It's Still the Economy, Stupid

Remember that phrase?

Well, it still applies: perhaps more so now than ever.

Consider the latest GDP report:

Economy Sputters With 0.6 Percent Growth
Thursday March 27, 9:18 am ET

By Jeannine Aversa, AP Economics Writer

Economy Nearly Sputtered Out at End of 2007, Probably Faring Worse Now

WASHINGTON (AP) -- The economy nearly sputtered out at the end of the year and is probably faring even worse now amid continuing housing, credit and financial crises.

The Commerce Department reported Thursday that gross domestic product increased at a feeble 0.6 percent annual rate in the October-to-December quarter. The reading -- unchanged from a previous estimate a month ago -- provided stark evidence of just how much the economy has weakened.

Or this:

Equity Loans as Next Round in Credit Crisis

By VIKAS BAJAJ, New York Times
Published: March 27, 2008

Little by little, millions of Americans surrendered equity in their homes in recent years. Lulled by good times, they borrowed — sometimes heavily — against the roofs over their heads.

Now the bill is coming due. As the housing market spirals downward, home equity loans, which turn home sweet home into cash sweet cash, are becoming the next flash point in the mortgage crisis.

Americans owe a staggering $1.1 trillion on home equity loans — and banks are increasingly worried they may not get some of that money back.

Or this:

Wall Street to shed 20,000 jobs as crunch hits

By Tom Leonard in New York
Last Updated: 12:24am GMT 27/03/2008

New York is expected to lose more than 20,000 financial sector jobs by the end of next year as Wall Street is hit heavily by the credit crunch, according to a new report.

The city's Independent Budget Office estimated that profits for 2007 will sink by more than 80pc to the lowest level since 1994, due largely to the effects of the sub-prime mortgage crisis.

The agency predicted the financial activities sector will shed 12,600 jobs in 2008, 2.7pc more compared with last year. The figure includes 5,300 jobs in the securities industry.

There have been a lot of diaries here at dkos about the economy recently. And a lot about the troubles on Wall Street.

The bad news, unfortunately, does not appear to be going away.

•  tips

  for fixing the economy for all Americans and for establishing real and lasting market reforms and regulations to prevent the next speculative bubble and financial crisis.

  by gnat on Thu Mar 27, 2008 at 08:21:20 AM PDT

  •  Obama speech this morning

    The part I heard was excellent, but the media interrupted it - and I don't have high speed internet out here in the country to hear it online...

    So would someone please summarize the major points for folks like me, and the responses from the audience?

    Also I messed the Bloom berg intro if it was live on TV.

    Thank you.  will check back in a few hours.

    by revgerry on Thu Mar 27, 2008 at 09:20:21 AM PDT

•  I am reminded

  of something I heard from a friend who works for one of those big financial firms (I'm scrubbing details, of course). She related that the firm was shifting their portfolio from traditional buys to luxury brands like Coach Handbags because they were more likely to hold their value or continue growing as the rich got richer.

  She then noted that none of the people at the firm struck her as particularly smart.

  So, yeah, here we are.

  by oldjohnbrown on Thu Mar 27, 2008 at 08:34:08 AM PDT

  •  well

    the corporate brain is trained to be uncurious.

    by gnat on Thu Mar 27, 2008 at 08:42:48 AM PDT

  •  I noticed that about two years ago as well...

    stores like JC Penny, Dillards, etc. were stalling but the sales at Saks and others were soaring.

    The middle class has been eroding for two decades, but I think people are finally seeing it.  

    We're an extremely wealthy country... and even most of the lower classes have it better than citizens of other countries. I hear it talked about on dkos often.  Even our worst isn't that bad, we're all still insanely lucky... blah, blah, blah.  

    So does that mean we should stop striving to feed, house, give healthcare, and provide excellent education to every child born here?  

    Times are going to be tough and yes we may still have it better than some others in the world, but that doesn't mean we shouldn't fight every day until we collapse to make sure the dreams of our children can come true.

    Good grief I'm having a bit of a "rant" day. I apologize.

    by LucyMO on Thu Mar 27, 2008 at 08:47:14 AM PDT

•  my 2cts

  Ya my last 2cts. Ha,ha.
  thank you for keeping this on page one.
  peace

  by imchange on Thu Mar 27, 2008 at 08:40:27 AM PDT

•  add American Axle to this list

  Dick Dauch, chairman and chief executive officer of American Axle & Manufacturing, lashed out Wednesday at UAW leaders for striking his company and refusing even to discuss what Dauch said was already a pattern of lower wage-and-benefit deals already reached with Dana Corp. and other direct AAM competitors.

  We are fighting for the absolute survival of AAM in America," Dauch said in an interview one month after a walkout by 3,600 hourly workers at AAM plants in Michigan and New York.

  "We have the flexibility to source all of our business to other locations around the world, and we have the right to do so," Dauch said, in a not-so-veiled threat. AAM has plants in Mexico, South America, Europe and Asia.

  "We will not be forced into bankruptcy in order to reach a market-competitive cost structure in the United States. If we cannot compete for new contracts in the U.S., there will be no work in the original plants," Dauch said, referring to operations in Detroit, Three Rivers and in the New York towns of Tonawanda and Cheektowaga.

  American Axle is a profitable business, but Dauch is asking for a 50 to 60% pay DECREASE from hourly wage workers. Shouldn't CEO pay be an indicator of economic instability?  In my book, it is. and receiving CEO pay higher than at least 27 other auto manufacturing CEO's screams of excessiveness.

  by Bendygirl on Thu Mar 27, 2008 at 08:44:23 AM PDT