There's a seemingly dry headline this week that is a lot scarier than it looks: Bank of America's profit declined 77% this quarter. They're a big bank. They're a consumer-oriented bank. And it turns out their losses are not just coming from the subprime mortage crisis. They're coming from small business loans, construction loans, and simple credit card debt. Bottom line--people can't pay their bills.
The time for arguing over whether or not we're in a recession is not only past, it seems almost quaint now--a little math game that we had the luxury of playing back when things seemed like they might improve at any moment. Whether or not the eventual numbers reveal that this is technically a recession, professional and amateur economists alike can now agree that the economy is technically "in the shitter."
I'm pretty sure that the Iraq war is significantly contributing to this recession. It's costing us hundreds of trillions of dollars, the costs to local governments and businesses to comply with various bizarre 'anti-terrorism' regulations is onerous, and the already-rising costs of health care are only going to be pumped up to incredible new heights by the demand from veterans—both military and civilian (in the form of contractors and volunteers)—who have been both physically and psychologically wounded by their experiences. It's a god-damned shame.
I'm pretty sure Frederique Bastiat is loling in his grave right now...