More bad news for Republicans - Recession over!

Discussion in 'Politics' started by joepistole, Sep 20, 2010.

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  1. Carcano Valued Senior Member

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    http://theburningplatform.com/blog/...nsumer-spending-at-65-of-gdp-retail-disaster/

    Now that the Wall Street Journal, New York Times and every other mainstream media outlet have figured out what some financial blogs had figured out months ago, everyone knows that the American consumers have not yet begun to deleverage.

    Consumer credit outstanding peaked at $2.58 trillion in July 2008. It has plummeted all the way to $2.42 trillion today, a 6% reduction over two years. The full $160 billion reduction can be attributed to write-offs by the banks.

    American consumers do not want the Age of Mammon to end. They will need to be dragged kicking and screaming into the Age of Austerity. Consumer expenditures peaked at $10.2 trillion in the 3rd Quarter of 2008. They reduced spending for two quarters, but when Big Daddy Government handed them billions and told them to spend it on cars, appliances, and homes, they dutifully obeyed.

    Today, consumer expenditures stand at an all-time high of $10.3 trillion, still accounting for 70.5% of GDP. There really has been no hint of austerity by Americans. It is a false storyline. The major reductions in consumption still loom in the future.

    The country has been on a 30 year drunken binge of debauchery, debt accumulation and delusions of never ending 10% annual home price gains funding a glorious 30 years of retirement on an island in the Caribbean.

    These visions of a sugar plumb life of leisure are slowly giving way to the nightmare scenario of eating cat food in your very own cardboard box McMansion. The bombastic Boomers are turning 50 years old at a rate of 10,000 per day. A staggering 38% of workers between the ages of 45-54 have less than $10,000 of retirement savings and a mind boggling 29% of workers over 55 have less than ten grand in their retirement savings, according to the Employee Benefit Research Institute.

    It is no longer a matter of people deciding whether to save, it is a matter of saving or else living in abject poverty in their old age.
     
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  3. IamJoseph Banned Banned

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    If Repubs are to be bashed, I agree on one count: Bush's great error was going to the afghan hills instead of S. Arabia and Egypt. The results speak for itself: 1000's of more lives were lost and America bankrupted herself trying to please radical Regimes.

    It is the Regimes, America's allies and national interest, which should have been hauled into Gitmo. We will see many Bin Laden dolls - the Regimes are laughing their heads off - the 9/11 victims are crying in their graves.
     
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  5. Buffalo Roam Registered Senior Member

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    Sorry to disagree with you but it wasn't the war that trashed the American economy, it was rampant government social spending, and the stupid free trade ideas.
     
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  7. iceaura Valued Senior Member

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    The country has been on a thirty year slide in takehome wages per hour and unit of production for everyone but the upper 20%, leading to an increasingly squeezed 80% attempting to maintain a middle class way of life by working longer hours per job, working more jobs per person, and working more persons per household - and when that failed, because there are only so many hours in a week, borrowing.

    Forty years ago, before the "debauchery", summer and part time winter employment at an entry level blue collar job would put the median student through a normal four year University education with little or no debt. Forty years ago, before the "debauchery", the median wage job bought the median house at the ordinary terms - 15% down, thirty year mortgage at less than 30% of income. Fifty years ago the federal minimum wage was set to the wage necessary to support a family of four at poverty level with one forty hour week fifty week year job.

    Those circumstances, which were simple and ordinary aspects of life a generation ago, look like pipe dreams - almost jokes, they are so unrealistic - today. And that is in the face of a huge increase in the productivity of those median wage hours, those standard jobs - if ordinary economic theory is applied, in which increasing productivity leads to rising return on invested labor, we should have been getting richer, not poorer - working less, not more.
     
  8. joepistole Deacon Blues Valued Senior Member

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    I don't fault george II for attacking Afganistan...but they bungled it. There is no reason on God's Earth why it should take us nine years to not get Bin Laden. He was cornered in Tora Bora and george II and company let him go.

    Two, I would fault george II and his merry band of Republicans for more than doubling the national debt and passing a 1.3 trillion dollar defict to Obama in 2009 when Obama took office. The bills they passed while in office committed the nation to future deficits in the trillions of dollars.

    The challenge now is to restore fiscal sanity in Washington...extract ourselves from senseless overseas ventures and grow our economy.

    I fault both Republicans and Democrats for not making the nation energy independent. The Republican solution is more oil....which means more imports. If we started using our natural gas reserves to power our trucks and cars, we would cut our trade deficit in half....no new technology needed. That alone would do miracles in improving the unemployment problem we face.

    However, Democrats are making progress. Things are improving. Unfortunately Republicans have no solutions except to go back to what they did before.
     
  9. countezero Registered Senior Member

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    Energy independence is a myth. It's not possible. Even if 100 percent of the energy was domestically created, it would still be subject to international pricing.

    More oil would not be a bad thing, necessarily. There is tons of oil in ANWR and off California and Florida. I say drill for it -- but unlike the Republicans, I would add the provisio that the majority of the oil gained (say 75 percent) would be controlled by a nationalized oil company and sold exclusively to the American people at a discounted rate. The rest could go to the open market.

    Neither party has said anything remotely interesting on energy issues.
     
  10. iceaura Valued Senior Member

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    Electrical energy is not subject to international pricing.

    Reducing the US demand for oil to a level at which the domestic supply could meet it, would all but eliminate serious energy dependence on unstable geopolitical circumstance. It's not really "energy" dependence - it's oil dependence.
     
  11. countezero Registered Senior Member

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    At least not yet.

    I mean pricing is done state-by-state.

    I can foresee a time when Mexico/Canada/US grids overlap, if that time has not already come (I don't know). My larger point is that pretending like reducing oil use solves everything is a myth perpetuated for political reasons.

    That's a tall order, given that we don't drill and don't refine much, comparitively speaking -- and now you have politicians looking to shut down the Gulf in the wake of BP.

    Further afield, pretending like the US suddenly won't care or won't be impacted by energy consumption and natural resource markets overseas if we suddenly became "energy independent" is another myth. What happens in the rest of the world affects us, whether we like it or not. China and India's growing consumption, Iranian and Venuzualian Petro-arrogance and the general scramble for resources will come home to roost in one fashion or another.

    What the politicians and environmental types aren't telling people is that transitioning from oil will take decades at the minimum -- and in the short term, that means more oil. Rather than deal honestly with this and try to transition rationally, we have people spreading malarky about the end of oil and the empty panacea of Green industry.
     
  12. Cowboy My Aim Is True Valued Senior Member

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    Either that or partisan to the point of being delusional.
     
  13. quadraphonics Bloodthirsty Barbarian Valued Senior Member

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    Ordinary economic theory doesn't say that. Rather, it says that when the intensity or quality of the labor effort rises, the result should be a rising return on invested labor (i.e., higher wages).

    Workforce productivity - the statistic that gets thrown around - includes a bunch of other factors besides the intensity and quality of labor effort. In particular, it also depends on the effects of technology and organization. Ordinary economics says that the returns on increased productivity ought to go to whatever factor is responsible for the increase, and that's not necessarily the actual labor effort input. If an increase in productivity is caused by capital investments in technology, then ordinary economics says that the returns should rightfully flow to the investors of said capital. If an increase in productivity is caused by improvements in management and organization practices, then the returns should rightfully flow to those who produced those improvements. So to the extent that productivity is rising because labor-intensive factories are being replaced with automated ones, ordinary economics says that the benefits should accrue to management and investors.

    Secondly, returns on gains in productivity (of the labor-input variety, appropriately-distributed) only necessarily translate into absolute wage gains in a closed, static market. The actual wage that gets paid also depends on growth of the workforce - if the workforce is outgrowing the labor-effort productivity gains, the net result is still a decline in real wages. It's just a smaller decline than would have occurred absent the improved productivity. So if something major happens to expand workforce competition (like, say, the rise of global supply and manufacturing chains including regions with lax regulations and massive, poor workforces), then the returns on improved labor-effort productivity may well fail to result in a net increase in wages, even if distributed completely equitably. And, as above, to the extent that productivity is rising because of factors other than the labor effort input, the situation for wages becomes even more dire.

    The problem is not that ordinary economics is being somehow thwarted here. The problem is that the consequence of ordinary economics in the present environment is increasing inequality, since the gains in productivity are being driven by people with access to lots of capital and strong educational backgrounds (i.e., the already-well-off) and the inclusion of huge numbers of poor foreign workers into the labor market. The proper way to deal with the former is progressive taxation to fund services to protect and advance the not-so-well-off (education, health insurance, unemployment insurance, microfinance, etc.). The solution to the latter is less obvious. Some think that isolation is a good response, but I doubt this. It amounts to screwing over the most vulnerable, marginalized workforces in the world in order to make sure that American workers can afford a second car without getting a college degree. In the end perhaps the only effective response is patience - eventually the standards of living of the newly-integrated poor regions and the entrenched rich regions will converge, and the giant sucking sound will subside.
     
  14. Buffalo Roam Registered Senior Member

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    Yes the recession is over......

    U.S. private employer payrolls fell by 39,000 jobs in September.
     
  15. joepistole Deacon Blues Valued Senior Member

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    Oh, now where pray tell did you get this number? The employer payroll data has not been released yet. It will be released on Friday. This is yet another example of you using data of which you know nothing about.

    The number you are citing is the ADP forecast which is just that and often wrong more than right. It is telling that you have to cling to the least little bit of negative data to keep your hopes for the nation alive.
     
  16. joepistole Deacon Blues Valued Senior Member

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  17. countezero Registered Senior Member

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    Joe, you're becoming a parody of yourself:

    http://www.bloomberg.com/news/2010-...cut-39-000-workers-in-september-adp-says.html
     
  18. joepistole Deacon Blues Valued Senior Member

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    I think the stock markets reaction to the ADP number bares me out. Yesterday and today the markets have been flat..relatively unchanged. As previously stated and as one who watches these numbers from month to month...you cannot put a lot at stake in the ADP forecast.

    The real jobs numbers, the official job numbers are released tomorrow. And therefore buffalo roams declaration was flat out wrong...nothing new there.
     
  19. countezero Registered Senior Member

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    There's plenty of bad news out there about the economy. You just don't want to see it.
     
  20. joepistole Deacon Blues Valued Senior Member

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    Oh I see it alright. Unemployment remains roughly twice as high as it should be. The nation still has issues with getting its fiscal house in order and their remains substancial political risk around the globe and at home.

    But all of that is not a reason to be overly gloomy, nor is it a reason to take glee in each potential piece of bad news...as Republicans have done and continue to do. It is my contention that no red blooded American would take joy in the destruction of his/her nation as Republicans do.

    And our current challenges are no reason to ignore the good thing that are happening in our economy as well. And there are good things happening in our economy.

    1) We are no longer loosing almost a million jobs a month as we were when Obama was sworn into office.
    2) Instead of facing an economy shrinking at a rate of 6% per year when Obama took office, we are now facing an economy growing at a moderate pace of 2% per year.
    3) Instead of loosing private sector jobs as we were during the george II adminstrations years, we have now grown private sector jobs for several months in a row.
    4) And inflation has remained almost non existent.

    If you are concerned about the well being of the nation, there is no doubt we are in a much better space today than we were a little over a year and a half ago when Obama took office.
     
  21. countezero Registered Senior Member

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  22. Alien Cockroach Banned Banned

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    And you think that anyone who agrees with his policies is either misinformed or a Democrat, and it makes you look like an ass.

    And there is plenty of relatively comforting news out there about the economy, but you are too angry about having a nigger in the White House to see it. Go fuck yourself.
     
  23. Alien Cockroach Banned Banned

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    ...yes. Unfortunately, the Republicans have an addiction to ear-marking that is equal to anything you could accuse a Democrat of, and Bush was highly unwise to sign into law a "free trade" agreement that applies to the US but not to other trading partners who are party to the deal.

    Hello over there on the moderate right. When you get tired of the partisan bullshit, let me know. We'll get together and form some sort of coalition party or something.
     
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