Grim 2012 Economic Outlook – by Stephen Lendman
Yearend isn’t just about holiday season binge shopping, parties, and over-indulgence. It’s also when economic predictions surface.
The Wall Street Journal publishes consensus views. On December 23, it headlined, “Risks Cloud Outlook for Economy in 2012,” saying:
“The economy is poised for another year of muddling through. Most private economists forecast a modest 2% growth rate for the US….with a pace subdued by housing woes, a lackluster job market, and cuts by government.”
“They also warn of potential spillover from weakness abroad, including a mild recession apparently under way in Europe.”
Concerns and uncertainties highlighted included:
- global weakness, threatening US exports;
- weak housing demand with foreclosures affecting prices;
- protracted unemployment and weak job creation; and
- government belt tightening.
Overall, mainstream economists predict continued recovery from crisis conditions beginning in late 2007. In fact, heading into it, they forecast continued good times.
According former market analyst Bob Farrell:
“When all the experts and forecasts agree – something else is going to happen.”
In other words, when mainstream consensus forecasts one way, expect another.
On December 22, on the Finance News Network, investor/author/analyst Jim Rogers sees current problems worsening because of too much spending and debt.
Asked to elaborate on what matters most, he said “too much debt” is problem one because the Fed “keeps printing money.” It spells trouble because it won’t stop until “systemic collapse.”
“It’s going to be very, very serious pain. You’re going to see riots in the street. You’re going to see serious, serious problems, maybe perhaps (more) war….”
No matter who leads America, he added, he has “absolutely no confidence at all that anything’s going to be done….”
In 2012, Gerald Celente predicts:
Festering socio-economic/financial/geopolitical trends will climax next year. “Some will arrive with a big bang and others less dramatically….but no less consequentially.”
On December 28, Financial Times contributor Mark Mallock-Brown headlined, “The downward slide continues – the great revolt will come later,” saying:
“Next year is not going to be better….Whatever temporary economic fixes are applied to the eurozone, American deficits and unemployment, the overheated Chinese real estate market, petering Indian reforms or stalling Brazilian growth,” expect more slide.
Global economic dislocations are “increasingly disorderly.” Deceptive political rhetoric may prove the “calm before the storm.”
As Progressive Radio New Hour regular Jack Rasmus explains, they consistently miss major turning points, “including their failure to predict the epic recession of 2008, their erroneous prediction of a rapid ‘V’-shape recovery in 2009-10, and now their failure to foresee what’s coming in the Eurozone, China and Emerging markets.”
Rasmus called mainstream economists “bird(s) without wings.” Practically all of them missed the impending 2008 crisis. Moreover, they’re blind to the “coming deeper economic crisis that will almost certainly emerge no later than early 2013 and potentially” much earlier as Eurozone, China and other economies crater.
Obama’s economic programs failed badly. Instead of creating jobs, helping homeowners, resurrecting housing, and aiding troubled state and local governments, he focused on Wall Street bailouts, transferring wealth to America’s super-rich, and relying on business to hire when they’re hoarding cash and treading water, not expanding.
Mainstream economists missed the significance. They also ignored the importance of massive domestic spending cuts and reduced consumer income, undermining recovery and growth.
These birds can’t fly, says Rasmus. Liberal economists can’t explain how much deficit spending is needed to sustain recovery, and conservatives don’t understand that transferring wealth to corporations and super-rich elites won’t stimulate investment, job creation and growth.
As harder times in 2012 loom, these birds “can only run around in circles, flightless, squawking as (they) turn left, then right and back again” aimlessly.
On December 25, James Petras headlined his article “Unrelenting Global Economic Crisis: A Doomsday View of 2012.” He focused on what matters most – reality, not broken models or a follow the crowd mindset.
His view, like this writer and others not bylined where most people get news, information and opinion, is “profoundly negative.” He believes “we are heading toward a steeper decline than what was experienced during the Great Recession of 2008 – 2009.”
“With fewer resources, greater debt and increasing popular resistance to shouldering the burden of saving the capitalist system,” continuing to bail out banks and other corporate favorites won’t work.
Conditions are in disarray and worsening. Troubled Eurozone countries face collapse. So do major banks. Global crisis looms. Policy errors worsen conditions.
Growing protests across Europe, America, the Middle East and elsewhere threaten rebellions if corrective measures aren’t taken. Instead, populations are being force-fed austerity when stimulus is needed. When pain levels cross thresholds of no return, revolutions can erupt any time.
Money and Markets (MM) contributors also see a “millennial tipping point” in 2012. Martin Weiss believes Europe’s debt crisis will climax. America’s budget battle will affect financial markets. Troubled global banks “will face their Day of Reckoning,” and world populations will face harder than ever hard times.
Other MM contributors see unprecedented panic cycles, Eurozone dissolution, failure of the euro, gold correcting then soaring, major bank failures, a global crisis of confidence, and a protracted black hole of decline, punctuated by recoveries and steeper slumps.
Buckle up! Forewarned is forearmed.
Stephen Lendman lives in Chicago and can be reached at firstname.lastname@example.org.
Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.