other results to compare- The Conference Board does not ask about inflation- adjusted income but its survey asks about income expectations. Positive expectations responses rose to 10.6% from 10.1% in August a monthly rise not a drop. The lowest reading from the Conference Board came in March 2009 when only 7.8% of respondents thought that incomes would rise. There are no inflation adjusted results per se in tha report but the Conference Board survey continues to see inflation expected above 5%. So when Curtin asks in the U of M survey about pay increases above the rate of inflation the response is an interesting one but we don't really know what it means.

Are people matching the correct inflation metric to their own expected pay results? We just don't know.

Can consumer finances really be that grim? While the ABC poll has a consumer finance index that is improving over an eight week period, the U of M survey has the smallest number of respondents saying their finances had improved at all, at 16%. This is interesting. We know house prices are still falling but that the drop has slowed. Stocks are up more than 20% (or much more) from their lows back in March of this year. Average hourly earnings rose in July and the work week got a bit longer (that is for July not August and the U of M survey is for August). In previous research I have found that in looking at the Conference Board data, income expectations responses are closely linked to the inflation environment. The fact that U of M has a question on income relative to inflation does not settle the matter for me, its a better question than the one asked by the Conference Board, perhaps, but not one whose response I would necessarily take to the bank - or what used to be a bank. So what is really going on here? Isn't some of this income response just people admitting that inflation is low?

Bad for this stage THIS STAGE OF WHAT?? Curtin says that 'at this stage' in past recoveries consumers have usually sensed the gains... Okay DICK, what stage of the recovery are you assuming we are in? My reading of these surveys -and granted I do not have the detailed data you do - but in terms of what is made public it seems that your index measures are up from their lows as they should be. After that, early recovery performance is not very well behaved. The end-recession/early-recovery game is not a very stable or consistent one. And since economists are only saying that the recession may have ended in June, we are only two months or so into the recovery period. Are you basing you comments on TWO MONTH"S DATA, DICK? These are two months in which your survey is much sourer than are others. And in these sorts of periods the values for sentiment, the current situation and expectations can turn around like crazy.

Another pessimist feeds his flock - I add Curtin to the forces who are conjuring up analysis that is far too dismal. No wonder people feel so bad. First of all his survey is worse of that the ABC or the Conference Board survey. Second of all, his voice on the matter is, I think, way too glum. Does he really have survey results back to the Great Depression on a consistent sample to make the statement he made? NO! More spin-o-nomics here I'm afraid.

Pessimistic public figures set the tone for U of M respondents - After the first GDP release for Q2 growth showed GDP losses in Q2 were trimmed to 1% the President came out and said there would still be months of recession left. Now Curtin is telling us that in August people are glum. I wonder why? Do they know something or are they reading the papers? One problem with the survey is all these forward-looking questions that we cannot expect people to know anything about. Contrarily, I am impressed that when people are asked reasonably, to evaluate things that they can see and that they can know about, they detect improvement. But when you ask them to forecast the future what do we get? We get the responses from people who just heard the President days ago say that it's not a recovery yet so they act like it's not a recovery yet when they present their expectations.

Questioning the results: I would ask Mr Curtin why with stocks soaring, the U of M current personal finance index fell to 58 in August from 70 in July? Job losses slowed sharply in July - we do not know about August. Layoffs have been at a reduced pace for several months, and, in the survey itself, respondents said that trend continued. What is driving these bad survey results? I find them astonishing and, moreover, not very credible.

At turning points: I have concluded in my own research that in the Conference Board index the business conditions survey made the most cyclical sense. The business conditions responses are the stronger ones in this report from U of M this month, too. I think the consumer is being raked over the coals in part by politicians looking to get approval for their next big spending agenda.

VENTING I'M VENTING!! YOU WON'T LIKE ME WHEN I'M VENTING - Let me vent on one such item here. The Obama economic team tells us we cannot stabilize the economy without heath care reform. They talk about huge future medical demands on the system. They use this as an excuse to get support for their medical reform bill. One problem: that bill does not solve the problem. If the problem is the size of the medical deficits in the future, it makes those worse. The kind of health care reform we need is not on the table. It may never be on the table. But this is Obama and friends playing bait and switch.

BAIT AND SWITCH - Yes, this is exactly the kind of bait and switch economics that has gotten us in trouble again and again and has pumped up the deficit. Former President George W. Bush fired one of his economic experts when that expert said (in what proved to be quite a correct assessment) that the war in Iraq was going to cost much, much more than the White House said. The White House knew it but it pressed ahead with its agenda not wanting to be derailed by a public that would trip over an inconvenient fact. Now in the Obama administration inconvenient facts again are being submerged. If you ever wondered why I can't bring myself to join a political party, this is it.

Feeling alright? not feelin' so good myself... No wonder consumers feel so crappy, so confused, so mislead, they are the sheep that are led to slaughter. This is not how politics and economics in America are supposed to work. The consumer is supposed to have the facts to deal with to make a decision, not so much spin he can't get a handle on it.

That's part of the problem.

Wednesday, August 26, 2009


You have nothing to lose but your short-selling losses.

Think about it... What happens as we put the 6.6mln who lost jobs in this recession back to work (nonfarm jobs figure)?

If population grows 1%/yr with the labor force doing the same and productivity is up by 1-1.5% that means trend growth is 2% to 2.5% per year.

Then there is that 6.6mln to put back to work. To give you perspective, they comprise 5.1% of total employment.

What happen to them?

Suppose it takes 5 years to get them all back to work.
That means we take 1% POINT of the 5% POINTS each year. So for FIVE years 'trend plus 'make up growth' is 3% to 3.5%. That's trend plus another one percent per year.

You get the point?

The economy will not be puttering along at 2%-2.5% any time soon.

Moreover we have labor force in-migration and the labor force will grow faster than population. People will go back to work and spend in excess of their income (YES THEY WILL) for a while because they have postponed many purchases. At some point down, the road we will have to confront other issues like the extent of debt and reduced portfolio values more savings, etc.

But forget talking to economists or low-growth believing portfolio managers. Just use your head.

Do you really think that 6.6million people are going to be left unemployed..forever? Don't you think that the stimulus plan spending that lies ahead and the people that need to work will ignite growth in the private sector? Don't you think that job means income and income means spending and that there is a HUGE potential for growth to ignite over the next five years???

Don't you think that one of the reasons debt has dropped and spending is off so sharply is that 6.6mln fewer people are working? This not just current working people spending less. Put on your thinking cap. Take off those blackened glasses.

DO NOT WRITE OFF the unemployed and try to 'project' an economy that will only limp along at 2% to 2.5% - the long term trend (please bow). THAT is not going to happen.

If you believe that it can then...


Tuesday, August 18, 2009

(PIP) Politically Inspired Pessimism

The most recent bug in my bonnet: Jack Healy a NY Times columnist is the most recent person to jump on the so-YOU-think-its-a-recovery bandwagon. His August 18th column is the object of my ire (link below). (Just to give you an idea where my head is at as I write Freudian, I typoed 'columnist' as 'communist' the first time around. Reader beware!)

Recoveryists: Let's make it very clear what we pro-recoveryists think.
  • We think that the economy has stopped getting worse.
  • We do not think that every single thing in the economy has stopped deteriorating but that enough is improving to put the weight of the economy more on the side of growth.
  • We do not think that everything is 'just fine.'
  • We do expect improvement to continue.
  • Those thoughts do not make us a wild bunch. Some us think recovery will be strong and some do not. We all think recession is over. That's our commonality.

Forecast with a view? The contrary view, that this is NOT a recovery seems to have its strongest and deepest roots among Democrat faithful, although why that is I don't really know. A recovery is not anti-Democrat. But I can see that an economy in danger and in trouble could be an excuse to spend even more of the public's money on another fix-it scheme. So is that it? Is this view really just an agenda forecast?

Pessimism meets Catch-22 -- The trouble is that all too many taxpayers/voters are getting angry over the monies that have been spent already. And to the extent some argue it is not recovery yet and that recovery will be slow they seem to be saying that the monies spent (nearly two trillion on financial institutions and on stimulus) were not spent wisely. This road is a Catch-22 for Democrats. They should not go down it.

Obama bombs -- There is growing disenchantment with the funds spent on the stimulus program and anger among Americans who seek to answer to the questions, "Did this come out of my paycheck?" It's a question increasingly asked in the once famous and soon to be shunned 'town hall' meetings.

Town Hall Meetings: too dangerous to insure -- When people are angry with you and your policies you do not want to go face-to-face with them. That's what many politicians are finding out. Make them go to your local office one at time and wonder if you will be there, or make them go to Washington DC. Do not let them gang up on your in their home district. After all with unemployment so high the opportunity cost and the out of pockets costs of a local trip are very low for your constituents. Remember that those most motivated to attend probably are not your supporters. The idea that Republicans are invading these meetings is ridiculous. Just look at the facts...and at the polls.

The proof of the stimulus is in the recovery - People were happy enough to the get the downturn arrested when they were in recession, but now when the yawning chasm of depression no longer seems about to suck them in many are wondering exactly what was in that stimulus package? Many do not like what they are finding out. They are sure less than impressed when they look at the numbers for spending and see the continued pessimism in the outlook.

Straight ahead: But all this is really separate from the assessment on the economy. I hope I have dissuaded you from being the permanent pessimist on the economy to pursue some political agenda. The economy really needs to be seen in an objective light or policy will backfire.

Agenda-nomics: It is hard enough to make sense of what the economy is doing without being confused by having an agenda you want it to support. If you look back in this blog you will see that I was heavily critical of the stimulus program for having not enough stimulus and too much agenda. Those chickens are coming home to roost now.

Recovery is to recession as... Recovery is like a move from the intensive care ward in the hospital. The move implies that you no longer need such intensive care and involves the doctor's judgment about your prospects. . Doctors begin to look for your stabilization to become more positive and for you to head into recovery when they move you. They move you when they think the risk of backsliding has gone or diminished or if they have done 'all they can' for you. But just wheeling you out of intensive care does not make you any better. 'Cause and effect' do not work that way in the hospital or in the economy.
A forecast is not just an agenda-maker it is a tool - Those railing about the economy and saying that there are still a lot of problems are not wrong, they are just missing the point. The point is about where we are headed. The point is to recognize what economic data look like at the bottom of a recession and the point is to be decisive in your recognition of a new set of facts. The point is not to sit back and wait until every job-loser from the recession is re-employed before calling it a recovery. By then you may be on the brink of another recession. Whether or not that is true depends on how we conduct ourselves in this recovery. If we continue act like we are in a recession, making recession-like policy moves when we are in fact in recovery we will sow the seeds of a recovery that will not have staying power.

Bear in mind the consequences - So when you look at the economy and make your diagnosis, make it with a clear head to the consequences. The assessment 'recovery or not?' is about economics not about politics. I get the feeling that there is a NY Times bias out there, and maybe - just maybe - it's time to stop reading the business section of the Times for a while because their recent economic stories should really have appeared in the politics section, or in the Op-Ed.


Monday, August 10, 2009

What you read and what you believe.

Be careful about suspending disbelief

Now that the financial crisis is past and the economy is either in recovery or poised for one, we are seeing the disingenuous opportunists come to the fore. Congress has had some hearings to rake over the coals some who were real heros, like Ben Bernanke whose innovations and timely actions at the Fed were at the forefront of saving the economy and stemming the spillover from the incipient financial disaster.

This was being done, while Henry Paulson had a hot-line installed to Goldman Sachs.

No one in Congress has a finger so supple that when it is pointed out to find the culprits it curls back to point at them.

Without letting the GSEs accept mortgages from houses be bought with no money down and no income tests, bank lending decisions would not have been so bad. Ask your Congressman/woman how that happened... Without that policy shift, the low interest rates allowed by the Fed would not have been able to have done much damage to the housing market. So let's remember that, when we start pointing fingers.

In the private sector there are a lot of reports about how government intervention has stopped the process of healing private sector wounds. The argument is roughly that de-leveraging is needed. The private sector is doing it. But now public credit is growing and the deleveraing is not being achieved economy-wide as federal debt is replacing private debt.

Yes, this incredibly stupid, but perhaps seemingly solid argument to some is making the rounds.

Let's remember that without the government invervention we would not be here in circumstances this, able to be so smug with our smartly pants assessments of the post crisis economy. If private sector de-leveraging (as some want to call it; it is also joblessness, bankruptcy, foreclosure and more) were allowed to go on unabated without an offset from government, there would have been multiplier effects and we could well have wound up in the depression some warned about.

Yes, the upshot of government intervention has been more debt. But having government tax us in real time to spend what it spent would not have made much sense would it? And doing nothing would have been reckless. So be careful what you read and believe.

Paul Krugman wants us to be glad we have a people running the show who do not dislike government. Paul says one million jobs already have been saved by Obamanomics and admits he wanted even more spent (cha-ching!). But let's remember that it was the BUSH Administration that sought and got the big financial aid package. Let's remember Under Bush there had been a very timely stimulus program that had little impact. Let's remember that Obama's package is backloaded and has its much larger impact next year. I don't know how anyone but Obama's best friend could tally one million jobs created to date by this program when more spending in 2008 disappeared into the black hole of nothingness. Clearly based on the resutls of the 2008 stimulus program the economy is recovering (at last) on its own not onthe dribbling early funds spent under Obamanomics. Obamanomics will give a push after recovery has already set it.

So Democrats may not be the only ones who can ride in on a white horse in crisis, despite what Krugman says. And when we see the budget consequences of Obama's (not even Krugman's desired) economic largess we might well wish he had been less generous in spending 'our' money and had put more into stimulus that bit early and less into programs adopted by people who do not hate government, as Krugman says.

Government has a role and that should be to be as effective as possible not as large as possible. The government should try to direct this capitalist economy to focus on fairness, law enforcement and to provide a base of public services to ensure public welfare at some level, while remaining as small as possible to do the job. While there is a role for government (there are several of them in fact). I believe government has social responsibilities as one of those roles; it also has the mandate to be as effective as possibile. Spending a lot of money for the goal of one administration is not a success. That is the wrong standard. We do not yet know anything about the effectiveness of Obamanomics.

Once again be careful what you read and what you believe. And dont' forget to think. You can suspend disbelief in a movie if it suits you but don't do it while reading the financial pages.

Monday, August 3, 2009

ISM jumps Yet more good news: can we stand it?

So why are Obama and Co so dismal? While the data are so good?
Do we really get top 5% jumps in the ISM during recessions?

Strong jump this month in ISM - The ISM headline rise is so strong this month that it is in the top 5% of all mo/mo jumps among all readings since 1951 (about 700 observations). The jobs jump month-to month is in the top 5.3% of all monthly jumps over the same period. This is obviously a big deal. The improvement in the month is big by historic standards. But that is not the end of understanding this report.

The venerated ISM - The ISM is a venerated manufacturing (MFG) survey most of whose readings date back to 1951. Its export and import gauges are newer and so are order backlogs. The ISM expresses readings on the MFG sector overall and in terms of some specific components by looking at monthly gains. Data are presented as a 'diffusion index' which tells us how widespread the changes are for better or worse compared to the month before. Survey responses are limited to 'no change,' 'up' or 'down'. We aggregate them across respondents and express each category as a 'diffusion index' which consists of all the 'up' responses plus half of the 'unchanged' responses with the sum taken as a percentage of the total. In this framework the value of '50' represents neutrality. This a simple scalar diffsion index for each category condenses the information in the three responses into a single gauge. The higher the reading, the more widespread are increases; the lower the reading, the more widespread are declines. Fifty is the line of demarkation between absolute net declines and absolute net increases. People talk of this breadth as though it is strength, largely because there is a statitistical association between strenght and breadth. But the survey is really one of the breadth of the month's trend, not of the strength of the underlying components.

Why diffusion gauges are imperfect - The main way folks look at the ISM readings, is to observe the diffusion values. But there is more to understanding the ISM than that. The various ISM categories are all sampled the same way; component indices are constructed the same way, but they all respond differently and with different degrees of variability over the business cycle. That fact makes direct comparison across categories a bit confusing. Each componet diffsuion index has a different habitat over which it ranges. While each component can theoretically range from zero to one hundred, none have taken on both (or even either) of the extreme values in the past 50-plus year period of monthly observations. Some hold to much narrower ranges while others use much of their theoretical range. Inventories, the PMI index itself and order backlogs vary over just little more than a 40 point range within their 100 points of possibility. Production varies over a near-60 point range while new orders span a 50 point range. Supplier deliveries and prices range over a span of 80 points each.
Putting ISM readings on a more equal footing - So to put these in context we like to look at ISM components (1) as a percent of their means or (2) to see where the current value stands as a percentage of the range overwhich the component has varied or (3) to rank the components within their own ranges. Until some sort of adjustment like that is made we can't really compare readings across categories. For example the highest lifetime average reading among ISM components is 62.8 for prices and the lowest average is 49.2 for employment. These differences remind us that prices almost always rise - even if by small amounts. So, of course, the price gauge will tend to be high. In MFG, in contrast, due to rising productivity and competiveness constraints, jobs in MFG have actually been falling over the years - in absolute as well as in relative terms. This is clear as the diffusion index averages less than 50. Clearly a reading of 55 for employment would mean something very different than a reading of 55 for prices. For prices it would represent a low reading, below its mean - a good inflation result even though prices are still indicated to be rising at a reading of 55. But for employment it would be a relatively high reading (Indeed the employment reading was last as high or higher than 55 in November of 2005, nearly four years ago). Prices which are at a reading of 55 in July have risen from abnormal lows in the recession and were last this strong or stronger in August of 2008.
This month's readings - The levels of the variables this month range from new orders and order backlogs in the low 60th percentile of their respective ranges to the 21st percentile for inventories and the 42nd percentile for employment. Most reading are around the 45th percentile of their respective ranges. That is below the midpoint but not by much. Indeed, the low standing of inventories points to how lean they are and that is a lurking positive, since when demand picks up lean inventories will be rebuilt and will stimulate output.

Understanding the differences - Three components are above their mean values: new orders, order back logs and production. That means they are in really quite ordinary shape, and do not lie at recession levels or even at levels seen in a slump. At 71% inventories are the lowest relative to their mean; at 87%, prices are the next lowest; at 92% of mean we find employment and then the PMI index itself.

Sorting out the meaning - The more we look at the data across the components the more it is clear that the weakness is now much less pronounced than it once was, while the upward momentum is strong. Many readings are still below par. But they do not lie below normalcy by much and some of the more important leading components are among the strongest readings, like orders and production. The change in the ISM tells us about momentum.

The ISM: It's a 'good news' report that is being regarded as demonstrating that the economy is either in recovery or close to it.

Sunday, August 2, 2009

Obama hits speed bumps...

Modern presidents seem to have 'handlers'. When things go bad a president is not so quick to step up and correct himself as a hander is apt to rephrase what 'the president' meant to say.

In the past two weeks Obama has two such moments.

A week ago it was a conflict over a race issue that led the President to stub his toe. The President, without knowing the facts sided with a friend and a fellow black man over a dispute that oddly involved a black Harvard professor being arrested by the police in his own home. Maybe you and I can back a friend on the basis of his character without knowing the facts but the President should not, especially not in such a charged moment as this. The really interesting aspect of the professor/police imbroglio is not even that the President got involved; that is just what brought this episode to our attention. What is most interesting is this: that each of the participants in this confrontation was supposed to be an expert in race relations issues (black professor/white cop). Some experts eh?

But to most of us the issue is that we do not really know the facts, and we cannot judge what happened, just that the conflict and outcome are quite odd. And to US it really matters that the President leapt before he looked. His handlers have since tried to snatch him out of thin air and sit him down for a friendly beer with the two parties and let the moment pass.

So it has.

But then there was another odd moment for the president this past week, and it has grieved me more, since it is about economics and I do understand the issues. It is not yet an issue in the press and probably will not become one. It is the Saturday remark by the President, coming after GDP fell by only a 1% annual rate in Q2, saying that there will be many more months of recession. Huh??

"It will take many more months to fully dig ourselves out of a recession - a recession that we've now learned was even deeper than anyone thought," the president said in his weekly radio and Internet address.

"And when we receive our monthly job report next week, it is likely to show that we are continuing to lose far too many jobs in this country. As far as I'm concerned, we will not have a recovery as long as we keep losing jobs."

This makes no sense to me. It's true that the recession was deeper than anyone thought but that's no longer news, it's old hat. What's news is that the Q2 drop in GDP is (just about) shallower than 'anyone thought.' The President is supposed to be a cheerleader for the economy. Yet he continues to pour cold water on good news and emphasize bad news. The economy fell at a 1% annual rate and that is just a stone's throw from positive growth and that will likely mark the end of the recession (it's not automatic, however). Economists are now lining up the side of saying that the recession is almost over; meanwhile, the President is living in the past. (Don't stop thinking about yesterday?)

Over the weekend his Treasury Secretary began the contrary spin that the recession may be almost over, pushing the positive message but fudging on the timing.

Yet another Obama advisor, Larry Summers tossed this curve ball into the mix:
"Historically, increased hiring typically lags increases in output, so it's going to take time before you see it ... in the employment statistics," White House economic adviser Lawrence Summers told NBC's "Meet the Press."
For anyone interested in the FACTS, here they are:

Recession of
count of months to first gain in jobs then to lasting gain
2001...... ..... 7......................... 20
1990............ 4..........................13
average: .......5.5........ .........16.5
Average........2.0............ .........3.0

So what is the agenda and what is Mr Summer's point? Do job losses continue when the recession ends? Yes, always in fact. For how long? Well, except for the last two recessions for 2 or 3 months. Geez, is that a reason to shift national policy?

Don't get me wrong. I am not against extending unemployment benefits. Just because jobs start increasing soon after the recession ends and just because the recession seems about ready to end there are still reasons for more government involvement. There are significant blocs of people whose unemployment benefits will expire soon due to the length of the recession. Jobs will still be hard to get even as employment begins to increase on a monthly basis. So do it for that reason, not for some bogus reason. Extend benefits even though the recession is ending. Do it to alleviate hardship, if that's what you want to do.

Both Geithner and Summers cite the lagging nature of the unemployment rate. They see it peaking in 2010. And that rate does lag by more than job growth --but not by much. If it does peak in 2010, and not in 2009, it will come early in 2010, not late.

All this distortion about jobs and how long it takes for them to grow and the economy and how bad it is, is destructive to the economy. I will not again issue the analysis I have already presented in this blog. But a set of historic recession FACTS tells us that when recessions are deep, the subsequent expansions tend to be strong. So we could be putting people back to work more quickly than it's now anticipated and at a faster rate when we do.

I want the President to regain his focus. He is our national leader; he must rise above representing an interest group. When JFK was president he was president first, Catholic second. Obama must be president first and black second. He must not be so quick to jump to support friends. He also needs to get his economic facts straight as well as his role or mission. I fear that it is for partisan reasons that the President does not want to take ownership of the economy. He wants to continue to live in the past and to blame the Republicans for a recession that really has some pretty deep bi-partisan roots. I don't think Lawrence Summers is a help in that regard. The President needs to be OUR cheerleader not another disheartened voice. We have enough of those. It does not sound to me like Mr Summer's council is going in the right direction. Mr Geithner seems to have this one right by at least looking at the positive. But then there is all that talk about deficits and the possibility of tax hikes. It would be nice to milk the good news for a while when we have it.

Hey did you know that GDP in Q2 fell at just a -1% pace after dropping at a -6.4% pace in Q1. Good news, eh?

Even more to the point, we need the President to pick the policy he wants to implement and to tell us why for the right reason, not for the wrong reason. I think we have had enough of that 'bait and switch', don't you?