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It's the Economy, stupid - Languishing & Lingering after the Great Recession

Discussion in 'Tilted Philosophy, Politics, and Economics' started by rogue49, Aug 10, 2012.

  1. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    What they can do and what they will do are different. If the CEO went to the board with a plan to spend $1 billion with no return, he would be fired. If they agreed to spend $1 billion I guarantee they have a plan in place to make up for it, and actually profit from it. I bet within a week we will start seeing the patriotic music, flag waving, ads with employees telling us how happy they are to work at Wal Mart and that they have renewed vigor to make your shoping experience better. And perhaps they will raise prices by 3% while beltway liberals trip over themselves to start shopping at Wal-mart for the first time- still cheaper than Whole Foods.
     
  2. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    I think my broader point is that it's not likely that the U.S. economy could have recovered substantially faster than it did. It's not that easy being the largest and the fastest.

    This is like saying, "OMG, Obama sucks because the economic recovery has only been good. It should have been fantastic!"

    I know you're not saying he sucks. (I think your biggest criticism is that he's not clear.) I just think that there are other things to be concerned about. The recovery overall has been good, but there are a lot of shitty things about the U.S. economy (flat wages, economic disparity, etc.).
     
  3. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    Let's track that, going into the future. My bet is that the trend will be increasing. Heck, the lawsuits will begin on a higher wage base - compensatory damages are usually based on that. I speculate that lawsuits will trend with graduating law students who pass the bar exam - unless Republicans fix the system
    --- merged: Feb 20, 2015 at 5:59 PM ---
    I gave an example of what could have helped our economy recover faster - small business lending by commercial banks. Pre-recession my business had access to several lines of credit at reasonable rates to finance growth when needed. Overnight, those lines were closed or rates went from 3% - 6% to in one case 21.9%. I manage growth differently now but those lines of credit have never came back. I interact with 100's of small business owners who have expereinced the same thing.

    My response is to those who say things like - he does not get credit...or he deserves credit...he has done little to help the economy and many things to hurt it. I hold the position that the Presidential powers are limited in this regard, but Presidents can make a difference through leading.

    His biggest problem in terms of the economy is his lack of an understanding of what it takes to run and grow a business. His class warfare rhetoric. His failure to appoint business people in key positions. His re-distribution tendencies....Etc.
     
    Last edited by a moderator: Feb 27, 2015
  4. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    I find that it's easy to play armchair economist, and it's always easy to say how things could have been better in hindsight. Also, it takes a lot of time and effort to enact change at the federal level, especially with the way Congress has been lately. But it's not like Obama ignored small business entirely. Are you saying the Small Business Jobs Act of 2010 should have been beefier? How so? $30 billion was provided for loans. Should this have been more?

    [qu0te]My response is to those who say things like - he does not get credit...or he deserves credit...he has done little to help the economy and many things to hurt it. I hold the position that the Presidential powers are limited in this regard, but Presidents can make a difference through leading.[/quote]True enough, the federal government has a limited impact on the economy. But I can't see how Obama has hurt the economy more than help it. Is this all based on whatever "vibes" people get from his leadership? I'm not sure what you're suggesting exactly.

    What makes you think he lacks this understanding? Did Reagan?

    Obama Outperforms Reagan On Jobs, Growth And Investing - Forbes

    You will have to give me some specific examples. Pointing out the problems inherent in the growing wealth gap, economic inequality, the concentration of wealth, and the recovery benefiting some more than others isn't "class warfare rhetoric"; it's called economic realities.

    Is there any indication that businesspeople in particular make good politicians? (I can only think of Mitt Romney and Ross Perot as high profile examples.) Has he overlooked anyone in particular? Why would these people fare better in these key positions?

    His redistribution tendencies aren't strong enough. Is that what you're talking about? Economic inequality in the U.S. is doing far more damage than any "redistributive tendencies" that I can think of.
     
    Last edited: Feb 20, 2015
  5. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    Location:
    Baltimore/DC
    To quote The Princess Bride, "You keep using that word. I do not think it means what you think it means."
    Meaning...Leading.

    You say this as if it is some magic skill...where NO president has this, certainly not with all the "wanna-be" presidents with egos in Congress
    and especially with an intransigent opposition.

    I haven't seen ONE president yet, "lead" to get others to do what they don't want to do.
    Those little "limitations" that you note keep them from doing it.

    And if they do Executive Orders, then you turn around and say its unconstitutional or overboard. (again, something that really hasn't been said about most presidents in the past)

    So you're contradicting yourself and having unrealistic expectations.
    You cannot "lead" an obstinate animal...much less a group of them. At least when you cannot "pick them up" and carry them where you want...not with them hissing and scratching.

    There is no magical leading. I have seen no leader like that. None.

    -------------

    On another note, with lingering affects of the Great Recession. (no fault of either President)
    We see this...
    Four Ways Millennials Are Still Scarred From the Recession


    And I say, this is occurring for all generations...it is a cascading affect.
    Baby Boomers cannot retire as they thought, their savings lowered, costs higher...and are working longer.
    Gen X'rs aren't getting into higher management for the lack of openings. Their investments just starting to rebuild.
    Millennials have no openings, no decent wages...and I wouldn't think they'd be decent investors, this takes experience...it doesn't just magically happen. AND you have to have spare cash too...

    All this is from the Corporations and Management, setting up rules, fees and structure to benefit themselves.
    And they're allowed to...they're in this for business...but the trend has become an extreme...and there's no investiment growth on their part...they're still quaking from the Recession too.

    Action, reaction.
    Confidence and resources.

    Simple as that.

    And it's not going to change, until businesses start reinvesting into their own...and for the future.
    It's one thing to make a profit for the now...but how do you invest into your people and development???

    Progressives aren't going to solve it with government and regulation.
    Conservatives aren't going to have solutions catering to self-involved businesses and removing safety-nets.

    The ones that are comfortable and stable now...these are the exception, not the rule.
    For any generation.

    Someone has to encourage corporations to start investing.
    Not just sitting on their money.
     
    Last edited: Feb 23, 2015
  6. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    Location:
    Baltimore/DC
    As a followup from yesterday...
    While I agree with what Mr. Krugman is noting as one of the aspects of the issues lingering in the US and the world in general,
    I don't agree with his suggestions for solutions...the Wealthy themselves is not the problem. (that's top down, trickle down) Minimum Wage is a factor, but not the whole (that's bottom up, trickle up...)

    Yes, the problem is lack of investment...or reinvestment. (this will hit ALL levels, at once...and relatively quickly)
    For some reason, corporate management after the Great Recession has forgotten how to kick themselves in the ass, create things and empower their staffs.
    All they do is exist on the status quo.
    Or they are more likely to trim...than build.

    But I don't think focused taxes are going to do it...they never do. If anything, it will backfire.
    How about you ENCOURAGE reinvestment.
    Get them back into the mindset of doing for the staff, R&D, new ideas, new ventures, etc...

    There is no need to stop the leak anymore, they're sitting on money.
    Encourage them to make that money work.
    They'll get better quality and productivity from not constantly starving the "beasts of burden"
    Cause a skinny mule can't climb a mountain well.

    Hard part, the Obama administration is horrid at mindset campaigns.
    And the Dems aren't good either.
    And the GOP is not into it that way now, they'll oppose it...if it isn't for their benefit or their idea. (they're good at it IF they come up with it)

    Do something to change the momentum.
    Not just plug a hole.
     
  7. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    Another way to look at it is in terms of a feedback loop. Policy makers can respond to what is happening in the market and make adjustments.


    Reagan had core principles and he surrounded himself with a diversity of thinkers who were willing and able to share their disagreements. Perhaps there is a new theme you have given me some insight into - a poor understanding and use of a feedback loop.

    Obama Outperforms Reagan On Jobs, Growth And Investing - Forbes

    Recently Obama singled out Staples in some of his comments:

    http://thehill.com/policy/healthcare/232469-staples-slams-obama-for-attacking-major-tax-payer-on-healthcare

    Among other things like the above he erroneously comment on Staples profitability. Staples is in a precarious position, recently consolidating with Office Depot, the business is weak and will potentially fail to competition from the likes of Wal-Mart and Amazon. The President clearly did not know what he was talking about. And, for the President to single-out an individual company like he did is wrong in my view.
     
  8. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    And they've done this, but there is only so much impact policymakers have on the economy without being too heavy-handed (like in a command economy). The U.S. didn't buy into the austerity insanity that gripped Europe. The notable example of American austerity was during a boom (when it makes sense to apply it). That in itself should tell you that America's policies were among the best in the world in response to the crisis.

    Now America is headed into a phase of deflation. Some are saying it will be short-lived. Others are blaming energy prices exclusively.

    Either way, this is a real risk because I'm among those who believe America is in a liquidity trap. This is probably what has made deflation possible (and we're talking real deflation here, not disinflation). People are hoarding cash, aggregate demand is still too low. In this situation, people don't want bonds; they want cash. The interest rate is hovering not far above zero (0.25%). All this means is that monetary policy will have almost no impact on interest rates.

    So in terms of policymaking, it's about figuring out how to get people to spend money. U.S. consumer spending has been weak in recent months (like, 2009 bad).

    I'm not sure what's in store from Congress on what to do in this regard.

    I don't know. Obama says the economy will do well this year, so maybe things are already lined up.

    Obama report: Economy poised for good year

    So this is basically what was reported vs. what an official company spokesperson says? Is this your best example? From what I ready, Obama's statement still makes sense despite what the spokesperson said—even, arguably, despite whether the flyers were a real thing.

    Honestly, you'll have to give me some other examples.

    The bottom line (I'm a big-picture guy) is that the Republicans turned out a bad economy twice, and the Democrats fixed it twice.

    I think for that, you should be satisfied.
     
    Last edited: Feb 26, 2015
    • Like Like x 1
  9. Derwood

    Derwood Slightly Tilted

    Location:
    Columbus, OH


    And just like that, Ace makes the liberal argument for us all. Money in the pockets of the corporations DOES NOT mean higher wages/more jobs. This nonsense about cutting taxes for the wealthy and corporations in order to create jobs is a MYTH, and Ace just told us why
     
    • Like Like x 1
  10. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    It's not entirely obvious to the average American as to why wages remain low or why unemployment is difficult to rein in.

    I'm a big picture guy, and I'll outline a few big factors here (in other words, there are more).

    First, declining union participation is directly correlated to wealth disparity. The U.S. has a devastating history when it comes to unions. Aggressive policies from both business and government have both decimated and demonized unions. Unions represent the greatest political power of workers, and yet to this day unions are relatively impotent when it comes to political power.

    Another big one is a slew of policies that have enabled America's corporate managers to capture ever larger shares of economic growth. Economic growth over the past few decades has been driven in large part by technological advances. Most of this economic growth has gone to the wealthy despite workers now requiring more training and education to participate in the economy. The cost of post-secondary education has skyrocketed, as has student debt, yet the incomes of most Americans remains flat. And in a lot of cases, graduates need post-degree certificate training to get proper qualifications for specific jobs. In other words, more is expected from workers, yet less is given to them.
    A big overarching one is, in general, globalization policies. Free trade, or an open and liberalized global market, is viewed as the be-all and end-all of economic prosperity, yet we now know that this is objectively false. NAFTA alone has had a net negative impact on American jobs. We simply need to look at the impact of globalization regarding many Asian nations to see that the impact is far-reaching.
    Looking at these three aspects alone should tell anyone capable of rational thought that simply cutting taxes for the wealthy and corporations isn't going to do very much at all, and it could (and has in the past) have a negative impact overall.

    Also, this:
     
    Last edited: Mar 14, 2015
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  11. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    Location:
    Baltimore/DC
    If Economists Were Right, You Would Have a Raise by Now

    I don't know why it's confusing...it's NOT a numbers thing,
    it's a human dynamics thing (which economists hate) ...specifically business management.

    The Great Recession encouraged them to keep wages down...and showed them what people were willing to put up with. (something is better than nothing...)
    Until employees demand, the wage supply won't flow
    It's a seller's market. (perhaps an inverse bubble)

    Wonder what will happen when it pop?
     
  12. Lindy

    Lindy Moderator Staff Member

    Location:
    Nebraska
    A case could be made that the lion's share of the increase in productivity is due to capital investment and the more efficient use of capital, not more productive employees. This is true in manufacturing, and especially true in distribution.
     
  13. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    Deskilling.

    It's why we'll end up with either a Star Trek world or a Mad Max world.

    We'll see either post-scarcity or hyperscarcity.
     
  14. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    Location:
    Baltimore/DC
    U.S. companies hoard record amount of cash

    Only about 1.4 Trillion (or ~ 1,400,000,000,000 dollars)

    So, the companies are doing the exact same thing that people are doing now...SAVING, avoiding credit.
    The companies don't spend on reinvestment...including wages.
    People don't feel comfortable...so they save, not spend.
    Neither wants to over-do credit again...or they're paying back their debt.
    Then BOTH are complaining that either isn't spending. (people buying, businesses paying...)

    It's a vicious cycle.

    See what happens when you do "irrational exuberance"?
    What a hangover.
    You don't want to be having that cool toilet again anytime soon... :rolleyes:
    --- merged: Mar 23, 2015 at 1:25 PM ---
    Having to hug that cool toilet... (damn editor isn't working at my work)
     
    Last edited by a moderator: Mar 30, 2015
    • Like Like x 1
  15. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    Most words have multiple meanings often depending on context. When I use the word leading it is in the context of an individual who is persuasive in articulating a set of principles, goals and objectives causing others join in his/her cause at some cost or sacrifice. A so called candy-man would not be a leader given my contextual definition - i.e. the guy who promises free stuff to people and the people follow in order to get the free stuff - that is more about human greed/desires than what I would consider leadership. And by now I bet you guessed that I think President Obama is what I would consider a so called candy- man. Without the promise of free stuff nobody would buy into his otherwise empty rhetoric.

    I disagree. Starting with Washington and those who founded the US - they lead people to form a nation at great risk. Lincoln was a leader. FDR was a leader. Even Bush was a leader - he got Congress and coalition of nations to agree to use military force to invade Iraq - while they did not believe Iraq was a threat - amazing! Why would they agree to this action? You can not say he lied, because he said he was going to use the military to invade Iraq and topple Saddam Hussein and his government.
    --- merged: Mar 24, 2015 at 5:50 PM ---
    Who says it is supposed to mean that? The value of invested capital or financial capital is one thing. The value of physical labor or human capital is another. The value of intellectual capital as a subset of human capital can be considered separate in my view. There is the value of social capital, the value of community. There is the value of nature, access to water, air, fertile farm-able land, build-able land, etc. These different types of capital can in some cases in terms of value respond independently of each other. For example why would Apple be worth $500 billion on one day and worth $750 billion on another day with no material change in business operations? Financial people apply differing valuations on the components that make up Apple - and most specifically the discounted values of future cash flows added to valuations of other assets. It is the creation of real wealth that correlates money in the pockets of corporations and higher living standards, compensation and jobs.

    In some cases, when taxes are high and spending is inefficient, a tax cut that allows for business to expand and grow, efficient allocation, will create jobs. The converse is also true - in some cases when taxes are low and government spending is required, a tax increase that allows for efficient government spending will create jobs. A supply side economist, understands the Laffer Curve, and it being a curve illustrates this concept. When Reagan was President tax reform which lowered tax rates helped economic growth. Keynesian government deficit spending is typically temporary, Reagan used government deficit spending giving short-term stimulus along with tax reform, long-term stimulus. It was most effective. Obama failed to connect short-term stimulus with a long-term stimulus. Job/wage growth during his Presidency has been a disappointment due to this failing.
     
    Last edited by a moderator: Mar 31, 2015
  16. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    Ace, he and Cheney/Rice/Powell (the only one to regret it) misled Congress, the American people and the UN about the WMD threat and al Qaeda connections in order to virtually abandon Afghanistan and pursue an ideological agenda he had even before 9/11 to take out Saddam.

    The Senate Intel Committee report on pre-war intel (led by a Republican) and his own NIEs since released are quite clear on the dubious nature of the "evidence" of the above that he presented as facts.
     
  17. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    President Clinton supported Bush he basically had the same information.

    CNN.com - Clinton defends successor's push for war - Jun 19, 2004

    There were multiple points in the resolution passed.
    Many Democrats voted against the resolution.


    It was after the fact that some in Congress pick-upped on the narrative that Bush mislead them, they were not mislead. They voted giving Bush what amounted to a blank check. Those who claim being mislead are acknowledging incompetence not doing their job and putting politics ahead of a thoughtful consideration of war.

    There were about 12 points in the authorization, it was not conditional that they all turnout to be true. There was imperfect intel on some of the points. and Iraq was acting in defiance of U.N. mandates, purposefully trying to deceive the world. Let us not revise history.
     
  18. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    Ace....he and his cronies misled Congress and the American people and overstated the WMD "threat" and connections to al Qaeda based on dubious intel at best. Taking advantage of the post 9/11 fear in the country and using that to pursue an ideological agenda does not make one a "leader" in my book.
     
  19. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    The resolution cited the Iraq Liberation Act of 1998 as one of the rationals for the use of military force. The Act basically stated that it was the policy of the US to support regime change in Iraq. It was signed by Bill Clinton. This condition alone in the resolution gave Bush the ability to use the military to overthrow Saddam and promote democracy in Iraq. What your position suggests is that people who needed to actually read the resolution failed to do so. They can not say they were mislead when they did not read what they voted for. War is a serious issue. Shame on them. And let's stop giving these people an excuse for their failure. Like I repeatedly write - I at least respect those who voted against the resolution and remained steadfast against the war.
     
  20. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    Ace...it is quite a stretch to use several "whereas" in the 1-2 page AUMF (that you claim some failed to read) to justify misleading Congress, the American people and the UN by not fully sharing the questionable or conflicting nature of the intel.

    But I agree that the 40% of Senate Democrats and 60% of House Democrats who voted against the AUMF deserve respect and, IMO, demonstrated greater leadership.