When Mort Zuckerman of US News says things are bad... then we are beginning to see at least some of the legacy media wake up and shake off the mental stupor they have been in for the last three years.

For now, anyway, Mr. Obama is losing not just the center, but the center left. 

Let me rhetorically ask the reader a question that Zuckerman's piece seems to beg:  has anything done by the Obama administration worked as advertised or even worked at all?

Anything?

But why would we expect anything different when the administration has larded government with Marxists, Trotskyites, and a whole host of leftist academics and intellectuals who have never been responsible or capable of executing a workable business plan. 

Not only is unemployment continuing to stay too high, there are many indicators that the rate is significantly worse than 9%.  The U6 rate is close to 16%, but this still does not reflect the absolute numbers of people walking away from the work force entirely.  Citizens are just giving up.  Giving up finding a job, giving up on being a productive member of society, giving up on the American dream.  This is heart breaking.

Besides housing- which is a total and complete train wreck, commercial real estate is not faring much better.  Bloomberg:

The Moody's/REAL Commercial Property Price Index dropped 3.7 percent from March and 13 percent from a year earlier. It's now 49 percent below the peak of October 2007 and at its lowest point in data going back to December 2000, the company said in a report today.

A brief drive through any community and an observation of all the vacant shops and missing merchants confirms this data pretty easily.

Think of the box we are in.  Federal borrowing is now almost 10% of GDP.  Nearly 10% of our output is now borrowed money.  If that amount is removed from the mix, then what happens to GDP?  Yet, this will not continue, because not only are other nations becoming reluctant to purchase so much of our debt, but there are good indicators that we have reached a point of debt saturation.  Debt saturation -- that is where further deficit spending does not add to any sort of growth.  It is like a drug addict who needs constantly higher doses of heroin to get a high, eventually killing himself.  The stimulus, TARP, the corporate bailouts, QE 1, QE 2, the federal reserve buying up treasuries because no one else will take them. All of these are distorting normal market forces and are artificially propping up the economy.

Just a few hours ago, the Federal Open Market Committee released their statement:

Information received since the Federal Open Market Committee met in April indicates that the economic recovery is continuing at a moderate pace, though somewhat more slowly than the Committee had expected. Also, recent labor market indicators have been weaker than anticipated. The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Inflation has picked up in recent months, mainly reflecting higher prices for some commodities and imported goods, as well as the recent supply chain disruptions. However, longer-term inflation expectations have remained stable

Looking at the tables and numbers, as Calculated Risk Blog noted,

basically FOMC is saying:

Strike One:     GDP is being revised downwards

Strike Two:     Inflation is being revised upwards

Strike Three:   Unemployment is being revised upwards

Of course, all of this is just "temporary" as the "recovery" picks up steam. Meanwhile, as this is happening, we will have fewer tools at our disposal as most of our fiscal ammunition has already been shot out of the barrel.

So where are we?

Zuckerman hints that we may be in the throws of a depression, not a recession.  I think he is right.

None of this will end well.

 "Sometimes I wonder if the world is being run by smart people who are putting us on, or by imbeciles who really mean it."   Mark Twain