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662 Comments
- inactive, on 02/09/2009, -72/+275Some of this is sensible. The Stimulus bill is a disaster that will promote inflation and not much else.
But the rest of this article is enough to make me laugh and I don't think that it was intended to be humorous.
7.6% unemployment!! ?? Where does this guy live?
try 14 to 17%
http://www.shadowstats.com/alternate_data
http://vdare.com/roberts/090208_fools.htm
How about taking into account a 45% drop in the stock market and the loss of trillions of wealth. at least 6 trillion just in real estate http://www.financialsense.com/fsu/editorials/amerm ...
The stimulus bill is a disaster. The typical Republican spin in this article is ridiculous BS.
And I am not a Democrat. There are more than two ways to think - FreedomsFire, on 02/10/2009, -46/+204I would have dugg this for being an anti-stimulus piece, but I can't. The article bases it's argument on statistics that show the economy in no where near as bad a shape as in the 70's and 80's. This is just not true. While we had bad times in the 70's that stretched into the 80's, does anyone remember massive banks, States, and even whole countries failing? The economy is far worse than they're leading us to believe. The key to recovery is a restoration of sound honest money by going back to the gold standard, shrinking government down to it's constitutional size, and eliminating government interference in free markets. This crisis was caused by over-borrowing by consumers and government, over printing dollars, and a total failure by government to enforce the law on Wall Street. Until we address these issues, there is no stimulus bill that can work. In fact, the borrowing and the inflation that this stimulus requires will only make it worse.
- noyritus, on 02/09/2009, -48/+1792008 Bailout Size:
Bigger than NASA entire budget - ever - plus the New Deal, Vietnam, Louisiana Purchase etc. combined!!!
http://digg.com/business_finance/Size_of_2008_Bank ... - leadfoot, on 02/10/2009, -12/+127Had we just allowed the investment banks to fail. Then allowed soundly run banks to buy up the assets at huge discounts. The value of these seemingly worthless assets would be set by the markets and our recovery would begin. The bankruptcy courts would have opened their books and we would know who the criminals were and who in government was complaisant in causing this. The bail out hid the crimes and bailed the rich Banksters out of their losses. We are sooooo screwed people!
Get ready to rely on the only person you can, yourself ! - Sean42, on 02/10/2009, -32/+138"It is common knowledge that the Kennedy, Reagan, and Bush (43) tax cuts spurred the economy back into shape"
Buried as inaccurate. - einrobstein, on 02/10/2009, -40/+140His entire argument is based on the false premise that FDR's New Deal "did nothing". Unemployment dropped from 25% to 15% between 1933 and 1940. Although 15% is very high, the New Deal succeeded in reversing the downward spiral of lost jobs.
An even better indicator than the unemployment rate is the annual GDP. Here it is in picture form: http://i43.tinypic.com/6yii43.jpg As you can see, the New Deal was quite successful. Within 3 years of instituting the New Deal the GDP exceeded the level that it had been in 1929. That dip in the graph in 1938 is due to cutting spending is exactly what the Republicans are advocating. - anexanhume, on 02/10/2009, -19/+108This article is riddled with partisan bias. Give me an even-handed approach that looks at facts and only facts.
- palmer, on 02/10/2009, -8/+77"at least 6 trillion just in real estate"
So? Most of that was hyper-inflated paper wealth that should never have accumulated. There is no "housing collapse"; it's a correction that was due to happen and still hasn't gone as far as it should. - kingcam, on 02/10/2009, -11/+74So what, Paul Krugman likes it, or did before the Republican's neutered the thing. He says it doesn't go far enough. See, I can cherry-pick economists too (Nobel laureates at that!); in fact since most of them believe in stimulus I will no doubt have an easier time of it than any of you. One more thing, after WWII the US national debt was over 100% of the nations GDP, even after the bailout we will be nowhere near that, this is not going to bankrupt the nation.
PS: Am I the only person who finds it objectionable that this article is likely les than 500 words and is comes from the 'DC Examiner'? - peacelvr, on 02/10/2009, -1/+50The chart is adjusted for inflation.
- inactive, on 02/10/2009, -2/+50The housing bubble was caused by the inflation of the money supply over ten years by the Fed. When the dotcom bubble burst, instead of allowing a recovery, the Fed lowered interest rates to dangerous levels and pumped new money into the American economy.
But as you say Palmer, all that did was allow housing prices to explode as that funny money was used to speculate in real-estate and commodities. Hence the spike in oil.
The problem is that through this period US production went offshore and the market was driven by consumer spending. But that spending was paid for with credit and a lot of that credit was guaranteed by real-estate.
So the housing collapse IS a big deal because now many home-owners are under water and they will default like crazy as the economy gets worse. - FallenTurtles, on 02/10/2009, -5/+51Did this guy submit his own article?
- Striker101, on 02/10/2009, -17/+60and that from HARVARD?????????? ~~~ !!!!!!!!!!!!!!!!!!!!
- richmomz, on 02/10/2009, -2/+32That was as of November last year - it's even bigger now. MUCH bigger.
- gbudavid, on 02/09/2009, -34/+64Like a "Pig "in a Poke??
- franklymister, on 02/10/2009, -9/+36So this one economist disagrees with Keynesian Theory.
I can find you a hundred more who agree with it. And a hundred more who feel a third way.
What does any of that prove? - kernel16, on 02/10/2009, -19/+46Why are people claiming the new deal was a disaster now? Wasn't what got us out of the depression + WW2?
- Ovalteen, on 02/10/2009, -6/+32I do believe you're contradicting yourself:
"and eliminating government interference in free markets"
"a total failure by government to enforce the law on Wall Street"
You can't enforce the law without interfering with the free market.
Also disagree on the gold standard. If the government can't be prevented from inflating the dollar by printing more money, it also can't be prevented from inflating the dollar by decreasing the amount of gold each dollar can be redeemed for. There's also issues pertaining to the fact that the money supply will need to grow at some point, and tying it to a fixed resource such as gold may not be the way to go.
Otherwise agree with you though. - inactive, on 02/10/2009, -4/+27It's not the finance industry that's stealing your money. It's your elected government. It's not the finance industry that chose to give loans to people that couldn't pay them back. Your elected government forced them to do that. It's not business that everyone should be pissed of at. Not even the "fat cat" CEO's. It's our elected government.
- yarcod, on 02/10/2009, -7/+29FYI, that first link you posted shows unemployment under 8%...
http://www.shadowstats.com/imgs/sgs-emp.gif
Obviously, he's going by the "Official" metric. You can argue the validity of the metric, but you can't compare one year in one metric and another year in another metric and call that accurate.
buried. - ucbmckee, on 02/10/2009, -10/+31Wow, a right-wing, conservative economist at Harvard? (boggle)
/sarcasm
Most of these guys still think the last authoritative doctrine on how economies should be run is Smith's "Wealth of Nations". - maxtangent, on 02/10/2009, -0/+21Not always. An apostrophe can also mean a contraction.
Its = possessive while it's = it is. - Nimda11, on 02/10/2009, -6/+27As a libertarian, I am a huuuuuuuuge fan of tax cuts. However providing tax cuts in an environment as hostile to investing such as todays, is f'ing retarded, rich folk are just gonna say "thanks for the cash" and put it in a foreign bank. The best thing (long run) is to probably do nothing, however I am not a fan of people starving and dieing in the streets., so we spend.
The GOP had better hope this fails in a big way, otherwise they might as well go on vacation for the next 20 years. And if it does fail, they all better head for the hills. - DarkBlueAnt, on 02/10/2009, -6/+26Exactly what I thought. I read the first sentence and immediately knew this article was toilet paper.
- jarjarbinx, on 02/10/2009, -12/+32because Bush spendings were the type that does not increase consumer consumption or employ more people. It actually transferred government money to large corporations (KBR, Halliburton, Blackwater, Boeing), which right now are saving all the money or were pulled out from the stock market by wealthy investors. What FDR New Deal did was to provide the money to those in need of it. Those who will use the money to purchase on food, and consumer goods. If you say World War 2 did it, the WOrld War actually increased taxed to the upper o10% of the income bracket and made it 90% of their income! THroughout the 50s and 60s, upper income bracket paid 90% of what they have on tax.... There was a better wealth distribution then.
- noahhoward, on 02/10/2009, -4/+24Question, is this one of the economist from the school of thought that got us here in the first place? Because my trust for those people is gone.
The economists ***** the market over then when the ***** hit the fan they all turn around and say "You're doing it wrong, I can fix it".
No thanks. - Ovalteen, on 02/10/2009, -3/+23After spending all this money the finance industry had better shut their bitch mouths the next time somebody proposes toughing up reporting/valuation regulations, decreasing the amount of risk banks can hold, or similar measures. As far as I'm concerned, $1 trillion buys every American citizen the right to conduct a prostate exam with a 2x4 piece of lumber on every finance company executive, annually.
Of course, the realist in me knows nothing will change. - inactive, on 02/10/2009, -1/+20The root of the subprime meltdown was the semi-government agencies Fannie Mae and Freddie Mac. They alone created a market for the subprime mortgages. Lenders simply have to make the loan and then they are able to cash the loan out by selling them to Fannie or Freddie (this is why both of these agencies are now bankrupt and has been taken over by the federal government, feds had to give them several hundred billion dollars in bailout immediately and possibly more in the future). So yet again, government intervention was the cause of the economic crisis. I can't imagine more government intervention (bailout package) would do any good, it would probably just prolong the depression.
- inactive, on 02/10/2009, -14/+32Then why didn't the "New Deal"-type spending of Bush prevent this downturn?
- Diggnabbit, on 02/10/2009, -0/+16zephc, you're missing the point. Those laws that the companies are breaking ARE interferences with the free market.
- Leezus, on 02/10/2009, -4/+20Two kinds of people go to those schools.
Incredibly smart kids, and incredibly over-privileged kids. - noahhoward, on 02/10/2009, -13/+29I'm not sure if this is how you meant it, but it amazes me too that he will risk his political popularity on doing the right thing. I wish more of them would.
- inactive, on 02/10/2009, -16/+31you can put lipstick on a pig but it's still a stimulus bill
- methdwman3, on 02/10/2009, -7/+21Agreed. I hear a lot of "Bush's uncontrolled spending got us into this mess". Followed by "we need to increase government spending to get out of Bush's mess". I also am a bit sick of the New Deal comparisons. What was our deficit when FDR enacted the New Deal? This is a different time.
- RonPauls, on 02/10/2009, -8/+21Very well said. This may be the Great Depression 2 (looks like Obama just sealed it...), and that is why it is so important that we allow the free market to clear out the malinvestment.
- tamuengineer, on 02/10/2009, -1/+14Digg needs to add an option: "Flag this article as partisan BS"
But sadly, most articles submitted would fall under that category. - kingcam, on 02/10/2009, -0/+13Really, I am pretty sure that a Nobel Prize in Economics and teaching economics at Princeton makes you an economist, but what do I know.
- CylonsOfTheLamb, on 02/10/2009, -2/+15Have you actually read the details of the pork plan? I've read about 1/2 of it so far. I can only read it in small doses followed by waves of nausea and vomitting. At best, the few jobs it will create will be temporary in nature.
- acroyear2, on 02/10/2009, -3/+15Like starting two ***** wars and not realizing we were in a recession for an entire year? WHOOPS! That was the previous guy! SIT DOWN!
- Jareth86, on 02/10/2009, -10/+22FTA:
"It is common knowledge that the Kennedy, Reagan, and Bush (43) tax cuts spurred the economy back into shape. By contrast, the FDR spendfest in the 1930's, as well as attempts in Japan and Argentina to spend their way out of recessions did nothing. These are proven (and disproven) models."
Obvious revisionist is obvious. - CoD4, on 02/10/2009, -3/+14it's a TARP!
- TreatsTheBear, on 02/10/2009, -2/+13It seems like nothing is 'common knowledge' in economics. It might be common knowledge among him and his buddies, but there's always another group that considers the exact opposite to be true.
- VitriolAndAngst, on 02/10/2009, -12/+23Palmer, Caferrell -- at least some people get it.
The Crisis is NOT in the housing market. If you used a house as an investment, then you went against hundreds of years of real-world experience. Looked at from the other point of view; None of our kids could ever afford to live in a home. What was everyone thinking?
Median home prices have to be two or three times median income -- it's just the basics of the world that someone has to afford a home it live in it. And home prices aren't going back up for a while -- just like mobile homes and Winnebago prices cannot go back up for a time. Think about it; Baby Boomers are more numerous than the next generation. They already mostly have homes. In retirement, they will either move into condos or retirement communities (a sound investment by Haliburton these days).
The problem in our economy is TOO MUCH PRODUCTIVITY. Or, in other words -- the devaluation of labor. The wealthy, think they are so damn important. So instead of sharing the wealth, they gave us cheap credit and no raise -- for the past 30 years, purchasing power of Americans has gone done for most people.
Well, if I don't have real money, then I can't buy real things. An iPod and a laptop are fine, but people need homes, health care, food and education. The NECESSITIES keep getting more expensive and the luxury items cheaper.
Well, now that you don't make much to work, but you make a lot sitting on money making money -- what do you think eventually happens? All the money chases money and the system comes crashing down.
There is no way to fix the problem at the top. The top has to LOSE all their fantasy cash, and we have to pay more to people at the bottom to MAKE INFRASTRUCTURE. We have to FORCE the increased valuation of labor.
More food stamps, an immediate increase in minimum wage, and a national light rail system and perhaps alternative energy grid -- things like that are NECESSARY to solve this problem.
Most people, think that is Socialism, because they've been lied to for many years. - DigeratiPrime, on 02/10/2009, -6/+17The real article from The Atlantic is linked to on that page:
http://business.theatlantic.com/2009/02/an_intervi ... - lefstathiou, on 02/10/2009, -22/+33it amazes me that Obama would risk his entire presidency on this...
- nbluth, on 02/10/2009, -1/+12***** grammer nazi got pwned
- inactive, on 02/10/2009, -1/+12@MindStalker,
Just like today, it wasn't the bursting of the bubble that was devastating, it was the attempt by the Federal Government to control the situation, to "stimulate" the economy that turned a painful economic correction into a long depression with terrible unemployement.
We cannot "lower her down nice and easy" because the areas that will prosper with the bailout and the stimulus are not going to create production, which is the only way to get out of this situation. We are continuing the globalization of the economy, our industry is going or gone and we are worried about the banks!?
We are in the process of repeating all of Hoover and Rooseveldt's errors. - JHW539, on 02/10/2009, -5/+16"Soundly run banks" had huge exposure to investment banks and would have failed with them as market liquidity disappeared completely in a matter of days. My paycheck would have stopped along with the majority of working Americans (most businesses rely on a revolving line of credit to manage cash flow - I do work today, but my boss doesn't bill it out until the end of the month and it's 90 days before the bill is paid). Complex problems often have simple, WRONG, answers.
- Trekhawk, on 02/10/2009, -6/+17See how long that -0.1% inflation rate cited in the table towards the bottom lasts after the remaining TARP fund's $350B + the "stimulus" $800B are injected into the economy's neck.
- anodos, on 02/10/2009, -2/+13I agree with you for the most part. The crazy thing to me is that everyone thinks we need to get back into the mode of debt in order to return the economy to "normal". They think our economy cannot function unless banks are freely lending. What about building capital and then using that to fund further activity? Many companies, even nations, started on this idea. Now they are talking about another bank bailout - the whole point of which is to get banks to start loaning tons of money again. They want to get us into massive debt in order to bail out banks so they can start lending money again so we can get into even more debt.
Personally, I think if we are ever going to truly recover we have to transition from a nation of debt to a nation of capital (savings). That takes at least a good 10 years of painful transition where people stop borrowing, start paying off debts, and start saving. During that time people spend much less, but the fruit is born later when you see people using their capital to take initiative, start companies, employ each other, and generally restart the economy on real value. Instead, the government wants to stand in the way of this movement and keep people addicted to borrowing first. We will be forever a debtor nation if the government has its way. -
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