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TechnoratiEconomic Recovery is Wishful Thinking
The media has been touting whatever good economic news it can find. But the truth is economic recovery is nowhere in sight
Last week we got a whole series of bad reports on the state of the economy. New and existing home sales both remain near their lowest level for the downturn, as house prices continue to drop at the rate of 2% a month. New orders for capital goods, a key measure of investment demand, fell by 2% in April. Excluding the volatile transportation sector, new orders were still down by 1.5%.
On Friday, the Chicago Purchasing Managers Index fell by more than 5 percentage points from its April level, approaching its low for the downturn. The employment component of the index did hit a new low.
These reports might have led to gloomy news stories, but not in the US media. The folks who could not see an $8tn housing bubble are still determined to find the silver lining in even the worst economic news.
For example, National Public Radio told listeners that the new home sales figure reported for April was up from the March level. While this was true, the April figure was only 1,000 higher than a March level that had just been revised down by 5,000. April new home sales were 4,000 below the sales level that had originally been reported for March. USA Today touted a "surge" in durable goods orders, which was also based on a sharp downward revision to the prior month's data.
The media have obviously abandoned economic reporting and instead have adopted the role of cheerleader, touting whatever good news it can find and inventing good news when none can be found. This leaves the responsibility of reporting on the economy to others.
Any serious examination of the data shows that recovery is nowhere in sight. The basic story of the downturn is painfully simple. We have seen a collapse of a housing bubble which has devastated the construction sector and also caused consumption to plunge.
The construction sector is suffering from the enormous overbuilding during the bubble years. Measured in months of sales, the inventories of both new and existing homes are close to double their normal levels. This inventory will ensure that construction remains badly depressed at least through 2010, if not much longer.
The plunge in house prices has sent consumption plummeting. The problem is not consumer attitudes, as many commentators seem to believe. Rather, the reason that most homeowners aren't buying a lot right now is the same reason that homeless people don't buy a lot of things: they don't have the money.
The decline in house prices since the peak in 2006 has cost homeowners close to $6tn in lost housing equity. In 2009 alone, falling house prices have destroyed almost $2tn in equity. People were spending at an incredible rate in 2004-2007 based on the wealth they had in their homes. This wealth has now vanished.
Housing is weak and falling. Consumption is weak and falling. New orders for capital goods in April, the main measure for investment demand, is down 35.6% from its level a year ago. And, state and local governments across the country, led by California, are laying off workers and cutting back services.
If there is evidence of a recovery in this story, it is very hard to find. The more obvious story is one of a downward spiral, as more layoffs and further cuts in hours continue to reduce workers' purchasing power. Furthermore, the weakness in the labour market is putting downward pressure on wages, reducing workers' purchasing power through a second channel.
Happy talk will not turn this economy around. The economy needs more demand, which can only be provided by another larger dose of stimulus from the federal government. There are easy, quick and effective ways to boost the economy with additional stimulus.
First, let's give more money to state and local governments so that they don't have to lay off workers, cut back services and raise taxes. This should be a complete no-brainer since this spending will immediately boost the economy.
The government could also provide a large boost to the economy by jump-starting healthcare reform with an employer tax credit (e.g. $2,500 per worker) for firms who do not currently provide coverage. This could quickly get us to near universal coverage as Congress works to restructure the system to contain costs.
It could also provide a $2,500 tax credit to employers for giving workers paid time off. This should both increase demand in the economy and provide workers with more leisure and flexibility at the workplace.
There are other ways in which the government could quickly generate new demand, but these will not be seriously discussed until there is more general recognition that additional stimulus is needed. At some point it will be impossible to conceal the bad news and Congress' attention will return to stimulus. But the media's reality defying happy talk on the economy is delaying this moment.
114 Comments so far
Show AllEconomic collapse- would be the best thing that could happen. A thriving economy means a poisoned and dying earth. A permanent, deep, devastating recession is the only possible way the planet will continue to be habitable, and would save countless hundreds of thousands of species from extinction, including probably ours.
The only other way would be if we all decided to stop using 80% of the energy we use right now, if EVERY couple limited themselves to one child, and if we put all the money we are now spending on ridiculous and wasteful activities like making war into repairing the damage that's been done- as much as that is possible. And you know what, I REALLY don't see that happening!
"The only other way would be if we all decided to stop using 80% of the energy we use right now, if EVERY couple limited themselves to one child"
I disagree and can prove it. Go visit Kerela, India. The population is much denser than any part of this country and yet people are doing well and making best use of their limited resources. Otherwise, you are correct.
Ranjit,
You have encountered the usual USAn notion that population is source of all problems. It arises because USAns are unwilling to change their wasteful consumption of material stuff - cars and huge houses on 5 acres of land, consumption of vast amounts of meat.
The people of Kerala and their socialist government are indeed a model of sustainable living for the world.
And I love south Indian food...
yunzer,
I have encountered that notion not only in this country but in many other countries as well including mine. The Malthusian trap is so easy to get into when one feels powerless and is looking for a source to blame. As I have witnessed on this forum, however, even in the USA, not everyone is a Malthusian. Earlier today on this forum, I had a response from Louise on my post and I told her not to give up even when the brainwashed out number us wise ones.
Thank you for your praise of our culture. My family and I moved to this country when I was a preteen. I am 33 years old and even in my own culture in this country, people have taken the wrong western values and put money and materialism over love and understanding. To some girls I am not western enough while to others I don't look easternly enough so I don't know if I'll ever find a woman who will accept me for who I am. I always find myself implicitly being asked that I be wickedly progressive so that she'll love me while the girl's parents except me to be straight conservative. I am neither. Sometimes, it can be very upsetting that I am not rewarded for being as true to my religion and culture while others appear to be rewarded for trashing and mocking it but as I told Louise and others, you must take spiritual pride in yourself and when others notice it, then they will follow.
Happy talk and manipulation of the meanings of statistics do not make the economy better. Show me the jobs. Show me the production. Everything else is smoke and mirrors.
Joe
The middle-classes of USA don't want USA to get economically better. The middle-classes of USA conspire to support the bankruptcy of the United States by voting every 4 years for Democrats and Republicans.
What we need is a workers-council state in USA. A government ruled by workers while at the same time on the economic side: the mega corporations of USA like Wal-Mart, Pepsi, Coca Cola, Mcdonalds, General Electric, etc. owned by workers, thru the system of "workers control of production" (Workers management/workers-ownership), or "Workers stock ownership" however you want to label it.
Only under the proletarian dictatorship are real liberties for the exploited and real participation of the proletarians and peasants in governing the country possible. Under the dictatorship of the proletariat, democracy is proletarian democracy, the democracy of the exploited majority, based on the restriction of the rights of the exploiting minority and directed against this minority.
The dictatorship of the proletariat cannot arise as the result of the peaceful development of bourgeois society and of bourgeois democracy; it can arise only as the result of the smashing of the bourgeois state machine, the bourgeois army, the bourgeois bureaucratic apparatus, the bourgeois police.
Therefore, Lenin is right in saying:
"The proletarian revolution is impossible without the forcible destruction of the bourgeois state machine and the substitution for it of a new one" (see Vol. XXIII, P. 342)
Soviet power as the state form of the dictatorship of the proletariat. The victory of the dictatorship of the proletariat signifies the suppression of the bourgeoisie, the smashing of the bourgeois state machine and the substitution of proletarian democracy for bourgeois democracy
Let other people you know learn about socialism! Spread the word... the more people who know the truth, the greater the force against the capitalist system! Resistance forever!
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SO PLEASE, STICK UP YOUR MIDDLE FINGER TO US IMPERIALISM AND CAPITALIST OPPRESSION !!
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The art work and the prose share the same level of sophistication.
Joe
There are some really insightful comments above, and I love the CD community, but could we please address the tyranny of the adjectives, as in "people that" and "corporations who"? This kind of usage is inherently insidious. Many articles published through CD contain this flawed usage despite the fact that so many CD commenters have discussed the evil of corporate "personhood" as a legal construct that ends up, for example, equating "free speech" with "money" as promoted in recent years by the likes of the senior senator from Kentucky, Minority Leader Mitch McConnell, a slick sophist if ever there were one.
Perhaps, ultimately, the solution to this conundrum will be to enable persons to become corporations, including 501(c)(3). For example, I heard a rumor a few days ago that President Obama's highest aide, former Congressman Rahm Emmanuel of Chicago/Israel has had his residential property "incorporated" probably for tax reasons. A couple of years ago I asked my CPA about doing this to my modest property and she said that would be a no-no. Maybe I should move to Israel and get a guvment grant to build a house on Palestinian land... oops, I've overextended the metaphor...NOT.
We need a redistribution of the wealth along lines now classically known. As both Roosevelts understood, you do not "punish" the psychopaths and manic-depressives who seek to control the Universe; you REGULATE them. Without regulation there can be NO Commonweal and no Democracy. Is anyone here not familiar with Social Darwinism and its defects?
-30-
Bad grammar and incorrect word usage abounds here, and I try not to notice it anymore. I am not exactly innocent when it comes to that, but I try to choose my words carefully.
Can the crap, clown.
Marxism is an economic system. We have socialism in this nation. But, as you see, it is socialism for the ruling elite.
Fair and equal government is the ideal.
CHAVEZ: NEXT GIFT FOR OBAMA AUTHORED BY VLADIMIR LENIN
CARACAS, Venezuela (AP) — President Hugo Chavez says he has a new book for President Barack Obama: "What is to be Done?" by communist Vladimir Lenin, founder of the Soviet state.
Chavez says he'll "give it to Obama at the next meeting."
"What is to be Done?" is Lenin's political treatise on the role of intellectuals and the proletariat in promoting revolution, written more than a decade before he led the Bolshevik takeover of Russia in 1917.
Chavez gave Obama a copy of "Open Veins of Latin America: Five Centuries of the Pillage of a Continent" by Eduardo Galeano at an April summit.
The book jumped the next day to the No. 2 seller on Amazon.com.
Chavez spoke Friday on a marathon, anniversary edition of his "Hello President" television show.
How about just some simple living and getting rid of the -isms altogether?
Let other people you know learn about socialism! Spread the word... the more people who know the truth, the greater the force against the capitalist system! Resistance forever!
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.................../..../
............./´¯/'...'/´¯¯`·¸
........../'/.../..../......./¨¯\
........('(...´...´.... ¯~/'...')
.........\.................'...../
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STICK UP YOUR MIDDLE FINGER TO US IMPERIALISM AND CAPITALIST OPPRESSION!
WHAT WE NEED IS A LARGE UNITED SOCIALIST FRONT IN THE USA, WHICH COULD RISE TO POWER THRU ELECTIONS AND ONCE IN POWER SMASH THE BOURGEOISE-STATE !!
WHAT USA NEEDS IS A TEMPORARY DICTATORSHIP OF THE PROLETARIAN !!
"The dictatorship of the proletariat is a stubborn struggle, bloody and bloodless, violent and peaceful, military and economic, educational and administrative against the forces and traditions of the old society." -Lenin
The dictatorship of the proletariat is the instrument of the proletarian revolution, its organ, its most important mainstay, brought into being for the purpose of, firstly, crushing the resistance of the overthrown exploiters and consolidating the achievements of the proletarian revolution, and secondly, carrying the revolution to the complete victory of socialism
The dictatorship of the proletariat arises not on the basis of the bourgeois order, but in the process of the breaking up of this order, after the overthrow of the bourgeoisie, in the process of the expropriation of the landlords and capitalists, in the process of the socialisation of the principal instruments and means of production, in the process of violent proletarian revolution
Under capitalism the exploited masses do not, nor can they ever, really participate in governing the country, if for no other reason than that, even under the most democratic regime, under conditions of capitalism, governments are not set up by the people but by the Rothschilds and Stinneses, the Rockefellers and Morgans.
Democracy under capitalism is capitalist democracy, the democracy of the exploiting minority, based on the restriction of the rights of exploited majority and directed against this majority.
Only under the proletarian dictatorship are real liberties for the exploited and real participation of the proletarians and peasants in governing the country possible. Under the dictatorship of the proletariat, democracy is proletarian democracy, the democracy of the exploited majority, based on the restriction of the rights of the exploiting minority and directed against this minority.
The dictatorship of the proletariat cannot arise as the result of the peaceful development of bourgeois society and of bourgeois democracy; it can arise only as the result of the smashing of the bourgeois state machine, the bourgeois army, the bourgeois bureaucratic apparatus, the bourgeois police.
Therefore, Lenin is right in saying:
"The proletarian revolution is impossible without the forcible destruction of the bourgeois state machine and the substitution for it of a new one" (see Vol. XXIII, P. 342)
Soviet power as the state form of the dictatorship of the proletariat. The victory of the dictatorship of the proletariat signifies the suppression of the bourgeoisie, the smashing of the bourgeois state machine and the substitution of proletarian democracy for bourgeois democracy
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"...But the media's reality defying happy talk on the economy is delaying this moment..."
I can't help but I think the constructive suggestions of Mr Baker are doing exactly the same. This is all small fry compared of what's coming.
The U.S. Government has crafted a distortion of reality. They have found a way to cover up 85% of the nation's actual debt!
The Feds essentially keep two sets of books that make up America's debt portfolio. The first set of books is the widely publicized "National Public Debt." The National Public Debt is currently over $11 trillion and is climbing at a rate of almost $4 billion per day. This is the figure that's quoted in the evening news and on the famous U.S. National Debt Clock in Manhattan. In the past century, this debt has skyrocketed nearly 400,000%.
But the National Public Debt doesn't even come close to telling half of the story.
The U.S. Government Is Another $60 Trillion in the Hole!
The U.S. government doesn't classify future financial responsibilities such as social security, government-sponsored health care, and other contractual obligations as "public debt." With this simple act of reclassification the Feds have been able to shield the American public from the truth about the country's actual debt position. Nevertheless, these financial obligations will cost the American taxpayers roughly $60 trillion!
This debt is no secret among Washington insiders, nor is the fact that the government is trying to hide it. In fact, David Walker, the former U.S. Controller General and the nation's top accountant between 1998 and 2008 said, "As the federal official who signs the audit report on the government's financial statements, it is apparent that our government's financial condition is far worse than advertised."
Walker has also said, "Current federal financial reporting and budgeting provides policymakers and the public with an incomplete and even misleading picture."
Add it all up, and the United States government is on the line for almost $70 trillion in total financial obligations, including public debt.
This is today’s scenario.
Lets look at what’s coming:
The U.S. Government Accountability Office released a new report a few weeks ago called "The Federal Government's Financial Health." In this report, the GAO reported an expected increase in National Public Debt of over 500% within the next several decades! And this is the U.S. government's own estimates!!!
A similar move in the nation's actual debt — that's the National Public Debt plus all other fiscal responsibilities — would result in a total financial obligation of over $550 trillion! That's over $1.8 million that would be owed by every American citizen!
But back to the present: America's current $70 trillion debt works out to about $500,000 per working American or to put it differently, every American child is born into debt owing nearly a quarter million dollars! The interest on that debt alone is going to cost almost twice as much as educating the child!
There won’t be happy talk.
There won’t be any talk at all.
And now watch the first hour of "Zeitgeist Addendum"
Well said...!
All those worthless certificates of securities & dirivatives...!
Harsh. But thanks for reminding me.
""There are other ways in which the government could quickly generate new demand, but these will not be seriously discussed until there is more general recognition that additional stimulus is needed.""
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Careful with that 'ask', eugene. Any call for more stimulus would have to go through the corporate world and wall street so that they will get theirs and leave the scraps for us, OR convince me that it will not.
During Bush2 wealth's concentration reached a tipping point which took ever since the Civil War, our 1st Revolution, to attain. Stealing what wealth is left from the lower and middle classes will go quickly now, with no checks or balances left intact, leading us to the US's 2nd Revolution.
Are you monetarily devoted or spiritually devoted? That my friend you must first ask yourself.
What is economic recovery anyway? Who are we to begin with? Is it money that we allow to control us? As a Hindu Brahmin, I don't know what to make of the Far Right and the Far Left except that both sides are too obsessed with money.
maxpayne, Jethro, and Louise hit the nail on the head by bringing frugality into this discussion. It is true that nobody gets rewarded and maybe that's what makes people not feel like wanting to be frugal. To you three, please do not be discouraged. I and plenty of my devout Hindu friends and supporters will always reward you with our blessings. Frugality is one major characteristic of Hinduism which is our way of life. You should never be frustrated that others are not being frugal like you. I currently live in America and have grown up here for a half of my life but I would like you three to visit south India and meet our people who are frugal and yet spiritually happy. It is not enough to just say that you're frugal, preach, and yet show frustrations or even schadenfreude just because others don't appear to follow.
I agree that we have been seduced into some soulless materialism in this country. The fact that health care has become a money driven industry rather than a helping industry is a great illustration of your point. But I question some of your other observatations.
Perhaps I am misreading things, but it seems to me that a lot of Indian people have been committing suicide because of lack of money. Inequality is rife. The use of gold, silk and jewelry is extravagant for those who can afford it. The Taj Mahal and other structures are not exactly testimonials to frugality. Hindus have often supported a caste system which can be cold, even cruel. Hindus are human, with all the variations and characteristics of humans.
Most sweeping characterizations of religion are not very useful or accurate. And one does not get points for being of that religion. The view from inside is often the most idealized, especially if one is from the highest and most privileged group.
Joe
Christians, Muslims, and even atheists have been stuck with caste systems of their own too which has turned out to be just as harsh and cruel as that of the Hindus. It's just that we don't call it caste system. Committing suicide because of lack of money? Not necessarily. My wife's uncle who was a farmer in India committed suicide after his land was forcefully taken over after he put up a tough fight refusing to sell his land off. The Taj Mahal was built by Muslims, not by Hindus. Yeah, surprising that a few Muslim radicals would want to destroy what their ancestors built, eh? If it weren't for all their gold and oil, would we be plundering them still? Most Hindus in India don't bother to be fancy and could care less that they're not dressed rich to begin with. They do, however, want the bare basics too. I only visited a few times so Ranjit has to confirm that I'm right or wrong.
Myself a Christian, I'm surprised to admit that much.
maxpayne, you are correct on your assumptions but I sense that you are reacting a bit too harsh on jclientelle. It's ok. Like most Americans, he has been brainwashed into opposing us from both the far right and the far left. Hindus may not be perfect but he looks like he could learn more from me about our culture so that I can help straighten his doubts and misperceptions.
This is it! We don't even realize how brainwashed we've become. We use their words, their story-line: ECONOMIC RECOVERY! JOBS! MONEY! WAGES! HEALTH CARE! INSURANCE!
Screw them and all of that! We live from moment-to-moment hanging on their every words, "What's the stock market doing?" "When will Obama DO something?" "What is Max Baucus going to do about single-payer health care?"
Stop living the way they tell us to! The creativity that comes out of chopping off the advertising and shopping and needing (wanting) is so astounding, as to be able to make them irrelevant.
Learn to keep yourself healthy instead of freaking out about health insurance. If enough of us stopped eating their crap food, we'd put the damned insurance companies out of business. Hospitals used to be about taking a piece of metal out of our body when we were in a car wreck, or setting a broken bone. Now it's about putting us on pills and having customers for life.
"Live simply so that others may simply live," means that Archer-Daniels-Midland and Mosanto WON'T live.
Amen!
We have been sold a false bill of goods. We are all tumbling down the rabbit hole.
I have basically opted out of "the media", because it is all BS.
How long have they been looking to "turn the corner" on the economy?
I laugh when I hear about "basis points" in my company's stock reporting. As a non-idiot-economist... no offense to real economists ... basis points are complete BS!
As basis point being, "a unit that is equal to 1/100th of a percentage point."
!!!NEW RULE!!! RHYYNO POINTS ARE WORTH 1/100,000,000,000 of a percentage point."
Just imagine how you are impress your friends?!
My company is up 1,234,876,232 Rhyyno points from this point last quarter! It is pretty sweet. We made our goal of 500,000,000 Rhyyno points...so we all get our bonuses.
I wished that some of my fellow Indians back in India would copy you instead of the yuppie kiddies. The devastation that will result from China and India copying the yuppie lifestyle will be worse than what you are witnessing currently. We devout Hindus can only hope that we're not dragged into their suffering. I'll keep praying for Lord Krishna to reform this planet.
Fuck State and Local Gov't workers! These people have in many cases wonderful healthcare and pensions and many have civil service protection as well. All paid for by the tax payers. If they are all we have to keep us a float were fucked anyway. This notion that people with Public service jobs are going to keep our economy or whats left of it going is backasswards!
I would like it if more of my tax money went for lovely things like health care, a secure and dignified old age and steady employment instead of endless war, weapons, and welfare for the rich. Why does this bother you? I think someone has been playing the divide and conquer game with your head.
Joe
I think I can explain. And take this from a government contractor who can differentiate from a federal employee. Often times, those of us in the private sector are stuck with all the harder work but get less pay or benefits for it. The federal employees on the other hand are already given everything and they can't be denied their fair pay or benefits so easily. Their job is secure while everyone else's isn't. You could be right though that we're all the victims of divide and conquer.
That would be me.
"These people have in many cases wonderful healthcare and pensions and many have civil service protection as well"
Like that was a bad thing.
The reason the Scandanavian countries are the happiest is because the get some return on their investment. Here all of our tax investment increasingly goes to subsidize the lifestyles of the wealthiest--yet we are conditioned to have kneejerk reactions accusing the welfare mother to the the Union worker. The idea is that we pool our investments to benefit the common good --not the masters of the corrupt capitalist class looting us. Get your damn priorities in line and THINK!
Sensible comments, Vern.
Joe
Buffett was right about $1000 in 1000 people's hands being more effective than $1,000,000 in one pocket. What we need is about $30,000 in the hands of about 10,000,000: a WPA 2.0 that will put people to work building some tangible, useful things.
It's all about JOBS. If the private sector is unwilling to employ us, let's employ ourselves.
This author is WRONG when he writes "The economy needs more demand, which can only be provided by another larger dose of stimulus from the federal government."
No! That's not really "demand," or at the least, it's the wrong kind of demand. It's debt, which will be paid off by our children. That kind of borrowing and cash infusion only leads to more bubbles in the future (and inflation in the near term). The economy can only be as big as true productivity allows it to be. The long term strategy has to be to let the economy shrink back down to a manageable level, and invest in useful projects that will increase productivity - infrastructure projects and new innovations that will improve life for everyone in the future, whatever they are.
You finally got the last part right. We need to "invest in useful projects that will increase productivity-infrastructure projects and new innovations..." Yes, yes, yes! So how do "we" do that? Wait around for some businessman to do something with the economy crashing all around him? We might wait a long frickin' time. We need to start now. The leadership must come from Washington and its ability to fund the cost. Sitting back and letting the economy shrink will lead to massive problems, more job losses, less tax money coming into the government, and most basically of all, more damaged Americans. Inflation might be a problem someday (and we can deal with it then), but it is not a problem "in the near term."
"Any serious examination of the data shows that recovery is nowhere in sight."
DB has no idea what he's talking about, according to KNBC 5 here in Dallas - they're running a new daily segment titled: "Ready for Recovery!"
Because it's just minutes away, see, and if you're not ready for it, well, you might just miss it!
Take that, Mr. Moneysmartypants DB!
I really do not see how the economy will turn around anytime soon. Real wages have been stagnant at best or falling for a very large part of the population for a very long time. These people kept spending by cashing out the equity of the houses when the real estate bubble was in full swing. That bubble is gone now, along with the easy credit that went with it. Wages are not going up. So where is the money going to come from to get the economy going again?
I guess like "The Onion" online paper said; "Recession-Plagued Nation Demands New Bubble To Invest In"
That makes about as much sense as throwing billions of bucks at the financial system.
"So where is the money going to come from to get the economy going again?"
This usually comes from borrowing from other nations when raising taxes on the wealthy or closing those tax loopholes is unthinkable such as in this insanely idiotic political climate.
'Economic recovery is wishful thinking..'
Well, gee fuckin' DUH.
You rape, pillage and murder the indigenous people of this land, and then you rape pillage and murder the hard-working honest farmers and laborers who replaced them and so where does that leave you Amerika?
It leaves you in your own sick soiled filth. Your evil madness and greed and fantasy.
YOUR OWN HELL. MAY YOU ROT THERE FOREVER, AMERIKA.
As much as you are disgusted with everything wrong in this country and who isn't, I don't think that bashing the country is helping anyone here. The purpose of this site is indeed to inform, inspire, and ignite change for the common good so let's try sticking to it.
uh thanks nedlud. most of us living in amerikkka are also victims, even those of us who fully internalized american ideology (most everybody).
if america is 'to rot in hell,' then so is the world. the shit ain't gonna fall apart in this country w/o it severely negatively affecting every part of the globe.
"...if america is 'to rot in hell,' then so is the world. the shit ain't gonna fall apart in this country w/o it severely negatively affecting every part of the globe..."
Yep, and that's EXACTLY the goal.
Fresh from the section Beyond Hope and Despair ;-) read “Collateral Damage” by E. P Heidner, part I and II.
>>> www.scribd.com/people/documents/2169400-ep-heidner <<<
Louise is almost right. While I agree that buying locally is a far better idea than getting a cheapskate version overseas and shipped, we need to go further. Most of the comments here are interesting but what's missing from this discussion is that nobody is rewarding one another for being frugal but instead everyday, for every one person who is frugal, at least 5 of them are not so and in fact go out there and try showing how proud you are to be frugal and you'll get laughed and sneered at more often than not. Your mileage may vary depending on where you live but I've noticed that the compulsive consumerism mentality is still out there. We wouldn't be otherwise occupying Iraq to steal more oil for plastics or whatever gets made with oil which is just about everything society buys to show off even when in debt. I sure wouldn't mind buying local plastics made out of hempseed oil grown locally although we would have to abolish the DEA to get that far.
More to the point though. Like most in the media, Dean is being too superficial on economic recovery in general. I would strongly recommend reading and learning from these two articles before you start to think about the term "economic recovery". While these two articles came up late last year, see what has been going on for the past 6 months since then. We need to think long term in years instead of short term.
#1:
Economy Done Tanking? Try Just Begun
by
Ben F. Terton
http://www.moderateindependent.com/v6iNOV232008Economy.htm
#2:
Hold Onto Your Seats - The Economic Collapse is About to Begin
by
Ben F. Terton
http://www.moderateindependent.com/v6iDEC282008economy.htm
Yes, but at this point in the game, shouldn't there be a comeback to people who make fun of someone who doesn't have the latest and greatest?
I mean, there should be a contest for the best comeback to some jackass who makes fun of your kid when he's wearing $50 jeans instead of $200 jeans. Or a plain, used T-shirt from the thrift store instead of the one that says, "I'm doing my part to help the environment. I bought this $75 organic hemp T-shirt on-line and it was made by indigenous tribes in Madagascar."
I mean, really, the only reason we are where we are today, is because we normal people never have good comebacks to the bullies at school.
How about, "Well, I don't have the money to help destroy the planet by buying every new thing the advertisers tell me to buy, like you do."
"Yes, but at this point in the game, shouldn't there be a comeback to people who make fun of someone who doesn't have the latest and greatest?"
I guess that can't hurt but I think we have to do it in a way that it hits them without turning others away from us. I usually take moderated approaches. I am aware of the hard-core consumerists who will never change until it really hits them but I still believe that there is some way to tap into the brainwashed who can be recovered. It's a matter of winning them over and not waking up the sleeping giant.
"I mean, there should be a contest for the best comeback to some jackass who makes fun of your kid when he's wearing $50 jeans instead of $200 jeans. Or a plain, used T-shirt from the thrift store instead of the one that says, "I'm doing my part to help the environment. I bought this $75 organic hemp T-shirt on-line and it was made by indigenous tribes in Madagascar.""
Now that's a healthy contest to consider. I think that we can combine the ideas of buying used and producing clothing made of material such as hemp and bamboo. It would be better if we could make our own hemp t-shirts instead of torturing those poor workers and wasting petroleum to ship them all because of the ban on hemp cultivation in this country.
"I mean, really, the only reason we are where we are today, is because we normal people never have good comebacks to the bullies at school."
I agree with that and I won't forget the flanking I took for not being "manly" enough in my high school and college years and that was back in the 1980s. I hear it's only gotten worse in the last two decades.
"...showing how proud you are to be frugal and you'll get laughed and sneered at more often than not..."
Do not worry: He who laughs last laughs best.
At least you know how to grow pumpkins.
Haven' grown pumpkins before but I see what you and Ranjit mean. I just wished there was a more united effort instead of individualized only. Ah but there's always so many to train on this planet I guess.
Well said yachtie.
"First they ignore you, then they ridicule you, then they fight you, then you win."
- Mahatma Gandhi
Given the justifiable outrage over how the stimulus money has already been spent there will be no third stimulus. Instead, we will limp along with a vastly shrunken economy for years to come.
There will be no return to the bubble years economy. Nor should there be. It wasn't good for us and it certainly wasn't good for the planet.
I don't miss the crass materialism, selfishness and militarism that has been the zeitgeist since Reagan. (I wonder if the spiritual emptiness of this period has anything to do with its overweening religiosity?)
Louise has the right idea. Globalization is $#it. What does it create for ordinary people? Minimum wage jobs in retail/services and cheap crap to buy at Walmart? I want locally produced goods and services made by people I know. If I want a loan, I want one from a local bank from a banker I know who knows I have some chance of paying it back. Who the hell needs the Wall Street banks?
Facts, please! What "justifiable outrage over how the stimulus money has already been spent" are you talking about? This has zero to do with bank bail-outs mind you. The economic stimulus money is about putting people to work. Virtually any kind of work is good. Instead of money OUT for unemployment, welfare, food stamps, ER visits, etc., it's money IN to the government with income tax revenue, and people spending that money increasing sales tax and buying stuff and thus creating other jobs. If the government stimulus money is used to create jobs that actually do good, productive work, then that's gravy.
Here folks you see the fundamental pathology of mainstream economics made manifest:
" The economic stimulus money is about putting people to work. Virtually any kind of work is good."
What kind of a cynical attitude toward human potential do you have to have to say such a thing? People (at least those I know) are given a finite amount of time on this earth and this guy thinks that it should be spent doing anything that creates jobs no matter whether that work needs to be done or not. No matter whether that work produces a product that is destructive or not.
And he is quite explicit about it:
"If the government stimulus money is used to create jobs that actually do good, productive work, then that's gravy."
I would much rather support someone on welfare than someone producing cluster bombs, for instance.
I argue that you are the one with the "cynical attitude." Of course you are free to assume stimulus money is likely to be used to produce "cluster bombs." I would wager that you are not out of work, out of money, with children to feed, clothe and shelter. I would argue that you are one of those "elitist" types who will do just as you please. Perhaps someday you'll find yourself in a situation where suddenly everything looks very different.
I really don't care how much anyone and their family is hurting, NOTHING gives them the right to perpetuate misery or rain down destruction on others, or the ecosystem. If the only choices on the table are allowing the latter or condemning desperate Joe and his family to abject poverty , Joe and his family have to accept being poor. Call me an elitist, I really don't care.
I think I was a little harsh with you since you were just repeating what is considered common knowledge. The problem is that food, clothing and shelter is denied to those who don't have a job when those jobs are created by wasting people's time, talents and other precious resources to make products we would be better off without.
They probably won't funnel stimulus money into making cluster bombs but you can bet that if this country decided to sign the treaty banning cluster bombs the people employed making them would scream bloody murder about loosing "their jobs" just like the people who make F22 fighter aircraft did when Gates proposed buying fewer than originally planned. It's not hard to understand why this happens but I still say the problem is not that this country doesn't produce enough weapons (or automobiles) but that we deny the essentials of life to the unemployed rather than reduce work time so that more people can be employed making the products that actually need to be made.
I am not an elitist. In fact, most people would consider my financial situation quite dire, although I am employed for now. I may very well find myself in a desparate situation in the not-too-far-distant future but I sure as hell won't blame it on the lack of jobs producing weapons or soul-destroying consumer goods.
I keep hoping your economy comes back. I don't know how anyone can live in your world without your money. Even my own mind can't fathom at times how the Tribes lived for 1000's & 1000's of years upon the Creator's earth in this land without your money?
I don't know how they ever lived without your Flag, Constitution, & form of Govt for 1000's & 1000's of years upon the earth. I am not saying it was perfect as you put any two human beings together & sparks will fly eventually.
But that is history & this is the now of things. In the now of things Walmart is rolling back prices for me, but not just for me, for everybody.
They don't care about your skin color. They don't care about the clothes you wear, how you look, or the car you drive. All they care about is if you got money.
I wonder if they are already planning to sell you Christmas next year? If I remember correctly your next big holiday is the 4th of July where you can dress yourselves up & call yourselves this thing, Free.
Free to pay bills. Free to go the store & buy stuff if you have money.
All I know is when I leave your world I won't need your money anymore. I won't even have to render unto Caesar what is Caesar's anymore. Already sounds like Heaven to me.
Life is good. What an experience! It's always best to forgive.
Excellent! We've been so brainwashed we can't even imagine it was any other way than the way it's been in the past thirty years.
Unlimited worthless crap for everybody!
great line in delillo's "white noise", from an american culture prof whose name i forget:
shopping? a lot like death when you think about it.
if asked what's the difference b/n "freedom" and "shopping," most americans wouldn't be able to answer.
at the end of "white noise" (which george will said was "unamerican", ha ha ha ha), after the 'toxic airborne event' has passed, the local supermarket for the town decides, for some reason (efficiency?), to rearrange all its items. people wander in, get lost, become hopeless, feel like life has lost its meaning, b/c they can't find anything. the town takes in stride the impending death of civilization due to industrialization (a la the 'airborne toxic event'), war, etc., but mess w/their shopping experiences...life is suddenly not worth living.
What's meant by 'economic recovery' anyway?
A return to business as usual? That is not going to happen, for many reasons, chief among which are the energetic predicament (looming peak oil), the fact that the process of societal decay is too far gone and can no longer be reversed (massive indebtedness of the citizenry, corruption, unemployment, lack of confidence in the fraudulent world of finance and banking, huge health problems in the population -- obsesity, diabetes, depression, drug addiction, paranoia, cancer, AIDS, autism -- erosion of the educational institutions, increase in multiple killings, etc.), and the ecological crisis (water shortages, exhaustion of the aquafers, pollution of water bodies by drugs, pesticides, and numerous other chemicals, extinction of species, global warming, etc.).
On the other hand, if by 'economic recovery' is meant a transition to a no-growth, downscaled, local mode of making a living, with an emphasis on non-invasive agriculture, (at least some) bartering, small communities and small towns, and public transportation (trains and renewed use of water ways), one might be talking more realistically.
Anything else is pure denial, self-deception, and psychology of previous investment.
Another thing the media likes to hype on is the Stock markets climb.
Stock market up 200 points!!
They fail to mention that poor performers have been delisted. As in Citigroup and GM and replaced by better performers.
This bit of manipulation is always used by Investment advisors who proclaim "Since 1930 the Stock market has returned more then any other type of Investment".
An easy claim to make when all the companies that go under are delisted.
Most Companies listed on the Dow of 1930 are long gone and no longer exist.
Sioux Rose
GW NORTH: I didn't know that, thanks for letting me in on "the secret." Kind of reminds me of the way the unemployment numbers don't bother to list those who have been without work for more than a year.
Rose, is that true? Is that a fact?
If you are asking about the employment and unemployment numbers, it is true. Even BLS admitted this back in 2006:
http://www.bls.gov/opub/ils/pdf/opbils53.pdf
Here's an article published in 2005 which talks more about this:
http://www.moderateindependent.com/v3i4Economy.htm
Thank you for link.
Nothing surprises me anymore.
The other "clever" thing they did with the numbers are those regarding inflation.
What USED to happen is that they would buy a basket of goods eacg year. If the basket of Goods was 10 percent more from one year to the next, the inflation rate was 10 percent.
They then GIMMICKED that.
They said Ok we Have STEAK in this basket...Now if the price of steak goes up 10 percent from one year to the next, the consumer will stop eating steak...he might eat hamburger..so what we will do is subsitute hmaburger for steak then measure the cost of the food basket...
Voila..Inflation is only 3 percent!!
This is so STUPID. Its like saying the price of gas never rose for the past 30 years because we got more fuel efficient cars . If it rises to 20 bucks a gallon they will be sating "the price of gas never wnet up because everyone is walking now".
"An easy claim to make when all the companies that go under are delisted.
Most Companies listed on the Dow of 1930 are long gone and no longer exist."
Thanks, I always wondered about that claim.
- There was an unintentionally hilarious comment in this vein, in a Reuters report on yesterday's stock market rise. A fund manager was quoted saying, "The Dow is now above its 200 day moving average. Stocks generally do better in that kind of environment."
What's funny is considering how little a remark like this really means, despite being echoed by the media as though it's "shrewd & savvy." Obviously, for example, if the market is above its 200 day moving average, it's been going up for while. So the guy is basically just saying that if it's been going up for a while, chances are it might go up some more. (Duh.)
Conversely, if it's NOT above its moving average, it hasn't recently been going steadily up. So the remark just means that in that case, it might not go up more. (Duh.)
Stock market chatter is intrinsically worthless & idiotic. Every day, the market goes up or down. Then the press writes its daily coverage, trying to adduce "reasons" why the market did what it did, & trying to make it seem all very natural & logical. Yet before any given day's action, none of these commentators can tell you what's going to happen. So it couldn't really be as "logical" as they try to make it sound in hindsight.
Often you hear comments like "The problem lately is that the market has been lacking leadership." This means absolutely nothing. It's like saying, "The market hasn't done well lately, 'BECAUSE' no important stock group has done well." This is what is called a "tautology." It's not an explanation of anything.
And yet, our whole economy is based on just such inanity.
Buying & selling worthless paper- or even worse- the "idea" of paper.
Wish a lot more people would see that "the Emperor has no clothes"!!
As XGenman said, "the entire point of this exercise" really does seem to be to "finally remove the middle class in America." Can someone explain to me WHY the monied interests/MIC/their puppets in our government would want to do that? If it's not the plan, it's certainly steadily turning out that way -- so what's in it for them? I'm lousy with the math of even my own non-existent finances, but even I know that if millions of people have a little extra money to spend, it's going to benefit the economy; and surely that's good also for the owners of the companies, bankers, and therefore the elite eventually -- right? What do you guys think is the rationale for these policies that are driving the middle class to extinction? Cheaper and cheaper labor? Mere shortsightedness, the wealthy merely grabbing everything they can while they can? What are they thinking??
Globalization.
Overseas markets as producers and consumers.
They don't need a middle class to buy their products anymore because the government is giving them the money directly. We've been bypassed and now if we'd just do the nice thing: starve, die and disappear.
They don't need as many middle class consumers here because they have an increasing number of middle class consumers to sell to overseas.
That's right. That is why this program really got going under Reagan, when the Reaganites could see the coming fall of the Soviet Union and that it would mean that the corporatists no longer needed to maintain a US middle class or to treat labor fairly. There would be a world full of foreign markets and cheap foreign labor. Also, there would be no longer a need to maintain the ideological competition with the Soviet Union which had required at least some degree of equal opportunity and widely shared prosperity in the US. And as a bonus the fall of the Soviet Union could be used to argue that socialism was always bound to fail, making it easier to compel third world nations to accept corporatism and more difficult for leftist groups to encourage an anti-capitalist rebellion in the US and around the world.
good point. can't underestimate the collapse of the soviet union for understanding where we are today.
To all above: yes and no and yes and no and yes and no.....
rush limbaughs taint is right.
You really have to get into some historic analysis if you want to make sense of the WHY.
Here you find THE answer: “Collateral Damage” by E. P Heidner, part I and II.
>>> www.scribd.com/people/documents/2169400-ep-heidner <<<
For example, National Public Radio told listeners that the new home sales figure reported for April was up from the March level.
NPR (Nervous Propaganda Radio, a division of Green Shoots Communications, Lawrence Summers, CEO) started going right several years ago and that's when I stopped bothering with it.
Apt comment on and renaming of NPR!
That outfit is so nervously eager to serve the machine that it's perceptible in the obsequious -- at times falsely hesitant -- tone of voice of the newscasters, not to mention the totally nauseating content of some of its news reports.
It actually offers an excellent example of what the Nazis called "Gleichschaltung," the policy of setting into line whatever institution could further the agenda of the National-Socialist party and state.
I've listened to NPR a few times when I got home late from work on my local radio station...they seem to be pretty fair to me. But the station I listened to only carries their special news or panel discussion reports, not much everyday news reporting.
About three years ago, an NPR reporter did a story about a 21 year old soldier who was killed in Iraq. At one point in his story the reporter said, " . . . and this young man who died for his country . . . " If you are killed in Iraq you've died for nothing. I don't expect NPR, especially then under the Bush regime, to say such an thing but the remark was the kind of flag waving BS that NPR never used to traffic in. Subsequently, other reports started engaging in the same kind of language and sentiments and I stopped listening altogether. NPR is now kind of the tame left wing of the MSM, if such a thing can actually be said to exist.
I'll just be thankful I haven't been exposed to that crap from them then. Then again, three years ago, I was much more right-wing when it came to national security.
people lose good paying jobs in manufacturing, get poorer paying jobs in sales and service...spending ability critically cut...many businesses, particularly the large number of them reliant upon frivolity and disposable income for activity, without customers...further layoffs...economic recovery reliant upon the devastation of the only known habitable world in our vicinity...
choice time...decision time...
the problem we're facing isn't a dying economy, it's a dying planet due to our economy...
Global Start Date: September 22, 2012...socialized, shared housing...let's get those gardens growing!
From the article:
"In 2009 alone, falling house prices have destroyed almost $2tn in equity. People were spending at an incredible rate in 2004-2007 based on the wealth they had in their homes. This wealth has now vanished."
This "wealth" was never real. It was fictitious, a textbook bubble---right up until the point at which we taxpayers were handed the bill. At that point, finite and irreplaceable hours of our lives, laboring for the bourgeoisie, were transmuted into legal tender going forward indefinitely. That's where the real wealth is, and always was.
Homeowners using their houses as ATMs, speculators large and small, those who dreamed of house-flipping their way to Easy Street---all got stuck when the music stopped. This scenario is nothing new, a few minor details excepted, and was foreseen by many. The frugality practiced habitually by those folks will now be the default position for the rest, and is the only long-term solution.
"The frugality practiced habitually by those folks will now be the default position for the rest, and is the only long-term solution."
I don't think that being frugal will be the default position automatically much as we would like to see that be the case. Frugality will be the norm only when more people stop belittling those who are frugal and give it a chance. For those of us who are frugal, I'm afraid we have our homework cut out for us and that is convincing others to be frugal and proud of it. I don't believe in laughing at people's suffering because they foolishly fell for it. We would do better to reach out, create incentives and reward one another for being frugal. Take credit cards as an example. If you have come across those shopping for points, you probably know what most people will do. What if there were a tax credit for being frugal instead? That's where we need to get the ball rolling.
That's the only way I see a frugal economy growing and sustaining. Otherwise, it will still remain like what I see every day. Those of us who are the wise and frugal cannot afford to remain in the minority because whatever happens to the rest, we'll get dragged into it. Sustainability and basic comfort also come to mind. None of this will come short term but will most likely stretch out long term. Until most people can be convinced out of their consumerist ways, we're just raisins in a muffin.
Sioux Rose
JETHRO: Great points, and I'm surprised Mr. Baker didn't express them. Perhaps the length constraints of his article accounts for those missing links? It's important to remember that housing prices were ballooned in an unnatural way to rise far faster than any other cost of living element. And market values are based on the presumption of what the buyer will buy, thus these always represent a rather fluctuating basis for worth (or wealth). What went up too fast, is coming down; but as some have noted, the problem was not treated, instead more fuel was given to the disease (corrupt bankers and the phony "products" they devised as a means to send more wealth upwards and rob workers of equity and decent housing at affordable costs). I cannot imagine that treating the effect rather than the cause was anything but a premeditated crime with the criminals relying on enough obstruction by the press and the legions of "experts" in a chorus singing "all is well" to keep the con rolling. Is it that much different from the press telling us how swimmingly well things have progressed in Iraq when in fact the nation is a shell of its former self, little that was broken actually repaired, a million lives rendered volition-less martyrs?
I know a millionaire who was very kind to me allowing me the use of one of his homes as a writer's retreat for several months. Each day he'd say that it was another beautiful day as I corrected him stating it had not rained in months and this was neither a good thing, nor natural. He is of that school that trains the mind to ONLY see positive outcomes and he has indeed manifested millions and millions of dollars. I think, however, a price is paid in that when one forfeits the truth of the world around them to fashion a cocoon based on empowered mental disciplines and specific style envisioned outcomes, one forfeits one's humanity and true connection to the state of the world and its beings.
But the market is rallying!!!
At least until Obama's Wall St speculators gamble away all our money.
No confronting reality is allowed because that would have negative psychological effects and we all know the entire balloon is inflated with happy talk.
Exactly.
The market is rallying, and that's all Obama's friends care about.
"Furthermore, the weakness in the labour market is putting downward pressure on wages, reducing workers' purchasing power through a second channel."
Meanwhile, the blood-sucking banks have been and continue to raise interest rates on credit card balances which will lead to more credit card defaults along with considerable mortgage defaults as thousands more ARMs adjust this year and next.
The economy doesn't stand a chance to recover with this stupidity taking place.
"The economy doesn't stand a chance to recover with this stupidity taking place." There is a fundamental flaw in this statement. The(ir) economy is doing fantastic. OUR economy is going the way of the dodo. The entire point of this exercise is to finally remove the middle class in America.
"The entire point of this exercise is to finally remove the middle class in America."
XGen:
You're right!
On the other hand, the "money cartel" and their feudalistic approach to controlling the globe is showing its ugly face to the "many" who have lost their pensions; lost their investments & savings; losing their homes and losing any hope to retire and enjoy the few years they have left before they die. There are lots of baby-boomers who are ready to retire!
At what point will these people, with nothing to lose, rebel against a cartel-led-government that is concerned only with its own survival? Ben Bernanke and everyone else in this pitiful government knows that our economic survival is hanging by a thread!
When will they do something constructive to stop the hemorhaging of the majority?
http://www.financialsense.com/Market/wrapup.htm
I agree they want to remove the middle class. But let's examine it for a minute. They built the middle class because they wanted to sell a bunch of crap they were manufacturing. Moreover, they were worried about an unemployed populace after WWII.
I wonder, if instead of wringing our hands over the demise of something they created for their own benefit, we might step back and imagine a different world, without them?
I think they are manufacturing the "revolution" (civil war,) as well with their tea bag parties and Fox News and Glenn Beck and all those jackasses constantly yammering on and on about "revolution."
Why don't we all (left and right and black and white and orange and purple) wake up and look around at how we are constantly played against one another and just end it once-and-for-all. Hell, they even play the animals and us against one another, "The wolf is gonna KILL ya!"
How about acknowledging the demise of this way of life and realizing it's probably the absolutely best thing that could have happened? It may have happened too late. But it certainly is time. Then moving on and working together to change things.
We need to stop "demanding" they "do" something for us. We need to do it for ourselves, and the best place to start is right at home, in our own neighborhoods.
The very best place to start is in our living rooms: KILL YOUR TELEVISION!
We still have a long, long way to go. The economy will not come roaring back - the game has changed. The standard of living (for certainly half the population, probably more) will be forever changed and things will never be the way they used to be. It takes a long time to heal 20 to 30 years of abuse.
There isn't going to be any economic recovery. The human race has overshot the ability of the planet to provide resources for our continued survival and we are headed for a die-off. Just wander over to http://dieoff.org/ and you can get all the details.
The banksters know this and have arranged for one last round of looting before everything goes to hell. You can be sure that long after the aged are abandoned in nursing homes and there are no funds for unemployment, welfare payments or food stamps there will be plenty of police keeping your homeless ass out of the houses the banksters "own."
Does anybody wonder why we are continuing two pointless wars in Afghanistan and Iraq long after it's obvious that muslim fanatics have ceased to attack the US? It's to keep the oil price up for the Saudi's and prevent the worlds people from understanding that there really isn't enough oil to go around.
The party is OVER. Finish your bottle and wait in line for the suicide booth.