The economy looks fine to me

The Capital Spectator worries about this chart. Housing looks to be on track for the normal pre-bubble period.  Note the dip in 2010 was likely another result of the harmful stimulus.  Also note there was no over production all the way through the bubble years in 2006. The housing industry will well managed. The overall economy looks like it passed through its normal business cycle and our real down turn was a short Obamacare dip in the first quart of this year. 

How about the manufacturing PMI, a survey of manufacturing expansion or contraction?

I see a dip that is well within the range of any other dip we have had since the crash.  Note, we again see the stimulus take its toll in 2010.

I may be a contrary indicator, but right now it looks a lot like we are on our second business cycle since the almost recession of Q1 2014. If Obama can hold back the DC Boat Anchor he may well come out looking even better than Bill Clinton.




Mark Thoma still claims the stimulus wasn't big enough. But he has never put up one single piece of evidence.  Nor have any of the other stimulus activists for that mater, all the Keynesians does is quote unproven recipes. If you are from Illinois and want to see how the stimulus put your economy into a double dip, look at this unemployment chart.

There we have it, 2011, yet again, Illinois unemployment climbs again, right where the stimulus began driving up oil prices.  This now makes five years in which not one single shred of evidence has been produced showing any good result from the stimulus. Keynesians should be booted from our colleges for teaching fraud to young students.


A few other notes about the stimulus, it drove inequality up.  The stimulus drove inflation above 2%, and inflation to high nearly always crashes the economy. We do not have a working fiat banker and inflation is almost everywhere simply a distortion in prices and not really the result of too much money.

And, by the way, a note on QE. Its purpose was most likely to halt the danger from the California pension system, and it also drove inequality higher. So poor people everywhere can blame the California legislature for their problems.  California is just too much of a flounder for the economy.

Here is a much better chart that explains what is going on.  Government spending flat, the blue line. And producer prices flat, the red line.  I would worry about the Republican tendency to sign onto more spending and we see the spike in spending in the recent quarter.  Note the same spike in federal spending in 2010 almost caused a double dip, and that was due to the stimulus. So it remains to be seen, clearly, but the Q1 dip was the end of the Obama recession cycle and we did in fact survive Obamacare.  And, Obama has one more delay available if Obamacare causes problems in 2015. But we may have defeated the Keynesians and saved the economy, just watch out for the Republican spending machine.