This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Avoiding a Double Dip Recession, or Worse

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- Jobs creation, industrial production and car sales are slipping. Consumer confidence and stock prices have turned south. The U.S. economy may be tumbling into a second recession or worse, hitting the mat for good. Solutions are at hand, but politicians--and voters--won't embrace what needs doing.

The U.S. economy lacks not ideas and enterprise, but is short on customers for what Americans make. The huge trade deficit sends dollars abroad that Americans earn to pay for imports but do not return to purchase exports and create jobs.

With a trade deficit exceeding 3 percent of gross domestic product, either Americans borrow and spend more than they earn to keep the economy going, or the demand for U.S. made goods and services is insufficient to accomplish full employment.

Too many Americans can't find decent paying jobs, houses don't sell and prices stay depressed, and consumers don't spend. In the funk, unemployment stays above 9 percent, and counting adults stuck in part-time jobs or too discouraged to look, and young college graduates flipping hamburgers, it is closer to 20 percent.

Oil and goods from China account for the entire U.S. trade deficit--on everything else, trade is balanced.

The United States produces only 5.6 million barrels a day of oil and imports 9.6 million barrels--gasoline accounts for 8.3 million barrels. The United States could easily increase domestic production by 3 or 4 million barrels a day over several years and slice 2 million barrels off fuel consumption by using readily available, more fuel efficient internal combustion engines and plug in hybrids, and further deploying domestic natural gas use.

Drilling in the United States is an anathema to Democrats, owing to environmental concerns, but not drilling and importing what oil is needed merely shifts environmental hazards abroad--mostly to developing countries--where those are handled less effectively. If American environmentalists really believe in thinking globally and acting locally, they should get behind domestic drilling if it is coupled with a program to substantially reduce domestic gasoline use.

Curtailing gasoline use will be a bitter pill for Republicans--more government intervention in the form of higher mileage standards and assistance to automakers to more rapidly transform their factories. Fanciful investments in electric cars are nice--but electric solutions put in place by the Obama Administration won't generate sufficient reductions in gasoline use for at least a decade.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,380.41 +263.17 1.63%
S&P 500 1,886.76 +24.00 1.29%
NASDAQ 4,258.4380 +41.0480 0.97%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs