-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
onmyknees
Look...some people are ideologues, some are pragmatists...you're the former, and so is Obama. No matter what the cost....you and he stay tied to your failed assertions and ideology. Unlike Clinton....In the wake of a resounding, historical rebuke in the mid term elections, it phased him not....he did not readjust, adapt, or amend, just hardened his unpopular, ineffective positions. So why could anyone expect you to change or reconsider? But you stay with that belief...if nothing else you're determined. Stay with the ship Captain...even as it descends to the ocean floor . It's entirely probable that even if he did win re-election, and after 8 years and a country crippled in debt and unemployment, bitterly divided between race and class, you'd still be showing us your charts and graphs and telling us not to believe our lying eyes...what a success it's really been.
It's almost become a truism on here that whatever you accuse others of is actually a perfect description of yourself and this one is spot on. Look, I'm going by the data, by what people who study this say, and you're going by your white-knuckle ideology of hatred. You're trapped in a echo chamber of propaganda. I give you evidence for my (and all economists') point of view and you spew insults. I ask for examples for your claims and you change the subject. I make an argument and you plug your ears, stomp your feet and throw a tantrum. You have NOTHING to say except what Limbaugh told you to say. You didn't come by your opinions honestly on your own; that's why you can't back any of it up. You lose your shirt every time you step into a political thread.
-
Re: Occupy Wall Street protest
To say that "economists agree with me" (and therefore I am right) is silly. Anybody can find and economist and/or a study that validates their political point of view. Economists are political animals just like everybody else.
Somebody once said that if you took all of the economists in the world and stacked them from head to toe you would never reach a concensus...How true. I listen to Tom Keene every day and there is a never ending stream of financial experts and nobel prize winning economists who couldn't agree less on the problems or the symptoms of the economic mess we are in right now.
As for me personally, the more I read about everything that is going on the less I am inclined to support the Keynesian approach. We tried it during the great depression and it didn't work. Japan tried it in the 90's and it didn't work (and they are very vocal about the fact that it didn't work and that all they did was perpetuate 'zombie banks' it what amounted to lost decade). We are doing it again this time around and, as we all know, it isn't working. Krugman has been confronted with Japan before and his only retort is that they didn't spend enough... (which by the way, is the exact same thing that he is saying now).
So that begs the question: If all of this government 'stimulus' isn't working (as well as other things like TARP and numerous other bailouts) why do we keep doing them every time there is a panic? (This same question can be asked of Japan too, not just America). I think the answer is really simple actually: The POLITICAL cost of not doing anything is simply unacceptable for those in power. They have to try and do SOMETHING right? Or do they?...
Although I am not in any particular 'camp' (i.e. monetarist, Keynesian, Austrian) I am starting to believe that the Austrian school is really onto something. Stimulus is wasteful because it doesn't create permanent jobs and it doesn't finance projects for which there is a demand (necessarily). Further, it adds to debt either through borrowing or printing of money (which leads to inflation). We've had about a trillion and a half dollar round of stimulus under Obama and unemployment hasn't budged. That's a bad, bad sign. I'm still trying to figure out how a freshly paved road is going to increase IBM's bottom line, or Macy's for that matter.
Many economists (even the monetarists gasp!) would have you beleive that the entire world would have melted down like a great nuclear reactor if we didn't bail out the banks. But NONE of them can tell you exactly what WOULD have happened, other than it would have been a systemic doomesday scenario. I am mis-trustful of them and I am still waiting for some explanation of what would have happened if we didn't pass TARP. Personally, I think the shadow banks should have gone through bankruptcy (as well as AIG). I'm not sure that we've saved anything with all of these bailouts. We've re-capitalized the banks but guess what...they aren't lending! Plus we have inflation to deal with and a debt problem that is getting worse and worse..
The question that should probably be asked is this: Is it better to suffer through a horrible depression that lasts 3 or 4 years or a very bad recession that lasts 10-15 years? I think that is what we are in for. We are in for a lost decade just like Japan in the 90's (but worse). We are already 4 years into this thing and housing still hasn't hit a bottom. Make no mistake, there is NO light at the end of the tunnel here.
-
Re: Occupy Wall Street protest
A recent Bloomberg survey of economists and financial institutions found 85% (29/34) predicted Obama's new jobs bill would stimulate job growth and GDP.
To say that unemployment hasn't budged and that inflation is a current problem is not only silly but flatly wrong.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
hard4janira
To say that "economists agree with me" (and therefore I am right) is silly. Anybody can find and economist and/or a study that validates their political point of view. Economists are political animals just like everybody else.
Somebody once said that if you took all of the economists in the world and stacked them from head to toe you would never reach a concensus...How true. I listen to Tom Keene every day and there is a never ending stream of financial experts and nobel prize winning economists who couldn't agree less on the problems or the symptoms of the economic mess we are in right now.
As for me personally, the more I read about everything that is going on the less I am inclined to support the Keynesian approach. We tried it during the great depression and it didn't work. Japan tried it in the 90's and it didn't work (and they are very vocal about the fact that it didn't work and that all they did was perpetuate 'zombie banks' it what amounted to lost decade). We are doing it again this time around and, as we all know, it isn't working. Krugman has been confronted with Japan before and his only retort is that they didn't spend enough... (which by the way, is the exact same thing that he is saying now).
So that begs the question: If all of this government 'stimulus' isn't working (as well as other things like TARP and numerous other bailouts) why do we keep doing them every time there is a panic? (This same question can be asked of Japan too, not just America). I think the answer is really simple actually: The POLITICAL cost of not doing anything is simply unacceptable for those in power. They have to try and do SOMETHING right? Or do they?...
Although I am not in any particular 'camp' (i.e. monetarist, Keynesian, Austrian) I am starting to believe that the Austrian school is really onto something. Stimulus is wasteful because it doesn't create permanent jobs and it doesn't finance projects for which there is a demand (necessarily). Further, it adds to debt either through borrowing or printing of money (which leads to inflation). We've had about a trillion and a half dollar round of stimulus under Obama and unemployment hasn't budged. That's a bad, bad sign. I'm still trying to figure out how a freshly paved road is going to increase IBM's bottom line, or Macy's for that matter.
Many economists (even the monetarists gasp!) would have you beleive that the entire world would have melted down like a great nuclear reactor if we didn't bail out the banks. But NONE of them can tell you exactly what WOULD have happened, other than it would have been a systemic doomesday scenario. I am mis-trustful of them and I am still waiting for some explanation of what would have happened if we didn't pass TARP. Personally, I think the shadow banks should have gone through bankruptcy (as well as AIG). I'm not sure that we've saved anything with all of these bailouts. We've re-capitalized the banks but guess what...they aren't lending! Plus we have inflation to deal with and a debt problem that is getting worse and worse..
The question that should probably be asked is this: Is it better to suffer through a horrible depression that lasts 3 or 4 years or a very bad recession that lasts 10-15 years? I think that is what we are in for. We are in for a lost decade just like Japan in the 90's (but worse). We are already 4 years into this thing and housing still hasn't hit a bottom. Make no mistake, there is NO light at the end of the tunnel here.
I think it was Hippifried in Politics & Religion a while ago who argued we are going round in circles because economic theory hasn't changed since the 19th century -Keynes was offering a temporary solution to mass unemployment, not an alternative economic system; the Austrian school, to the extent that it was part of Friedman's monetarist theory and the de-regulation fetish that gripped the Thatcher-Reagan perspective hasn't worked either -one of the reasons we are in this mess is that de-regulation enabled high-flying capitalist whizz kids to invent all sorts of financial products that started out as ingenious ways of making money, but ended up being tacked on to real assets, like people's homes: and our government's didn't seem to know what was going on in the markets. If its true then they were in dereliction of their duty; if they did know and did nothing about it, ditto.
I think that where there was no separation of a bank's tangible assets -its customers accounts -and its 'casino' operations, ie its investment branch, then a bank collapse would have immediately impoverished millions of people -even the Bush administration could not have coped with that. TARP was a bandage and it stopped the bleeding, but the wound is a deep one, and as you suggest we are in for a grim decade at least, but so far I have yet to see any economic suggestions -other than the creation of jobs-that will change things.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
Stavros
I think it was Hippifried in Politics & Religion a while ago who argued we are going round in circles because economic theory hasn't changed since the 19th century -Keynes was offering a temporary solution to mass unemployment, not an alternative economic system; the Austrian school, to the extent that it was part of Friedman's monetarist theory and the de-regulation fetish that gripped the Thatcher-Reagan perspective hasn't worked either -one of the reasons we are in this mess is that de-regulation enabled high-flying capitalist whizz kids to invent all sorts of financial products that started out as ingenious ways of making money, but ended up being tacked on to real assets, like people's homes: and our government's didn't seem to know what was going on in the markets. If its true then they were in dereliction of their duty; if they did know and did nothing about it, ditto.
I think that where there was no separation of a bank's tangible assets -its customers accounts -and its 'casino' operations, ie its investment branch, then a bank collapse would have immediately impoverished millions of people -even the Bush administration could not have coped with that. TARP was a bandage and it stopped the bleeding, but the wound is a deep one, and as you suggest we are in for a grim decade at least, but so far I have yet to see any economic suggestions -other than the creation of jobs-that will change things.
Personally, I am not against de-regulation. De-regulation gets a bad rap most of the time. I'm not saying that there shouldn't be any rules: I'm just saying that more and more regulation created by larger and larger bureaucracies is not the answer. Take the SEC for example; They were basically led by the nose do the doorstep of Bernie Maddoff and they STILL couldn't catch the guy. That's gross incpompetance and ineptitude from a government agency that failed to perform it's basic function. To think that if we had all these regulations and agencies in place to monitor them is naive - I KNOW that this would never work.
So what about the swaps then, or the crazy financial instruments that these Wall Street 'wiz-kids' came up with? On the surface, I am not against them in theory. What I am against is the lack of transparency into these instruments which is what we had. If AIG wants to go out and over-leverage 500 times in swaps against Lehman brothers - I say let them do it: HOWEVER, these swaps should be on the books for all to see, especially the shareholders. Do you honestly think that shareholders would stick around and keep money in a company that takes such dangerous risks? The stock price of AIG (or any other company) would be punished as a result and the company would hesitate to engage in such risky behavior. In this sense, the market is self-regulating if the proper parties have all of the requisite information. So here is where we probably agree: We need more/stronger regulation to make sure that people who have a stake in a company (bondhoders/shareholders) have FULL visibility into a companies financials.
Now, a lot of companies were not forthright about thier holdings and THIS IS CRIMINAL BEHAVIOR. Bear Stearns, for example, were sitting on a couple of Hedge Funds (the Enhanced Leverage Fund and I can't remember the name of the other one...) When these two funds collapsed (and subsequently brought down the Wall Street giant) it became clear that the fund managers misguided (or outright lied) to the investors about the quality of the assets in these funds. The fund managers were tried and acquited - to this day I do not know how.... but it is this kind of nonsense that makes me want to join the OWS protesters. These fuckers should have spent some time in jail, that's all I'm saying.
I also think that there was shady (if not criminal) behavior by the credit rating agencies who by all accounts knew that they were rating B stuff AAA. I've always said and I still say that criminal behavior should be punished. If you are an OWS protester and you are in the park because the rating agencies and investment banks were not held accountable for these shennanigans then I am with you 100%. I do believe 100% that there was some criminal behavior here that has gone unpunished and it is not fair to the American people.
On the other hand, I believe that a lot of what the mortage companies and investemen banks did was simpy bad business (not criminal) and bad business should GO BANKRUPT. Bankruptcy doesn't mean they go away, it simply means that the stakeholders take their loses (privatized losses), management gets canned, and a stronger company emerges. This sense of 'too big to fail' and socialized losses where the taxpayer takes on the burden of bad business decisions is simply NOT CAPITALISM. By the way, I'd like to make it VERY CLEAR that this Wall Street vs. Main Street business is simply bullshit. Wall Street IS main street. How many jobs were lost when Lehman when under? 26,000. That's TWENTY SIX THOUSAND. You think those were all fat-cats driving Bently's? Nope, that included mail clerks, secretaries, security guards - a whole shitload of regular joes lost jobs. And what about GM? How come the OWS protesters aren't occupying Deerborn, MI? GM is seen as 'main-street', but it's just another example of crony capitalism at it's absolute worst. GM is a company that has been against the ropes for years. Even before the collapse in 2008, GM had to go to the Federal Government for loans at reduced interest rates because it couldn't get them in the open market. This is not capitalism. The taxpayer has been bailing out the auto-makers for YEARS and it is wrong. These companies should have gone through bankrupcty years ago. They would be much stronger companies now. The reason that Washington bails out the auto-makers is because of the unions. The unions are very powerful and they provide a lot of campaign finance money to the louts in DC. So the taxpayer continues to subsidize the losses in Michigan for political reasons: It is really a shame and a disgrace. The OWS protesters have every right to be up there in Michigan as well.
Lastly (as I ramble on here), the Federal goverment was complicit in the housing bubble, and we probably wouldn't be in the mess at all if these assholes weren't involved in shit they have no business in. Fannie and Freddie are perfect examples of government that is completley out of control. Two GSE's that privatize gains and socialize losses via government gurantees. Government encouraged poor lending (even mandating it in some cases via the CRA and threats of lawsuits from the regional Federal Reserve banks). The GSE's DIRECTLY ENCOURAGED BAD LENDING PRACTICES AND POOR UNDERWRITING STANDARDS, and politicians were more than happy to be complicit with these shennanigans as they took thousands upon thousands of dollars to the bank in the form of campaign contributiosn (see Rahm Emmanuel). It's a disgrace and a shame to see these politicians running around blaming capitalism and the banks for the housing bubble when they are the most culpable of all. Thomas Sewell wrote a terrific little book 'The Housing Boom and Bust' which (admittedly) takes an informative albeit conservative look at the reasons behind the housing boom/bust. You can read it in half a day and I reccommend it to anybody who would like a lay-person's read on what happenned.
Fuck it, that's all for now I need coffee.....lol
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
BluegrassCat
A recent Bloomberg survey of economists and financial institutions found 85% (29/34) predicted Obama's new jobs bill would stimulate job growth and GDP.
To say that unemployment hasn't budged and that inflation is a current problem is not only silly but flatly wrong.
What the economists like is the social security tax-cut part of the plan. Gee, imagine that, tax cuts to stimulate the economy and create jobs. Wow, who would have ever thought of that!
I have no doubt that directly injecting 'stimulus' into the ecomomy will contribute to the GDP, for a while. But at what cost? The first round of stimulus certianly hasn't increased GDP to the point of offsetting the debt burden created by borrowing/printing that took place in order to inject it into the economy. Funny side note here: Obama is big on fixing roads and bridges, but as Rand Paul pointed out, the entire annual road/highway budget of Kentucky is less that what Obama threw down the toilet at Solyndra.... You really have to wonder where Obama's priorities lie....
And can you say inflation isn't a problem? Why don't you ask people who are living paycheck to paycheck who have to deal with the increased cost of food and energy. Even Krugman was surprised by what he saw back in may (note the first paragraph).
http://krugman.blogs.nytimes.com/201...flation-notes/
Oh, and you REALLY know that Obama is flat out of ideas when he allows people to sue employers if they think they were discriminated against (i.e. not hired0 because they were unemployed. What a dope. As if Obama needed to alienate business any more than he already has.... Now they live in fear of being sued because they aren't hiring uneployed people.... I guess that's one way to try and get the unemployement numbers down.
-
Re: Occupy Wall Street protest
Hard4Janira: a compelling argument: and I agree with you, that the quality of the regulatory process is the key to the oversight the private sector should be submitted to, and you provide good examples why this should be so, and where and how it failed.
I also understand the reasoning you provide for culpability of banks and hedge funds for their own risks, and for the government-sponsored laxity in the creation of popular but financially disastrous mortgages that had been going on for years and was unsustainable.
However, if you are in the White House or Downing St and you are told that, not 26,000 but 2 million six hundred thousand people will lose their jobs this weekend because of all those shabby dealings and weird financial instruments, and incompetent regulatory agencies run by the people you put there -do you say Let the Markets Decide? Or, We need a rescue plan...both carry risks, but the risk of political suicide is not in most politicians In Tray.
The Greek government created 800,000 jobs in the last ten years or so, most if not all civil servants; many are/were grace and favour jobs for relatives, party members, and so on. In effect, Greece actually has defaulted, it wanted a prosperity it could not make on its own, so it borrowed itself into a paradise of credit, only to discover that heaven on earth is not possible.
There was talk of BP going bankrupt as a consequences of the Deepwater Horizon disaster in the Gulf of Mexico, and, because its revenues account for £1 in every £7 of most pensions in the UK it is said to be Too Big To Fail -but it can, and if it did, what would happen? Its assets would be bought up by Shell, Exxon, Conoco, Chevron and Total who would then have to re-structure their own portfolios for competition reasons and so on: but it can be done. In one sense, then, nobody is Too Big To Fail.
But just as the story is not over yet, if you are saying that we have to in effect purge the capitalist economies of the credit-soaked parasites, are you prepared to deal with its political as well as its economic consequences? There are no simple or easy answers to this, but it is clearly the most important issue of the day.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
hard4janira
And can you say inflation isn't a problem? Why don't you ask people who are living paycheck to paycheck who have to deal with the increased cost of food and energy. Even Krugman was surprised by what he saw back in may (note the first paragraph).
http://krugman.blogs.nytimes.com/201...flation-notes/
And you say inflation is a problem? Go ahead and ask those people and they'll tell you it's because they're un or under-employed, not because of inflation. See what Krugam said this month.
http://krugman.blogs.nytimes.com/201...not-exploding/
And if you're interested in reading an objective and thorough discussion of the lead up to the crisis of 08 rather than right wing talking points try "All the Devils are Here" by McLean & Nocera.
-
Re: Occupy Wall Street protest
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
Stavros
I also understand the reasoning you provide for culpability of banks and hedge funds for their own risks, and for the government-sponsored laxity in the creation of popular but financially disastrous mortgages that had been going on for years and was unsustainable.
Add to that the Federal Reserve, who by keeping interest rates artificially low for nearly a decade made credit available to people who simply would not have access to that capital otherwise. The Federal reserve (along with CMA and the GSE's) contributed massively to the housing bubble that simply had to burst.
Quote:
Originally Posted by
Stavros
However, if you are in the White House or Downing St and you are told that, not 26,000 but 2 million six hundred thousand people will lose their jobs this weekend because of all those shabby dealings and weird financial instruments, and incompetent regulatory agencies run by the people you put there -do you say Let the Markets Decide? Or, We need a rescue plan...both carry risks, but the risk of political suicide is not in most politicians In Tray.
I agree 100% and I suggested as much in my first post I think. The POLITICAL cost of not doing anything (or seemingly not doing anything) is simply too much to bear. You are right, it's probably political suicide. Remeber though, TARP failed to pass congress the first time around. Only after Bernanke and Paulson put the fear of financial holocaust into both parties did they rally enough support to get it passed with the second effort.
Quote:
Originally Posted by
Stavros
The Greek government created 800,000 jobs in the last ten years or so, most if not all civil servants; many are/were grace and favour jobs for relatives, party members, and so on. In effect, Greece actually has defaulted, it wanted a prosperity it could not make on its own, so it borrowed itself into a paradise of credit, only to discover that heaven on earth is not possible.
Ergo austerity measures. And it isn't just Greece. It's Ireland, Portugal, Spain, and now Italy (which really has a lot of folks worried). The big quesiton over the next couple of weeks is if Germany and Frace are going to suck the big one and re-capitalize the banks. The jury is still out on that.... I hope they don't. That will be the end of the Euro... These bankrupt countries are REALLY going to have to deal with austerity measurs then... Same thing will be coming to the US one day.
Quote:
Originally Posted by
Stavros
There was talk of BP going bankrupt as a consequences of the Deepwater Horizon disaster in the Gulf of Mexico, and, because its revenues account for £1 in every £7 of most pensions in the UK it is said to be Too Big To Fail -but it can, and if it did, what would happen? Its assets would be bought up by Shell, Exxon, Conoco, Chevron and Total who would then have to re-structure their own portfolios for competition reasons and so on: but it can be done. In one sense, then, nobody is Too Big To Fail.
While I think the BP should be held 100% accountable for the clean-up I do think that it was embarrassing that the Obama administration 'shook down' BP for political points. The environmental impact of the spill is one of the greatest overblown stories in history. Nobody is even talking about it anymore and I was the the Gulf in August and enjoyed lovely, beautiful beaches. I agree that nobody is 'too big to fail' - but we should find a way to remove that phrase from our vocabulary completely. Any and all businesses should go through bankruptcy if necessary. No company in America (can't speak for the world) should be 'too big for bankruptcy'. If they are, you can bet your bottom dollar that there is crony capitalism at work.
Quote:
Originally Posted by
Stavros
But just as the story is not over yet, if you are saying that we have to in effect purge the capitalist economies of the credit-soaked parasites, are you prepared to deal with its political as well as its economic consequences? There are no simple or easy answers to this, but it is clearly the most important issue of the day.
Well, I'm saying this:
1) Any company that SHOULD go bankrupt needs to go through bankruptcy, and government shouldn't stand in the way of that happening. I don't care if you are an investment bank, an auto manufacturer, or a cupcake bakery that employs 5 people. Bad business decisions MUST be punished by the market.
2) Profits AND losses should both be privatized. No more Federal 'guarantees' of mortgages, student loans, bank accounts, or any other such nonsense. It creates a HUGE moral hazzard that leads us directly into the kinds of messes that we have now
3) If somebody commits a crime then punish them swiftly and severely. We treat white collar criminals with kid-gloves and it's wrong. There are so many shennanigans going on in these investment banks that it really gives captialism a black eye. You have to enforce the laws of the land and you have to be efficient in doing so. I honestly think that so many people get away with these crimes because they don't fear getting caught or what would happen if they actually do get caught.
4) Obey the rule of law. We have bankruptcy rules in place already. Who in the hell does Obama think he is telling the bondholders at GM to go stuff themselves while he bails out the union employees? I really regret that the Supreme Court rejected the bondholders case in this instance (they simply didn't have enough time to put forth a proper case). Also, a mortgage is a legal CONTRACT between two parties. How does the government justify telling a judge that he can arbitrarily reduce the amount of principal on a loan in the hopes that the borrower doesn't go under? That is an EXTREME violation of the rule of law. If I hold the title to that property I'm getting screwed big time. Why would I ever loan money again to anybody to buy anything If I fear the government will step in and arbitrarilty modify the terms of my contract without any legal precedence whatsoever? People who borrowed more than they can afford need to go through bankruptcy (or forclosure) just like the investment banks. It seems harsh and unkind, but honestly this is the ONLY fair way for the market to work. The sooner we do this, the sooner the market acutally finds a bottom and the sooner the 'bad assets' get off the books of these goddamn banks.
-
Re: Occupy Wall Street protest
hard4janira:
I understand your frustration and your belief that markets should be allowed to regulate themselves, but a lot of contemporary politics is derived from the experience of the 1930s when it was felt that the social consequences of failure were too great, that the depression was part of the rise of fascism and devastating world war, and that capitalism when it gets sick does not always have a cure for the patient.
It may be that the 1890 Sherman Act was the first attempt by politicians to use the law to intervene in markets, to break up monopolies that were perceived to prevent the 'little guy' from entering the market at all: but if there is a natural tendency in free markets to create monopolies, why should the state intervene? Rockefeller's Standard empire was broken up in 1911, but not the Microsoft empire; was the market involved in either of those decisions?
A powerful factor has been the growth of the modern state -the increase in intervention which followed the depression was politically motivated, but even though both Reagan and Thatcher tried to roll back the state from the economy, they could only do it it in part -because just in defence procurement alone, the US Government is one of the biggest sources of business in the USA; in all modern states now, the government is a regulator, and a producer, and a consumer -in a very real sense you cannot detach government, or the state from the economy -there can be no 'free markets', there can be no tax free rides on the gravy train.
Where I think you hit an exposed nerve, it is in the quality of institutions -the application of existing laws on contracts without political interference, and the quality of advice and the application of law by regulatory agencies. It beggars belief that the Bank of England or the UK Treasury had no staff whose monitoring of markets and whose specialist knowledge of financial isntruments could not follow and analyse the movements of capital over two or three decades and work out what was happening by 2008-this is what we pay good money for, and historically the Treasury was the smallest dept of government but had the brightest minds (!). Either that, or the papers being written for Gordon Brown were dumped in the bin just as Blair dumped expert advice on Iraq from the Foreign Office in the bin -I don't know about the Treasury but the latter is true. But if we are paying experts £75,000 a year for advice the politicians don't want to hear, why bother paying for it at all?
And what about inter-state unions? We used to have the Hanseatic League, and there was the Communist International, and now the European Union -some English Tories (and the Little Englanders in the Labour Party like Tony Benn) did not object to joining a common market but think the European Union is too many political steps too far, even though a cursory knowledge of the Treaty of Rome should have alerted them to its origins and ambitions. The enlargement of the Union is made on political rather than economic grounds -just as the decision to let Greece into the Euro was political and a mistake. But can the Euro survive if the reality is that not just Greece, but Ireland, Spain and Portugal -conceivably even Italy- are thrown out of it? It even begs the question in an age of globalisation, why should the European Union continue to exist at all, when it ring-fences its economies to provide a competitive advantage on world markets at the expense of small states in Africa, Asia and Latin America? Same with the British Commonwealth that offers preferential terms to its member states -?
I feel that the problem is that a) the modern state is now too embedded in capitalist economies for the operation of markets to be free of political interference or influence; and b) history shows that left to themselves, markets are too brutal, and the social consequences of failure are believed to be morally unacceptable -and isn't this why we have so many One Way Street protests?
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
Stavros
hard4janira:
I understand your frustration and your belief that markets should be allowed to regulate themselves, but a lot of contemporary politics is derived from the experience of the 1930s when it was felt that the social consequences of failure were too great, that the depression was part of the rise of fascism and devastating world war, and that capitalism when it gets sick does not always have a cure for the patient.
If you are referring to WW2 then I'd say that rise of facism was more directly tied to the rather draconian Treaty of Versailles rather than a failure of capitalism.
Your point that the Fed's intervention during the great depression due to the social consequenes is spot-on, I agree completley. I also agree that that is really the only reason governments continue to get involved. However, this country has seen it's fair share of financial panics (far more than most people realize) and the goverment did NOT always get involved. Still, capitalsim finds a way to pull through.
Quote:
Originally Posted by
Stavros
It may be that the 1890 Sherman Act was the first attempt by politicians to use the law to intervene in markets, to break up monopolies that were perceived to prevent the 'little guy' from entering the market at all: but if there is a natural tendency in free markets to create monopolies, why should the state intervene? Rockefeller's Standard empire was broken up in 1911, but not the Microsoft empire; was the market involved in either of those decisions?
I do believe that there should be some regulation of the market by the government. Breaking up monopolies is one of them. The government should be concerned with maintaining fee and open markets. Too often however, they are engaged in crony capitalism, assisting business and/or unions rather than simply regulating the playing field.
Quote:
Originally Posted by
Stavros
A powerful factor has been the growth of the modern state -the increase in intervention which followed the depression was politically motivated, but even though both Reagan and Thatcher tried to roll back the state from the economy, they could only do it it in part -because just in defence procurement alone, the US Government is one of the biggest sources of business in the USA; in all modern states now, the government is a regulator, and a producer, and a consumer -in a very real sense you cannot detach government, or the state from the economy -there can be no 'free markets', there can be no tax free rides on the gravy train.
We need to make the markets as free and private as possible. I support a constitutional amendment that balances the budget AND restricts Federal spending to a fixed percentage of GDP (say 18%).
Quote:
Originally Posted by
Stavros
Where I think you hit an exposed nerve, it is in the quality of institutions -the application of existing laws on contracts without political interference, and the quality of advice and the application of law by regulatory agencies. It beggars belief that the Bank of England or the UK Treasury had no staff whose monitoring of markets and whose specialist knowledge of financial isntruments could not follow and analyse the movements of capital over two or three decades and work out what was happening by 2008-this is what we pay good money for, and historically the Treasury was the smallest dept of government but had the brightest minds (!). Either that, or the papers being written for Gordon Brown were dumped in the bin just as Blair dumped expert advice on Iraq from the Foreign Office in the bin -I don't know about the Treasury but the latter is true. But if we are paying experts £75,000 a year for advice the politicians don't want to hear, why bother paying for it at all?
Why can't government do it's job you're asking? Good question. All the more reason to make government smaller - because they constantly prove thier ineptitude time and time again. I don't trust big-goverment to save me or make the marketplace any safer with ever-increasing, bloated bureaucracies. I would be naive to think this is possible.
Quote:
Originally Posted by
Stavros
And what about inter-state unions? We used to have the Hanseatic League, and there was the Communist International, and now the European Union -some English Tories (and the Little Englanders in the Labour Party like Tony Benn) did not object to joining a common market but think the European Union is too many political steps too far, even though a cursory knowledge of the Treaty of Rome should have alerted them to its origins and ambitions. The enlargement of the Union is made on political rather than economic grounds -just as the decision to let Greece into the Euro was political and a mistake. But can the Euro survive if the reality is that not just Greece, but Ireland, Spain and Portugal -conceivably even Italy- are thrown out of it? It even begs the question in an age of globalisation, why should the European Union continue to exist at all, when it ring-fences its economies to provide a competitive advantage on world markets at the expense of small states in Africa, Asia and Latin America? Same with the British Commonwealth that offers preferential terms to its member states -?
Every time I listen to an economist speak about the debt problem in Europe they all say the same thing: German and France have no choice but to recaptialze the banks, trim the debt, and eat a shit sandwich. What buggers me is that none of them seem to understand the political consequences of anything. If I am a German grandfather-clock maker in the black forrest, why should I have to suffer Greek citizin's addiction to debt and refusal to accept necessary austerity measures? Why?
Quote:
Originally Posted by
Stavros
I feel that the problem is that a) the modern state is now too embedded in capitalist economies for the operation of markets to be free of political interference or influence; and b) history shows that left to themselves, markets are too brutal, and the social consequences of failure are believed to be morally unacceptable -and isn't this why we have so many One Way Street protests?
Possibly. I think that markets CAN self-regulate much more than they are allowed to now. I think that government makes matters worse in many cases (particularly with social engineering initiatives such as CMA, FDA, Fannie and Freddie that exacerbate the real-estate bubble). I think that there is too much crony capitalism when governments are involved (with unions as well as large corporations). I think people in goverment are corrupt and self-serving just like people in the private world, therefore I do not believe government has the citizens best interests in mind even if that is what they sell the voters. AND....we haven't even talked about the feasability of central banks and fiat currencies... the damage that it causes and the power it gives corrupt goverments to run up mountains of debt....
-
Re: Occupy Wall Street protest
To take some of your points in sequence:
If you are referring to WW2 then I'd say that rise of facism was more directly tied to the rather draconian Treaty of Versailles rather than a failure of capitalism.
When the coalition parties in the 1940s inn the UK began developing the social welfare legislation that the 1945 Labour government put into law, it was a response to the appalling conditions of the inter-war years, and because David Lloyd-George had claimed that soldiers returning from the first World War would have a 'country fit for heroes to live in', sadly typical of Lloyd-George's Liberal bombast. The fear of fascism was based on the perception that in its initial phases in Germany and Italy it was perceived to have been economically successful, hence the danger of its appeal to the working class; it was not a claim that economic depression itself was the cause of war.
I think that markets CAN self-regulate much more than they are allowed to now. I think that government makes matters worse in many cases (particularly with social engineering initiatives such as CMA, FDA, Fannie and Freddie that exacerbate the real-estate bubble). I think that there is too much crony capitalism when governments are involved (with unions as well as large corporations). I think people in goverment are corrupt and self-serving just like people in the private world, therefore I do not believe government has the citizens best interests in mind even if that is what they sell the voters. AND....we haven't even talked about the feasability of central banks and fiat currencies... the damage that it causes and the power it gives corrupt goverments to run up mountains of debt....
The problem with this argument is that it was precisely the reliance on self-regulation that enabled the whizz-kids in finance to develop financial products whose end result was to encourage borrowing at an unsustainable level; the mirage of figures suggested huge flows of capital were lubricating the system when in effect the borrowing was drowning it. As for government, I think it is now too embedded in the state economy for a detachment to be truly effective if it is job creation you want. Efficiency too often gets translated into job losses, when it should really just mean hiring people who are good at their job and don't have to make you jump through eleven hoops to get something done that used to take a phone call or a visit to a local office.
The European Union is actually in danger of breaking up; it isn't just the Euro that is in crisis. I have always supported European integration for political reasons because of the history of war and prejudice, and feel that economically the European states will trade with each other anyway because of geographical propinquity as much as commercial logic. The problem with the European Union is that because it confers advantages on its members, everyone wants to join the club. We have admitted Israel into the European Broadcasting Union, but not Morocco, just as we have given Israel preferential status on a raft of economic activities, but not Syria. To me, Israel is a Middle Eastern not a European country.
And, because of geography and some bogus claim on our intellectual history, modern Greece wanted to be in it, and not only that but was also let in to the Euro even though it did not meet the criteria for membership. Having joined, the succession of venal governments, staffed for the most part at the top by the same families that have ruled Greece since Metaxas, and staffed below by an increasing nomenklatura of friends, and friends of friends, proceeded to pretend it was not just shipping magnates who could be rich in Greece, even though the shippers actually have assets and can run a business.
One of the bizarre results of recent research -by a Greek- that is so telling, shows that there are more owners of the Porsche Cayenne in the town of Larissa than anywhere else in the world. Larissa is in agricultural Thessaly. The research went on: "A couple of years ago, there were more Cayennes circulating in Greece than individuals who declared and paid taxes on an annual income of more than 50,000 euros.”
(story is here:
http://blogs.telegraph.co.uk/finance...-euro-incomes/)
If you ever wondered where all the money went, now you know. The problem is that this recklessness which was motivated by greed and political ambition, threatens to so undermine the Euro that it could undermine the EU itself, because voters who are outraged by the bankers who award themselves for failure, are deeply unhappy about the direction the EU has been going in. That Greece is now painting the Germans as the villain really is outrageous, but characteristic of the denial too many of them live in.
So I am now wondering if 2008 marked the beginning of a major structural shift in global capitalism, not just the confirmation of Asian supremacy in manufacturing, but the break-up of the European Union -possibly even of the UK- and the relegation of North America to second tier status. Any thoughts on this?
-
Re: Occupy Wall Street protest
are those ferals still there.Our Aussie cops gave our lowlifes a kick up the arse and told them not to come back because people were complaining about them
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
russtafa
are those ferals still there.Our Aussie cops gave our lowlifes a kick up the arse and told them not to come back because people were complaining about them
I think your ferals might be more feral than our ferals. The real ferals (homeless and just released Riker's Island prison inmates) are taking advantage of the free grub, sleeping arrangements, supplies and committing acts of sexual abuse and violence on the protestors.
...this was of course entirely predictable.
-
Re: Occupy Wall Street protest
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
fred41
I think your ferals might be more feral than our ferals. The real ferals (homeless and just released Riker's Island prison inmates) are taking advantage of the free grub, sleeping arrangements, supplies and committing acts of sexual abuse and violence on the protestors.
...this was of course entirely predictable.
ours are just rich kids or fully paid up protesters and a few nut cases .Australia does not have the same problems,we are doing very well off China
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
Stavros
When the coalition parties in the 1940s inn the UK began developing the social welfare legislation that the 1945 Labour government put into law, it was a response to the appalling conditions of the inter-war years, and because David Lloyd-George had claimed that soldiers returning from the first World War would have a 'country fit for heroes to live in', sadly typical of Lloyd-George's Liberal bombast. The fear of fascism was based on the perception that in its initial phases in Germany and Italy it was perceived to have been economically successful, hence the danger of its appeal to the working class; it was not a claim that economic depression itself was the cause of war.
I have to defer here. I am not familiar enough with the history of British politics to comment (or European for that matter).
Quote:
Originally Posted by
Stavros
The problem with this argument is that it was precisely the reliance on self-regulation that enabled the whizz-kids in finance to develop financial products whose end result was to encourage borrowing at an unsustainable level; the mirage of figures suggested huge flows of capital were lubricating the system when in effect the borrowing was drowning it.
Like I said before though, I do not think that the derivatives were transparent enough to the shareholders and the market. If we lacked the oversight to make them transparent to the market then I fully believe that we need to have that in place (so we agree here). I think the Volker rule addresses this somewhat (in an otherwise heaping lump of maggot infested shit called the Dodd-Frank Wall Street Reform act). To your point, the CDO's cooked up by the whizz kids (not the swaps mind you) encouraged the mortgage brokers lend more and more. However, the ease of access to credit was the fault of the Federal Reserve not Wall Street. I don't see how it is possible to keep intersest rates artificially low for nearly a decate and not expect there to be a bubble of some kind. The GSE's and the Federal government were also co-conspirators in the lowered underwriting standards (no-doc loans) as well. Let me be clear: There is nothing wrong with the CDO instrument itself. It is an wonderful and ingenious idea that is supposed to spread the risk of fixed income assets. Where it fails is when credit rating agencies LIE about the risk that is in them and AAA securities are pawned off to unsuspecting customers with junk in them. If the ratings agencies did thier job this would be a non-issue. (That's not to say that the banks weren't complicit either - they knew what the ratings agencies were up to. In fact, a bank would take its business to another agency if it didn't get the ratings it wanted).
So yes, we need regulation enforced by government. I think we can agree here. Where you and I probably differ is what the government needs to be doing in order to ensure free and open markets. I don't have an issue with CDO's or credit default swaps as financial instruments. I have issues with shareholders not knowing how leveraged a company is in swaps (i.e. AIG's swaps on Lehman). I have issues with CDO's being sold AAA when they are not. I'm not even sure that I think that there should be a rule about how much leverage a company can have. To me, if it is public knowledge how leveraged company is then that risk gets factored into the stock price. Risk-reward.
Quote:
Originally Posted by
Stavros
As for government, I think it is now too embedded in the state economy for a detachment to be truly effective if it is job creation you want. Efficiency too often gets translated into job losses, when it should really just mean hiring people who are good at their job and don't have to make you jump through eleven hoops to get something done that used to take a phone call or a visit to a local office.
Job creation (IMO) is best left to the market. If Uncle Sam get's its boot off the neck of business in this country, then the economy will grow. It's absurd to me to think that the allmighty government has the wisdom to create jobs when and where it deems necessary, and in the appropriate places for which there is actual demand. Many people (myself included) don't even think that the Federal Reserve Bank has enough insight into the economy to be setting the price of money effectively, so I DAMN sure don't believe that goverment knows BEST about when/where to create jobs. Bottom line: Stop putting crushing regulations on business and stop taxing them into oblivion. Stop threating them with lawsuits if they don't do this or that, or hire these people or that. Just take away the chains and let it grow. Government will be better off in the long run because tax revenues as a whole will grow as a result.
Quote:
Originally Posted by
Stavros
The European Union is actually in danger of breaking up; it isn't just the Euro that is in crisis. I have always supported European integration for political reasons because of the history of war and prejudice, and feel that economically the European states will trade with each other anyway because of geographical propinquity as much as commercial logic. The problem with the European Union is that because it confers advantages on its members, everyone wants to join the club. We have admitted Israel into the European Broadcasting Union, but not Morocco, just as we have given Israel preferential status on a raft of economic activities, but not Syria. To me, Israel is a Middle Eastern not a European country.
Maybe I'm wrong but I see the EU and the Euro as one in the same. I've always believed it to be a financial union, nothign more. As the euro goes, so goes the EU. It's really all about the euro I think. I don't know all of the rules as to who you let in or keep out - but if the Euro collapses, what then is the purpose of the EU? Are there trade agreements that are negotiated as a whole with the EU?
Quote:
Originally Posted by
Stavros
So I am now wondering if 2008 marked the beginning of a major structural shift in global capitalism, not just the confirmation of Asian supremacy in manufacturing, but the break-up of the European Union -possibly even of the UK- and the relegation of North America to second tier status. Any thoughts on this?
2008 was the beginning of the downward spiral. We (Europe / America) are all living and experiencing 'the great credit unwinding'. It will go on for many years, because Central Banks are too heavily involved in mucking things up. As far as I am concerned, right now China is the top dog: America is already 2nd tier status.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
hard4janira
Job creation (IMO) is best left to the market. If Uncle Sam get's its boot off the neck of business in this country, then the economy will grow. It's absurd to me to think that the allmighty government has the wisdom to create jobs when and where it deems necessary, and in the appropriate places for which there is actual demand. Many people (myself included) don't even think that the Federal Reserve Bank has enough insight into the economy to be setting the price of money effectively, so I DAMN sure don't believe that goverment knows BEST about when/where to create jobs. Bottom line: Stop putting crushing regulations on business and stop taxing them into oblivion. Stop threating them with lawsuits if they don't do this or that, or hire these people or that. Just take away the chains and let it grow. Government will be better off in the long run because tax revenues as a whole will grow as a result.
I think we agree about the need for increased transparency and regulation for complex financial instruments but your diagnosis of why unemployment is so high seems off base. Obama and Bush have done nothing but cut taxes and the economy has not grown except at the top. There is plenty of evidence suggesting that the current recession is caused by a lack of demand and not by excessive regulation or taxes. Here is just one such example.
http://i74.photobucket.com/albums/i2...ssproblems.png
Given that this recession is due to a lack of demand then I think the government has a pretty clear warrant for fiscal spending. The argument now is not who knows how best to spend the money but who is willing to spend at all. The private sector is not spending which leads to a vicious contractionary circle unless some other agent, the government, steps in to up demand. I'm also not arguing that the government should always be in the business of fiscal expansion; when the economy is out of the ditch the government can retract its spending and leave it up to the market. There is very specific case for the need for government spending now as opposed to later: high unemployment, low demand, low interest rates, cheap materials, cheap labor, crumbling infrastructure - they all point to the same solution: more or less Obama's job bill (although it could be bigger).
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
hard4janira
Maybe I'm wrong but I see the EU and the Euro as one in the same. I've always believed it to be a financial union, nothign more. As the euro goes, so goes the EU. It's really all about the euro I think. I don't know all of the rules as to who you let in or keep out - but if the Euro collapses, what then is the purpose of the EU? Are there trade agreements that are negotiated as a whole with the EU?
UK is part of the "EU" but we are not in the Euro hence GBP/sterling. Being part of the EU is a lot more than just a currency, the EU maintains a format of rules on trading , legislation, agriculture bla bla. For example Judicial precedent can be set by the European Court of Appeal that we have to adhere to.. ah the Human Rights Act.
If the Euro collapses then that affects nations currencies and we get guilders and pesetas back!!
-
Re: Occupy Wall Street protest
Hard4janira: I agree with a lot of whayt you say, but when you call for more transparency in the marketing of financial products so that customers are made aware of the long term risks as well as gains, you are assuming that the sellers will not be aggressive and sidestep precisely those details or assume their buyers understand the deal, have read the small print, and so on -yet this often does not happen and is often how financial products are sold -perhaps the right kind of government regulation forcing the details to be laid bare would make a difference -but in the 1980s and 1990s when these products were developed, any link to government was opposed.
Another fundamental problem is that governments can create bureaucratic jobs, but if those layers of bureaucracy are stripped out, the private sector doesn't step in to replace it; many of the so-called 'services' that government 'return to the private sector' just disappear, leaving thousands of middle class, university educated workers without an income. And yes, some of those people were working in regulatory agencies that piled paperwork onto small businesses which were not crucial to either their business or whatever the agency was there for. Regulation is essential but I think on both sides of the Atlantic it became a means of growing government rather than serving the specific constituency the agency was set up to monitor.
The European Union as Sammy says is more than a currency union, and because its origins lie in a 'new deal' for states that had been fighting each other for centuries, it offered a practical way of pooling economic resources and diluting political conflict. The founders always had a vision of a united Europe, and one that would grow into a federation of states, if not really a European 'super-state'. So there have always been people who were opposed to the growth of federalism if it undermined national sovereignty -Britain being a major dissenter in this- while some cynics see this process anyway as a Franco-German partnership. The growth of the EU into southern and eastern Europe has tended to make these divisions worse, because many people feel the poorer states are 'not ready' to join the club and actually seeks membership because they are poor and undeveloped, seeing EU status bringing with it preferential trade arrangements and, of course, access to soft loans. Even before Greece and later Poland joined, there was a 'north-south' cleavage with organised crime in Italy taking advantage of EU loan arrangements to claim millions of dollars for olive groves that didn't exist. When peple read about the astonishing number of Porsche Cayennes the Greeks have bought, apparently not all of it from the sale of olive oil or shipping contracts, they may feel the EU is one giant rip off.
Anti-Europeans argue that the admin costs of the EU are excessive, and that we would all be trading with each other anyway so why bother paying so much into a bloated, bureaucratic, often unaccountable, and often corrupt organisation? Trade, ultimately, is seen as the foundation of the EU, but I wonder if the Euro can survive, and ultimately if things go badly in Greece and Italy, people will say that there are limits to what we can afford to pay to help countries out of a mess they created themselves -particularly when German and English workers pay taxes every week when Greeks and Italians don't seem to pay them ever.
Interesting times, but the OWS protestors don't seem to be focused on the real issues, either here or in the US.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
BluegrassCat
I think we agree about the need for increased transparency and regulation for complex financial instruments but your diagnosis of why unemployment is so high seems off base. Obama and Bush have done nothing but cut taxes and the economy has not grown except at the top. There is plenty of evidence suggesting that the current recession is caused by a lack of demand and not by excessive regulation or taxes. Here is just one such example.
It's difficult to say that the Bush tax cuts didn't spur the economy. The Bush tax cuts went into effect in 2001 when GDP was 0.3%. After the tax cuts annual GDP was: 2.45, 3.1, 4.4, 3.2, and 3.2% until the recession struck in 2007 because of the real estate bubble. A great many economists told Obama that he shouldn't allow the Bush era tax cuts to expire (and he didn't). He didn't cut taxes, he simply extended the existing cuts (although his new 'jobs' plan may have some new SS tax cuts in them).
Ironically, even with the Bush 'tax cuts', the Unites States still has one of the highest corporate tax rates among industrialized countries. Now, you may say that this is offset by deductions and corporate 'welfare'. While this may be true for a few large companies that have real lobbying clout I hardly think that it is true for small buisiness which employes about 75% of working Americans. I am in favor of a small, flat tax rate for corporate America (like 12%) with no deductions whatsoever. The playing field should be the same for small business and big business alike.
But now we are talking about two different thigns: Unemployment and Recession. You can have a recession with low unemployement and you can not be in a recession with high unemployement. The two are not necessarily related (but they can be). In our case, high unemployment is a symptom of the 'great recession', IMO. So what caused the recession that led to the high unemployement? You claim it is 'lack of demand'. I agree, to a large extent. In a nutshell, several things happenned:
1) People who had easy access to credit no longer had it. This took potential spenders out of the market
2) People were underwater on their mortages w/ more debt that their house was worth. These people lost thier homes or went through bankruptcy (or both). This also took a lot of spending away because people could no longer borrow against the equity in their homes to spend
3) A lot of poeple lost their jobs on Wall-Street (and main-street in companies related to mortgages/lending) when the real-etate bubble burst and the banks went south. This had a ripple effect into other industries that were dependent on housing (construction etc..)
4) People see companies slashing to preserve the bottom line. They are laying people off and cutting costs. People get scared and they start saving more because they are unsure of the future.
Add all of these things together and you have a sinking GDP and rising unemployment because everybody is tighting their belts (people and corporations). The banks have all this money but there is no demand for it. The people that CAN borrow don't WANT to borrow.
Quote:
Originally Posted by
BluegrassCat
Given that this recession is due to a lack of demand then I think the government has a pretty clear warrant for fiscal spending.
First of all, recessions are healthy for an economy. If you don't have recessions then it means you haven't had growth (ask Warren Buffet - he'll tell you he hopes to live to see another recession). We need this recession to purge out the bad. Unfortunately, the Federal Goverment was responsible in large part for creating the real-estate bubble that led to the recession. The money supply was simply way,way too much - it created a culture of consumerism and debt that was not sustainable. The recession is the markets way of 'undoing' what the Federal Reserve has done by keeping interest rates artificially low for 10 years. That being said, you cannot simply revert back to a cheap-credit, borrow and spend mentality that got us into this mess and that is exactly what the Federal government is doing. Interest rates are lower than they have ever been (even if the demand for money isn't what it once was). The Federal Goverment keeps trying to force spending when they shouldn't. My gosh, if we keep this up then the real estate market is never going to find a bottom and the bad assets on the bank books will never get purged.
Quote:
Originally Posted by
BluegrassCat
The argument now is not who knows how best to spend the money but who is willing to spend at all. The private sector is not spending which leads to a vicious contractionary circle unless some other agent, the government, steps in to up demand. I'm also not arguing that the government should always be in the business of fiscal expansion; when the economy is out of the ditch the government can retract its spending and leave it up to the market. There is very specific case for the need for government spending now as opposed to later: high unemployment, low demand, low interest rates, cheap materials, cheap labor, crumbling infrastructure - they all point to the same solution: more or less Obama's job bill (although it could be bigger).
Now that we've had a recession and are dealing with the unemployment, the question becomes: why are companies are not hiring. As you know, companies make capital expeditures based on decisions that are 3-5 years out in the future. If they don't know what the regulatory or financial climate is going to be (or they fear it could be worse) why would they risk capital to grow and hire? Obamacare is a big piece of this and will significantly burden businesses (unless you were lucky enough to get a crony-capitalist exemption). Other regulations are also a part of it. So is uncertainty as to the tax laws in the future as well as the possibility of rising interest rates. If corporate America isn't hiring or spending then they are sending you a messages that they've peeked into the future and they don't like what they see. Steve Wynn (the hotel magnate) had a very brutal and scathign indictment of the current administrations policies towards business and he's a Democrat. Look it up on Youtube.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
hard4janira
A great many economists told Obama that he shouldn't allow the Bush era tax cuts to expire (and he didn't). He didn't cut taxes, he simply extended the existing cuts (although his new 'jobs' plan may have some new SS tax cuts in them).
Obama DID cut taxes. In reality more than a 3rd of the $800 billion stimulus was in tax cuts. And I never said Bush tax cuts had no stimulative effect, just that the gains during his tenure were confined mostly to the top.
Quote:
Originally Posted by
hard4janira
First of all, recessions are healthy for an economy.
While recessions may be inevitable there's nothing healthy about the high level of unemployment we're experiencing. Try telling people out of work that it's good for them. And you're conflating the easy credit of the Bush years with what actually brought on the crisis: misbehavior and over-leveraging by the largest financial firms and the compliance/incompetence of their regulators. Letting the recession "run its course" sounds innocuous or even reasonable but it will cause a very real increase in human misery. Long term unemployment does long term damage to our economy both through people dropping out of the workforce and by harming new cohorts entering the workforce during the downturn. There is nothing healthy about any of this.
Quote:
Originally Posted by
hard4janira
Obamacare is a big piece of this and will significantly burden businesses (unless you were lucky enough to get a crony-capitalist exemption). Other regulations are also a part of it. So is uncertainty as to the tax laws in the future as well as the possibility of rising interest rates.
I just don't see any evidence for this view, in fact there's plenty of evidence that this view is incorrect. Check out Larry Mishel's piece on the reasons for low demand.
http://www.epi.org/publication/regul...y-explanation/
-
Re: Occupy Wall Street protest
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
BluegrassCat
Obama DID cut taxes. In reality more than a 3rd of the $800 billion stimulus was in tax cuts. And I never said Bush tax cuts had no stimulative effect, just that the gains during his tenure were confined mostly to the top.
What 'gains' are you talking about. Are you saying that the rich just got richer? If I recall, unemployement was very low up unitl the recession in 2007 so you could argue that the Bush tax cuts were instrumental in keeping unemployment low. It's hard to argue that middle income familes should be getting 'richer' when they don't save anything and are addicted to debt. Maybe that is part of the problem. (Oh and you are correct, 275 billion of the 800 billion in the stimulus was in the form of tax cuts or rebates of some kind).
Quote:
Originally Posted by
BluegrassCat
While recessions may be inevitable there's nothing healthy about the high level of unemployment we're experiencing. Try telling people out of work that it's good for them.
I never said high unemployment was good (recession or otherwise). I wouldn't bother telling an unemployed person that recessions are necessary in a capitalist society - I'll leave the politicizing of recessions and unemployment to elected officials since that is what they do best.
Quote:
Originally Posted by
BluegrassCat
And you're conflating the easy credit of the Bush years with what actually brought on the crisis: misbehavior and over-leveraging by the largest financial firms and the compliance/incompetence of their regulators. Letting the recession "run its course" sounds innocuous or even reasonable but it will cause a very real increase in human misery.
Here we have a fundamental disagreement. The Federal Reserve (and other Federal/State government agencies) are largely responsible for the real-estate bubble in my opinion. I base my opinion largely on several books that I have read from noted economists and numerous other articles and such. I will list them for you if you are interested but I doubt that we would agree on this. The over-leveraging by the banks and the shenanigans of the mortgage originators and credit rating agencies are a SYMPTOM of the lax lending standards encouraged by GSE's, HUD, initiatives such as the commuity reinvestment act, and financial blackmail against lenders by goverment and Federal reserve banks. This, coupled with the easy money policy of the Federal reserve was the ROOT cause of the bubble, which in turn left investment banks (and other) with toxic assets that they could not sell. This caused a panic in the shadow banking market and the dominoes began to fall. Again, I do not exhonerate the brokers and credit rating agencies that lied or the banks that lied to thier customers about what was on the books (Bear Stearns for example). Here, I am sure we agree.
Lastly, I would argue that NOT letting the recession run it's course will cause more human misery in the long run rather than just letting the system purge itself. All of this goverment intervention only makes matters WORSE in the long run. Would you rather rip the band-aid off or pull it off slowly? We choose to pull it slowly and it only prolongs our misery. GM should go through bankruptcy and emerge a stronger company. It should be a crime what the goverment is doing to the taxpayer. Crony capitalism steps in and uses taxpayer dollars to preserve union wages and lend GM money at below market rates. The Federal government stepping in to prop up the investment banks when they should go bankrupt is another example of this absurdity. Note that over 250 community banks have gone under since 2007 and the Federal Reserve hasn't saved a single one of them. I guess those jobs don't matter. The people what work there can just go pound sand I guess, while they bail out bad decision making at AIG and the rest of the clowns on Wall Street. It's an outrage. Many people have argued that re-capitalizing the banks has done no good whatsoever. The banks still aren't lending - the Federal Reserve has simply given them free money to buy long term bonds with, because they don't want to stomach any risk in the market. Many poeple have aruged that the actions taken as a result of the real-estate bubble bursting will be a bond bubble (that will eventually burst as well). Thanks to the Federal reserve, the American people can live from bubble to bubble, losing all of their wealth in the subsequent collapses. Get the goverment out of the way, let companies go bankrupt (moreover, let them know in advance that there is a moral hazzard involved with bailing them out) and you will see much more responsible behavior from them. What incentive does GM have to be more efficient and competitive when it knows that it can get a taxpayer handout whenever things get bad?
Quote:
Originally Posted by
BluegrassCat
There is a LOT of evidence that uncertainty is the reason companies aren't hiring.
http://www.msnbc.msn.com/id/44006656...-more-workers/
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
hard4janira
This article provides 7 reasons businesses aren't hiring, and only 1 mentions uncertainty about taxes/regulations and even this 1 assertion is not backed up by any evidence. 5 of the 7 reasons have to do with low demand and weak growth. There may be a LOT of evidence for the uncertainty view but this article isn't it.
-
Re: Occupy Wall Street protest
If you were the CEO of a multinational and you made record profits for the last three years running, why would you be uncertain? Sure the economy's screwed up for the middle class and for small businesses, but that's not you. You're making record profits. You downsized your labor force, used their own fear of the jobless economy to raise production levels, lower salaries and slash benefits. You've restructured to make higher profits with less personnel. You're not a job creator, your a profit maker and you're doing just fine.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
BluegrassCat
This article provides 7 reasons businesses aren't hiring, and only 1 mentions uncertainty about taxes/regulations and even this 1 assertion is not backed up by any evidence. 5 of the 7 reasons have to do with low demand and weak growth. There may be a LOT of evidence for the uncertainty view but this article isn't it.
This is an excerpt from the article:
Many companies are reporting thatbusiness is improving, but that’s not necessarily translating into new jobs. A survey of chief executives, released in June by the trade group Business Roundtable, found that 87 percent expect sales to increase in the coming six months. But just around half said they expected to add jobs during that period.
So based on this survey last June (which admittedly is just one survey), CEO's see sales IMPROVING (which directly contradicts your assertion that poor sales is why companies are not hiring).
They go on to state (as one of the reasons):
When asked why they aren’t hiring, you’ll often hear the word “uncertainties.” Those range from not knowing whether taxes might increase at some point to worries about how health care reform could add to employee costs in the future.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
trish
If you were the CEO of a multinational and you made record profits for the last three years running, why would you be uncertain? Sure the economy's screwed up for the middle class and for small businesses, but that's not you. You're making record profits. You downsized your labor force, used their own fear of the jobless economy to raise production levels, lower salaries and slash benefits. You've restructured to make higher profits with less personnel. You're not a job creator, your a profit maker and you're doing just fine.
Most of the growth in U.S. based multi-nationals has come from sales OVERSEAS, not domestic growth. Why don't you ask Caterpiller that question: They've already said that Obamacare will cost them 100 million in the first year alone. McDonalds also said that they would have to drop health care for their employees - I wonder if these two behemoths have the lobbying clout to get crony-capitalist exemptions from the White house (oh, wait - McDonalds already has).
That means the 'uncertainty' is left to small and medium size business, who get the screw-job once again. Too small to get exemptions or corporate tax breaks, these business bear the burden of uncertainty while employing 75% of all working Americans.
ITS A SHAM, BABY!!!
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
hard4janira
It's difficult to say that the Bush tax cuts didn't spur the economy. The Bush tax cuts went into effect in 2001 when GDP was 0.3%. After the tax cuts annual GDP was: 2.45, 3.1, 4.4, 3.2, and 3.2% until the recession struck in 2007 because of the real estate bubble. A great many economists told Obama that he shouldn't allow the Bush era tax cuts to expire (and he didn't). He didn't cut taxes, he simply extended the existing cuts (although his new 'jobs' plan may have some new SS tax cuts in them).
Ironically, even with the Bush 'tax cuts', the Unites States still has one of the highest corporate tax rates among industrialized countries. Now, you may say that this is offset by deductions and corporate 'welfare'. While this may be true for a few large companies that have real lobbying clout I hardly think that it is true for small buisiness which employes about 75% of working Americans. I am in favor of a small, flat tax rate for corporate America (like 12%) with no deductions whatsoever. The playing field should be the same for small business and big business alike.
But now we are talking about two different thigns: Unemployment and Recession. You can have a recession with low unemployement and you can not be in a recession with high unemployement. The two are not necessarily related (but they can be). In our case, high unemployment is a symptom of the 'great recession', IMO. So what caused the recession that led to the high unemployement? You claim it is 'lack of demand'. I agree, to a large extent. In a nutshell, several things happenned:
1) People who had easy access to credit no longer had it. This took potential spenders out of the market
2) People were underwater on their mortages w/ more debt that their house was worth. These people lost thier homes or went through bankruptcy (or both). This also took a lot of spending away because people could no longer borrow against the equity in their homes to spend
3) A lot of poeple lost their jobs on Wall-Street (and main-street in companies related to mortgages/lending) when the real-etate bubble burst and the banks went south. This had a ripple effect into other industries that were dependent on housing (construction etc..)
4) People see companies slashing to preserve the bottom line. They are laying people off and cutting costs. People get scared and they start saving more because they are unsure of the future.
Add all of these things together and you have a sinking GDP and rising unemployment because everybody is tighting their belts (people and corporations). The banks have all this money but there is no demand for it. The people that CAN borrow don't WANT to borrow.
First of all, recessions are healthy for an economy. If you don't have recessions then it means you haven't had growth (ask Warren Buffet - he'll tell you he hopes to live to see another recession). We need this recession to purge out the bad. Unfortunately, the Federal Goverment was responsible in large part for creating the real-estate bubble that led to the recession. The money supply was simply way,way too much - it created a culture of consumerism and debt that was not sustainable.
this was a great post, and I want to expand on the aspect in bold. This culture of consumerism is not new. Our country was designed for this very thing at the end of the 1940's. There was a decision made to go one of two ways--to continue on the path we were on of self-sustinence, or to become a consumeristci society. The choice for consumerism was made, and we bought ourselves into this problem we currently face. as technology expands, it gets easier and easier to "afford" more and more things that were once available to the wealthy. As well, a higher demand relates to a bigger need for simpler-to-produce goods. Which creates a system where things are made cheaper so that they break and we dont' feel so bad when we have to replace them.. its an almost guaranteed system. Check out www.storyofstuff.org its amazing the shit we just don't know. I look at all the protesting, and the political garbage, the debt, the welfare, the unemployment, and all the jackwagons in power who think they can just make us feel warm and cuddly and that they have the solution.
There is no "one" solution to all this. it will take a lot of work from everone to change our way of living. We can be a consumer society and still be a productive, smart and saavy society without all the crap in between that is killing us now. the cure starts with each one of us individually.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
hard4janira
This is an excerpt from the article:
Many companies are reporting that
business is improving, but that’s not necessarily translating into new jobs.
A survey of chief executives, released in June by the trade group Business Roundtable, found that 87 percent expect sales to increase in the coming six months. But just around half said they expected to add jobs during that period.
So based on this survey last June (which admittedly is just one survey), CEO's see sales IMPROVING (which directly contradicts your assertion that poor sales is why companies are not hiring).
They go on to state (as one of the reasons):
When asked why they aren’t hiring, you’ll often hear the word “uncertainties.” Those range from not knowing whether taxes might increase at some point to worries about how health care reform could add to employee costs in the future.
Nothing here "directly contradicts" what I've said, rather it supports it quite clearly. CEO's see sales improving and thus are looking to hire more and spend more, exactly what I've been saying would happen. & Btw the more recent survey has expected improving sales at 65% and expected hiring at 35% showing a pretty clear and significant relationship between the two (As expected demand drops so does anticipated hiring). There's been no new regulations or taxes since then to otherwise explain this drop which directly contradicts what you've said. Again you cite the 1 out of 7 reasons which is an unsourced anecdote with no evidence to back it up. If there was truly a LOT of evidence you wouldn't be hanging your hat on this fairly flimsy piece.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
BluegrassCat
Nothing here "directly contradicts" what I've said, rather it supports it quite clearly. CEO's see sales improving and thus are looking to hire more and spend more, exactly what I've been saying would happen. & Btw the more recent survey has expected improving sales at 65% and expected hiring at 35% showing a pretty clear and significant relationship between the two (As expected demand drops so does anticipated hiring). There's been no new regulations or taxes since then to otherwise explain this drop which directly contradicts what you've said. Again you cite the 1 out of 7 reasons which is an unsourced anecdote with no evidence to back it up. If there was truly a LOT of evidence you wouldn't be hanging your hat on this fairly flimsy piece.
I suppose you can refute the survey if you wish as 'anecdotal'. I'll take it at face value and assume that the CEO's interviewed were telling the truth and that the survey is an accurate reflection of their strategies (I can't say that the CEO's interviewed represent a good sample because I don't know what industries they cross referenced etc..).
But based on that: If 87% see improving sales but only 35% plan on hiring, then there must be a reason why there isn't MORE hiring given the improving outlook. The article highlights those reasons and supports my argument that one of the reasons that companies are not hiring is because of uncertainty about the regulatory climate, taxes, and costs assoicated with health care. You said that you couldn't find ANY evidence that this was true, I am saying that this article indicates otherwisse. Again, you can dismiss the survey as anecdotal if you like (on what grounds you would do this I am not sure).
But think about if even for a minute: If the survey is a good sample and we could extrapolate that 80+% of CEO's see improving sales in the future - then why is unemployment still over 9%? I agree with your basic premise that an improved outlook is one reason why companies grow and hire, but it is NOT the only reason. Therefore, you can't simply say that poor sales is the ONLY reason why companies aren't hiring and unemployment remains above 9%.
There are a great many other factors as well (uncertainty is just one of them). I think another factor is simply that large companies are growing but they are growing overseas. This creates demand for jobs, unfortunately they are non-domestic jobs. This is different from 'off-shoring' jobs. For example, if Coors brewing company wants to increase distribution in Asia it will have to build warehouses and employee people abroad to store and transport the product etc... These jobs necessarily cannot be created in the United States. That is just one example of what I am talking about. Of course, this doesn't necessarity apply to small or medium business that doesn't have an international market.
-
Re: Occupy Wall Street protest
Steve Wynn Goes On Epic Anti-Obama Rant On Company Conference Call - YouTube
Steve Wynn, a Democrat, explains clearly on a corporate conference call EXACTLY why he's sitting on his capital. It is a fear of Obama, the regulatory environment, and escallating healt care costs. This guy talks to other CEO's and he isn't the ony one who feels this way.
Somebody should explain to me why Steve Wynn would say these things if they weren't true or he didn't believe them.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
hard4janira
I suppose you can refute the survey if you wish as 'anecdotal'. I'll take it at face value and assume that the CEO's interviewed were telling the truth and that the survey is an accurate reflection of their strategies (I can't say that the CEO's interviewed represent a good sample because I don't know what industries they cross referenced etc..).
But based on that: If 87% see improving sales but only 35% plan on hiring, then there must be a reason why there isn't MORE hiring given the improving outlook. The article highlights those reasons and supports my argument that one of the reasons that companies are not hiring is because of uncertainty about the regulatory climate, taxes, and costs assoicated with health care. You said that you couldn't find ANY evidence that this was true, I am saying that this article indicates otherwisse. Again, you can dismiss the survey as anecdotal if you like (on what grounds you would do this I am not sure).
But think about if even for a minute: If the survey is a good sample and we could extrapolate that 80+% of CEO's see improving sales in the future - then why is unemployment still over 9%? I agree with your basic premise that an improved outlook is one reason why companies grow and hire, but it is NOT the only reason. Therefore, you can't simply say that poor sales is the ONLY reason why companies aren't hiring and unemployment remains above 9%.
There are a great many other factors as well (uncertainty is just one of them). I think another factor is simply that large companies are growing but they are growing overseas. This creates demand for jobs, unfortunately they are non-domestic jobs. This is different from 'off-shoring' jobs. For example, if Coors brewing company wants to increase distribution in Asia it will have to build warehouses and employee people abroad to store and transport the product etc... These jobs necessarily cannot be created in the United States. That is just one example of what I am talking about. Of course, this doesn't necessarity apply to small or medium business that doesn't have an international market.
First of all, the comparison was 87% expected growth in sales and 51% expected to increase employment in June and more recently the comparison is 65% expected sales growth and 35% expect job growth so the relationship between expected demand and expected hiring is quite strong. These numbers are from the business roundtable survey.
This quote:
When asked why they aren’t hiring, you’ll often hear the word “uncertainties.” Those range from not knowing whether taxes might increase at some point to worries about how health care reform could add to employee costs in the future.
is not sourced to anyone, it's not clear whether it's from the survey or just the author's assertion. That's why it's not evidence.
And I'm looking at this from the point of view of diagnosing the biggest problems with the economy in order to fix them. So demand is clearly the biggest problem and requires the focus of legislators and the Fed. Conversely, regulatory uncertainty may play some role, we can't ever rule it out completely, but the case is so weak that focusing on it rather than demand amounts to little more than a distraction from the real issue. Now if there's some evidence that regulatory/tax uncertainty is as important, point me to it but I have seen no evidence that it is nearly as important.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
livepersona
I like that video.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
BluegrassCat
First of all, the comparison was 87% expected growth in sales and 51% expected to increase employment in June and more recently the comparison is 65% expected sales growth and 35% expect job growth so the relationship between expected demand and expected hiring is quite strong. These numbers are from the business roundtable survey.
Where do you get the second set of numbers (65 / 35)? I didn't see that - is that from another source?
Quote:
Originally Posted by
BluegrassCat
is not sourced to anyone, it's not clear whether it's from the survey or just the author's assertion. That's why it's not evidence.
You're nit-picking a bit here. I think its rather obvious that the author is citing examples given by the CEO's as 'uncertanties' if you read it closely.
Quote:
Originally Posted by
BluegrassCat
And I'm looking at this from the point of view of diagnosing the biggest problems with the economy in order to fix them. So demand is clearly the biggest problem and requires the focus of legislators and the Fed. Conversely, regulatory uncertainty may play some role, we can't ever rule it out completely, but the case is so weak that focusing on it rather than demand amounts to little more than a distraction from the real issue. Now if there's some evidence that regulatory/tax uncertainty is as important, point me to it but I have seen no evidence that it is nearly as important.
Why is weakened demand bad? If the economy was overheating because of too much credit (and subsequent consumer debt) then it doesn't make sense to try and artificially stimulate demand. This will only lead to consumers taking on more debt that they cannot afford. The recession is telling us that the consumers are DONE, they are finished. It's time for private debt to go down in this country and for savings to go up. The response to a lack of demand has been necessary and it has been deflation. Demand will only go up when consumers have renewed faith. That means less debt, a stable housing market (which still needs to find the bottom) and a sense of financial/job security. The idea that the Federal reserve or the Goverment can force demand by pumping trillions into the market is absurd. Nobody wants it. Banks are sitting on gobs of cash but they aren't lending. America is over-leveraged and borrowed-out. And what good did the first round of 'stimulus' do? A trillion dollars for what? Where are the jobs? And what good has the Fed done with QE1 and QE2? They are causing inflation in food and energy prices and hurting the very people who would benefit from deflation - the lower and middle class (if they had jobs). Now people are stuck without jobs and rising food prices. Nice work Bernanke.
(I snatched this off Ritholtz blog)
http://www.ritholtz.com/blog/wp-cont...11/11/meat.jpg
-
Re: Occupy Wall Street protest
I think it is weird for Steve Wynn to argue that nothing will change until 'weird' Barack Obama goes and takes his 'uncertainties' with him, that capitalists will just sit on their capital and not spend. He seems to think that the President controls everything, when Obama has had problems with Congress, which is where the real meat is put in the sandwich of American law and policy. The point Obama makes about redistribution is a populist one that taps into the issue of the day -why people who work for $30,000 a year don't get a bonus when people who work for $30m a year do. Populism doesn't always make good policy, but it sounds good. Uncertainty is the mantra of the age, Obama didn't create it, he inherited it, and if he and his advisers dont really know whats going to happen in the next five years, nobody does -we get the usual bullshit from the Coalition govt in the UK about growth being 'on track' that the cuts which are sacking thousands of public servants are 'painful but necessary' and so on.
The fundamental premise, that jobs being done in central and local govt can be provided by the private sector and thus relieve tax payers of a bloated wage bill, is false: a) the jobs either don't exist in the private sector; or b) the ones that do are not moving, not enough businesses are hiring people to reduce unemployment and raise tax revenues. I dont see how President Obama can be held responsible for all of that any more than we can blame Cameron, Clegg and Osborne who are making a dog's mess out of the scraps left behind by Blair and Brown.
And what, anyway, is the alternative? We are in the sailor's equivalent of the doldrums, and until the winds pick up, we are stranded in the middle of the ocean.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
hard4janira
Where do you get the second set of numbers (65 / 35)? I didn't see that - is that from another source?
You're nit-picking a bit here. I think its rather obvious that the author is citing examples given by the CEO's as 'uncertanties' if you read it closely.
Why is weakened demand bad? If the economy was overheating because of too much credit (and subsequent consumer debt) then it doesn't make sense to try and artificially stimulate demand. This will only lead to consumers taking on more debt that they cannot afford. The recession is telling us that the consumers are DONE, they are finished. It's time for private debt to go down in this country and for savings to go up. The response to a lack of demand has been necessary and it has been deflation. Demand will only go up when consumers have renewed faith. That means less debt, a stable housing market (which still needs to find the bottom) and a sense of financial/job security. The idea that the Federal reserve or the Goverment can force demand by pumping trillions into the market is absurd. Nobody wants it. Banks are sitting on gobs of cash but they aren't lending. America is over-leveraged and borrowed-out. And what good did the first round of 'stimulus' do? A trillion dollars for what? Where are the jobs? And what good has the Fed done with QE1 and QE2? They are causing inflation in food and energy prices and hurting the very people who would benefit from deflation - the lower and middle class (if they had jobs). Now people are stuck without jobs and rising food prices. Nice work Bernanke.
(I snatched this off Ritholtz blog)
http://www.ritholtz.com/blog/wp-cont...11/11/meat.jpg
The other numbers are from the business roundtable website
http://businessroundtable.org/news-c...nomic-outlook/
I don't think it's nitpicking at all, when the author is quoting people she indicates it by using quotations or by attribution (said Maryland). Even if it's from the survey we have no idea how many people said this or how important they thought it was. So it's mostly a useless quote.
Weakened demand is bad because high unemployment is bad. If we disagree on high unemployment being bad, there's no point in discussing it further, we have irreconcilable views. Since the crash debt has decreased and savings have increased but still the economy is stalled. Inflation is what we need because that would diminish the remaining debt, helping the poor middle class the most and spurring our trade competitiveness while conversely deflation punishes the poor/middle class the most. The problem is we don't have any inflation. The too small stimulus was hugely successful in staving off disaster but more was needed. QE tripled the money base and still no inflation. A Keynesian model predicts this, while an Austrian doesn't.
Low demand is the biggest problem and the answer to getting the economy back on track is clearly fiscal stimulus coupled with more a active role by the Fed.
-
Re: Occupy Wall Street protest
Quote:
Originally Posted by
Stavros
I think it is weird for Steve Wynn to argue that nothing will change until 'weird' Barack Obama goes and takes his 'uncertainties' with him, that capitalists will just sit on their capital and not spend. He seems to think that the President controls everything, when Obama has had problems with Congress, which is where the real meat is put in the sandwich of American law and policy.
True, congress is very responsible for the current political and economic climate as well. Obamacare was as much a liberal congress as it was Obama. Obama does have the ability to circumvent congress with executive orders through agencies such as the FDA and the EPA, and he's using them. I think the rhetoric from Obama doesn't help much either (i.e. corporations are bad, corporations that go offshore should be punished, corporations don't pay their fair share, corporations should get sued if they are discriminating against unemployed people). It creates a very negative business climate.
Quote:
Originally Posted by
Stavros
The point Obama makes about redistribution is a populist one that taps into the issue of the day -why people who work for $30,000 a year don't get a bonus when people who work for $30m a year do. Populism doesn't always make good policy, but it sounds good.
The problem with Obama is that he campaigns as a populist but he tries to govern as a progressive. That angers people and it is largely why the tea-party movement came to be, IMO. I'm tired of the class warfare in this country. It is perpetuated by the left who pander to the have-not's. The problem with the liberals is that they are not satisfied with equal opportunity. Equal opportunity is never enough; what they want is equl outcomes, and re-distribution of wealth is the only way to accomplish this because many people do not have the intelligence or means or wherewithall to acheive great things on thier own. Not everybody can or will sit at the head of the table, that's just the way it goes. Funny thing though, at least capitalism affords a free society the BEST opportunity to acheive wealth. Do these people honestly think that they would be better off financially if we were socialist or communist (or other)? Seriously, there are far fewer seats at the head of those tables.....
Quote:
Originally Posted by
Stavros
Uncertainty is the mantra of the age, Obama didn't create it, he inherited it, and if he and his advisers dont really know whats going to happen in the next five years, nobody does -we get the usual bullshit from the Coalition govt in the UK about growth being 'on track' that the cuts which are sacking thousands of public servants are 'painful but necessary' and so on.
He inherited it but he needs to step up and own it now, just as he said he would. Obama said that he would turn things around in 3 years and he was dead wrong. Now he has nothing but excuses and the line 'I'm better than the alternative'. Governments in the Western world need to shrink. They have been on an unsustainable path of growth and debt. Goverments are necessarily becoming smaller because they have to cut the massive debts that they have accumulated. Cutting government jobs IS painfull but it is also necessary. As I have said in the past, I believe that government should be limited to a % of GDP via a constitutional amendment.
Quote:
Originally Posted by
Stavros
The fundamental premise, that jobs being done in central and local govt can be provided by the private sector and thus relieve tax payers of a bloated wage bill, is false: a) the jobs either don't exist in the private sector; or b) the ones that do are not moving, not enough businesses are hiring people to reduce unemployment and raise tax revenues. I dont see how President Obama can be held responsible for all of that any more than we can blame Cameron, Clegg and Osborne who are making a dog's mess out of the scraps left behind by Blair and Brown.
It sounds cruel but necessity is the mother of all invention. This country has demand for jobs it just can't match skillsets to the needs. People need retraining to some extent and we need to better educate our workforce (it's very, very bad here in the U.S.) On the other hand, there are also jobs available here that poeple are too 'proud' to work (farm work/labor). Tighter immigration laws are opening a lot of these up (esp. in the South). I say if you are an unemployed worker with a limited skill set then you need to get your ass out in the field. At some point, unemployment benefits must run out and people must be forced to work. Permanent unemployment benefits creates a welfare class dependent on handouts who wont fill jobs that they think are beneath them.
-
Re: Occupy Wall Street protest
the "movement" dosent even know what the movement is about....until 8 out of 10 people at the rallies can agree on why they are there, this is just a clusterfuk.
