President Obama and his policies, and of course the work of the Democratically-led Congress, continue to resurrect the economy from the depths of a near catastrophic recession that started in 2007 after the disastrous mismanagement of the previous administration. All despite absolute obstructionism and political gamesmanship by the Republicans.
I've shown this chart before, but now there have been a few additional months added. We're not out of the woods yet, for sure, but the direction is promising. Not only is the stock market at it's highest point in years, but jobs are starting to come back. See especially the last few months where 3 out of the 5 months showed actual job growth (not just reduced job losses).
As I'm sure we all remember, jobs is a lagging indicator. Which means the economy turns south long before the floodgates of job losses kick in because companies hold onto trained employees as long as they can. And these same companies are slow to hire employees back once cut because they want to build up their reserves again.
So where do we go from here? Well, continue working hard to improve conditions so the private sector can hire more workers. Not protect the big insurance companies, the big banks, and the big oil companies like the minority party.
Oh, by the way, ExxonMobil made $45 Billion (with a "B") in profit last year and yet paid ZERO federal taxes. So how's that "protecting big corporations" thingee working out for you Republicans?
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Comments: 115
The Toy Box
she calls it the BIKINI Chart and for GOOD reason! I love it..thanks for posting this!
The private money at the top is not investing in the U.S.A.
And, once again it is going to take federal gov. money to get things moving.
thats my guess
http://www.pbs.org/wgbh/amex/reagan/peopleevents/pande06.html
Seems to me that we've managed to surpass unemployment levels of the early 80s recession.
that's the link for the department of labor's numbers for Georgia's unemployment rate. As you can see, it only goes back to 2000. Georgia's state department of labor data only goes back 13 months. So "highest in history" is not very applicable.
I think I'll tell the IRS that I will deposit all my money in a sand dune in Guadalupe and won't be sending any to them. After all, if corporations are now people according to the Supreme Court, should not people also be corporations?
I noticed that too.
How would that happen?
Wouldn't that be past tense?
The diction is a bit constrained, but I obviously don't mean that the record debt drove us into the recession. But clearly we got into a recession while we were recording record debts due to the whole "mortgaging our future" thing.
I think the big difference between the Republicans and Democrats is that the former likes to do nothing while borrowing while the latter likes to do something while spending.
Republicans did stuff too- like Medicare Part D, for instance.
As I'm sure you know, there is no answer to that question. Different people will have different viewpoints on which programs carry value added and which don't. And obviously we would prefer to have a surplus each year that can be used to help trim the debt and thus reduce interest payments, which add no value.
Republicans did stuff too- like Medicare Part D, for instance.
Exactly, and Part D is a good example of borrowing money to provide a large unfunded social program. Which included things such as donut holes and other lobbyist gems that provided protection for the insurance companies.
But mostly the Republican party believes in doing nothing, or at least as little as possible. The overriding belief is that the "free market" will sort things out. The problem with such a belief is that it overemphasizes the market and ignores the socialist subsidies that are necessary for the market to work. It also ignores the boom and bust nature of the market, where companies overextend and everyone runs with the herd...right over the cliff. When you have millions of dollars stashed offshore paying no taxes (see note about ExxonMobil), and you guarantee yourself the upside while leaving the downside for normal investors (see ING bailout/bonuses), those "haves" max out the booms and can easily withstand the busts. Those who have more terrestrial incomes and who do not have access to various vehicles used as tax havens are very susceptible to those busts.
I'm sure you'll agree that the system is gamed by those with the assets to game it. It isn't a "free market," it is a manipulated market. And the vast majority of Americans don't have the opportunity to get in on the inside track.
Interest rates obviously cannot remain at zero for much longer. What happens when rates start climbing closer to reality? The interest payments of the federal government balloon. This creates a huge problem that is not being addressed.
Do you know what causes the boom and bust cycle?
I agree it's a manipulated market, and obviously it's not working very well. The only thing Washington has in mind is more manipulation- that's no solution.
No, there is no answer. There is a point where everything falls apart and the country defaults, but we all know that isn't going to happen because the rest of the world would have fallen to our knees long before then (or perhaps, to China's knees). It's something that isn't answerable. Someone once said we can always print more money.
That said, most of us have to spend less than we take in. So the challenge for the US is to decide what is worth spending for and what isn't. And that is where different people have different opinions. There is no way we will agree, especially when one side lies about what the other side is doing.
Interest rates obviously cannot remain at zero for much longer.
Economics speaking, I'm not sure that is true. It's just arbitrary. But I agree that they won't remain at zero for much longer, though what "much longer" means would be speculative. I doubt we'll see any substantive movement until everyone feels the recession is far enough in the rear view mirror to have been lost from the minds of the IM generation.
What happens when rates start climbing closer to reality? The interest payments of the federal government balloon. This creates a huge problem that is not being addressed.
It's being addressed. Not enough for some, too much for others, and as much as is economically, logistically and politically possible for the times. We're going to have to be more fiscally responsible. But that doesn't just mean pulling out the old saws to shut down, it means being smart. Both in what we cut and in what we invest. Growth takes investment. Sustainability is the future. The big money is currently invested in the past. We need to change that.
Do you know what causes the boom and bust cycle?
Not definitively. Do you?
Let's be honest. We have a "get rich quick" mentality in this country. We got the dot.com boom and bust because we all thought we could make billions investing in some start-up that would become the next Microsoft, eBay or Google. So we put in tons of money who didn't actually make anything, didn't have capable managers, and didn't even have a business plan. We rolled the dice and like the craps table, the house wins and we lose most of the time. Ditto the housing boom and crash. Speculators created a boom market by buying up and turning over houses like cards, and the banks facilitated the process by making it too easy to borrow and by playing derivative games with mortgages like they were playing blackjack in Monte Carlo. Etc, etc, etc.
In short, we tend to be like lemmings following the hot stock over the cliff. We are greedy, and we don't learn very well.
Oh, and I'm talking about corporations as well as individuals. When you have to show big enough gains every quarter, you think short term only. And you make sure your contract gives you a huge payout when you get fired or retire. Unlike most Americans who get nothing (or next to nothing) when they are involuntarily retired by these same corporations who rolled the dice after gaming the system.
Don't get me wrong. I'm not anti-corporation or anti-wealth. In fact, I'm all for wealth. But I'm also not strategically blind to reality either. No one is altruistic in the economic world.
I agree it's a manipulated market, and obviously it's not working very well. The only thing Washington has in mind is more manipulation- that's no solution.
Here's the thing. Both Democrats and Republicans are too busy painting the other side as evil and not being honest with the populace. Why? Because they want to be reelected. That is the only thing that matters. So why do they get away with it? Because the populace forces them to lie to us. We "can't handle the truth" (sorry Jack), so we believe what we believe even when it is nonsense. Someone yells "death panel" and a large part of the country bows at their feet even though there is no death panel, and in fact, the closest thing to it is the same sort of system pushed through the last big social legislation by the very people who are now calling it death panels.
And the public laps it up.
This is on us. We, the people, created our elected representatives. And when we smarten up, they will smarten up. When we are honest with ourselves, they will be honest with us. And when we base decisions on real information and facts and don't cater to platitudes and lies, then we'll start getting real information and facts and stop getting platitudes and lies.
It starts with us.
BTW, anyone in the tea party who wants to go the honest route isn't going to find it there. Try the coffee party instead. Honest discourse starts with honesty and ends with discourse.
So the rest of the world will keep giving us their goods for our paper? We can always print more money until foreigners decide to reject the weakening dollar and keep and consume their own goods. We have the world reserve currency which puts us in a unique position to tax the world but that will not last much longer.
We're going to have to be more fiscally responsible.
That’s right and there is no indication of that happening- according to projected deficits.
The current boom and bust cycles have been cause by the Federal Reserve. They set interest rates too low, sending a false signal to investors and consumers, resulting in massive malinvestment and excessive consumption. Everyone made the same mistakes at the same time not because they were stupid but because the market was distorted.
Good points about democracy- reminds me of a few quotes:
The American Republic will endure until the day Congress discovers that it can bribe the public with the publics money.
- Alexis de Tocqueville
A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.
- Thomas Jefferson
“A Republic, if you can keep it.”
-Ben Franklin
To me a Constitutional Republic is the best form of government. Going back (actually forward) to that would be quite a transition, but it’s necessary.
I don’t really have an opinion on the coffee party yet but if it’s a open place to discuss ideas then it should be interesting.
I wouldn't say tax, but we are in a unique position. One we seem intent to give up. Euros and Ren min bi (RMB) could be the future.
Obviously we need to get our act together. Any ideas on how to do that intelligently?
The current boom and bust cycles have been cause by the Federal Reserve. They set interest rates too low, sending a false signal to investors and consumers, resulting in massive malinvestment and excessive consumption. Everyone made the same mistakes at the same time not because they were stupid but because the market was distorted.
I see. It's all the Fed's fault. Got it.
Good points about democracy- reminds me of a few quotes:
Good quotes. Not particularly useful for anything other than quoting, but good ones.
To me a Constitutional Republic is the best form of government. Going back (actually forward) to that would be quite a transition, but it’s necessary.
Explain what that means to you.
I don’t really have an opinion on the coffee party yet but if it’s a open place to discuss ideas then it should be interesting.
It's less about ranting irrationally about things that don't exist and more about discussing civilly and honestly actual issues and actual potential solutions.
The only way out is to stop borrowing and start living within our means. If we can’t pay for our government then it is too big, or taxes are too low. Significant spending cuts are necessary, across the board. End the Iraq and Afghanistan wars, close some of our bases, and focus on defending this country. Federal welfare programs need to be phased out somehow, without putting the needy on the streets. If we don’t the welfare recipients will end up receiving worthless checks.
I see. It's all the Fed's fault. Got it.
There are certainly a lot of other culprits involved, but the root problem is a central bank that artificially sets interest rates and creates money out of thin air.
Explain what that means to you.
That means the federal government must govern according to existing constitutional law that limits the government's power over citizens. Unless there is an expressly given power, the federal government has no authority to act on a particular issue. It is left to the people and the states.
That's the coward's way out, really (not you personally, but in general). Some programs are underfunded, or not funded at all. Others should be cut completely. Only if we are honest and thoughtful can we cut spending intelligently.
End the Iraq and Afghanistan wars, close some of our bases, and focus on defending this country.
Okay, but how? Both wars are being phased out, but to do so without creating the same power vacuum that led to Saddam Hussein, the Taliban, and a host of other dictator types around the world takes intelligence and responsibility, and probably more time than we would like. And "defending our country" is a pretty vague term. Everyone sees everything as "defending our country." We need thoughtful and honest debate, not platitudes, which is mostly what our elected officials give us because that is what we respond to.
Federal welfare programs need to be phased out somehow, without putting the needy on the streets.
It is not possible, nor preferable to completely eliminate "welfare" programs, whether they support people left unemployed because some company decided Malaysians work cheaper or support the biggest corporations on the planet. Some directed incentives are how we deal with state-supported companies from abroad, steer ourselves into new technologies, and keep people from becoming street rats. The trick is to have the programs be life-nets, not life-styles. Again, that takes honesty and intelligence.
There are certainly a lot of other culprits involved, but the root problem is a central bank that artificially sets interest rates and creates money out of thin air.
I'm not about to defend the Fed, but focusing on that as the primary cause is severely simplistic and unhelpful.
That means the federal government must govern according to existing constitutional law that limits the government's power over citizens.
According to the Supreme Court, that is exactly what the federal government is doing. No violations of the constitution are ongoing. So you'll have to start focusing on realities of governing and not some theoretical whipping post that doesn't accomplish anything.
How else do you reduce borrowing? We are slowly losing our world reserve currency status because we have been irresponsible with it. It’s a serious situation.
Okay, but how? Both wars are being phased out, but to do so without creating the same power vacuum
We need to declare victory and leave. It’s not our responsibility or right to tell the people of Afghanistan and Iraq what type of government they may have. As long as those countries do not attack us we have no just reason to invade and occupy them. Terrorists should be treated as criminals as you cannot have a war on a person or a tactic.
And "defending our country" is a pretty vague term.
True, especially considering how politicians use such phrases today. We need to defend this country against attacks on our soil. We should not go on offensive ‘preventive’ wars. Our intervention causes more harm than good- a.k.a. blowback.
It is not possible, nor preferable to completely eliminate "welfare" programs
I was just talking about federal welfare programs, which are in serious trouble. Politicians have made promises they cannot keep- current unfunded liabilities are near $108 Trillion. If we do nothing our financial collapse will eliminate all welfare programs.
I'm not about to defend the Fed, but focusing on that as the primary cause is severely simplistic and unhelpful.
F.A. Hayek won the Nobel prize in economics in 1974 for explaining a central bank’s role in creating the business cycle. Artificially low interest create the illusion that there are more savings than there really is.
We saw this happen in the housing crash. It can ultimately be traced to the Fed proving cheap credit that resulted in an unsustainable bubble.
What would you focus on if not the central bank’s role?
According to the Supreme Court, that is exactly what the federal government is doing.
But the SCOTUS is a branch of the federal government, the justices are appointed by the executive branch and confirmed by the legislative branch. Not exactly an unbiased place to get your answer on Constitutionality. They have chosen to ignore history and permit the federal government to step far beyond the borders the Constitution set up.
The question was whether we need to reduce borrowing or not, the question was how to go about doing it. There is money well spent (i.e., invested) and money not well spent (i.e., wasted). We need smart decisions to decide which is which, not some mindless across the board sweep of 10 or 50% cuts that absolve us of any responsibility.
As for loss of being reserve currency, that is more due to the growth of China and the EU than it is our fiscal mismanagement (though that certainly doesn't help). Remember, the economies of nearly every country in the world followed us into the tank, and virtually all of them also spend more than they take in.
I believe we have already declared victory and left. It takes more than a bit of time to move 170,000 people out of a country (not to mention Af-Pak).
It’s not our responsibility or right to tell the people of Afghanistan and Iraq what type of government they may have.
But more importantly, while I agree that it isn't our responsibility to tell Iraq and Afghanistan what kind of government they should have (and for the most part we aren't, which is why they are such a mess), we do have a responsibility not to leave them with the nightmare that would happen if we left overnight. After all, we invaded their countries. In a sense, we broke it, we pay for it. Getting out as quickly as we responsibly can is critical, but remember there were no al Qaeda in Iraq before we took out Saddam Hussein and (effectively) invited them in.
As long as those countries do not attack us we have no just reason to invade and occupy them.
Unfortunately, one did attack us and while the other didn't, we already screwed that pony by invading anyway. It's a little late to make believe we aren't there or can just walk out the door without anyone noticing. And most assuredly if certain factions are allowed to just plop themselves back into the vacuum, they will be attacking us all over again.
Terrorists should be treated as criminals as you cannot have a war on a person or a tactic.
Agreed. Which is why Obama dropped the bumper sticker line "war on terror" and started doing the full court press using all the tools in the shed, not just the hammer.
Well, it was Bush (or more accurately, Cheney) who came up with the "1% doctrine" as a rationale for preemptive war. But "on our soil" is a bit dicey. 9/11 was clearly "on our soil." But what about the Cole? The African embassies? The ability to plan long-term operations from Afghanistan? "Our soil" can't wait until they step over the line, especially when they can fire nukes from half a world away. It's a difficult line to draw, but it needs to be done honestly and again, using all our tools including diplomacy, financial constraints, and military, each as appropriate. Now the big problem is deciding what "as appropriate" means.
I assumed you were, which is why I included all the other forms of welfare. You can't just single out one. I'm not where your $108 trillion number comes from given that our entire GDP in 2009 was only about $14 trillion.
I think you're missing the cause and effect here. The Fed didn't just wake up one morning and decide to drop the interest rate to 0, they reacted over time to signals in the market. You can't ignore why we all rushed out to buy and flip houses - we all wanted the quick cash. Ditto with the dot.com boom and bust. Ditto with the derivatives markets. Ditto ditto ditto. We act irrationally and roll the dice. It's just some people are at the craps table and others are "the House."
What would you focus on if not the central bank’s role?
I never said I wouldn't include the Fed's role, just not it as the primary driver. It is a reacting mechanism even though it tries to "pre-react" to stave off what it anticipates happening. But it reacts to the market conditions. In addition, we need to take a serious look at educating consumers. And while you may not like it, we have to have regulation because 1) the market will always tend to push the limits, and 2) consumers are not rational.
Finding the right combination takes intelligence, tact, guile, and cojones. A hard combination to put find.
And yet that is there job. And they have done so through many changes in personnel, partisan leanings, and more than 200 years of legal precedent. Versus a handful of self-appointed, untrained (in the legal sense), ideologues who mistake their beliefs for law.
Congress is tasked with passing laws. They have done so. Just as the Constitution specifies.
We did? Obama decided to send an additional 30,000 troops. Also there’s the question, how many troops are being replaced by private contractors?
"Our soil" can't wait until they step over the line, especially when they can fire nukes from half a world away.
Any nation that wants to survive will not be nuking us, we could crush them. They would have little incentive to do so if we didn’t meddle in other nation’s affairs. Either way that is a good reason to have a well equipped military, ready to defend the nation from such attacks.
I'm not where your $108 trillion number comes from given that our entire GDP in 2009 was only about $14 trillion.
Here’s the source. It includes the unfunded liabilities of SS, Medicare, and Prescription Drug.
The Fed didn't just wake up one morning and decide to drop the interest rate to 0
Certainly. They lower interest rates (gradually) to avoid the economic pain, but this comes at the cost of a weaker dollar and economy in the long run.
You can't ignore why we all rushed out to buy and flip houses - we all wanted the quick cash.
But that came after the fact- what caused housing prices to rise in the first place? It would have been impossible without an excessive supply of cheap credit from our central bank.
And while you may not like it, we have to have regulation because 1) the market will always tend to push the limits, and 2) consumers are not rational.
How much regulation? Where do you draw the line?
My approach is that if you have the government backstopping corporate losses, which creates huge moral hazard, then there certainly needs to be regulation. But when you’re using your own money, you have the incentive to restrain yourself and from irrational or overly risky moves, (i.e. self regulation). The solution isn’t government regulation, it’s ending all forms government guarantees and bailouts- and letting the market work.
Another problem: government regulation always favors the larger incumbent businesses, since the largest firms have economies of scale, and entry into the market more difficult for new competitors.
Definitions of victory are malleable (remember "Mission Accomplished"). In Iraq the decision was made to leave them to their own devices, while trying to unplug as many as possible before we left. We are hardly even showing our faces in public anymore. In Af-Pak, we had to do what we should have been doing from the beginning. But even here we have decided we won, just that we're doing some major cleaning up before leaving.
I have no idea how many troops are being replaced by contractors. Are you implying that we are simply hiring mercenaries to stay on? There is no question that we hope to leave behind lots of people who can help rebuild. It's called business, and business is clamoring to get Iraqi (and I suppose Afghani) contracts to build roads, bridges, dams, shopping centers, golf courses, etc. I think they call that free enterprise or something like that.
Any nation that wants to survive will not be nuking us, we could crush them.
Who said anything about anyone nuking us? (BTW, I hope you're not saying there is such a thing as a winnable nuke war) They would just fly planes into buildings, poison water supplies, detonate an explosive bow tie in the middle of K-Mart during a blue-light special rush, fill a 4th of July parade float with C-4. You get the idea.
Either way that is a good reason to have a well equipped military, ready to defend the nation from such attacks.
And we do, and we always will. But hopefully we won't throw away so many billions on fraudulent contractors like we've been doing for decades.
Here’s the source. It includes the unfunded liabilities of SS, Medicare, and Prescription Drug.
Cool clock! It doesn't say who does it, though they do claim what seem to be legitimate sources. With respect to the point you were making, how do they determine what "unfunded" means and over what time period?
Certainly. They lower interest rates (gradually) to avoid the economic pain, but this comes at the cost of a weaker dollar and economy in the long run.
How so? Wouldn't they just be trying to keep companies from defaulting, banks lending, and people solvent? And isn't it our own responsibility not to overextend ourselves?
But that came after the fact- what caused housing prices to rise in the first place? It would have been impossible without an excessive supply of cheap credit from our central bank.
I'll have to look back at the timing, but can concede that in general the lower cost of money will stimulate borrowing. But if I recall correctly, that is exactly what the Bush administration was shooting for as a way to stimulate the economy. Either way, the Fed was reacting to the depressed economy. I would also argue that the low cost of credit didn't "cause" the speculation in the housing market, merely facilitated it. House prices climbed because people were speculating and the very act of speculation creates the market dynamics that push prices up. Happens with houses, orange juice, pork bellies, oil, and any other fungible commodity. That's what speculators count on - artificially push the market up and sell when they think it tops off (and the selling creates an artificial drop, which is exactly what we saw with housing).
How much regulation? Where do you draw the line?
Aye, there's the rub. Who knows. It's a moving target because the ones with all the money will always find ways around regulation. Unfortunately, that leaves normal folk as pawns, which makes them all want to get rich quick, thus taking more chances, thus giving the ones that already have the money the chessboard to play.
The solution isn’t government regulation, it’s ending all forms government guarantees and bailouts- and letting the market work.
But the market doesn't work. That's why all those companies lobby for tariffs, loopholes, and offshore tax havens. With or without bailouts the economy would have crashed, and economists pretty much agree the crash would have been much worse. Meanwhile, the unemployment rate was kept to "only" 10.3 and now less.
Another problem: government regulation always favors the larger incumbent businesses, since the largest firms have economies of scale, and entry into the market more difficult for new competitors.
Hmmm. Well, there isn't any question that larger businesses have the advantage, both in resources and market share, and that they lobby for such additional advantages as I already mentioned. But all regulations that I'm aware of have provisions to protect SMEs who just don't have the resources and thus are disproportionately impacted. There are always reduced fees, threshold tonnage or revenue limits, and other financial and management assistance to help SMEs meet obligations.
That is also why the incentives that now still go to, for example, ExxonMobil, for producing oil or Massey Energy for producing coal should be shifted to renewable and sustainable energy development. Because if left to purely market forces, renewables wouldn't have a chance until the cost of oil and coal gets so high we would all be learning Chinese.
I don’t either, I can’t comment to much on this without speculating; perhaps I’ll get time to do more research on it at some point.
We still have over 20,000 troops in S. Korea after 50 + years. At what point do we give full responsibility back to a country? I recall John McCain saying troops could be in Iraq for 100 years. This mentality that we can intervene and ‘occupy’ other countries is a expensive and arrogant. Our empire is going to come down (for financial reasons) like every other one in history because we couldn’t exercise the necessary discipline to restrain ourselves.
There is no question that we hope to leave behind lots of people who can help rebuild.
How much might this rebuilding cost us? I’m quite sure we can’t afford it.
Who said anything about anyone nuking us? (BTW, I hope you're not saying there is such a thing as a winnable nuke war) They would just fly planes into buildings, poison water supplies, detonate an explosive bow tie in the middle of K-Mart during a blue-light special rush, fill a 4th of July parade float with C-4. You get the idea.
I was responding what you said in a previous comment especially when they can fire nukes from half a world away.
I agree a nuclear war would be a loose-loose situation.
The best way to minimize the amount of terrorism is to pursue a non-interventionist foreign policy, have a well equipped military, and allow citizens to bear arms. And of course swift prosecution and justice for any terrorists that may still emerge.
But hopefully we won't throw away so many billions on fraudulent contractors like we've been doing for decades.
Agreed. I think there’s a simple solution for that problem. (See the second paragraph of this post)
With respect to the point you were making, how do they determine what "unfunded" means and over what time period?
These numbers are from the Federal Reserve itself. Unfunded liabilities are defined by once source as “The actuarial calculation of the value of future benefits payable (eg. to members of a defined benefit superannuation fund) less the net assets of ...”
But if I recall correctly, that is exactly what the Bush administration was shooting for as a way to stimulate the economy.
Exactly. He wanted re-election, and the Congress wanted re-election in 2002. They took a shortcut to prosperity, unfortunately shortcuts often have unintended consequences.
I would also argue that the low cost of credit didn't "cause" the speculation in the housing market, merely facilitated it.
I agree with that too. There were some smaller things that preceded the low interest rates which helped direct the cheap credit into housing. Among those culprits was the political goal of increasing home ownership- by making lenders lower their standards (ironic- the government trying to deregulate natural market regulation). This was accomplished through the Community Re-investment Act, and a tax code that encouraged home ownership.
But the market doesn't work.
How do we know that if there’s never been a free market? (As Nippy said below). The effects of a government intervention are always blamed on the market.
Because if left to purely market forces, renewables wouldn't have a chance until the cost of oil and coal gets so high we would all be learning Chinese.
In a free market all the externalized costs would be factored in, possibly doubling or tripling the current price of oil, while the price of renewable would probably be the same. Seems like that would help renewables a whole lot. Consumers won’t demand clean energy when dirty energy is so cheap.
It sure speaks volumes to me.
Clearly the economy is recovering. The question is how much and how sustainable. If we just do the same old same old then we will get bubble/burst/bubble/burst/bubble/burst as we have in the past. That may be okay for those with tons of cash stashed away (especially if it is stashed away in offshore holdings that let them pay no taxes), but for the rest of us 99% of the population, the boom and bust cycles are like riding a roller coaster without any brakes and without anything holding the cars onto the tracks. And to make it worse, we're not even the ones driving.
J. Reid Apr 6, 2010, 3:43pm EDT
I saw it on Rachel Maddow a few nights ago, some people need to see things up close and personal and yet, those who scream the most will not see it at all!
Cue the Outer Limits music.
There is still a lot of work to do. The government did its part. Now it is time for the private sector to step up to the plate. After all, that's what the free market is all about - private industry putting people to work. Its time they started doing so.
Why aren't they here for a rebuttal?
Unlike those TOO SCARED of opposing views, I see an open forum for EVERYBODY!
Too busy making up songs and doctoring photos and videos to meet the truth.
They are so frightened of the truth, they block voices that interfere with the voices in their head.
Are we up to the challenge?
Let's add jobs coming: Phase II of the Stimulus Bill starts soon with the infrastructure work; 30 million new customers coming soon and adding jobs for the health care field, the insurance companies and the IRS and;
More green jobs coming soon.
Also, new financial reform says companies too big to fail have to put aside their own money to bail themselves out next time around;
and MA is asking non-profits to contribute 25% to the tax base instead of getting the tax break and all of the city/town benefits for free.
What was it some didn't like about the President's agenda?
Why do the Right want America to fail?
I've been a lifelong Independent, and have had some major disagreements with some Democrats. But the Republicans have developed a systemic disdain for the truth, and don't seem to care who gets hurt while they focus on protecting the top echelon on the theory that wealth "trickles down." All one has to do is see how the CEO to worker income ratio has gone from about 17 to 1 up to about 300 to 1 to see how that theory is working. Those with money seek to protect and enhance their profits, not fritter it away with pay increases to their employees. The real wealth is in the opportunity this country gives to all Americans to succeed. Unfortunately, those who have the wealth now lobby to restrict competition as much as they can. It's just good business.
Which is why we have anti-trust laws.
They want obama to fail but they dont have the foresight to realize what that would do to America.
Big question is, does the graph continue heading UP, with result that we replace a million of the lost jobs in time for 2010 election? In that case, not so bad for Dems. If on the other hand, things just sort of stall out, that is (perversely) exactly what the Republicans are praying for.
Well, jobs don't come back as fast as they go, and they are a lagging indicator anyway, so the short answer is that the unemployment rate will likely not drop substantially enough to save a lot of Democratic seats. Ironic that the Democrats will suffer the consequences of the public's unhappiness about a recession the previous adminstration put us into and the current administration is extracting us out of.
I suspect we'll see some bumps in the road forward, but the road will continue to move forward. The challenge for the Democrats will be to convince the public that the steps taken by them have put us on the right road and progress is being made, all while the Republicans will work their hardest to convince people that not only is progress not being made but that the road we're on is the wrong one.
Should be an interesting campaign. Democrats will lose a ton of seats. The question is whether the ton is a long ton or a short ton.
We could point to low unemployment numbers under Bush:
But now’s it’s easy to see this was the result of a bubble economy and not genuine, sustainable economic growth.
Well, it's certainly true that such huge job losses wouldn't be sustainable. But you assume that things just got better on their own. To some extent that may also be true, but only to some extent. But just today Ben Bernanke noted that the actions taken (as headlined by the Washington Post) "prevented cataclysm worse than the great depression."
We could point to low unemployment numbers under Bush:
And they were low. But the time period in your chart is misleading. It starts immediately after 9/11 when the stock market and economy dipped out of fear and anxiety. The unemployment rate got lower as that anxiety lowered and the economy returned more to normality where the usual factors impacted the rate. The chart then ends before it had even reached its peak in the late winter/early spring of 2009, before the stimulus money kicked in. And since jobs is a lagging indicator, movement up or down lags behind the actual economic changes. The recession actually started in mid-2007. A more useful chart would show what the unemployment rates were going back into the 90s, 80s and 70s and going forward to the present.
Unfortunately, jobs are the last part of the economy to show movement, so I suspect we won't see a huge drop downward for quite some time.
But now’s it’s easy to see this was the result of a bubble economy and not genuine, sustainable economic growth.
I'm not sure the chart reflects a bubble economy, at least not primarily. We did have a housing bubble during that time, but we had many other major factors also at play, including the derivatives game playing that ultimately tanked the economy (the housing bubble was bad, but the banking failures were what took the economies of the US and every other country down into the toilet).
All that said, I agree that we need a "genuine, sustainable economy." To do that we need to change the status quo. Guess who doesn't like change very much (well, actually, none of us do).
But the time period in your chart is misleading.
I looked for a chart that show unemployment for Bush's Presidency, unfortunately this one was all I could find.
Did anyone else predict that Bear Stearns would be the first domino?
Conditions without a bailout and stimulus would have been a little worse for a short period of time, but in all likelihood the economy would be in much better shape today.
Based on whose analysis? Certainly not the vast majority of economists who state that the stimuli (Bush's and Obama's) kept up from a more disastrous meltdown then we saw.
I looked for a chart that show unemployment for Bush's Presidency, unfortunately this one was all I could find.
I'm sure the BLS has figures going back decades.
If you have time, this speech is a fantastic one to listen to, made in 2006. Or this shorter video clip, of the same economist. He was one of the most public of the group of economists that predicted the crisis.
Based on whose analysis? Certainly not the vast majority of economists who state that the stimuli (Bush's and Obama's) kept up from a more disastrous meltdown then we saw.
Based on those economists that understood the market enough to predict the crisis. And, based on history, such as the 1920 depression. The majority of economists didn’t get it right before the 2008 meltdown and they are probably not right now either.
Why the U.S. recovery will be bigger, faster, and stronger than economists and politicians expect.