DENVER (MarketWatch) — The Great Depression that Federal Reserve Chairman Ben Bernanke claims to have averted has been part of the background radiation of our economy since at least 2008.
It’s just that like radiation — it’s invisible.
We’ve called it the recovery, the jobless recovery, the slogging recovery and more recently the fading recovery. We’ve measured modest growth in our nation’s gross domestic product to record that our so-called Great Recession ended in June 2009. And now we are saying that if this disappointing growth suddenly disappears, as currently feared, we will be in a new recession.
There is nothing more depressing than hearing about a new recession when you haven’t fully recovered from the last one. I take heart in suspecting that in a still-distant future, historians will look back with clarity and call this whole rotten period a depression.
The precise definition of a depression, of course, remains as debatable as anything else in the field of economics. By some definitions, it is a long-term slump in economic activity, often characterized by unusually high unemployment, a banking crisis, a sovereign-debt crisis, surprising bankruptcies and other horrible symptoms we can find in the headlines almost every day.
It is easy to avoid seeing all of these events as constituting a depression if you somehow have kept your livelihood intact all this time. But it’s important to remember that not everyone has to stand in a bread line during a depression.
According to a 2010 piece on Bloomberg, economists Michael McDonough and Carl Riccadonna note that waste has an 82 percent correlation to US economic growth.
This should be pretty intuitive. The more you produce, the more you throw out.
“The Economics Associated with Natural Areas in the Delmarva” reported that the economic value of outdoor recreation in the Delmarva Peninsula, comprising coastal counties of Delaware, Maryland and Virginia, amounted to $4 billion annually.
Prepared by Southwick Associates for the Theodore Roosevelt Conservation Partnership, the report divided outdoor recreation into categories: recreational boating sales, $1.3 billion; camping, biking and trail-based activities, $1.07 billion; and hunting, fishing and wildlife-watching, $1.5 billion.
Of the Maryland-specific figures in the report:
In recreational boating sales, Maryland accounts for $607 million, tops among the three states.
In hunting, fishing and wildlife-watching, Maryland accounts for $657 million, second to Virginia.
Commercial fishing in the Delmarva Peninsula is a $300-million-plus industry, of which Maryland accounts for one-third.
Nature tourism contributes $367 million to the Dorchester County economy.
Talbot County’s three-day Waterfowl Festival brought in more than $5 million, half from out-of-state visitors, according to a 2007 study.
In Maryland, tourism was a $13.1 billion industry in 2010 — the most current year for which data are available — supporting 130,000 tourism jobs and generating $1.9 billion in state and local taxes. In 2010, more than 32 million domestic travelers visited Maryland; 18 percent of them included a trip to the Eastern Shore.
And goodness knows there would be no reason to visit the Eastern Shore without the Chesapeake Bay; it kind of like Kansas, but with Greenheads, mosquitoes, and nutria.
People with "Norman" surnames like Darcy and Mandeville are still wealthier than the general population 1,000 years after their descendants conquered Britain, according to a study into social progress.
Research shows that the descendants of people who in 1858 had "rich" surnames such as Percy and Glanville, indicating they were descended from the French nobility, are still substantially wealthier in 2011 than those with traditionally "poor" or artisanal surnames. Artisans are defined as skilled manual workers.
Drawing on data culled from official records that go back as far as the Domesday Book as well as university admissions and probate archives, Gregory Clark, a professor of economics at the University of California [at Davis], has tracked what became of people whose surnames indicated their ancestors had come from either the aristocratic or artisanal classes.
By studying the probate records of those with “rich” and “poor” surnames every decade since the 1850s, he found that the extreme differences in accumulated wealth narrowed over time. But the value of the estates left by those belonging to the “rich” surname group, immortalised in the character of Fitzwilliam Darcy, in Jane Austen's Pride and Prejudice, were above the national average by at least 10 per cent.
In addition, today the holders of "rich" surnames live three years longer than average. Life expectancy is a strong indicator of socio-economic status.
Next time some liberal claims that without the giant budget busting stimulus program, the economy would have gone into a depression, point out that Andrea Mitchell's husband says otherwise.
1. Private-sector jobs have increased by an average of just 105,000 over the past three months and by just 89,000 a month during the entire Obama Recovery. In 1983 and 1984, during the supply-side Reagan Boom, private sector jobs increased by an average of 292,000 a month. Adjusted for population, that number is more like 375,000 private-sector jobs a month
2. If the labor force participation rate for May had just stayed where it was in April, the unemployment rate would have risen to 8.4%. As it is, the U.S. economy is suffering is longest sustained bout of 8% unemployment or higher since the Great Depression.
3. Private-sector GDP rose just 2.6% in the first quarter, after rising a measly 1.2% last year. By contrast, private-sector GDP rose 3.8% in 1983 and 6.5% in 1984 during the supply-side Reagan Boom.
4. The U.S. stock market is down 7% since early April.
5. Real take-home pay is down over the past year.
6. That first-quarter GDP report also showed that after-tax corporate profits dropped for the first time in three years. Major red flag.
After year-end, under current law, the top dividend tax rate will rise to 43.4% from 15%. That's not only because the temporary low 15% rate granted under the 2001 Bush tax cuts will revert to the prior rate of 39.6%. In addition, a provision of ObamaCare slaps a 3.8% surtax on all forms of investment income, including dividends—the resulting total is 43.4%.
So on Jan. 1, an investor won't keep $8.50 of that dividend—he'll pay a 43.4% tax and keep only $5.66. Suddenly, a stock that yielded him 8.5% now yields only 5.66%.
If 8.5% was the after-tax yield that investors demanded in order to allocate their capital to that particular company, then 5.66% will not be sufficient. That company's stock price will have to fall until it once again offers an 8.5% after-tax yield.
Precisely, the stock price has to fall by the percentage difference between $8.50 and $5.66. It will therefore fall to $66.60 from $100—that's 33.4%. And it's also a good first approximation of how much the overall stock market will fall when dividend taxes rise to 43.4% from 15%.
Unless Congress acts. Good luck with that. Time to buy gold? or lead...
Yen Hui to its lowest level in eight and a half months against the dollar on Tuesday after strong economic data in the United States increased the expectations of investors to raise interest rates this year.
And approached the lowest level of the euro in the year with the growing concerns about the success of the plan of financial assistance to Greece and settled the Australian dollar was up before an expected increase in interest rates.
The dollar rose 0.4 percent to 94.98 yen, its highest level since 24 August. And later settled near 94.90 yen.
The Commerce Department reported Monday that manufacturing in the United States recorded the fastest growth rate in nearly six years in April and rose U.S. consumer spending, which represents more than two-thirds of U.S. economic activity in March for the sixth consecutive month.
The yen fell against the euro and Australian dollar.
The euro of $ 1.3195, unchanged from the closing price in New York, which fell 0.7 percent.
The transaction is expected to be light due to the closure of the market in Tokyo on Tuesday.
