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Thread: Report: Economists Say Recession Over, Want Bernanke to Stay

  1. #71
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    Re: Report: Economists Say Recession Over, Want Bernanke to Stay

    Quote Originally Posted by Devil505 View Post
    Let's try to keep things simple here:

    Good economic news is Good for our country but very bad for the GOP. (therefore they will keep praying for another depression)

    Bad economic news (which kind stopped right after GW Bush left town) is BAD for our country but great for the GOP



    Therefore ( end of the logical syllogism)

    What's good for our country is bad for the GOP & what's good for the GOP is bad for our country.
    As always, sterling examples of "moderate" thinking.

    Seriously, the board might as well just default the "Moderate" and "Centrist" tags to "Liberal" or "Very Liberal."

    Which brings me back to the age-old question . . . if being a "Liberal" is a badge of honor, why do so many run from the accolade?
    “Offing those rich pigs with their own forks and knives, and then eating a meal in the same room, far out! The Weathermen dig Charles Manson.”-- Bernadine Dohrn

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    Re: Report: Economists Say Recession Over, Want Bernanke to Stay

    Quote Originally Posted by Catz Part Deux View Post
    I've also noticed that the housing market has picked up in my community, after being really stagnant. People are actually buying houses again, which means that they believe that the prices have bottomed out and are headed up again.

    In most places housing is bottoming. Not all, but most. Nevada, California, Arizona and most of Florida account for 57% of all foreclosures in July. In most other places the housing outlook, while not rosy, is looking better.
    Wow. Am I awesome or what?

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    Re: Report: Economists Say Recession Over, Want Bernanke to Stay

    Quote Originally Posted by justone View Post
    You, like everyone else, make an assumption that the historical rule of thumb is the rule we should follow without any doubt. The rule says that economy always recovers. Thus Obama can abuse it for personal and ideological purposes and that would result only in some delay, but economy will recover. Economy will still start recovering on his watch and will grant him the 2nd term (especially if to consider the massive brainwashing campaign in media and Internet).
    Justone,

    Your conclusions go far beyond what I am suggesting. I believe that the stimulus has had a net positive effect, albeit a small one. It did not undermine economic growth prospects as some of its critics allege. It helped soften the dramatic drop in aggregate demand.

    That the economy will recover at some point does not give any Administration license to pursue ideological agendas that could be harmful to long-run growth. That Administrations have often followed the politically expedient course e.g., in adopting policy changes that increase the nation's long-term fiscal imbalances, in effect allow today's generation to benefit at the expense of tomorrow's, has to do with political judgments not economic ones.

    I believe adoption of Medicare Part D, which added another $30 trillion to the nation's perpetual horizon unfunded liabilities, was a terrible policy move. Adopting health care legislation that would not be budget neutral and would fail to address the imbalance associated with health expenditures rising at a multiple of economic growth would be another huge error. At this time, I don't believe any of the emerging health care proposals satisfies those criteria.

    Generally in the bolded part you are conducting the war on the private sector blaming it in all sins...
    Not at all. I'm only noting that behavior, which is reasonable in times of great risk, can have an overall drag on the economy. The principle of the Paradox of Thrift, what is good for the individual (saving), may not be good for the economy (lack of consumption) in the short-term.

    The seeds of the ongoing recession were planted by households, the private sector, and government. No single sector is to blame.

    In the private sector, possibly in some part due to the retirement of those who had first-hand or close to first-hand knowledge of the Great Depression, led to an overall degradation of risk management. The ability of firms to keep large areas of risk e.g., derivatives positions, off their balance sheets, the drift away from accounting conservatism that allowed firms to avoid expensing stock options (even as they have a dilutive impact on shareholder wealth), etc., contributed. The enormous explosion in household debt to almost 100% of GDP contributed. Bad federal policy e.g., increases in the nation's structural budget deficits during the 2000s, encouraging increased subprime lending, lack of smart regulation when it came to transparency on derivatives positions, failure to recognize the risks associated with "too big to fail" institutions (GSEs, AIG, Citibank, etc.), and moral hazard from past bailouts from the 1970s to the present contributed. Monetary policy that maintained excessively low interest rates under the misguided notion of a "new era" in which technology/productivity had fundamentally lowered the risk of inflation helped fuel the credit binge. At a time of euphoria, the absence of regulatory safeguards, the deterioration in risk management, and the ongoing credit binge converged to form a dangerous housing bubble that put the nation's financial system at risk. All--government, business, and households--contributed to that situation. There are no "innocent" parties. No single party is the villain.

    With respect to government policy, real risks persist. I've noted in the past and will do so again, that the only bailouts that were justified were those associated with systemic risk to prevent the collapse of the nation's financial system. The auto companies should not have been bailed out and homeowners should not be bailed out. The bailed out financial institutions should have been resolved or be in the process of being resolved. Instead, funds have been provided, but very little resolution has been done e.g., AIG still maintains substantial derivatives positions that should have been unwound by now with the profitable sectors of the company sold off to stronger firms; the GSEs have not been cleansed of their toxic assets, broken into smaller pieces, and reprivatized, etc. As a result, there is the risk that U.S. timidity on resolving the bailed out financial institutions could mark a repetition of some of the errors that had been made in Japan's early efforts to confront the problems associated with the collapse of its twin stock market and real estate bubbles.

    Furthermore, once the economy is on a sustainable growth path, the U.S. will need to undertake a credible fiscal consolidation program to eliminate its budget deficits and reduce its debt. That program will require reforms to the mandatory spending programs to address their long-term imbalances. It will require discretionary spending reductions. It will require some tax hikes. Every agency, even the Pentagon, will need to increase its productivity, to be able to do more with less growth in spending, and in cases, reduced spending. In general, the more that is done with respect to the mandatory spending programs, the less the tax hikes will need to be. Creating a new health care program(s) that is not budget-neutral and does not address the expenditures imbalance, will only undermine any credible fiscal consolidation effort.

    Failure to undertake a credible fiscal consolidation would lead to a reduced growth trajectory in the long-run, as long-term interest rates rise. A credible fiscal consolidation effort would keep long-term interest rates lower than they would be in the face of little or no effort to address the nation's structural budget deficits.

    Excessive tax hikes in a bid to avoid restructuring the mandatory spending programs would also be damaging to the economy, as they would significantly lower returns on capital. Modest ones, and the emphasis is on "modest," that contribute to a credible fiscal consolidation program could be beneficial, with the benefits of a reduction in long-term interest rates outweighing the costs associated with a modest hike in taxes.

    In your war on the private sector – who will be there to make profits?
    I believe you have fundamentally misread my point. I only addressed a very narrow issue dealing with special circumstances, specifically the effect on GDP of hoarding cash during a recession.

    I did not and would not advocate a "war" on the private sector. The private sector is and, and I believe, needs to remain the largest contributor to economic growth, job creation, and rising living standards. No other growth model can compare in terms of outcomes.

    Profit is the key incentive for private enterprise and federal policy should not seek to dramatically reduce long-term economic profits. Otherwise, such policies would inflict material damage on the economy and the nation's ability to continue to improve its standard of living.

  4. #74
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    Re: Report: Economists Say Recession Over, Want Bernanke to Stay

    Quote Originally Posted by stekim View Post
    Who are the unemployed if they are not individuals?



    Factually not true. Recessions are not defined by when we reach "normal" employment. In fact, we had "normal" employment for quite some time after the recession started in December 2007.



    If you noticed the market has been rallying. Which says what? People are, in fact, investing. So it looks like that thought is out the window.
    You can talk in ever widening circles if you like, but the recession will not end with high unemployment rates still in place. The economy needs consumers, and I don't see that many people returning to the stores with lots of discretionary income.
    Investing will always occur, but we will be a long time getting back to DJIA of 14,000....
    Oracle of Utah
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    Re: Report: Economists Say Recession Over, Want Bernanke to Stay

    Quote Originally Posted by UtahBill View Post
    You can talk in ever widening circles if you like, but the recession will not end with high unemployment rates still in place.
    Actually, my friend, they ALL do. Unemployment is a lagging indicator. Recessions always start before the unemployment rate rises by any major amount and they always end before the unemployment rate drops by any major amount. Always. Just like the stock market is a forward indicator, unemployment is a backward one.

    The economy needs consumers, and I don't see that many people returning to the stores with lots of discretionary income.
    Investing will always occur, but we will be a long time getting back to DJIA of 14,000....
    Well, the Dow at 14,000 is a different story. And people never stopped shopping. They buy less. They trade down. But they never stop. Good economic news always boosts consumer sentiment. That, in turn, boosts spending. That eventually leads to increased GDP and then VIOLA, unemployment drops.
    Wow. Am I awesome or what?

  6. #76
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    Re: Report: Economists Say Recession Over, Want Bernanke to Stay

    Quote Originally Posted by stekim View Post
    Actually, my friend, they ALL do. Unemployment is a lagging indicator. Recessions always start before the unemployment rate rises by any major amount and they always end before the unemployment rate drops by any major amount. Always. Just like the stock market is a forward indicator, unemployment is a backward one.



    Well, the Dow at 14,000 is a different story. And people never stopped shopping. They buy less. They trade down. But they never stop. Good economic news always boosts consumer sentiment. That, in turn, boosts spending. That eventually leads to increased GDP and then VIOLA, unemployment drops.
    the spelling is voila, not viola....
    Yes, unemployment may be a lagging indicator instead of a leading indicator, that only means we have to wait a bit longer to have more evidence that the recession is actually over...

    I dabble in old car parts quite a bit, making more than a few bucks on ebay and craigslist selling that kind of stuff.
    In the last year, I have sold next to nothing. To clean out my inventory, I have sold stuff for just the cost of shipping, basically giving it away.

    People are shopping for the same necessities they always have.
    Shopping for non-essentials is way down, even with deep discounts.
    Oracle of Utah
    Truth rings hollow in empty heads.

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    Re: Report: Economists Say Recession Over, Want Bernanke to Stay

    Quote Originally Posted by UtahBill View Post
    the spelling is voila, not viola....
    Indeed it is! Actually, I spell so poorly I'm shocked all my posts aren't filled with misspelled words.

    Yes, unemployment may be a lagging indicator instead of a leading indicator, that only means we have to wait a bit longer to have more evidence that the recession is actually over...
    Speaking of another lagging indicator, we will out of the recession before we get the announcement we are out of the recession. GDP has to grow before we know GDP grew.

    I dabble in old car parts quite a bit, making more than a few bucks on ebay and craigslist selling that kind of stuff.
    In the last year, I have sold next to nothing. To clean out my inventory, I have sold stuff for just the cost of shipping, basically giving it away.
    I'm not surprised. We're in a recession.
    Wow. Am I awesome or what?

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    Re: Report: Economists Say Recession Over, Want Bernanke to Stay

    Quote Originally Posted by Harshaw View Post
    As always, sterling examples of "moderate" thinking.

    Seriously, the board might as well just default the "Moderate" and "Centrist" tags to "Liberal" or "Very Liberal."

    Which brings me back to the age-old question . . . if being a "Liberal" is a badge of honor, why do so many run from the accolade?
    We're wandering off topic here but I'll answer your question anyway.
    I don't run from meaningless political TAGS...I just don't think they are very useful.
    I answered the question "moderate" when I signd up becuase I feel that is the most accurate tag for me.

    I am:

    For the death penalty
    Agree with an individual's right to carry concealed firearms, with sensible limitations.
    Agree that pro-life taxpayers should not be forced to pay for abortions
    Not a big "Bail-out" supporter

    I am also:

    For a woman's right to choose & agree with Roe vs Wade
    Believe real diplomacy is not a sign of weakness
    Believe HC should be a RIGHT of all citizens & not be a "For Profit" business opportunity to make money off the sick.(like it is now)
    Believe in stem cell research



    In other words, I am quite liberal on many issues, conservative on others & therefore defend my TAG as Moderate. I don't really understand the utility of these tags anyway.

    How about trying to lump all PEDESTRIANS into some catch-all bag????...Same as Socialist..Communist....Capitalist...etc.......The re are shades of gray in this world & to deny that & see everything in ABSOLUTE terms is just a sign of lazy thinking, or perhaps inability of some to think at all. (No one in particular in mind)
    Last edited by Devil505; 08-13-09 at 01:33 PM.

  9. #79
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    Re: Report: Economists Say Recession Over, Want Bernanke to Stay

    Quote Originally Posted by Devil505 View Post
    We're wandering off topic here but I'll answer your question anyway.
    I don't run from meaningless political TAGS...I just don't think they are very useful.
    I answered the question "moderate" when I signd up becuase I feel that is the most accurate tag for me.

    I am:

    For the death penalty
    Agree with an individual's right to carry concealed firearms, with sensible limitations.
    Agree that pro-life taxpayers should not be forced to pay for abortions
    Not a big "Bail-out" supporter

    I am also:

    For a woman's right to choose & agree with Roe vs Wade
    Believe real diplomacy is not a sign of weakness
    Believe HC should be a RIGHT of all citizens & not be a "For Profit" business opportunity to make money off the sick.(like it is now)
    Believe in stem cell research



    In other words, I am quite liberal on many issues, conservative on others & therefore defend my TAG as Moderate. I don't really understand the utility of these tags anyway.

    How about trying to lump all PEDESTRIANS into some catch-all bag????...Same as Socialist..Communist....Capitalist...etc.......The re are shades of gray in this world & to deny that & see everything in ABSOLUTE terms is just a sign of lazy thinking, or perhaps inability of some to think at all. (No one in particular in mind)
    Whatever. You have shown NO moderation in your posts.
    “Offing those rich pigs with their own forks and knives, and then eating a meal in the same room, far out! The Weathermen dig Charles Manson.”-- Bernadine Dohrn

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    Re: Report: Economists Say Recession Over, Want Bernanke to Stay

    Quote Originally Posted by tlmorg02 View Post
    Yeah, you guys were doing sooooo much better.
    I never claimed Republicans did any better.
    "The problem in defense is how far you can go without destroying from within what you are trying to defend from without."

    ~Dwight D. Eisenhower

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