The Mound of Sound

The US economy is either in a recession or teetering on the edge of one. Every leading American paper, even the real right wingers, forecasts the country will be in a hard recession come summer in any case.

Congress knows what’s happening, so does the White House. That’s led them both to scramble about looking for ways to stimulate economic activity. Even Bush, after having spent the first seven years of his presidency catering to the “Haves and the Have-Mores” now claims to see the need to help working and middle-class Americans (as an aside, since when has the middle-class not actually been made up of working people just with slightly larger paycheques?).

Suddenly there’s talk about tax rebates for the lowly working folk. Rebates? Surely the notion of a rebate implies the return of something but what if there’s nothing to return? A government mired in debt and sitting atop other layers of government mired in debt is already thoroughly in the hole. To rebate money to the taxpaying class the feds will have to borrow money on the workers’ behalf that the taxpaying workers will have to repay along with interest at some point in the future unless they manage to pawn that little bag of nastiness off onto their kids and grandkids.

Bear in mind that those talking about rebates are also fully intent on making permanent Bush’s tax cuts for the rich and continuing the bottomless money pit called the Iraq war. Their idea of economic stimulus is to come up with ways to make their government even more indebted than it already is.

And these are supposed conservatives. What ever happened to the “conserve” part?

America’s latest hot pants Holy Roller, Archbishop Ernie Paulk of Atlanta’s Cathedral of the Holy Spirit at Chapel Hill Harvester Church is facing a perjury charge for allegedly lying about his philandering.

According to the Associated Press, Ernie is accused of lying for saying that he only had sex outside of marriage with one woman. Seems there was more than one.

“Former church employee Mona Brewer is suing Paulk, his brother and the church on allegations that Paulk manipulated her into an affair from 1989 to 2003 by telling her it was her only path to salvation. In a 2006 deposition stemming from the lawsuit, the archbishop said under oath that the only woman he had ever had sex with outside of his marriage was Brewer.

But the results of a court-ordered paternity test revealed in October that Paulk is the biological father of his brother’s son, D.E. Paulk, who is now head pastor at the church. As part of Brewer’s lawsuit, eight women have given sworn depositions that they were coerced into sexual relationships with Earl Paulk.

A judge ordered the paternity test at the request of the Cobb County district attorney’s office and the Georgia Bureau of Investigation. District Attorney Pat Head declined to comment when reached at his home Monday night.

Paulk and his brother, Don, have been hit with lawsuits from former members alleging they were coerced into sexual affairs, but this is the first time criminal charges have been filed against the archbishop.”

Don, of course, is the legal father of D.E. or Donnie Earl Paulk, the current head pastor. He’s just not his son’s biological father, an honour claimed by his brother. Keeping this straight is giving me a headache. Your uncle is your dad so does that make your dad your uncle? Now there’s eight more women? Earl, when did you find time for preaching?

In a debt-ridden, import-addicted, consumer-driven economy, any cut in consumer spending can be the economic equivalent of an aneurism. This is the very scenario that appears to be developing in the United States just as the president and congress try to come to grips with the aftershocks of the credit crunch resulting from the subprime mortgage meltdown.

About the only debate in the business news is whether America is already in a recession or on the eve of one. From the New York Times:

“Strong evidence is emerging that consumer spending, a bulwark against recession over the last year even as energy prices surged and the housing market sputtered, has begun to slow sharply at every level of the American economy, from the working class to the wealthy.

The abrupt pullback raises the possibility that the country may be experiencing a rare decline in personal consumption, not just a slower rate of growth. Such a decline would be the first since 1991, and it would almost certainly push the entire economy into a recession in the middle of an election year.

There are mounting anecdotal signs that beginning in December Americans cut back significantly on personal consumption, which accounts for 70 percent of the economy.

And consumer confidence, an important barometer of economic health, has plunged. Andrew Kohut, president of the Pew Research Center, says consumer satisfaction with the economy has reached a 15-year low, according to the firm’s polling.

Even wealthier consumers, who were seen as invulnerable to rising gasoline prices and falling home values, are feeling the squeeze.

Even in tough economic times Americans rarely reduce their consumption, preferring instead to slow the growth in their spending. Since 1980, they have cut spending in only five quarters — a total of 15 months — most of them in the depths of a recession. The 2001 recession passed without a cutback in consumer spending.

Fresh evidence of a pullback is pouring in from many quarters as Americans confront the triple threats of higher energy costs, falling home prices and a volatile stock market.

Perhaps the strongest barometer over the last 30 days is the performance of the country’s big chain stores. December turned out to be a blood bath for retailers at every rung on the economic ladder, with sales for the month growing at the slowest rate in seven years.

But it is the trouble at the highest reaches of retailing that has economists most worried about a recession. Over the last year, even as low-wage and middle-income consumers have cut back, the wealthy have spent freely, keeping high-end chains insulated from the economic turbulence.

That started to change in December, as shoppers held off on buying $300 designer shoes and $500 dresses. For example, store sales fell 4 percent at Nordstrom, the high-end department store.

A “made in America” recession would be felt globally throughout the developed world, probably in Canada as much as anywhere. This time, however, the effects may be softened by sustained, strong growth in the 7% range in the developing world which may offset some loss of trade to the United States.

Given the unreliability of polls, let’s call it a statistical tie. After supposedly being up on the Libs by 7% over the Christmas holiday, Ipsos-Reid reports the Conservatives have now fallen to two points behind. Ipsos’ tally – Libs 35%, Cons 33%.

The poll was conducted January 8-10, well before Harpo’s aides called Danny Williams a liar.

Gee, with talent like Harper, Baird, Clement, O’Connor, Ambrose, MacKay and Flaherty, it’s hard to understand why these folks aren’t riding a comfortable majority. Maybe it’s because we still remember the last majority Conservative prime minister. Then again, so does Harper.