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I've noticed that, as Obama's policies begin to show signs of success, there are more and more of his perpetual haters posting popular opinion polls rather than substantive policy arguments. I think Obama overestimated the intelligence of the population, actually, to see the bigger picture.
Unfortunately for them, while the undereducated and unaware population gets emotionally frustrated by deficits and spending, the economists who actually know what they are talking about are working through a very well established process.
The result? A dropping unemployment rate, increased rates of hiring, and a stabilizing economy.
If "policies begin to show signs of success" means we saw a three percent drop in the unemployment rate ((10.0 - 9.7)/10 = 3.0%) in a one month period, it makes me a bit uneasy.
It's a classic debate over whether government doing nothing would be better than government intervening. I think there's a case for both:
Among much else in this thread, I admire your generosity in allowing that the do-nothing argument has anything but hot air behind it. Since we're into polls in this thread, we can tally the votes of the world's active finance ministries on the matter by seeing which of them has intervened with programs to promote recovery and which has elected to do nothing. The voting so far seems to be all such finance ministries to nothing, leaving pundits to opine that the do-nothing side is completely out of the running on this one. And deservedly so...
You can't fix a financial meltdown that was caused by creating Trillions of dollars out of thin air by creating trillions more.
The meltdown, if you want to call it that, was not caused by anyone's having created trillions of dollars out of thin air. It was created in a Sorcerer's Apprentice style by a bunch of ambitious and self-serving capitalists who found a way to make millions of dollars by stripping off profit for themselves, then selling off the residual risk to someone else. As they didn't hold any of it, they stopped caring how much cumulative risk they had created, so they kept piling up the risk (and piling up their own profits) until the sytem finally began to collapse from the weight of the load. The problem at that point (roughly mid-2007) was confined to the credit markets and it could have been contained and treated there with bold action, but none was taken, and the crisis leaked out into the economy at large, ultimately striking down equity markets, employment, and aggregate demand. More than $15 trillion worth of wealth was wiped out in the process, and against that backdrop, creating new liquidity -- trillions of dollars worth of it -- is the only avenue that offers any hope of success. You cannot just create jobs. No one in his right mind hires a worker to produce a good or service for which there is no existing demand. You can't sell such goods and services and thereby recoup your costs. Nothing good happens until demand can be reinflated and just as it was vanishing liquidity that led to the drop in demand, it is in the creation of new liquidity that the seeds of new demand are sown.
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Originally Posted by GuyNTexas
Manufacturing has been moved off shore ... an economy cannot recover and survive without production!!
The US is still by far the largest manufacturing economy in the world. All that has happened over the past 15 years or so is that our share of the total manufacturing produced by the top twelve manufacturing economies has shrunk from a little over 25% to a little under 25%. Since the mid-1990's, every large manufacturing economy has lost manufacturing jobs, while manufacturing output has soared. The loss of manufacturing jobs in the US has been about average. China for instance has lost jobs at a much faster rate than we have.
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Originally Posted by GuyNTexas
What do you think the stimulus package could possibly stimulate? Building crap that no one needs on borrowed money that will never come back in real terms?
The stimulus is intended to create a bridge over the worst of this crisis. It tempers the effects upon those hardest hit, it preserves jobs that would otherwise have been lost, and it creates investments in infrastructure and technologies that will breed and support jobs in the future. It's a pretty simple concept, and after fifteen months of heading nowhere but straight down, it has promoted a nascient recovery in six months. But what we see at the moment is a stimulus-sustained recovery. The job is not done until that can mature into a self-sustained recovery. If we never reach that point, then all that has been done so far will go to waste. This is why it is very dangerous to be taking steps such as any toward aggressive deficit reduction. Huge deficits are not good. But there are times when all of the alternatives are worse, and this is one of those times -- for us and for every significant economy around the world.
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Originally Posted by GuyNTexas
Do you even realize that there aren't enough dollars in existence to pay the national debt? If everyone on earth handed the US Treasury every dollar in existence, the debt could still not be paid off.
There also isn't any reason on earth to WANT to pay off the public debt. We haven't done it since 1836, and there is no prospect of its being done again within the lifetime of any living person and probably not any of their yet unborn children. National debt is very unlike your personal debt, so stop being so all-fired agitated over it for no reason. All that is necessary is that we be able to service the debt, which is easiest when debt sits at about 55-65% of GDP. Because of this recent crisis, it is currently a little above 85% -- too high, yet well below the levels seen duiring and after that other crisis known as WWII. As the recovery moves on, deficits will decline, the GDP will grow, and slowly that debt-to-GDP ratio will fall back to more healthy levels. That is, unless some bunch of economic whackjobs comes along and upsets the apple-cart.
The stimulus is intended to create a bridge over the worst of this crisis. It tempers the effects upon those hardest hit, it preserves jobs that would otherwise have been lost, and it creates investments in infrastructure and technologies that will breed and support jobs in the future. It's a pretty simple concept, and after fifteen months of heading nowhere but straight down, it has promoted a nascient recovery in six months. But what we see at the moment is a stimulus-sustained recovery. The job is not done until that can mature into a self-sustained recovery.
Still parroting this revisionist history I see.
All that is certainly not how the Failed Stimulus was sold. It was supposed to create an immediate jolt to the economy (never did), it was supposed to prevent the UE from rising above 8% (never did), those hardest hit have not been tempered, the investment in infrastructure and those New Green Technologies HAVE NOT produced the job growth envisioned.
Amazing that you of all people, the one always bragging about your "qualifications", completely ignore what the CBO said in Jan of 2009 - the recession would end, all by itself, end of 2009/early 2010.
Another thing you ignore - Obama's CEA Chair, Romer stated LAST YEAR that the stimulus would not have an impact going forward.
Before Keynes we had the Edinburgh con man, John Law. Same sh*t, different box.
Actually, Law's thinking and focus were rather different from those of Keynes, but I guess you've nominated him now to serve as your latest Guy-to-attack-mercilessly-as-if-we-knew-what-we-were-talking-about. The right-wing after all does need a steady supply of those. As a thinker, Law was quite brilliant, and his impact is still felt in modern monetary theory. Over on the applied side, his record was a good deal more spotty, in part due to what some might consider to have been moral shortcomings. I'm sure you won't mention his role in rejuvenating the French export sector over a mere handful of years so I will, but most would see that and other accomplishments as outweighed by his failures and proclivities for engaging in less than honorable relationships. Still, moving from today through Keynes to Law is a journey to no end, unless one's end is merely to find a route to the proverbial whining and babbling.
Funny how Mises has proven to work and Keynes doesn't. Unless you are going to rewrite history and say Keynes got Austria out of their mess in the 1920's and not Mises.
What makes you think that the propaganda mill today known as the Mises Institute has any actual connection to Mises himself or to the original Austrian School? How do you connect utter hacks such as Thomas DiLorenzo to Mises et al in any way at all?
As for post-WWI Austria, Mises was working on the very problem of post-war debt management for the Austrian government (thereby making him a parasite in the eyes of some here). Keynes was working at the time as a jounalist and financial advisor in London, and the General Theory was still a decade away. The major piece that Keynes did produce in that era (Tract on Monetary Reform) has been widely admired by many right-wing economic heroes. Indeed, Hayek himself would one day call Keynes the one really great man he had ever known.
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Originally Posted by Loveshiscountry
Inflation is the opiate of the ruling elite.
Please do present your thesis In Defense of Deflation. I'll certainly look forward to reading that.
What proof or reasons do you have to say Mises Institute would close? Why do you think the people who have followed the Austrian economic theory would desert the Mises Institute?
Is it because of your arrogant theories that only the ruling elite can make and understand economic policies and the masses are animals?
Well, let's see, there are about a hundred to two hundred supposed economists actually affiliated in any way with the Mises Institute. The Institute's financial support does not come from them, nor from the limited for-profit circulation of any of their work. The whole operation is propped up by the Scaife's, the Bradley's, the Coors', and the Koch's as noted earlier. Without them, the whole enterprise collapses. By contrast, actual economics might be represented by the American Economic Association. It has well over 20,000 professional members. They don't need the Scaife's to get by.
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Originally Posted by Loveshiscountry
There are people who voted for Obama and his promise of transparency and still defend him. There are people who voted for Bush on his no nation building promise and still defend him. It looks like the tea party is "getting it" better than most.
The Tea Party, such as it is, doesn't get much more than laughed at.
No, setting the record straight after you and a few have littered the place with pure rubbish as usual.
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Originally Posted by sanrene
All that is certainly not how the Failed Stimulus was sold. It was supposed to create an immediate jolt to the economy (never did), it was supposed to prevent the UE from rising above 8% (never did), those hardest hit have not been tempered, the investment in infrastructure and those New Green Technologies HAVE NOT produced the job growth envisioned.
For fifteen months the Republican nosedive continued its relentless plunge. The stimulus bill was first enacted midway through the first quarter of 2009. By the third quarter, we saw GDP growth larger than during 17 of the 32 quarters during which W was President. <sanrene>, let me introduce you to Jolt. Jolt, <sanrene>.
As you know but will never admit, there never was a promise that the stimulus bill would prevent unemployment from going above 8%. You have a number on an axis of a graph that was dependent upon the levels prevailing at the time. That's not a promise except to those desperate enough to try to make one out of it.
Quote:
Originally Posted by sanrene
Amazing that you of all people, the one always bragging about your "qualifications", completely ignore what the CBO said in Jan of 2009 - the recession would end, all by itself, end of 2009/early 2010.
And at the same time, the consensus of private economists was that unemployment would not rise above 8.25% at any point during 2009. How many times do you have to be hit over the head with it before the fact sinks in that no one in late 2008 or early 2009 yet appreciated the degree of momentum that the on-going collapse had accumulated. The rows of dominos had become more complex and fell faster than anything that had ever been seen before. Keep in mind that this was no ordinary economic downturn. This time, your cowboy capitalist friends had broken a major link in the economic chain. What they unleashed in that foolish, foolish act was bigger and broader than what anyone actually anticipated.
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Originally Posted by sanrene
Another thing you ignore - Obama's CEA Chair, Romer stated LAST YEAR that the stimulus would not have an impact going forward.
Another thing that you flat out lie about. Romer very plainly and particularly spoke of the impacts of the FISCAL portion of the stimulus package -- the tax cuts and tax-cut equivalents -- the effects of which (without any augment or extension) were expected to peak in the third quarter. Beyond that point they would no longer create new GDP growth of their own, but merely contribute to maintaining the base excess in GDP with the stimulus bill over what would have been expected without it.
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Originally Posted by sanrene
Perfect revisionist history.
No, just some actual facts put in the place of your interminable lines of propagandist garbage.
The meltdown, if you want to call it that, was not caused by anyone's having created trillions of dollars out of thin air. It was created in a Sorcerer's Apprentice style by a bunch of ambitious and self-serving capitalists who found a way to make millions of dollars by stripping off profit for themselves, then selling off the residual risk to someone else. As they didn't hold any of it, they stopped caring how much cumulative risk they had created, so they kept piling up the risk (and piling up their own profits) until the sytem finally began to collapse from the weight of the load. The problem at that point (roughly mid-2007) was confined to the credit markets and it could have been contained and treated there with bold action, but none was taken, and the crisis leaked out into the economy at large, ultimately striking down equity markets, employment, and aggregate demand.
You just described, exactly, what Fannie and Freddie did. They committed millions of counts of securities fraud by intentionally misrepresenting risk. Origins of an American Kleptocracy | zero hedge
Bernanke, just recently backed by Obama and reconfirmed, concurs: "BEN BERNANKE: Oh, the worst moments were back in September. The financial crisis began with Fannie Mae and Freddie Mac, the large housing companies that were taken over by the government, and subsequent to that a number of very large financial firms came under enormous pressure. One of them, Lehman Brothers, an investment bank, failed. Others came close to failure, needed government support, not just in the United States, but around the world. And those were some very long nights I spent on the sofa in my office as we worked to try to keep the financial system running." At Forum, Bernanke Defends Fed's Aggressive Moves | Online NewsHour | July 27, 2009 | PBS
Quote:
As the recovery moves on, deficits will decline, the GDP will grow, and slowly that debt-to-GDP ratio will fall back to more healthy levels. That is, unless some bunch of economic whackjobs comes along and upsets the apple-cart.
You just described, exactly, what Fannie and Freddie did. They committed millions of counts of securities fraud by intentionally misrepresenting risk. Origins of an American Kleptocracy | zero hedge
Great. More exciting blog-economics from whackjob internet wannabes. Not that the post you refer to was written by him (it was written by some speculating neophyte who can't spell Rahm Emanuel), but is Zero Hedge's central figure by any chance banned from holding any position in the brokerage industry as the result of his past record of insider trading? Just asking.
As for the piece-of-trash blog-post itself, how many times do slippery phrases like "we wondered" or "suspiciously convenient" or "we have seen no credible data" or "it seems almost beyond question" or "it takes only a cursory examination to suspect" appear within this piece? I just totally lost track. It sometimes amazes me that such low-grade poppycock can be taken seriously by even the most biased and gullible readers.
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Originally Posted by InformedConsent
Bernanke, just recently backed by Obama and reconfirmed, concurs:
BEN BERNANKE: Oh, the worst moments were back in September. The financial crisis began with Fannie Mae and Freddie Mac, the large housing companies that were taken over by the government, and subsequent to that a number of very large financial firms came under enormous pressure. One of them, Lehman Brothers, an investment bank, failed. Others came close to failure, needed government support, not just in the United States, but around the world. And those were some very long nights I spent on the sofa in my office as we worked to try to keep the financial system running.
Yes, you've tried (multiple times) before to misrepresent that quote from six months ago. First of all, the question asked was what were the worst moments for Bernanke PERSONALLY, and second the answer that he gives is in chronological order, not order of severity. But hey, why bother with the truth of the matter when the spin can be made so much more exciting...
Last edited by saganista; 02-07-2010 at 12:27 PM..
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