• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Report: Economists Say Recession Over, Want Bernanke to Stay

Just to add my 2 cents, I believe the very simple rules of the GOP playbook govern here & they say:

Nothing President Obama does or says deserves praise/credit............. & nothing any GOP politician does or says deserves discredit or not to be funded.
 
stekim said:
Recessions are not defined by the unemployment rate. So your post is meaningless.
Click to expand...

perhaps, but they are defined by how much cash flow the economy has and the fewer people that are employed means that much less cash flow; not only because they aren't spending any money, but because the folks that are still employed aren't spending any money either.

The unemployment rate is a byproduct of an economy. Bad economy, high unemployment; good economy, low unemployment.
 
apdst said:
The unemployment rate is a byproduct of an economy. Bad economy, high unemployment; good economy, low unemployment.
Click to expand...

But unemployment is also a lagging indicator. Productivity will increase, manufacturing and service growth will recover, GDP will rise, the market will rise and unemployment will be flat. The economy will be robust for a time with unemployment barely moving. Then it will move. The opposite happens when the economy goes south. I look at financial statements for a living. Judging by profits the ecomomy went WAY south when we were still at 5% unemployment. It was awful. Then the layoffs hit.

And keep this in mind: Japan's unemployment rate for a decade long recession was very low. China's unemployment rate is very high (comparatively) and they grow quicker than any country on Earth.
 
stekim said:
But unemployment is also a lagging indicator. Productivity will increase, manufacturing and service growth will recover, GDP will rise, the market will rise and unemployment will be flat. The economy will be robust for a time with unemployment barely moving. Then it will move. The opposite happens when the economy goes south. I look at financial statements for a living. Judging by profits the ecomomy went WAY south when we were still at 5% unemployment. It was awful. Then the layoffs hit.

And keep this in mind: Japan's unemployment rate for a decade long recession was very low. China's unemployment rate is very high (comparatively) and they grow quicker than any country on Earth.
Click to expand...

You're right that unemployment is going to follow recovery, but it's definitely a close second. Is the unemployment rate going up yet? It's not, is it? hell, nothing is going up. A leveling off isn't a recovery. Let's not count our chickens before they hatch.

I actually run a business for a living. I'll let you know when the economy improves.
 
& it means an 8 year Presidency for Obama, probably followed by another 8 years of a Joe Biden Presdency, followed by another 8 years of a Al Gore Presidency (2nd times a champ) followed by.....
 
stekim said:
The GM bailout was not the stimulus, either. In case that escaped your attention. Further, Jim Cramer isn't Obama or the Treasury secretary or the FED Chairman. So, in other words, your post could not any further off topic than a post about cooking.
Click to expand...

Go to google and enter stimulus to prevent next depression and there are thousands of hits. Sometimes because you say so, doesn't make it true.
 
apdst said:
You're right that unemployment is going to follow recovery, but it's definitely a close second. Is the unemployment rate going up yet? It's not, is it? hell, nothing is going up. A leveling off isn't a recovery. Let's not count our chickens before they hatch.
Click to expand...

Leveling off is a good sign the economy is recovering. That alone is not proof it's in recovery, but it's a good sign.

I actually run a business for a living. I'll let you know when the economy improves.
Click to expand...

You are one business. I see tons of business financial statements. I'll know before you do! Besides, the profitabilty of one business says literally nothing about the economy. Some of my clients are doing great right now. Most are not. But I'm seeing far more statements now where results are flat (still down, but not falling anymore) or improving slightly. Not too many major increases in earnings, but the rock is no longer rolling down the hill.
 
tlmorg02 said:
Go to google and enter stimulus to prevent next depression and there are thousands of hits. Sometimes because you say so, doesn't make it true.
Click to expand...


Show my a link. That way I know what the hell you are talking about.
 
UtahBill said:
Tell that to the unemployed....
Click to expand...


I will! Because it's a fact.

Even in a booming economy some people are unemployed. And I'll be happy to tell them the ecomony is booming. The circumstances of any individual person or company is not related to economic strength or weakness.
 
tlmorg02 said:
Utlimately though, I think you and I are arguing semantics. Regardless what you call it, the stimulus was set to stimulate the economy to prevent further failure in the economy.
Click to expand...

I can go with that.
 
stekim said:
I will! Because it's a fact.

Even in a booming economy some people are unemployed. And I'll be happy to tell them the ecomony is booming. The circumstances of any individual person or company is not related to economic strength or weakness.
Click to expand...

well DUH, but we are not talking about individuals....
when the unemployment rate gets back to what economists like to think of as normal, the recession is over. Certainly it should be less than 7 percent before we start saying the economy is healthy again.
A healthy economy needs consumers, and even those who are not suffering now are wary of what might happen tomorrow, to them individually and to all of us collectivley.
If the American people are half as smart as I think they are, there will be precious little dabbling (investing) on Wall Street for a long time to come.
Finanicers and our elected officials, are supposedly educated and sophisticated enough to know how to run the country and the economy, and we SHOULD be able to trust them. But betrayal of the public trust has become almost the norm for those people. The rest of us will not soon forget....
 
Ultimately it's always the same ridiculous, partisan refrain wafting up form the right-wing gutter :

Bush & the Repubs deserve no blame for any of their vast array of failures & Obama & the Dems deserve no praise for any of their successes. (The only one's who don't buy that argument are the vast majority of American voters....but who cares about THEM anyway?....Certainly not the Republican party.)
 
UtahBill said:
well DUH, but we are not talking about individuals....
Click to expand...

Who are the unemployed if they are not individuals?

when the unemployment rate gets back to what economists like to think of as normal, the recession is over.
Click to expand...

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 the American people are half as smart as I think they are, there will be precious little dabbling (investing) on Wall Street for a long time to come.
Click to expand...

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.
 
Last edited:
stekim said:
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.
Click to expand...

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.
 
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.
 
Devil505 said:
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.
Click to expand...

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?
 
Catz Part Deux said:
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.
Click to expand...


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.
 
justone said:
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).
Click to expand...

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...
Click to expand...

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?
Click to expand...

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.
 
stekim said:
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.
Click to expand...

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....
 
UtahBill said:
You can talk in ever widening circles if you like, but the recession will not end with high unemployment rates still in place.
Click to expand...

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....
Click to expand...

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.
 
You must log in or register to reply here.
Back
Top Bottom