Tuesday, April 08, 2008

Economic Cleansing


clipped from bp1.blogger.com
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The unemployment rate rose from 4.8 to 5.1 percent in March, and nonfarm payroll employment continued to trend down (-80,000)

An Economic Cleansing   [Larry Kudlow]

Recessions are part of capitalism. They happen every so often. We’ve had two in the last 25 years. And it looks like we are entering a third one after today’s jobs-loss report.
A lot of Keynesian economists expect the tax rebates will promote recovery
Recessions are therapeutic. They cleanse excess from the economy.
Recessions are curative: They restore balance and create the foundation for the next recovery
Despite the housing and credit problem and the sub-prime virus, banks are still lending to businesses. So we don’t have a genuine credit crunch across the board. That is very good.
domestic corporate profits are down 20 percent from their peaks of late 2006.
Since profits are the mother’s milk of stocks, businesses, and the economy, we will need to see profit improvement before the recovery-turn can be called.
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