Is another recession likely?

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CLARKONOMICS: UPS warns the economy is getting ready to slow down again. They’re not necessarily using the “R” word, but others are.

Logistics companies like UPS and FedEx, along with the trucking companies, are considered to be bellwethers of what’s going on with the economy. When the economy gets ready to slow, these are the companies that see shipments immediately plummet.  

Analysts, meanwhile, are saying it’s because of the U.S. Congress primarily and other factors secondarily that we may be headed to another recession.

Worries about the fiscal cliff

Have you heard the term “fiscal cliff”? If you haven’t yet, you probably will soon. When the GOP and the Democrats could not reach an agreement on what to do about the fiscal problems, they reached a deal to push problems into the future with cuts in spending designed to hurt the philosophical interests of both parties.

The idea is going over the fiscal cliff would cause so much harm to our country that the threat of it would force these foes to sit down and reach an agreement on how to deal with our country’s problems.

Shockingly, both parties seem willing to harm our country. Both parties, in concert, are to blame. It’s not one or the other.

The problem is let’s say you own a business. You are clueless which way D.C. is going economically, forget politically. So as a business, you tighten the reins. You don’t open a new facility or hire a few more workers. You retrench.

Consumers sense that uncertainty and pull back on their spending to increase savings. We’re already seeing that with retail sales slowing 3 months in a row. Cars sales, meanwhile, are slowing though still doing well overall. The only outlier is the housing recovery.

The problem with American politics

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Having a “D” or an “R” next to a politician’s name is now more important than being an American first — and that’s what is causing us harm. If you’re a Republican and don’t like what I’m saying, go look in a mirror. Ditto if you’re a Democrat. I love this great country of ours. And right now, unfortunately, there is so much anger and raw vicious hate blinded by rage, the whole country loses its sight.

It’s a shame that in a time that calls for statesman and political giants, what we get is a bunch of weasels. That absolutely incenses me.

It’s not just the fiscal cliff though that’s problematic. We’ve also got troubles in the Middle East, the European financial crisis, plus question marks about the Chinese economy.

We could have, as they say in tennis, an unforced error — a recession coming that never should have been.

Having said that, I still maintain as I said several weeks ago on air that a lot of what put us in such a tight spot structurally speaking 5 years ago — the housing bubble, reckless lending, excessive borrowing — is far along in the healing process. When we get our political act together in D.C., we will overcome this unforced error and be poised for meaningful economic growth.

I don’t say that just to say it. I believe it to be true and I believe the facts to show it to be true.



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