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Dow Drops 300 Points on Weak Economic News

June 1, 2011

Weak manufacturing and anemic job creation caused the Dow to take a 300 point dive today. As I have written many times here, until the major corporations invest the nearly $3 trillion they have in capital reserves and the banks cut loose on the more than $2 trillion they are sitting on, the U.S. economy will continue to slip and slide.

I heard a housing report this morning and it stated that housing will not return to “normal’ for 5 ~ 8 years.

Job creation is around 200,000 a month for the last three months. We need to be above 250,000 a month over the next 3 years ( easy math ) to get back to 2007 employment levels.

With the Republicans threatening to shut the government down (more blackmail tactics), unless Medicare is “reformed” and trillions cut from the deficit and debt ( two different things), job creation will take a back seat to nasty politics for the foreseeable future.

As I posted recently: There are answers to putting our nation back on the road to recovery. One glaring answer is to let the $2 trillion dollar Bush tax cuts for the wealthy expire next year. This is supported by a recent report from the Center on Budget and Public Policy. The CBPP reports: Simply letting the Bush tax cuts expire on schedule… would stabilize the debt-to-GDP ratio for the next decade.

Read related Atlantic Monthly article: Does Washington DC Care About the Economy Anymore?

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  1. DP
    June 1, 2011 at 9:44 pm

    It’s an interesting situation that we find ourselves in. The truth of the matter is that it will just take time to digest all the news and economic stuff. The sad part is that we will probably get another QE because there is no choice. I just posted about this on my blog, feel free to read and comment!

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