I know plenty of people at plenty of companies. I know lots of people at those service companies. They know what's going on and where the money is and isn't at. There is cash at some of those companies - they have just put the death grip on it until they see what happens with the economy. Bonfires made out of cash might be slightly dramatic, I think you can admit to that. The last time I saw a bonfire made out of cash was during the dotcom craze, and we know what happened there.
As you've pointed out before, we borrowed the money from China to fund the stimulus bill. Was China going to hire a bunch of Americans with that money otherwise? Didn't think so. Not really. It's good at continuing to do what it already does. It is not particularly quick about implementing new spending. Sure, except they wouldn't have. They would have kept the cash. Maybe you didn't notice, but companies weren't investing in anything they didn't absolutely have to this year. Same as consumers. barfo
http://blog.richardsprague.com/2009/01/worst-economy-since-great-depression.html Worst economy since the Great Depression From the Jan 13th issue of Time Magazine: The slump is the longest, if not the deepest, since the Great Depression. Traumatized by layoffs that have cost more than 1.2 million jobs during the slump, U.S. consumers have fallen into their deepest funk in years. "Never in my adult life have I heard more deep- seated feelings of concern," says Howard Allen, retired chairman of Southern California Edison. "Many, many business leaders share this lack of confidence and recognize that we are in real economic trouble." Says University of Michigan economist Paul McCracken: "This is more than just a recession in the conventional sense. What has happened has put the fear of God into people." (oops, forgot to mention the year: this article is from 1992, during what in retrospect turned out not to be much of a recession at all.) [via Marginal Revolution] If you’re one of those who thinks President Obama is inheriting “the worst economy since the Great Depression”, please check out two years: 1982 [via David Leonhardt in NYTimes] The first big blow to the economy was the 1979 revolution in Iran, which sent oil prices skyrocketing. The bigger blow was a series of sharp interest-rate increases by the Federal Reserve, meant to snap inflation. Home sales plummeted. At their worst, they were 30 percent lower than they are even now (again, adjusted for population size). The industrial Midwest was hardest hit, and the term “Rust Belt” became ubiquitous. Many families fled south and west, helping to create the modern Sun Belt. Nationwide, the unemployment rate rose above 10 percent in 1982, compared with 7.2 percent last month. and, of course, 1973. I wouldn’t trade today’s situation for either of those two years, and not just because today’s economy is by comparison so much better. It’s impossible to know the future, so who knows and maybe things will get a lot worse. But meanwhile it’s important not to over-react based on over-dramatic headlines.
http://symonsez.wordpress.com/2009/...omy-not-worst-since-great-depression-not-yet/ From July: All of this points to a recession comparable to the late 1970’s and early 1980’s. The comparison to the Great Depression is simply a tough argument to make, at this point. I truly hope, as I think everyone does, that politicians will not be able to accurately say that we are in the worst condition since the Great Depression. Many people have blamed the depression on Herbert Hoover. Others blamed the deep recession of the late 70’s and early 80’s on Jimmy Carter. Could this be the reason why the media and politicians choose Republican President Hoover’s legacy instead of Democrat President Jimmy Carter’s? Or is it more because from a PR standpoint, the Great Depression is something that every one knows about. Maybe its more attention getting or sexy to talk about the Great Depression instead of a simple recession. But, regardless of the reasoning, many aspects of the current situation cannot credibly be compared with the depression and more accurate reporting by the media and proclamations by policians would be that it is the worst in 30 years.
I don't think you are addressing the point, Denny. To show that it isn't arguably the worst economy since the depression, you have to show that an argument cannot be made that it is. You are merely showing that arguments can be made that it isn't. That is not disputed. barfo
You don't read? Does it help if it's in bold? Or bigger font? All of this points to a recession comparable to the late 1970’s and early 1980’s. The comparison to the Great Depression is simply a tough argument to make, at this point.
You don't comprehend? There's no "comparison to the Great Depression" to be made here, so that part of your very large quote is irrelevant. The relevant comparison is to everything that came after the depression. The other part of your very large quote just says that this recession is comparable to the 70's and 80s. Well, comparable to does not necessarily mean better than. I don't see anything in anything that you've posted so far that backs up your claim. To the contrary, I posted a few metrics which can be used to argue that it is the worst since the depression. barfo
What does this imply? It's the next sentence from the economist's blog I posted: "I truly hope, as I think everyone does, that politicians will not be able to accurately say that we are in the worst condition since the Great Depression." That we are NOT in the worst condition since the Great Depression. Of course. And it is way better now than it was after the Carter debacle. Nobody was projecting debt of 75% of GDP, people can afford a home because prices are down as are interest rates, taxation is lower, people who are lucky to have jobs and get COLAs aren't bumped by them into higher tax brackets (negating the effect), etc. Nobody thinks we're heading toward being a 3rd world country like they did back then - at least not due to the underlying economic conditions. There are a lot of economists predicting massive inflation to pay for Obama's massive (and worthless) spending, which would put us in a similar situation to the early 80s.
It says he hopes that politicians will not be able to accurately say that. It doesn't say it isn't or won't be accurate, inarguably. That's your opinion, and it is certainly arguably valid. Just like the opposite viewpoint. barfo
Won't be? That mean it isn't. The statements by the president and his advisors are simply untrue. It's like, we've been lied into spending $10T. Interest rates being below 5% and the dive in housing prices aren't a matter of opinion.
You are changing the subject, and not very successfully. You think the late 70's were worse, which is fine, but doesn't prove anything at all. Specifically, it does not prove that they were inarguably worse. And, of course, lied into spending $10T is a lie itself. The deficit wasn't going to be zero no matter who was elected. Not sure what that has to do with the topic at hand. Are you arguing that low interest rates are a sign that we aren't in economic trouble? And that the housing crash is a positive economic development? Is down the new up? barfo
http://www.examiner.com/x-6356-Wichita-Independent-Examiner~y2009m4d30-Obamas-inherited-deficit-AP-fact-checks-his-fiction Low interest rates make this economy better than the economy of the late 1970s and early 1980s.
They make it different, for sure. They make it better if what you care about is borrowing money and you have a lender willing to lend. Otherwise, interest rates are just one factor in the bigger picture. Is the economy better now than, say, 2006? Because interest rates were much higher then, too. barfo
Interest rates are one measure of a decent economy. Low housing prices combined with cheap money means the american dream (house in the 'burbs, white picket fence, etc.) is more attainable now than any time in my lifetime. The stock market is another... I note people seem to be happy with their 401K lately. The market is a good way for companies to raise capital for expansion. If only the guy with the bully pulpit encouraged expansion.... Inflation is another. It's been quite low since Reaganomics kicked in (interest rates, too). Obamanomics is going to change that back to the Carter ways/days of malaise. You do realize they're printing money like crazy, right?
So, the economy is great, and Obama is to blame for ruining the economy. I'm going to have leave it there, as I have a conference call at the crack of dawn today (yes, on Labor Day...) barfo
It's not great, but it's better than it was in the early 1980s. And it would have recovered already without govt. interference.
Really. You think if there was no stimulus bill, no bank bailout, no bailout of GM and Chrysler, the economy would have recovered by today? Interesting perspective. Any particular reason why you think that? barfo
Yeah, I do. We've had banking crises (S&L GHWB), stock market collapses (Clinton), and collapse of housing prices (Clinton) before. We survived 9/11 and the economic aftermath of the shutdown of the airlines and the decreased willingness to travel that followed. We've had them during times of war and occupation (Gulf War I, Kosovo). We've had the collapse of several huge corporations in a short period of time (AT&T, Enron, Worldcom ring a bell?). The only time we've not recovered in as short a time as by today is when the president goes around saying that everything is broken, that people are going to be taxed, that the future is going to be mortgaged for nothing tangible, and expresses downright hostility toward the sectors of the economy that produce 20%+ of the jobs. You do see that he's constantly talked down the economy. Like saying it's the worst situtaion since the depression. It may be out of Rahm's playbook (never let a serious crisis go to waste) to try to scare people into thinking there's a need to spend on all this shit. The downside is that it becomes a self fulfilling prophecy. People want and need some sort of certainty about the future. The uncertainties are not about whether their taxes are going up but by how much and how soon. While the stock market may be pumped up right now because there's nothing better for people to put their money in, you can't know if the govt. is going to take over some company you own stock in and wipe you out. As I said before, the "stimulus" bill should have been focused on getting money into main street's hands and focused on immediate job creation. The $800B (stimulus bill only) would seed 32,000 startup companies with $25M in capital each. At 100 employees each, that's 3.2M jobs. I can continue to point out really good ways the money could have been spent (or not spent at all is even better). But I can also continue to point out how futile and wasteful and harmful the way it was spent is.
