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A New Recession and a New World Devoid of Washington's Arrogance?

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Cross-posted from Paul Craig Roberts

From Economic Collapse
Economic Collapse
(image by YouTube)

June 25, 2014. A final number for real US GDP growth in the first quarter of 2014 was released today. The number is not the 2.6% growth rate predicted by the know-nothing economists in January of this year. The number is a decline in GDP of -2.9 percent.

The negative growth rate of -2.9 percent is itself an understatement. This number was achieved by deflating nominal GDP with an understated measure of inflation. During the Clinton regime, the Boskin Commission rigged the inflation measure in order to cheat Social Security recipients out of their cost-of-living adjustments. Anyone who purchases food, fuel, or anything knows that inflation is much higher than the officially reported number.

It is possible that the drop in first quarter real GDP is three times the official number.

Regardless, the difference is large between the January forecast of +2.6 percent growth and the decline as of the end of March of -2.9 percent.

Any economist who is real and unpaid by Wall Street, the government, or the Establishment knew that the +2.6 percent forecast was a crock. Americans' incomes have not grown except for the one percent, and the only credit growth is in student loans, as those many who cannot find jobs mistakenly turn to "education is the answer." In an economy based on consumer demand, the absence of income and credit growth means no economic growth.

The US economy cannot grow because corporations pushed by Wall Street have moved the US economy offshore. US manufactured products are made offshore. Look at the labels on your clothes, your shoes, your eating and cooking utensils, your computers, whatever. US professional jobs such as software engineering have been moved offshore. An economy with an offshored economy is not an economy. All of this happened in full view, while well-paid free market shills declared that Americans were benefiting from giving America's middle class jobs to China and India.

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I have been exposing these lies for a decade or two, which is why I am no longer invited to speak at American universities or to American economic associations. Economists love the money that they receive for lying. A truth-teller is the last thing that they want in their midst.

An official decline of -2.9 percent in the first quarter implies a second quarter GDP decline. Two declines in a row is the definition of recession.

Imagine the consequences of a recession. It means that years of unprecedented Quantitative Easing failed to revive the economy. It means that years of Keynesian fiscal deficits failed to revive the economy. Neither fiscal nor monetary policy worked. What then can revive the economy?

Nothing except to force the return of the economy that the anti-American corporations moved offshore.

This would require credible government. Unfortunately, the US government has been losing credibility since the second term of the Clinton regime. It has none left.

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Today no one anywhere in the world believes the US government except the brain dead Americans who read and listen to the "mainstream media." Washington's propaganda dominates the minds of Americans, but produces laughter and scorn everywhere else.

The poor US economic outlook has brought America's two largest business lobbies -- the US Chamber of Commerce and the National Association of Manufacturers (or what is left of them) into conflict with the Obama regime's threat of further sanctions against Russia.

According to Bloomberg News, beginning tomorrow (June 26), the business groups will run advertisements in the New York Times, Wall Street Journal, and Washington Post opposing any further sanctions on Russia. The US business organizations say that the sanctions will harm their profits and result in layoffs of American workers.

Thus, America's two largest business organizations, important sources of political campaign contributions, have finally added their voice to the voices of German, French, and Italian business.

Everyone, except the brainwashed American public, knows that the "crisis in Ukraine" is entirely the work of Washington. European and American businesses are asking: "why should our profits and our workers take hits in behalf of Washington's propaganda against Russia?"

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Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available here. His latest book,  How America Was Lost, has just been released and can be ordered here.

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Thank you for connecting the dots for us. If you ... by lila york on Wednesday, Jun 25, 2014 at 11:11:02 PM
Wolf PAC From bit.l... by Pal Palsimon on Thursday, Jun 26, 2014 at 3:28:08 AM
Propagate, propagate, propagate your own belie... by Pal Palsimon on Thursday, Jun 26, 2014 at 3:29:07 AM
Some things we need to be doing to get the mone... by Pal Palsimon on Thursday, Jun 26, 2014 at 3:33:10 AM
Reduce your use of google for all purposes, and ma... by Peter Duveen on Thursday, Jun 26, 2014 at 9:00:28 PM
"Only a government drowning in arrogance and hubri... by Paul Easton on Thursday, Jun 26, 2014 at 2:19:47 AM
11 Now what I am commanding you today is not too d... by Paul Easton on Thursday, Jun 26, 2014 at 2:37:11 AM
I think you may be on to something. Did you ever s... by Fernando Macias on Thursday, Jun 26, 2014 at 2:38:53 AM
Ive asked myself where the NWO is planning to live... by Catherine McCoy on Thursday, Jun 26, 2014 at 2:23:52 PM
Think subterranean. You might want to Google that ... by Fernando Macias on Thursday, Jun 26, 2014 at 6:57:06 PM
"Psychopaths are not especially delusional, and t... by Derryl Hermanutz on Thursday, Jun 26, 2014 at 2:57:58 PM
Thank you Dr. Roberts for another truthful account... by Fernando Macias on Thursday, Jun 26, 2014 at 2:57:59 AM
Welcome to this blog Fernando. I note you only rec... by Pal Palsimon on Thursday, Jun 26, 2014 at 3:36:34 AM
Well I thank you for the welcome Pal. I just want ... by Fernando Macias on Thursday, Jun 26, 2014 at 7:17:51 AM
I am acutely aware of the banking problem and have... by Pal Palsimon on Thursday, Jun 26, 2014 at 8:17:44 AM
P.S. I work hard advocating, but I am not optimist... by Pal Palsimon on Thursday, Jun 26, 2014 at 8:21:57 AM
Pal, The original problem is not money in election... by Derryl Hermanutz on Thursday, Jun 26, 2014 at 3:05:36 PM
There are thousands of issues, most importantly th... by Pal Palsimon on Thursday, Jun 26, 2014 at 4:14:33 PM
Under what Ralph Nader calls "The Duopoly," an ele... by Ron Brassfield on Thursday, Jun 26, 2014 at 10:09:44 AM
I agree with your assessment Ron. ... by Fernando Macias on Thursday, Jun 26, 2014 at 1:52:24 PM
Thank Paul for the article. Your insights are spo... by Linda Laurin on Thursday, Jun 26, 2014 at 8:54:31 AM
This is the type of strategy where I, too, see the... by Ron Brassfield on Thursday, Jun 26, 2014 at 10:22:41 AM
PCR is once again mixing data points to mislead an... by Norm Conrad on Thursday, Jun 26, 2014 at 1:36:59 PM
If the economy was suffering from accumulated chr... by Lance Brofman on Sunday, Jun 29, 2014 at 11:08:26 AM
I wish our legislatures would take economic tutori... by Pal Palsimon on Sunday, Jun 29, 2014 at 6:37:24 PM
Dr. Roberts, once again thank you for a very impor... by Hosea McAdoo on Wednesday, Jul 2, 2014 at 10:01:19 PM