Robert Reich – professor, book author and servant of three U.S. administrations, most recently as Secretary of Labor under President Clinton – is calling out Washington and Wall Street on the “truth”, as he puts it, that they will not admit: that the U.S. economy is heading back towards a double-dip:

Why aren’t Americans being told the truth about the economy? We’re heading in the direction of a double dip – but you’d never know it if you listened to the upbeat messages coming out of Wall Street and Washington.

Consumers are 70 percent of the American economy, and consumer confidence is plummeting. It’s weaker today on average than at the lowest point of the Great Recession.

The Reuters/University of Michigan survey shows a 10 point decline in March – the tenth largest drop on record. Part of that drop is attributable to rising fuel and food prices. A separate Conference Board’s index of consumer confidence, just released, shows consumer confidence at a five-month low — and a large part is due to expectations of fewer jobs and lower wages in the months ahead.

Pessimistic consumers buy less. And fewer sales spells economic trouble ahead.

According to Reich, the problem is not limited to sagging consumer confidence due to oil and food prices. There’s more bad news about growth, real wages and housing prices:

But isn’t the economy growing again – by an estimated 2.5 to 2.9 percent this year? Yes, but that’s even less than peanuts. The deeper the economic hole, the faster the growth needed to get back on track. By this point in the so-called recovery we’d expect growth of 4 to 6 percent.

Consider that back in 1934, when it was emerging from the deepest hole of the Great Depression, the economy grew 7.7 percent. The next year it grew over 8 percent. In 1936 it grew a whopping 14.1 percent.

Add two other ominous signs: Real hourly wages continue to fall, and housing prices continue to drop. Hourly wages are falling because with unemployment so high, most people have no bargaining power and will take whatever they can get. Housing is dropping because of the ever-larger number of homes people have walked away from because they can’t pay their mortgages. But because homes the biggest asset most Americans own, as home prices drop most Americans feel even poorer.

All together, this is not the picture of an economy in recovery that Washington and Wall Street are pushing. It is better described as the picture of an economy at a turning point where a nascent recovery is threatened.

Coincidentally, or on second thoughts not really a coincidence, noises about stalling growth are also starting to come out of China, and straight from the horse’s mouth – the PBoC, which is the Chinese Central Bank, as reported by Michael Pettis in his latest email review:

In their 2011 Q1 conference earlier this week the PBoC said that the fundamental basis of the global recovery is not very solid. The central bank still acknowledges that stabilizing price levels is an important task, but they only refer to “managing liquidity efficiently”.

What does this imply? I suspect it means that policymakers are becoming a little more concerned with slowing growth and a little less concerned about domestic overheating. As I argued in the past few newsletters, growth may be slowing more quickly than Beijing would like, and combined with the very volatile external environment, I suspect they are going to be cautious about too much more tightening.

China is increasingly trapped in a no-win situation where they will be forced to worry in equal measure about overheating AND growth at the same time. Their unique political system both demands and delivers “growth” which in this era is increasingly taking the form of misallocation of capital investments supported by unsustainable credit expansion. However, this same credit expansion and “growth strategy from hell” also fueled the mother of all property bubbles. The pictures of ghost cities with their 64 million empty and overpriced apartments are proof enough.

Occam’s razor says that what cannot last will not last, and woe betide the global economy if the number 1 and number 2 growth locomotives sputter for a second time since 2008.