Of Exports, Gas Prices and the "Job Recession"

This morning off the top of The Call on CNBC I was chatting about jobs and the economy with Larry Kudlow and Robert Reich. It was, as you might expect, highly amusing, with noisy positions taken all around, and little time to expand on things.

So, three quick points:

1. First, Larry kept saying we may "technically" be in a "jobs recession". I tried to point out that I have no idea what that is, that it must be some sort of Larry-ism, but don't think it came through in the cross-talk. But here's the main takeaway: Whatever a jobs recession is (and I'll defer to Barry's Kudlow-to-English dictionary on that one), we have never had eight months of job losses without being in a recession, so splitting things this way is semantic at best.
2. Lower gas prices are good, as Larry said, but we are only back to prices that eight months ago people, ahem, were were calling outrageously high and economically damaging. So, while some of the pressure is off, let's be clear about relative versus absolute effects of lower gas prices. Transportation and manufacturing generally are still being pounded, and that isn't stopping.
3. Finally, with respect to exports, it is true that Europe and Japan haven't accounted for the bulk of the growth in U.S. overseas exports in recent years, so weakness in those markets is, while not a wash, less dire than weakness elsewhere. That said, the BRIC countries aren't currently headed into a recession, but they are all weakening materially, as I have been saying they would for some time.  So, from a U.S. export standpoint, a 300 basis-point across the board cut in GDP growth in BRICs, which is what we are currently looking at, is highly damaging, even if you stay well away from recession.

Comments

[dlaw:]

These are times of change that have people totally confused.

Where can we find your stuff consistently?

People are so lost, I've started by odd contribution here:

financialroadtosociali.../

I figure I'd start out slowly - just sort of announcing the impending new socialist Revolution.

2008 Sep 05 04:32 PM

[dlaw:]

Ah, there it is: paul.kedrosky.com/

Sorry, I'm just getting up to speed here.

2008 Sep 05 04:37 PM

[whidbey:]

The jobs thing is awkward for Larry, but he knows it is just BS. The real thing to focus on is the absolute lack of importance of gas prices, that is a tax, which if removed does nothing with the deflation from asset depreciation that is eating the economy alive. Same way with exports, they are less than 5% of the economy, and while nice, hardly count in a trillion dollar melt down. Face it, we are going into a deflation which will not let up until consumers are cleaned up via bankruptcy, and the housing stock is depreciated to levels where buyers come in the mean time those of us who never did anything but live here will find we are denuded and left wretched. Too late! the Dye is cast.

2008 Sep 05 07:03 PM

[inthemoney:]

Larry Kudlow is among the worst cheerleaders outthere. He is an emabarsement for a business network, he should be on Fox news instead.
Did he also have something to say about our 3.3% GDP "growth"?

2008 Sep 07 09:52 PM