On July 25 2012 03:05 paralleluniverse wrote: What part of "Republicans are dogmatically opposed[...] Obama in general" don't you understand?
Haven't they even stated this explicitly? I forget who is was... something about how the goal of the republican party was to make the next four years go as badly as possible...
The chance of QE3 coming from the Fed is virtually zero.
Bernanke has been saying that he's ready to act if the economy gets worse since the beginning of time. Over the last few months things have gotten worse and he's still saying that he's ready to act if the economy gets worse.
What makes you think this time is going to be anything different? In fact, the minutes from the last Fed meeting says that the FOMC would prefer to look at additional support for the economy that is not QE.
People have been forecasting, hoping, praying for QE3 for years. It's not going to happen.
So Tyler Durden has nothing to fear from QE3. More on Tyler Durden here.
On July 24 2012 23:56 xDaunt wrote: A closer look at Obama's polling trends from Dick Morris:
His personal favorability, once a strong point for Obama, has vanished and is now being replaced by a personal dislike that is dragging him down.
These data, buried deep in the latest NY Times/CBS poll (of registered voters, not likely voters) are both stark and important. In April, Obama had a 42-45 favorable/unfavorable rating, itself a shock given his vastly higher favorable ratings only a few months before. Now, he has a favorable rating of only 36% and an unfavorable rating of 48%.
The NY Times poll showed Romney getting 47% of the vote compared to 46% for Obama (again, this poll is of registered voters, likely voter polls are more pro-Romney). So that means that one-quarter of Obama’s voters do not give him a favorable rating – a danger sign for the president.
What is most notable about this statistic is that it is not due primarily to the bad economy. While the Times poll showed that the percent of voters who feel he is doing a good job in handling the economy has dropped to 36%, Obama’s ratings in this category have been low for some time. The drop in favorability is new.
Rather the cause of his decreased likeability is his negative campaigning, both in person and on the air. He is now no longer the sunny, optimistic, friendly person he portrayed himself as being in 2008. Instead, a nasty, surly, angry image has taken over.
This change is at the heart of Obama’s dilemma. The more he goes negative, the more he hurts himself in the process and undermines the reservoir to good will that has sustained him through tough economic times.
As recently as one year ago, Obama’s personal favorability was ten points above his vote share in most polls. Now it is ten points below it presaging further a likely further drop in his poll numbers.
The chance of QE3 coming from the Fed is virtually zero.
Bernanke has been saying that he's ready to act if the economy gets worse since the beginning of time. Over the last few months things have gotten worse and he's still saying that he's ready to act if the economy gets worse.
What makes you think this time is going to be anything different? In fact, the minutes from the last Fed meeting says that the FOMC would prefer to look at additional support for the economy that is not QE.
People have been forecasting, hoping, praying for QE3 for years. It's not going to happen.
So Tyler Durban has nothing to fear from QE3. More on Tyler Durban here.
Gotta agree with this. I have a semi-inside source that Ben Bernanke is admitting that QE2 was a mistake and he's talking to the finance ministers in other countries who are reminding him that they tried it several times and it doesn't work.
The bottom line is that the government cannot generate growth and it is unwise to try to manipulate or trick people into thinking the economy is healthier than it is, which is what QE and Operation Twist are supposed to do.
He'll do it if the situation is so desperate that the Fed needs to convince people we're not in the 2nd Great Depression, but it can only be a defensive tool.
The chance of QE3 coming from the Fed is virtually zero.
Bernanke has been saying that he's ready to act if the economy gets worse since the beginning of time. Over the last few months things have gotten worse and he's still saying that he's ready to act if the economy gets worse.
What makes you think this time is going to be anything different? In fact, the minutes from the last Fed meeting says that the FOMC would prefer to look at additional support for the economy that is not QE.
People have been forecasting, hoping, praying for QE3 for years. It's not going to happen.
So Tyler Durban has nothing to fear from QE3. More on Tyler Durban here.
Gotta agree with this. I have a semi-inside source that Ben Bernanke is admitting that QE2 was a mistake and he's talking to the finance ministers in other countries who are reminding him that they tried it several times and it doesn't work.
The bottom line is that the government cannot generate growth and it is unwise to try to manipulate or trick people into thinking the economy is healthier than it is, which is what QE and Operation Twist are supposed to do.
He'll do it if the situation is so desperate that the Fed needs to convince people we're not in the 2nd Great Depression, but it can only be a defensive tool.
Two-thirds of likely voters say the weak economy is Washington’s fault, and more blame President Obama than anybody else, according to a new poll for The Hill.
It found that 66 percent believe paltry job growth and slow economic recovery is the result of bad policy. Thirty-four percent say Obama is the most to blame, followed by 23 percent who say Congress is the culprit. Twenty percent point the finger at Wall Street, and 18 percent cite former President George W. Bush.
....
The poll, conducted for The Hill by Pulse Opinion Research, found 53 percent of voters say Obama has taken the wrong actions and has slowed the economy down. Forty-two percent said he has taken the right actions to revive the economy, while six percent said they were not sure.
What exactly do they blame Obama for? For the GFC? He wasn't even in office at the time. For this I'd blame Wall Street and Reagan/Clinton/Bush for their deregulation of the financial industry,
For the job losses, most of that happened around the time of his inauguration before he had any chance to react.
For the slow recovery? Give me the chain of causes and effects that starts at "fiscal stimulus" and ends at "makes the economy worse".
I blame Republicans for preventing Obama from doing more.
The fiscal stimulus was huge and the recovery is very slow. Too much was blown on keeping people that vote Democrat happy. It didn't make the economy worse but we got very little bang for our buck.
The stimulus wasn't huge relatively. China had a $600 billion stimulus for an economy that's 1/3 the size of the US in terms of GDP. And when you're splashing around $700 billion, anyone who you give it to could be called a "special interest". Construction is a special interest. So is research. Education is also a special interest. Tax cuts for the middle class... well middle class people have special interests too.
The question originally raised is who is to blame. Let's put it this way: Who's stopping more stimulus now?
The stimulus WAS huge. Show me a bigger fiscal stimulus post WW2 in the US if you want to prove otherwise.
The US has also added to the stimulus already this year, as it has in each year of the recession.
Are Republicans blocking somethings that Obama wants to do? Yep. Opposition parties do tend to do that. Would be nice if Obama had some political capital left over but that wad was already blown getting Obamacare passed.
Show me a bigger recession since the Great Depression.
It was a 4% of GDP stimulus to plug an 8% of GDP output gap. As Krugman, Romer, and other economists have said, the stimulus needed to be twice the size. But I guess, if there was another $700 billion stimulus, that money has to go somewhere. Wherever it would hypothetically ended up would be called a "special interest".
I don't need to show you a bigger recession. A stimulus need not cover 100% of the drop in spending to be effective. Recessions can solve themselves and monetary policy has a stimulative effect as well. The point of Keynesian economic theory is not that stimulus is necessary, but without it the recovery may take too long and leave a lot of damage in its wake.
Moreover, the recession DID END. The economy has been growing since Q3 of '09 - yet the recovery has been slow and not self-sustaining. At this point in the recovery the economy shouldn't need continued stimulus.
Part of the reason for the lackluster recovery is the stimulus itself - too much was blown on wasteful spending. Like it or not all spending is not equal.
Just that we have had... what? 40 recessions in 200 years? So we should be expecting a 41st one (or whichever # it is).
Well everything we did from 2009 till now hasn't worked.
And when you take a look at the numbers from the Philly Fed last month, and Richmond this month, the next one is shaping up to get here sooner than later.
On July 25 2012 03:45 JonnyBNoHo wrote: Part of the reason for the lackluster recovery is the stimulus itself - too much was blown on wasteful spending. Like it or not all spending is not equal.
This much is certainly true. I'm no Keynesian, but the stimulus was bungled even on its own terms.
Two-thirds of likely voters say the weak economy is Washington’s fault, and more blame President Obama than anybody else, according to a new poll for The Hill.
It found that 66 percent believe paltry job growth and slow economic recovery is the result of bad policy. Thirty-four percent say Obama is the most to blame, followed by 23 percent who say Congress is the culprit. Twenty percent point the finger at Wall Street, and 18 percent cite former President George W. Bush.
....
The poll, conducted for The Hill by Pulse Opinion Research, found 53 percent of voters say Obama has taken the wrong actions and has slowed the economy down. Forty-two percent said he has taken the right actions to revive the economy, while six percent said they were not sure.
What exactly do they blame Obama for? For the GFC? He wasn't even in office at the time. For this I'd blame Wall Street and Reagan/Clinton/Bush for their deregulation of the financial industry,
For the job losses, most of that happened around the time of his inauguration before he had any chance to react.
For the slow recovery? Give me the chain of causes and effects that starts at "fiscal stimulus" and ends at "makes the economy worse".
I blame Republicans for preventing Obama from doing more.
The fiscal stimulus was huge and the recovery is very slow. Too much was blown on keeping people that vote Democrat happy. It didn't make the economy worse but we got very little bang for our buck.
The stimulus wasn't huge relatively. China had a $600 billion stimulus for an economy that's 1/3 the size of the US in terms of GDP. And when you're splashing around $700 billion, anyone who you give it to could be called a "special interest". Construction is a special interest. So is research. Education is also a special interest. Tax cuts for the middle class... well middle class people have special interests too.
The question originally raised is who is to blame. Let's put it this way: Who's stopping more stimulus now?
The stimulus WAS huge. Show me a bigger fiscal stimulus post WW2 in the US if you want to prove otherwise.
The US has also added to the stimulus already this year, as it has in each year of the recession.
Are Republicans blocking somethings that Obama wants to do? Yep. Opposition parties do tend to do that. Would be nice if Obama had some political capital left over but that wad was already blown getting Obamacare passed.
Show me a bigger recession since the Great Depression.
It was a 4% of GDP stimulus to plug an 8% of GDP output gap. As Krugman, Romer, and other economists have said, the stimulus needed to be twice the size. But I guess, if there was another $700 billion stimulus, that money has to go somewhere. Wherever it would hypothetically ended up would be called a "special interest".
I don't need to show you a bigger recession. A stimulus need not cover 100% of the drop in spending to be effective. Recessions can solve themselves and monetary policy has a stimulative effect as well. The point of Keynesian economic theory is not that stimulus is necessary, but without it the recovery may take too long and leave a lot of damage in its wake.
Moreover, the recession DID END. The economy has been growing since Q3 of '09 - yet the recovery has been slow and not self-sustaining. At this point in the recovery the economy shouldn't need continued stimulus.
Part of the reason for the lackluster recovery is the stimulus itself - too much was blown on wasteful spending. Like it or not all spending is not equal.
Monetary policy is at the zero lower bound. And while the stimulus doesn't need to cover the entire output gap, it doesn't change the fact that it wasn't large enough.
The recession (as defined by a board of economist being 2 quarters of negative growth) did *technically* end, but output is still below potential GDP, and employment is far below maximum employment, and so the economy has not recovered.
Not all spending is equal, for example spending on infrastructure has better fiscal effects than tax cuts. You also haven't justified how the stimulus constitutes wasteful spending. But suppose you're right, how did you come to the conclusion that wasteful spending is bad for the economy in a recession? Sure, good spending is better than wasteful spending. But wasteful spending is better than no spending at all.
Two-thirds of likely voters say the weak economy is Washington’s fault, and more blame President Obama than anybody else, according to a new poll for The Hill.
It found that 66 percent believe paltry job growth and slow economic recovery is the result of bad policy. Thirty-four percent say Obama is the most to blame, followed by 23 percent who say Congress is the culprit. Twenty percent point the finger at Wall Street, and 18 percent cite former President George W. Bush.
....
The poll, conducted for The Hill by Pulse Opinion Research, found 53 percent of voters say Obama has taken the wrong actions and has slowed the economy down. Forty-two percent said he has taken the right actions to revive the economy, while six percent said they were not sure.
What exactly do they blame Obama for? For the GFC? He wasn't even in office at the time. For this I'd blame Wall Street and Reagan/Clinton/Bush for their deregulation of the financial industry,
For the job losses, most of that happened around the time of his inauguration before he had any chance to react.
For the slow recovery? Give me the chain of causes and effects that starts at "fiscal stimulus" and ends at "makes the economy worse".
I blame Republicans for preventing Obama from doing more.
The fiscal stimulus was huge and the recovery is very slow. Too much was blown on keeping people that vote Democrat happy. It didn't make the economy worse but we got very little bang for our buck.
The stimulus wasn't huge relatively. China had a $600 billion stimulus for an economy that's 1/3 the size of the US in terms of GDP. And when you're splashing around $700 billion, anyone who you give it to could be called a "special interest". Construction is a special interest. So is research. Education is also a special interest. Tax cuts for the middle class... well middle class people have special interests too.
The question originally raised is who is to blame. Let's put it this way: Who's stopping more stimulus now?
The stimulus WAS huge. Show me a bigger fiscal stimulus post WW2 in the US if you want to prove otherwise.
The US has also added to the stimulus already this year, as it has in each year of the recession.
Are Republicans blocking somethings that Obama wants to do? Yep. Opposition parties do tend to do that. Would be nice if Obama had some political capital left over but that wad was already blown getting Obamacare passed.
Show me a bigger recession since the Great Depression.
It was a 4% of GDP stimulus to plug an 8% of GDP output gap. As Krugman, Romer, and other economists have said, the stimulus needed to be twice the size. But I guess, if there was another $700 billion stimulus, that money has to go somewhere. Wherever it would hypothetically ended up would be called a "special interest".
I don't need to show you a bigger recession. A stimulus need not cover 100% of the drop in spending to be effective. Recessions can solve themselves and monetary policy has a stimulative effect as well. The point of Keynesian economic theory is not that stimulus is necessary, but without it the recovery may take too long and leave a lot of damage in its wake.
Moreover, the recession DID END. The economy has been growing since Q3 of '09 - yet the recovery has been slow and not self-sustaining. At this point in the recovery the economy shouldn't need continued stimulus.
Part of the reason for the lackluster recovery is the stimulus itself - too much was blown on wasteful spending. Like it or not all spending is not equal.
and employment is far below maximum employment, and so the economy has not recovered.
But the ultimate goal is maximum UNemployement...
But wasteful spending is better than no spending at all.
It is this attitude which is the ideological root of most of our problems.
I think that the problem with the current economy is really based on a few main flaws:
1. Faith in the economy is still down. It doesn't matter if the economy isn't getting smaller because investors are still quite wary of the current economy. The faith in the economy is still not there. The idiocy of our current Congress probably has a lot to do with this. They're more concerned with 33 symbolic gestures repealing Obamacare than with actually doing something useful for the economy. It would be hard to believe in them to be reasonable enough to warrant investment. Saving seems like the more logical option, although this is bad for the economy as a whole.
2. Socially harmful business practices. This refers to the "business is business" attitude of the finance world and the general short-sightedness of quite a few businesses. One example of this is a situation that arose in Citi just a year ago. A few employees sued Citi over a certain business practice. Basically, they were responsible for filtering out bad investments, and their superiors told them "the number of loans deemed substandard will have to go down." I don't doubt that every other financial institution does similar BS. The problem with this is that it makes public losses and private gains. Definitely not good for the economy. Another problem is more general: a general downfall of employer loyalty. Basically, a lot of employers now tend to want workers that can be used and quickly thrown away when they're not needed (ex: contractors instead of employees for technical work). There are quite a few problems with this, but one of the main ones is simply that the lack of job security isn''t very good for the economy.
3. Massive, unreasonable personal debt. Student loans (tuition inflation), healthcare(unreasonably high cost for critical care), legal fees (especially divorce), etc. These always cause trouble, and this economic crisis is no exception because bankruptcy is socially harmful. If Obamacare does work, this is a step in the right direction for solving that problem.
Though all of these are common in any recession, the fact that this is a pretty big one exacerbates these problems and really needs a long-term solution to restore the economy. 1873 (first Great Depression) needed quite a few reforms to finance, 1913 needed the Fed, the Great Depression needed a social safety net, and now this recession needs some similar repair of the fundamental flaws in the economy. This time, it's really not enough to just pump more money into the system.
Two-thirds of likely voters say the weak economy is Washington’s fault, and more blame President Obama than anybody else, according to a new poll for The Hill.
It found that 66 percent believe paltry job growth and slow economic recovery is the result of bad policy. Thirty-four percent say Obama is the most to blame, followed by 23 percent who say Congress is the culprit. Twenty percent point the finger at Wall Street, and 18 percent cite former President George W. Bush.
....
The poll, conducted for The Hill by Pulse Opinion Research, found 53 percent of voters say Obama has taken the wrong actions and has slowed the economy down. Forty-two percent said he has taken the right actions to revive the economy, while six percent said they were not sure.
What exactly do they blame Obama for? For the GFC? He wasn't even in office at the time. For this I'd blame Wall Street and Reagan/Clinton/Bush for their deregulation of the financial industry,
For the job losses, most of that happened around the time of his inauguration before he had any chance to react.
For the slow recovery? Give me the chain of causes and effects that starts at "fiscal stimulus" and ends at "makes the economy worse".
I blame Republicans for preventing Obama from doing more.
The fiscal stimulus was huge and the recovery is very slow. Too much was blown on keeping people that vote Democrat happy. It didn't make the economy worse but we got very little bang for our buck.
The stimulus wasn't huge relatively. China had a $600 billion stimulus for an economy that's 1/3 the size of the US in terms of GDP. And when you're splashing around $700 billion, anyone who you give it to could be called a "special interest". Construction is a special interest. So is research. Education is also a special interest. Tax cuts for the middle class... well middle class people have special interests too.
The question originally raised is who is to blame. Let's put it this way: Who's stopping more stimulus now?
The stimulus WAS huge. Show me a bigger fiscal stimulus post WW2 in the US if you want to prove otherwise.
The US has also added to the stimulus already this year, as it has in each year of the recession.
Are Republicans blocking somethings that Obama wants to do? Yep. Opposition parties do tend to do that. Would be nice if Obama had some political capital left over but that wad was already blown getting Obamacare passed.
Show me a bigger recession since the Great Depression.
It was a 4% of GDP stimulus to plug an 8% of GDP output gap. As Krugman, Romer, and other economists have said, the stimulus needed to be twice the size. But I guess, if there was another $700 billion stimulus, that money has to go somewhere. Wherever it would hypothetically ended up would be called a "special interest".
I don't need to show you a bigger recession. A stimulus need not cover 100% of the drop in spending to be effective. Recessions can solve themselves and monetary policy has a stimulative effect as well. The point of Keynesian economic theory is not that stimulus is necessary, but without it the recovery may take too long and leave a lot of damage in its wake.
Moreover, the recession DID END. The economy has been growing since Q3 of '09 - yet the recovery has been slow and not self-sustaining. At this point in the recovery the economy shouldn't need continued stimulus.
Part of the reason for the lackluster recovery is the stimulus itself - too much was blown on wasteful spending. Like it or not all spending is not equal.
Monetary policy is at the zero lower bound. And while the stimulus doesn't need to cover the entire output gap, it doesn't change the fact that it wasn't large enough.
The recession (as defined by a board of economist being 2 quarters of negative growth) did *technically* end, but output is still below potential GDP, and employment is far below maximum employment, and so the economy has not recovered.
Not all spending is equal, for example spending on infrastructure has better fiscal effects than tax cuts. You also haven't justified how the stimulus constitutes wasteful spending. But suppose you're right, how did you come to the conclusion that wasteful spending is bad for the economy in a recession? Sure, good spending is better than wasteful spending. But wasteful spending is better than no spending at all.
The problem with just spending is that it is temporary and you need to pay it back. In the short run the spending provides a boost to the economy but once it ends you have nothing (or worse, only debt).
When the government just throws money around as stimulus everyone knows it and acts accordingly. For example, a retailer will add more cashiers and stock a bit more inventory, but the retailer will be very reluctant to add more stores because he knows that once the stimulus ends a lot of the demand he sees will vanish.
Additionally the debt the government incurs is problematic for two reasons. First, the debt will need to be paid back somehow and at sometime in the future. This creates more uncertainty for businesses thinking of expansion because they now have to consider the now increased possibility of taxes increasing. Secondly, adding debt works counter to monetary policy. Low interest rates are supposed to drive investors into riskier assets. However, the government is making it easier for investors to stay in safe Treasuries by issuing a lot more of them.
Good stimulus needs to leave you with something after it is gone. For example, tax credits for building alternative energy plants are good. Their construction provides jobs now and once completed provide the economy with a stream of income to replace the government stimulus once it is gone. Infrastructure spending, in general, has the same effect as new roads mean new businesses along side them - and a larger tax base from which to repay the debt.
Two-thirds of likely voters say the weak economy is Washington’s fault, and more blame President Obama than anybody else, according to a new poll for The Hill.
It found that 66 percent believe paltry job growth and slow economic recovery is the result of bad policy. Thirty-four percent say Obama is the most to blame, followed by 23 percent who say Congress is the culprit. Twenty percent point the finger at Wall Street, and 18 percent cite former President George W. Bush.
....
The poll, conducted for The Hill by Pulse Opinion Research, found 53 percent of voters say Obama has taken the wrong actions and has slowed the economy down. Forty-two percent said he has taken the right actions to revive the economy, while six percent said they were not sure.
What exactly do they blame Obama for? For the GFC? He wasn't even in office at the time. For this I'd blame Wall Street and Reagan/Clinton/Bush for their deregulation of the financial industry,
For the job losses, most of that happened around the time of his inauguration before he had any chance to react.
For the slow recovery? Give me the chain of causes and effects that starts at "fiscal stimulus" and ends at "makes the economy worse".
I blame Republicans for preventing Obama from doing more.
The fiscal stimulus was huge and the recovery is very slow. Too much was blown on keeping people that vote Democrat happy. It didn't make the economy worse but we got very little bang for our buck.
The stimulus wasn't huge relatively. China had a $600 billion stimulus for an economy that's 1/3 the size of the US in terms of GDP. And when you're splashing around $700 billion, anyone who you give it to could be called a "special interest". Construction is a special interest. So is research. Education is also a special interest. Tax cuts for the middle class... well middle class people have special interests too.
The question originally raised is who is to blame. Let's put it this way: Who's stopping more stimulus now?
The stimulus WAS huge. Show me a bigger fiscal stimulus post WW2 in the US if you want to prove otherwise.
The US has also added to the stimulus already this year, as it has in each year of the recession.
Are Republicans blocking somethings that Obama wants to do? Yep. Opposition parties do tend to do that. Would be nice if Obama had some political capital left over but that wad was already blown getting Obamacare passed.
Show me a bigger recession since the Great Depression.
It was a 4% of GDP stimulus to plug an 8% of GDP output gap. As Krugman, Romer, and other economists have said, the stimulus needed to be twice the size. But I guess, if there was another $700 billion stimulus, that money has to go somewhere. Wherever it would hypothetically ended up would be called a "special interest".
I don't need to show you a bigger recession. A stimulus need not cover 100% of the drop in spending to be effective. Recessions can solve themselves and monetary policy has a stimulative effect as well. The point of Keynesian economic theory is not that stimulus is necessary, but without it the recovery may take too long and leave a lot of damage in its wake.
Moreover, the recession DID END. The economy has been growing since Q3 of '09 - yet the recovery has been slow and not self-sustaining. At this point in the recovery the economy shouldn't need continued stimulus.
Part of the reason for the lackluster recovery is the stimulus itself - too much was blown on wasteful spending. Like it or not all spending is not equal.
Monetary policy is at the zero lower bound. And while the stimulus doesn't need to cover the entire output gap, it doesn't change the fact that it wasn't large enough.
The recession (as defined by a board of economist being 2 quarters of negative growth) did *technically* end, but output is still below potential GDP, and employment is far below maximum employment, and so the economy has not recovered.
Not all spending is equal, for example spending on infrastructure has better fiscal effects than tax cuts. You also haven't justified how the stimulus constitutes wasteful spending. But suppose you're right, how did you come to the conclusion that wasteful spending is bad for the economy in a recession? Sure, good spending is better than wasteful spending. But wasteful spending is better than no spending at all.
Good stimulus needs to leave you with something after it is gone. For example, tax credits for building alternative energy plants are good. Their construction provides jobs now and once completed provide the economy with a stream of income to replace the government stimulus once it is gone. Infrastructure spending, in general, has the same effect as new roads mean new businesses along side them - and a larger tax base from which to repay the debt.
Yes! I wish our government understood this. Too bad about the dino-energy special interests...
Two-thirds of likely voters say the weak economy is Washington’s fault, and more blame President Obama than anybody else, according to a new poll for The Hill.
It found that 66 percent believe paltry job growth and slow economic recovery is the result of bad policy. Thirty-four percent say Obama is the most to blame, followed by 23 percent who say Congress is the culprit. Twenty percent point the finger at Wall Street, and 18 percent cite former President George W. Bush.
....
The poll, conducted for The Hill by Pulse Opinion Research, found 53 percent of voters say Obama has taken the wrong actions and has slowed the economy down. Forty-two percent said he has taken the right actions to revive the economy, while six percent said they were not sure.
What exactly do they blame Obama for? For the GFC? He wasn't even in office at the time. For this I'd blame Wall Street and Reagan/Clinton/Bush for their deregulation of the financial industry,
For the job losses, most of that happened around the time of his inauguration before he had any chance to react.
For the slow recovery? Give me the chain of causes and effects that starts at "fiscal stimulus" and ends at "makes the economy worse".
I blame Republicans for preventing Obama from doing more.
The fiscal stimulus was huge and the recovery is very slow. Too much was blown on keeping people that vote Democrat happy. It didn't make the economy worse but we got very little bang for our buck.
The stimulus wasn't huge relatively. China had a $600 billion stimulus for an economy that's 1/3 the size of the US in terms of GDP. And when you're splashing around $700 billion, anyone who you give it to could be called a "special interest". Construction is a special interest. So is research. Education is also a special interest. Tax cuts for the middle class... well middle class people have special interests too.
The question originally raised is who is to blame. Let's put it this way: Who's stopping more stimulus now?
The stimulus WAS huge. Show me a bigger fiscal stimulus post WW2 in the US if you want to prove otherwise.
The US has also added to the stimulus already this year, as it has in each year of the recession.
Are Republicans blocking somethings that Obama wants to do? Yep. Opposition parties do tend to do that. Would be nice if Obama had some political capital left over but that wad was already blown getting Obamacare passed.
Show me a bigger recession since the Great Depression.
It was a 4% of GDP stimulus to plug an 8% of GDP output gap. As Krugman, Romer, and other economists have said, the stimulus needed to be twice the size. But I guess, if there was another $700 billion stimulus, that money has to go somewhere. Wherever it would hypothetically ended up would be called a "special interest".
I don't need to show you a bigger recession. A stimulus need not cover 100% of the drop in spending to be effective. Recessions can solve themselves and monetary policy has a stimulative effect as well. The point of Keynesian economic theory is not that stimulus is necessary, but without it the recovery may take too long and leave a lot of damage in its wake.
Moreover, the recession DID END. The economy has been growing since Q3 of '09 - yet the recovery has been slow and not self-sustaining. At this point in the recovery the economy shouldn't need continued stimulus.
Part of the reason for the lackluster recovery is the stimulus itself - too much was blown on wasteful spending. Like it or not all spending is not equal.
Monetary policy is at the zero lower bound. And while the stimulus doesn't need to cover the entire output gap, it doesn't change the fact that it wasn't large enough.
The recession (as defined by a board of economist being 2 quarters of negative growth) did *technically* end, but output is still below potential GDP, and employment is far below maximum employment, and so the economy has not recovered.
Not all spending is equal, for example spending on infrastructure has better fiscal effects than tax cuts. You also haven't justified how the stimulus constitutes wasteful spending. But suppose you're right, how did you come to the conclusion that wasteful spending is bad for the economy in a recession? Sure, good spending is better than wasteful spending. But wasteful spending is better than no spending at all.
The problem with just spending is that it is temporary and you need to pay it back. In the short run the spending provides a boost to the economy but once it ends you have nothing (or worse, only debt).
When the government just throws money around as stimulus everyone knows it and acts accordingly. For example, a retailer will add more cashiers and stock a bit more inventory, but the retailer will be very reluctant to add more stores because he knows that once the stimulus ends a lot of the demand he sees will vanish.
Additionally the debt the government incurs is problematic for two reasons. First, the debt will need to be paid back somehow and at sometime in the future. This creates more uncertainty for businesses thinking of expansion because they now have to consider the now increased possibility of taxes increasing. Secondly, adding debt works counter to monetary policy. Low interest rates are supposed to drive investors into riskier assets. However, the government is making it easier for investors to stay in safe Treasuries by issuing a lot more of them.
Good stimulus needs to leave you with something after it is gone. For example, tax credits for building alternative energy plants are good. Their construction provides jobs now and once completed provide the economy with a stream of income to replace the government stimulus once it is gone. Infrastructure spending, in general, has the same effect as new roads mean new businesses along side them - and a larger tax base from which to repay the debt.
The debt never has to be paid back. The only thing we have to do is continue to finance it, which means pay the interest. Right now, investors are lending at a loss to the U.S. on any bond at or shorter than 10 years. If we can use this moment to stimulate the economy with PURE spending (no tax breaks), we will see a huge return and can then lower gov spending.
On July 25 2012 04:09 Lightwip wrote: I think that the problem with the current economy is really based on a few main flaws:
1. Faith in the economy is still down. It doesn't matter if the economy isn't getting smaller because investors are still quite wary of the current economy. The faith in the economy is still not there. The idiocy of our current Congress probably has a lot to do with this. They're more concerned with 33 symbolic gestures repealing Obamacare than with actually doing something useful for the economy. It would be hard to believe in them to be reasonable enough to warrant investment. Saving seems like the more logical option, although this is bad for the economy as a whole.
2. Socially harmful business practices. This refers to the "business is business" attitude of the finance world and the general short-sightedness of quite a few businesses. One example of this is a situation that arose in Citi just a year ago. A few employees sued Citi over a certain business practice. Basically, they were responsible for filtering out bad investments, and their superiors told them "the number of loans deemed substandard will have to go down." I don't doubt that every other financial institution does similar BS. The problem with this is that it makes public losses and private gains. Definitely not good for the economy. Another problem is more general: a general downfall of employer loyalty. Basically, a lot of employers now tend to want workers that can be used and quickly thrown away when they're not needed (ex: contractors instead of employees for technical work). There are quite a few problems with this, but one of the main ones is simply that the lack of job security isn''t very good for the economy.
3. Massive, unreasonable personal debt. Student loans (tuition inflation), healthcare(unreasonably high cost for critical care), legal fees (especially divorce), etc. These always cause trouble, and this economic crisis is no exception because bankruptcy is socially harmful. If Obamacare does work, this is a step in the right direction for solving that problem.
Though all of these are common in any recession, the fact that this is a pretty big one exacerbates these problems and really needs a long-term solution to restore the economy. 1873 (first Great Depression) needed quite a few reforms to finance, 1913 needed the Fed, the Great Depression needed a social safety net, and now this recession needs some similar repair of the fundamental flaws in the economy. This time, it's really not enough to just pump more money into the system.
wooh bring on 2008/2009 all over again. Good thing I don't plan on selling my stocks anytime soon so I'll just keep on buying stocks while the market turns "bearish".
No matter who's president Obama, Romney, Fred Flintstone, by at least the end of 2013 I promise you the economy will be booming again.
On July 25 2012 04:09 Lightwip wrote: I think that the problem with the current economy is really based on a few main flaws:
1. Faith in the economy is still down. It doesn't matter if the economy isn't getting smaller because investors are still quite wary of the current economy. The faith in the economy is still not there. The idiocy of our current Congress probably has a lot to do with this. They're more concerned with 33 symbolic gestures repealing Obamacare than with actually doing something useful for the economy. It would be hard to believe in them to be reasonable enough to warrant investment. Saving seems like the more logical option, although this is bad for the economy as a whole.
2. Socially harmful business practices. This refers to the "business is business" attitude of the finance world and the general short-sightedness of quite a few businesses. One example of this is a situation that arose in Citi just a year ago. A few employees sued Citi over a certain business practice. Basically, they were responsible for filtering out bad investments, and their superiors told them "the number of loans deemed substandard will have to go down." I don't doubt that every other financial institution does similar BS. The problem with this is that it makes public losses and private gains. Definitely not good for the economy. Another problem is more general: a general downfall of employer loyalty. Basically, a lot of employers now tend to want workers that can be used and quickly thrown away when they're not needed (ex: contractors instead of employees for technical work). There are quite a few problems with this, but one of the main ones is simply that the lack of job security isn''t very good for the economy.
3. Massive, unreasonable personal debt. Student loans (tuition inflation), healthcare(unreasonably high cost for critical care), legal fees (especially divorce), etc. These always cause trouble, and this economic crisis is no exception because bankruptcy is socially harmful. If Obamacare does work, this is a step in the right direction for solving that problem.
Though all of these are common in any recession, the fact that this is a pretty big one exacerbates these problems and really needs a long-term solution to restore the economy. 1873 (first Great Depression) needed quite a few reforms to finance, 1913 needed the Fed, the Great Depression needed a social safety net, and now this recession needs some similar repair of the fundamental flaws in the economy. This time, it's really not enough to just pump more money into the system.
No matter who's president Obama, Romney, Fred Flintstone, by at least the end of 2013 I promise you the economy will be booming again.
Nice article of faith you've got there. It's nice that we have such a long period of data on post-industrial economies that we can assume things will keep working as they have been.
What exactly do they blame Obama for? For the GFC? He wasn't even in office at the time. For this I'd blame Wall Street and Reagan/Clinton/Bush for their deregulation of the financial industry,
For the job losses, most of that happened around the time of his inauguration before he had any chance to react.
For the slow recovery? Give me the chain of causes and effects that starts at "fiscal stimulus" and ends at "makes the economy worse".
I blame Republicans for preventing Obama from doing more.
The fiscal stimulus was huge and the recovery is very slow. Too much was blown on keeping people that vote Democrat happy. It didn't make the economy worse but we got very little bang for our buck.
The stimulus wasn't huge relatively. China had a $600 billion stimulus for an economy that's 1/3 the size of the US in terms of GDP. And when you're splashing around $700 billion, anyone who you give it to could be called a "special interest". Construction is a special interest. So is research. Education is also a special interest. Tax cuts for the middle class... well middle class people have special interests too.
The question originally raised is who is to blame. Let's put it this way: Who's stopping more stimulus now?
The stimulus WAS huge. Show me a bigger fiscal stimulus post WW2 in the US if you want to prove otherwise.
The US has also added to the stimulus already this year, as it has in each year of the recession.
Are Republicans blocking somethings that Obama wants to do? Yep. Opposition parties do tend to do that. Would be nice if Obama had some political capital left over but that wad was already blown getting Obamacare passed.
Show me a bigger recession since the Great Depression.
It was a 4% of GDP stimulus to plug an 8% of GDP output gap. As Krugman, Romer, and other economists have said, the stimulus needed to be twice the size. But I guess, if there was another $700 billion stimulus, that money has to go somewhere. Wherever it would hypothetically ended up would be called a "special interest".
I don't need to show you a bigger recession. A stimulus need not cover 100% of the drop in spending to be effective. Recessions can solve themselves and monetary policy has a stimulative effect as well. The point of Keynesian economic theory is not that stimulus is necessary, but without it the recovery may take too long and leave a lot of damage in its wake.
Moreover, the recession DID END. The economy has been growing since Q3 of '09 - yet the recovery has been slow and not self-sustaining. At this point in the recovery the economy shouldn't need continued stimulus.
Part of the reason for the lackluster recovery is the stimulus itself - too much was blown on wasteful spending. Like it or not all spending is not equal.
Monetary policy is at the zero lower bound. And while the stimulus doesn't need to cover the entire output gap, it doesn't change the fact that it wasn't large enough.
The recession (as defined by a board of economist being 2 quarters of negative growth) did *technically* end, but output is still below potential GDP, and employment is far below maximum employment, and so the economy has not recovered.
Not all spending is equal, for example spending on infrastructure has better fiscal effects than tax cuts. You also haven't justified how the stimulus constitutes wasteful spending. But suppose you're right, how did you come to the conclusion that wasteful spending is bad for the economy in a recession? Sure, good spending is better than wasteful spending. But wasteful spending is better than no spending at all.
The problem with just spending is that it is temporary and you need to pay it back. In the short run the spending provides a boost to the economy but once it ends you have nothing (or worse, only debt).
When the government just throws money around as stimulus everyone knows it and acts accordingly. For example, a retailer will add more cashiers and stock a bit more inventory, but the retailer will be very reluctant to add more stores because he knows that once the stimulus ends a lot of the demand he sees will vanish.
Additionally the debt the government incurs is problematic for two reasons. First, the debt will need to be paid back somehow and at sometime in the future. This creates more uncertainty for businesses thinking of expansion because they now have to consider the now increased possibility of taxes increasing. Secondly, adding debt works counter to monetary policy. Low interest rates are supposed to drive investors into riskier assets. However, the government is making it easier for investors to stay in safe Treasuries by issuing a lot more of them.
Good stimulus needs to leave you with something after it is gone. For example, tax credits for building alternative energy plants are good. Their construction provides jobs now and once completed provide the economy with a stream of income to replace the government stimulus once it is gone. Infrastructure spending, in general, has the same effect as new roads mean new businesses along side them - and a larger tax base from which to repay the debt.
The debt never has to be paid back. The only thing we have to do is continue to finance it, which means pay the interest. Right now, investors are lending at a loss to the U.S. on any bond at or shorter than 10 years. If we can use this moment to stimulate the economy with PURE spending (no tax breaks), we will see a huge return and can then lower gov spending.
I like the way you think. If only such a perspective were able to survive amidst the political bullshit.
What exactly do they blame Obama for? For the GFC? He wasn't even in office at the time. For this I'd blame Wall Street and Reagan/Clinton/Bush for their deregulation of the financial industry,
For the job losses, most of that happened around the time of his inauguration before he had any chance to react.
For the slow recovery? Give me the chain of causes and effects that starts at "fiscal stimulus" and ends at "makes the economy worse".
I blame Republicans for preventing Obama from doing more.
The fiscal stimulus was huge and the recovery is very slow. Too much was blown on keeping people that vote Democrat happy. It didn't make the economy worse but we got very little bang for our buck.
The stimulus wasn't huge relatively. China had a $600 billion stimulus for an economy that's 1/3 the size of the US in terms of GDP. And when you're splashing around $700 billion, anyone who you give it to could be called a "special interest". Construction is a special interest. So is research. Education is also a special interest. Tax cuts for the middle class... well middle class people have special interests too.
The question originally raised is who is to blame. Let's put it this way: Who's stopping more stimulus now?
The stimulus WAS huge. Show me a bigger fiscal stimulus post WW2 in the US if you want to prove otherwise.
The US has also added to the stimulus already this year, as it has in each year of the recession.
Are Republicans blocking somethings that Obama wants to do? Yep. Opposition parties do tend to do that. Would be nice if Obama had some political capital left over but that wad was already blown getting Obamacare passed.
Show me a bigger recession since the Great Depression.
It was a 4% of GDP stimulus to plug an 8% of GDP output gap. As Krugman, Romer, and other economists have said, the stimulus needed to be twice the size. But I guess, if there was another $700 billion stimulus, that money has to go somewhere. Wherever it would hypothetically ended up would be called a "special interest".
I don't need to show you a bigger recession. A stimulus need not cover 100% of the drop in spending to be effective. Recessions can solve themselves and monetary policy has a stimulative effect as well. The point of Keynesian economic theory is not that stimulus is necessary, but without it the recovery may take too long and leave a lot of damage in its wake.
Moreover, the recession DID END. The economy has been growing since Q3 of '09 - yet the recovery has been slow and not self-sustaining. At this point in the recovery the economy shouldn't need continued stimulus.
Part of the reason for the lackluster recovery is the stimulus itself - too much was blown on wasteful spending. Like it or not all spending is not equal.
Monetary policy is at the zero lower bound. And while the stimulus doesn't need to cover the entire output gap, it doesn't change the fact that it wasn't large enough.
The recession (as defined by a board of economist being 2 quarters of negative growth) did *technically* end, but output is still below potential GDP, and employment is far below maximum employment, and so the economy has not recovered.
Not all spending is equal, for example spending on infrastructure has better fiscal effects than tax cuts. You also haven't justified how the stimulus constitutes wasteful spending. But suppose you're right, how did you come to the conclusion that wasteful spending is bad for the economy in a recession? Sure, good spending is better than wasteful spending. But wasteful spending is better than no spending at all.
The problem with just spending is that it is temporary and you need to pay it back. In the short run the spending provides a boost to the economy but once it ends you have nothing (or worse, only debt).
When the government just throws money around as stimulus everyone knows it and acts accordingly. For example, a retailer will add more cashiers and stock a bit more inventory, but the retailer will be very reluctant to add more stores because he knows that once the stimulus ends a lot of the demand he sees will vanish.
Additionally the debt the government incurs is problematic for two reasons. First, the debt will need to be paid back somehow and at sometime in the future. This creates more uncertainty for businesses thinking of expansion because they now have to consider the now increased possibility of taxes increasing. Secondly, adding debt works counter to monetary policy. Low interest rates are supposed to drive investors into riskier assets. However, the government is making it easier for investors to stay in safe Treasuries by issuing a lot more of them.
Good stimulus needs to leave you with something after it is gone. For example, tax credits for building alternative energy plants are good. Their construction provides jobs now and once completed provide the economy with a stream of income to replace the government stimulus once it is gone. Infrastructure spending, in general, has the same effect as new roads mean new businesses along side them - and a larger tax base from which to repay the debt.
The debt never has to be paid back. The only thing we have to do is continue to finance it, which means pay the interest. Right now, investors are lending at a loss to the U.S. on any bond at or shorter than 10 years. If we can use this moment to stimulate the economy with PURE spending (no tax breaks), we will see a huge return and can then lower gov spending.
Technically yes, you can refinance the debt over and over. But in practice this is the same as repaying the debt since you'll pay a lot more in interest. You can't really avoid paying it back. Nor can you guarantee that rates will be low at your next refinancing.
EPT
