Not to get all political but..

[Reactionary]

Even though I didn't support Representative Griffith in the election, this is the second 'good' vote he's cast (the first was voting 'No' on the the Lily Ledbetter Fair Pay and Trial Lawyer Employment Act).

Before the "needless pain and suffering" issue surfaced in the campaign, I noted that I could vote FOR Griffith based on his conservative message. I'm still uncomfortable with him, but I appreciate his votes.

DvlsAdvc8 - you note that the "key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom" and then you seem to favor MORE expansion of the money supply as a solution? Huh?!?

Another contributing factor to the Great Depression was the imposition of anti-free trade measures similar to anti-free trade provisions of the Porkulus Bill.

From the WSJ:

In 1930, just as the world economy was sinking as it is today, the U.S. Congress passed the Smoot-Hawley Tariff Act, which essentially shut off imports into the U.S. Our trading partners retaliated, and world trade plummeted. Most economic historians now conclude that the tariff contributed importantly to the severity of the world-wide Great Depression.

Later, as one of his last acts, President Herbert Hoover made the situation even worse by signing a "Buy America Act" requiring all federal government projects to use American materials. (That act is still on the books although it was weakened during the 1980s.) We must avoid repeating the disastrous mistakes of the past.

From The Economist:

Smoot-Hawley did most harm by souring trade relations with other countries. The League of Nations, of which America was not a member, had talked of a “tariff truce”; the Tariff Act helped to undermine that idea. By September 1929 the Hoover administration had already noted protests from 23 trading partners at the prospect of higher tariffs. But the threat of retaliation was ignored: America’s tariffs were America’s business.

[Reactionary]

PS - remember to vote for your candidate in the Primaries on March 3 to fill Griffith's Senate seat.

[33458]

Originally Posted by FCEddie

Start with term limits and go from there.

Seems most of the economists I've read think doing nothing would be the way to go.

TERM LIMITS. With you there.

[DvlsAdvc8]

Originally Posted by Reactionary

DvlsAdvc8 - you note that the "key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom" and then you seem to favor MORE expansion of the money supply as a solution? Huh?!?

I've asked anti-Stimulus folks to tell me what their plan would be as opposed to whining about the one we have. The answer I get: nothing. My point was that "nothing" didn't work out too well for Hoover now did it?

Leaving the situation with the banks alone for the moment... several places in the US are pushing 10% unemployment, and it continues to worsen at a pace greater than predicted each month. Unemployment is quickly becoming the primary concern. Most economists (even conservatives) believe the unemployment numbers actually under represent the problem, as many who would otherwise work, have stopped seeking work in order to stay home with children. 10%+ unemployment, which some economists have predicted, doesn't sound like an efficient market at work.

It is one thing to say that credit should not be so easily available in order to prevent such bubbles - it is another to say that "doing nothing" and the resultant mass unemployment that will result is a reasonable solution.

Unemployment compounds itself, as everyone tightens spending over concern for their own job, only causing companies to continue to retract. This is a snowball down hill. Expanding the money supply during such times of possible deflation (with no risk of inflation in the short-run) is prudent policy. The government can take up the slack to avoid a self-feeding economic over-correction.

Lest we forget, blind faith in the market's ability to regulate itself is also part of what got us here. We need a heavier hand on both sides of the curve. Laissaz faire rightfully died with Hoover.

The sooner you get people back to work, the sooner private consumption increases and hiring in the private sector returns... and the sooner the recession is over with. Doing nothing only prolongs the pain, and is in fact MORE costly in the long run (in terms of lost productivity)... as history has already shown. My only complaints with the bill are that it includes too many tax cuts which are less efficient at creating jobs in the short-run than government spending, too much aid to localities was cut (which has immediate impact - keeping teachers, police etc from being cut) and too much of the spending won't really "hit" until late 09, early 2010.

Bottom line, put people to work and you'll have a quicker recovery.

[Frankie117]

In the grand scheme of things, 10%+ unemployment is a good number compared to most countries. For example, some European nations regularly experience numbers on average between 8%-15%. The 1970s and 1980s were rough patches as far as unemployment goes, but that period in our economic history was big on rationalization and modernization of industry. Quite frankly, without that period of those processes, the technology age would never have been boomed in the 90s.

The problem I had with the 'stimulus package' is the fact that it is all based on temporary jobs that will not last for more than a few years. Like the New Deal, it depends on some mystic aura to spawn jobs out of nowhere. However, World War II was required to take us out of the slump of the 30s, and unfortunately it will take something of that magnitude to pull us out of this one.

But in the end, this should not be a political thing, no matter how much the media and/or Congress wants us to think. And honestly, I believe around this time next year it will be time for a second 'stimulus package' to keep things rolling..

[DvlsAdvc8]

Originally Posted by Frankie117

In the grand scheme of things, 10%+ unemployment is a good number compared to most countries. For example, some European nations regularly experience numbers on average between 8%-15%. The 1970s and 1980s were rough patches as far as unemployment goes, but that period in our economic history was big on rationalization and modernization of industry. Quite frankly, without that period of those processes, the technology age would never have been boomed in the 90s.

The problem I had with the 'stimulus package' is the fact that it is all based on temporary jobs that will not last for more than a few years. Like the New Deal, it depends on some mystic aura to spawn jobs out of nowhere. However, World War II was required to take us out of the slump of the 30s, and unfortunately it will take something of that magnitude to pull us out of this one.

But in the end, this should not be a political thing, no matter how much the media and/or Congress wants us to think. And honestly, I believe around this time next year it will be time for a second 'stimulus package' to keep things rolling..

Honestly, I expect them to come back for a second stimulus. That's the biggest reason I would have liked to have seen a larger bill - every dollar spent today has a greater impact than a dollar spent tomorrow.

Also, what was WW2 other than absolutely massive government stimulus? I don't think things are quite as bad today as they were then thanks to many of the things enacted because of the great depression - The Federal Reserve System, FDIC, unemployment insurance, to name a few...

The stimulus-related jobs aren't supposed to last more than a couple years. The whole idea is that the government takes up the slack while the private sector gets its act together. Businesses spend reactively... they don't hire more people until there is demand... but high unemployment stiffles demand. Government on the other hand can spend proactively... it can put idle resources to some use, rekindle demand for private goods, and thereby restore hiring in the private sector. Private sector jobs are created as "stimulus jobs" are phased out and the economy is returned to a normal state of being.

I'm a Keynesian through and through. I firmly believe that government should run deficits in bad times and surpluses in good times (which really only serve to cancel each other out). There is a net gain to the economy as a whole as times of low productivity are kept to a minimum.

[33458]

(We need to bring this back to Huntsville specifically or we're going to get lost once moved to that other n.a.s.t.y. forum.)

I have not seen stats for how Huntsville (Madison County) rates in comparison concerning job loss, growth or unemployment rates...maybe I'll Google some tomorrow - though I am not the chart builder here.

Also interested in how the 'Stimulus' is actually to be applied locally - improvements or "job creation"...have heard blurbs on the news but nothing truly informative. Television is useless.

[33458]

2008 unemployment average of 3.7 %.
Huntsville Alabama USA - Huntsville Metropolitan Area Employment/Unemployment Rate

This says we have an unemployment rate of 8 percent?
http://www.simplyhired.com/a/local-j...Huntsville,+AL

This says 2.4 percent...
Moderator cut: link removed, linking to competitors sites is not allowed

I have a headache.

[DvlsAdvc8]

Huntsville is insolated from recession by government spending. In a sense, its quite ironic for Huntsvillians to rail against government stimulus, when their own jobs depend on government spending. Much like DC, Huntsville is probably a relatively safe harbor from recession.

I heard that Huntsville is expected to get money for a couple road projects, but that's all as of yet.

I read Paul Krugman's blog from time to time, and sure enough, this subject came up the other day:

Originally Posted by Paul Krugman

Use, delay, and obsolescence
One question that seems worth asking right now is, how fast would the economy recover in the absence of a stimulus plan and a financial rescue? Would it, as Rush Limbaugh says, be over in a few months? Or are we talking about a sustained slump — and how sustained?

Well, my general view is that this isn’t your father’s recession; it’s your grandfather’s recession. And the experience with pre-WWII recessions may be a useful guide. I’m not just talking about the Great Depression; some earlier experiences may in some ways be equally or more relevant.

So let’s look at the NBER business cycle data. What we see is that some of those prewar slumps were really, really long: the Panic of 1873 was followed by a recession that lasted 5 1/2 years.

And Keynes explained why: in the absence of an effective monetary or fiscal policy, a recession would have to go on until

"the shortage of capital through use, decay and obsolescence causes a sufficiently obvious scarcity to increase the marginal efficiency"

So this could go on for a long, long, long, long time.

For some reason, I value the opinion of a nobel prize winning economist over that of Rush Limbaugh.

[Keeper]

Originally Posted by 33458

(We need to bring this back to Huntsville specifically or we're going to get lost once moved to that other n.a.s.t.y. forum.)
.

Yep.. unfortunately that is what will happen if it strays too far off of how it affects H'ville.