Let me be the first to say it

[TakeYouToTasker]

You guys are too biased to come up with a decent reason. Where's Magox when you need him?

 

The conditions underlying this economy are not unlike the 1930s. The private sectore Debt/Gdp ratio was 240% in 1929, and it was 300% in 2008. The economy contracted from 1929-33 then, and it's been fairly stagnant for the past four years. As Richard Koo says, this is a balance sheet recession, and households may now be done repairing their balance sheets. Barring unforeseen chaos externally, the US economy should grow faster than it has the past couple years.

 

Regarding BO and his promises, my take is he had to be re-elected so that he could force the bottom 90% to pay the major part of any deficit reduction. While he feigns support for the middle, the dems money comes from Wall Street, and they want SS and Medicare cut, not their taxes.

 

That's why I don't vote for the major parties, it's all a show. Keep us all fighting each other for the crumbs.

This is patently absurd. Underlying economic conditions don't even remotely resemble the 1930's as we've been exporting our inflationary checks for 80 years since then, functionally removing our manufacturing base; as well as being long past our industrial revolution and virgin investor asset bubble. Individual debt to savings ratios have scarcely been worse; and the housing bubble is nowhere near being deflated and normalized.

 

As to your canard about unforseen chaos, I can't remember that last time your particular school of thought accurately predicted market events, so please, don't mind me while I laugh at the silliness of that particular offering.

[ExiledInIllinois]

I disagree

 

Did you ever live in Buffalo? (Past) wars were the best thing that ever happened to that city!

 

[LeviF]

Did you ever live in Buffalo? (Past) wars were the best thing that ever happened to that city!

 

 

The Erie Canal was probably the most revolutionary and important economic development in NYS history.

 

There - I said it! Can't take it back now!

[GG]

Barring unforeseen chaos externally, the US economy should grow faster than it has the past couple years.

 

That's like saying, there's a chance that the quarterback following Bruce Mathison should probably be better.

 

If you set the bar low enough, it's tough not to jump over it. Big question is will growth approach 4%? Not based on the current state of affairs.

 

Regarding BO and his promises, my take is he had to be re-elected so that he could force the bottom 90% to pay the major part of any deficit reduction. While he feigns support for the middle, the dems money comes from Wall Street, and they want SS and Medicare cut, not their taxes.

 

That's mighty confidence in the Class Warrior in Chief, that he'll roll back all Bush tax cuts and take a knife to entitlements.

[B-Man]

Washington Post: ‘This Economic Recovery Has Been a Big Disappointment’

 

Over at the Washington Post, Neil Irwin explains that just how disappointing this recovery has been:

This economic recovery has been a big disappointment relative to what the United States has usually experienced after a recession. Growth has been 9 percent below what was seen in past recoveries on average in its first three years. The CBO report tries to disentangle where that underperformance is coming from and its answer is deeply unsettling: The U.S. economy just isn’t as good at growing as it used to be.

 

The new CBO report claims that two-thirds of the underperformance of the economy over the past three years compared to a typical recovery is due to a slower rate of growth in potential GDP. Only one-third, in this analysis, is due to factors related to this recession.

The Congressional Budget Office’s chart, on the cover of a recent report, makes this clear:

 

 

 

Irwin concludes:

So what the CBO study is really saying is that there remains a gigantic cyclical gap in the U.S. economy, and this recovery has been awfully slow. And it has also occurred at a time when our potential economic growth isn’t rising as fast as it used to,

mainly for reasons unconnected to the unique impact of the financial crisis

.

[fjl2nd]

^^^ All recessions are not created equal.

 

There has been stagnant growth in the U.S. for 10 years now. There isn't some magic bullet fix.

Edited November 20, 2012 by fjl2nd

[3rdnlng]

^^^ All recessions are not created equal.

 

There has been stagnant growth in the U.S. for 10 years now. There isn't some magic bullet fix.

 

Why don't you post some charts or something that proves your point?

[B-Man]

^^^ All recessions are not created equal.

 

There has been stagnant growth in the U.S. for 10 years now. There isn't some magic bullet fix.

 

That is not the case, there was growth between 2002 and 2006.

 

and as for your "magic bullet" strawman, NO ONE has suggested there is.

 

but we know what doesn't work now after the past 6 years.

 

 

Recoveries are not equal, yes, but there is a reason why this one is weaker.............quit denying it.

 

 

 

 

.

[fjl2nd]

Why don't you post some charts or something that proves your point?

 

Stagnant may have been bad word choice. But, growth in the years after the giant crisis has not been all that different than before it. Real growth is tough for an economy that doesn't make things anymore (or as much as it used to). The housing market was a big reason for what growth we did see before the downturn. That was essentially "false growth" because as we all know now, it was a huge bubble and it all went down the drain.

 

Take into consideration that incomes have flattened out and you see that we have ourselves a long term problem that has been going on for a while. I think we are making some strides in coming back by pushing education for higher skilled jobs in the medical, engineering, and energy fields. Gone are the days where you can make a great living working at the local manufacturing plant.

 

That is not the case, there was growth between 2002 and 2006.

 

and as for your "magic bullet" strawman, NO ONE has suggested there is.

 

but we know what doesn't work now after the past 6 years.

 

 

Recoveries are not equal, yes, but there is a reason why this one is weaker.............quit denying it.

 

 

 

 

.

 

I'd love to hear why this recovery is weaker according to you.

 

2002 to 2006 we did some growth but it was a facade basically. It was all based off of pushing the ownership society so everyone could own a house. That's not real growth. It all evaporated after 2007-2008. Everyday people didn't see any payoff from it.

[Philly McButterpants]

The media's been looking the other way on the economy for 4 years. Anyone who remembers W's first term, and was paying attention, remembers an ongoing national crisis over 6% unemployment. Then when we went into recovery all the talk was of a jobless recovery. And acknowledgement of the reality that the recession wasn't of Bush's doing was quickly dismissed by people like Brian Williams by explaining that right or wrong we attribute what happens to who's in office at the time. Funny how just a few years later that standard & those concerns have changed so dramatically.

 

Too true . . .and with a Dow over 14,000. I can clearly remember Brian Williams telling me that the sky was falling every. damn. day.

[fjl2nd]

The media's been looking the other way on the economy for 4 years. Anyone who remembers W's first term, and was paying attention, remembers an ongoing national crisis over 6% unemployment. Then when we went into recovery all the talk was of a jobless recovery. And acknowledgement of the reality that the recession wasn't of Bush's doing was quickly dismissed by people like Brian Williams by explaining that right or wrong we attribute what happens to who's in office at the time. Funny how just a few years later that standard & those concerns have changed so dramatically.

 

 

"Jobless recovery" refers to the fact that unemployment continued to rise even after the recession ended. Happened over the last 3 recessions dating back to 1990-91.

 

We were discussing this recently in my Macro class. We came up with an idea that businesses wait until recessions are now officially deemed over by the NBER. That usually happens about 6 months after it actually ends. It's now a topic I plan on researching possibly for a paper.

[TPS]

That is not the case, there was growth between 2002 and 2006.

 

and as for your "magic bullet" strawman, NO ONE has suggested there is.

 

but we know what doesn't work now after the past 6 years.

 

 

Recoveries are not equal, yes, but there is a reason why this one is weaker.............quit denying it.

.

Yes, there is a reason this one is weaker. The report you include compares this one to all post-war recessions. Here's one that does a better comparison. As i said, it's because of the level of debt that was used to build up this bubble that makes it longer to recover.

http://www.voxeu.org...N9of0ptiU.email

 

Their conclusion:

 

To assume that this US recovery would resemble previous“normal recession” is to use the wrong benchmark. Such forecasts risk overstating growth, lending, interest rates, investment, and inflation. Our work shows that the leverage run-up was unusually high going in, so as in the past it is unsurprising that a painful deleveraging dynamic is taking its toll on the way out.

This time actually is different – and worse – in one very clear and measurable dimension. Now, as in past debt overhangs for more than a century, credit has exerted a crucial influence on the course of the businesscycle.

Also, regarding the CBO report you posted, here's what they had to say about consumer debt:

 

Separately from those factors, some households may have been trying to get their debt level back to a historical relationship with their income and level of assets. In fact, weak demand for consumer loans and home mortgages during the recovery is consistent with that possibility. If households are targeting historical levels of debt to income or assets, that sort of deleveraging could continue to hold down spending for some time.

 

It's interesting that the CBO report also says that government spending has held back growth.

 

That's like saying, there's a chance that the quarterback following Bruce Mathison should probably be better.

 

If you set the bar low enough, it's tough not to jump over it. Big question is will growth approach 4%? Not based on the current state of affairs.

 

 

 

That's mighty confidence in the Class Warrior in Chief, that he'll roll back all Bush tax cuts and take a knife to entitlements.

I certainly can't predict war in the middle east but, all else constant, it won't exceed 4% on an annual basis. I'd say 2.5-3%, which is way better than it has been.

I didn't vote for him (this time).

Ps. That was a lot of work...trying to get you to respond...

Edited November 20, 2012 by TPS

[Doc]

Yes, there is a reason this one is weaker.

Yup. The failed policies of the Obama administration.

[TPS]

Yup. The failed policies of the Obama administration.

As I said, I didn't vote for him. However, I also don't base my analysis on political bias. Had it been McCain, things wouldn't have been much different.

Until we have real choices politically, nothing will be materially different in this country...

[outsidethebox]

As I said, I didn't vote for him. However, I also don't base my analysis on political bias. Had it been McCain, things wouldn't have been much different.

Until we have real choices politically, nothing will be materially different in this country...

I agree with this as well. I'll even go further and say I don't think much would have changed if Romney would have won.

[Doc]

As I said, I didn't vote for him. However, I also don't base my analysis on political bias. Had it been McCain, things wouldn't have been much different.

Until we have real choices politically, nothing will be materially different in this country...

I agree with this as well. I'll even go further and say I don't think much would have changed if Romney would have won.

Totally disagree. Obamacare by itself has put a damper on the economy and will do further damage as companies make workers part-time to avoid having to give them health care insurance or face a fine. Then there are the failed jobs initiatives, the regulations that are choking small businesses, and the wasted billions on "green" energy, the auto bailouts, cars for clunkers, etc.

[TPS]

This is patently absurd. Underlying economic conditions don't even remotely resemble the 1930's as we've been exporting our inflationary checks for 80 years since then, functionally removing our manufacturing base; as well as being long past our industrial revolution and virgin investor asset bubble. Individual debt to savings ratios have scarcely been worse; and the housing bubble is nowhere near being deflated and normalized.

 

As to your canard about unforseen chaos, I can't remember that last time your particular school of thought accurately predicted market events, so please, don't mind me while I laugh at the silliness of that particular offering.

I guess you never heard of Nouriel Roubini, Steve Keen, Wynne Godley or the Levy Institute.

[Rob's House]

 

 

 

"Jobless recovery" refers to the fact that unemployment continued to rise even after the recession ended. Happened over the last 3 recessions dating back to 1990-91.

 

We were discussing this recently in my Macro class. We came up with an idea that businesses wait until recessions are now officially deemed over by the NBER. That usually happens about 6 months after it actually ends. It's now a topic I plan on researching possibly for a paper.

No ****. That's kind of the point. Increased employment is a result, not a cause, of recovery. But all theobjective respected media types would look into the camera with their stern, serious faces on, and talk about this "jobless recovery" like it was novel, mysterious, & terrifying.

 

Why? Because they're a bunch of frauds. And Brian Williams is a pu$$y.

[IDBillzFan]

Watching liberals try to defend the current state of the economy, and the steps taken by their leader, is like watching two college kids try to decide which one is taking home the fat chick.

 

If you guys think turning out the lights will somehow make things better, you're crazy. This economy is going to continue to slump and stammer and crawl until the Barack Obama Middle-Out Economic Expansion Plan (Now Available in Kiwi Banana and Ironic Twist!) takes hold. And that won't happen until, well, until, uhh, until everyone stops trying to stand in his way.

[B-Man]

The Unmentionable Solution To The Fiscal Cliff.

 

Watch public policy even for a short while and the trick becomes evident. Whether we’re talking my hometown of Tiverton, Rhode Island, (population 15,780) or the federal government, the maneuver is to claim increasing amounts of power and make sure that’s the one thing not on the table when something has to give.

 

Thus, we get massive government interwoven like a terrible tumor around the vital organs of our economy. When the predictable illness follows, the two operations suggested, as if in opposition, are cuts on the spending side and increases on the revenue side.

 

Either, we’re told, is apt to drive the patient into shock. The government can take money out of the economy through taxes, or it can stop putting money into the economy via cuts. That’s not much of a choice.

 

We can argue efficiencies and concoct elaborate plans that best manage pain. But no matter how many news cycles it takes the politicians to bring the public around to the preordained conclusion, the final prescription will be that more room must be made for the growth of government. And that means raising the debt ceiling.

 

Notice what’s not included in this description. Money is not the only measurement of government. Intrusiveness — mostly regulation — is part of the tumor, too.

 

The mythic “balanced solution” to the U.S. government’s fiscal cliff problem has more tools than just cuts, taxes, and debt. Hidden discreetly below the table is the complete set of power grabs that make it more difficult for Americans to work and to spend. On the sharp end are rules that hinder our efforts to make that which we’re inclined to produce; on the dull end are rules that prevent us from buying that which we’re inclined to purchase.

 

To see the path away from the fiscal cliff, throw a century’s worth of data on <a href="http://oceanstatecur...nto-this-mess/" title="Umm… Who (and What Policies) Got Us into This Mess?">a line graph, including GDP, government debt, total stock market capitalization, consumer credit, and (of course) inflation. The numbers are apt to blur in the eyes, but the lines bring things into focus.

 

{snip}

 

The lessons are, first, that there is more wealth in the economy than is presently counted in dollars and, second, that wealth and inflation are mobile within the economy. The solution to our current conundrum is to draw unused wealth and productivity into circulation and wean ourselves from government debt.

 

The closed-door negotiations concerning the cliff shouldn’t be an exchange of revenue chips for spending chips; it should be an exchange of fiscal relaxation for regulatory loosening and safety-net tightening. Raise the debt ceiling for a while, but with the conditions that neither taxes nor spending increase and that Americans are given opportunity and incentive to invest and to be economically productive by means of policy changes that aren’t typically part of this conversation.

 

Such a strategy will be insufficient in the long run, mainly because it does not address the larger problem of a slowing population’s addiction to acceleration. But it might just give the patient enough time to tackle life’s tougher questions.

 

In this case, though, the devil isn’t so much in the details as in the existential imperative of a tumor to grow.

 

 

 

.

Edited November 27, 2012 by B-Man