Hey RBE, do you see the Japanese economy of the 90's and beyond coming?
I loved Obama's response--we don't need another Dr. Phil.
Of course they backed away from that comment, but it goes to show where their heads are out.
When I first saw the title, I thought you were talking about test scores.
The stock market goes in cycles and we are in a down cycle. Remember, the last down cycle started 8 years ago in March 2000, under Bill Clinton. The same is now happening under George Bush.
The oil spike was due to Iran's missile test and a rumor of an Israeli attack. Plus speculators make up 30 to 70% of the oil market. Supply and demand? Forget about it.
Both the Obama and McCain economic plans will make little difference in the market. Both need to develop a program of energy independence with wind, solar, and geothermal energy credits for commercial applications.
So far, neither candidate has a good grasp of the problem.
The road to hell is paved with magical thinking.
"Both need to develop a program of energy independence with wind, solar, and geothermal energy credits for commercial applications."
Ironically, it was Jimmy Carter who truly had such an energy policy. I bought my house in 1979 and there were incentives to save on energy and there were also cars coming out that got 35 miles to a gallon. Reagan killed all of it.
Chaz,
With all due respect, you couldn't be more wrong. The EXCUSE for the spike in oil prices is tensions with Iran. The REAL reason why oil has spiked is because the dollar has fallen so drastically in the past few years - and a weak dollar has been official Bush policy no matter what Bush, Paulson, Bernanke or any of the other shills say on the record. A weak dollar and low interest rates have allowed the administration to fight two wars on credit, make the budget deficit and the national debt seem less problematic than they really are, and boost American exports (thus making the economy seem slightly better than it really is.) The housing boom was of course another consequence of those policies. But now we are paying the price and we will continue to pay the price for short-sighted economic policy, bad business decisions and out-and-out greed by guys in the financial and housing industries.
Also, let us remember that the Bush administration started out with a recession, created the most anemic post-war "recovery" ever (only the top 1% benefited from the "recovery" - the rest of either treaded water income-wise or had to tap our home equity to keep pace), and saw terrible job creation (the Bush administration is going to finish it's 8 years with just about 3 million jobs created - an average of 2.7 million jobs were created a year during the Clinton administration.)
The right track/wrong track numbers tell you just who Americans blame for this mess - Bush and the GOP. And in large measure they do deserve the blame - they took a budget surplus and turned into a huge deficit, they continue to fight two wars on credit (wait till those bills come due - and they will), oil went from $18 a barrel in 2000 to $147 today, they looked the other way at all the Wild, Wild West activity in the housing market, they encouraged people to take out ARMs and other crazy mortgage instruments...
This is not to say that Dems will run things any better. It is to say that the the "fiscally prudent party, as Phil Gramm likes to call the GOP, has created most of this mess and needs to be saddled with the blame for it.
That's true about Reagan. I recall Jimmy Carter put solar panels on top of the White House and Reagan had them removed.
So much for foresight. At least the American people had some when they elected Al Gore President.
Paul Krugman weighed in on this issue the other day:
http://www.nytimes.com/2008/07/0.../
07krugman.html
You know we are in trouble when the Russian President tells us we are in no shape to give advice, as we are essentially in a "Depression."
http://www.iht.com/articles/2008.../
03medvedev.php
Due to years of accusations of redlining and threats of investigations for racial discrimination, the lending industry came up with no-documentation loans to avoid further congressional investigation.
Now the lending industry is being vilified for doing what everyone of liberal persuasion demanded of them.
What was the result? Millions of people who would not qualify through proving they had the wherewithal to financially support a loan got them. This increased the supply of money that could buy available homes and thus ran up the price of those homes immensely. People who did not fake their ability and stayed within their means paid the higher prices due to increased demand. People not buying homes but staying in the homes they already owned paid the price buy having to pay out of control increasing property taxes caused by these new types of loans.
Now we are being asked to bail out the irresponsible which means-if we do-there will be nothing to stop them from doing this again.
Therefore, there should be no government rescue and the lending institutions that made these bad loans and people who should have received them should go down the tubes where they belong. This failure to bailout will benefit those who were responsible will see their property values decline to realistic values and benefit from lower property taxes. Local governments will have to cut back on out of control spending. Lenders will not make loans to people without proof positive they can pay those loans.
And this "crisis" will not happen again.
"Too big to fail" got that way because failure was not allowed. Such concepts draw the very people we call speculators due to failure not being allowed. Remember this jewel of wisdom: Bad money drives out good money.
As for a recession. uh, there is no recession and hasn’t been one for quite a long time. One must have two quarters of consecutive negative growth for there to be a recession. We have not had even one quarter. Just because one 'feels' a recession in their lives does not mean there is one for the economy any more than 'feeling' that today is Monday when it is fact Friday because it 'feels' like Monday.
Well, I guess I'll just tell all of the people I know who are either losing their homes or taking on second and third jobs to pay their bills that "its just a feeling."
Whew. I thought it was real!
avoiceinthewilderness, if you read again what I wrote-"Just because one 'feels' a recession in their lives does not mean there is one for the economy..." is very clear that one can have a recession in their lives but it not be a recession in the economy. What you wrote was not a refutation of my points.
I can 'feel' the cost of higher gasoline prices by having to shift funds from one activity to another thus reducing activity in an area or areas of my life and "feel" a personal recession, but I would be completely wrong to assume what I was experiencing was what the entire country was going through.
The term "recession" is used to describe what is happening or not to an entire economy and not to individuals. At worst a person who is experiencing hardhip now in general were marginal even in the best of times and has a difficult time bettering their economic position no matter the conditions.
This is why we see the motor travel for the nation reduced by little more than 1% for the summer. The shift in personal resources due to higher gas prices hs come from the luxury market with such an example being a reduction in the purchases of Starbuck's coffee. Gas prices have taken a bite out of disposable income and not necessity income. For the small proportion of people that higher gas proices has pushed into cutting from their necessity income, they were already over-extended finacially and need to right-size their lives..or upgrade their economic value for better income.
Sit still in any economy and you will be eaten.
Yes, you are correct. I should probably learn how to "Move My Cheese", and suck it up.
Dear Voice/Wilderness:
I would like to know if there are any classes to help me move my cheese? My wife and I are of the "feta" type and we tend to crumble a bit during uncertain economic times.
I think Miller Smith is right on. That is why my wife and I work so much. If we don't we will be eaten by the cats. As you know, these cats are not ordinary; they are of the very large type. Big bellies and big teeth.
For eons now many of us "Cheesers" have tried to play by their rules but they still bite and try to swallow us whole. What gives?
Perhaps there is a class that can tell me how to move my cheese and get the better of these large cats?
One last thing, I am a big fan of definitions like "recession" that the large cats come up with. Their definitions help me make sense of myself, my family and the world. Whatever would I do without their definitions?
Sleep Tight!
John
With apologies to Tom and Jerry!
RBE:
Two years ago interest rates were what they are today. The dollar was justt as weak then and oil was $40/barrel not $145/barrel. I stand by my comment.
It's true the mortgage mess has come to roost but these policies were supported by everybody on the political spectrum. Subprime mortages were a way for people with questionable history (usually the working class) to be able to obtain a mortgage and live the American dream.
I do not remember any politician coming out and question this practice, Republican or Democrat alike.
Chaz, I refer you to conservative blogger and contributor to The American Conservative magazine for the oil price dilemma:
http://cunningrealist.blogspot.c...-of-
system.html
http://cunningrealist.blogspot.c...-north-
sea.html
The price is up not because of supply disruption in Iran or Nigeria or because China and India are using more energy - the price is up because it is being manipulated.
To your other point: Plenty of people called "chips" on the mortgage mess long before it imploded - starting with Cunning Realist, Barry Ritholtz at The Big Picture, Calculated Risk, the boys at Minyanville, not to mention Ron Paul - it's true there's not a Dem named there, but those guys also aren't Bushies either, which was my point - the GOP establishment and the Bush administration created the deregulated environment where all kinds of fraud and/or unethical behavior could occur and turned a blind eye to it. You think Countrywide couldn't have used a little sterner eye overlooking their activities? How about Indymac. Dems are often as sold out to corporate interests as GOPers, but at least some are willing to try and add oversight to the system. Most GOPers think the market can regulate itself best. And how did that work this time around?
reality-based educator, consider a system where people who took a risk gained all the rewards from that risk and all the penalties from that risk. Imagine there were no white knight to come and save you if you made unusual risk and you would lose everything if that unusual risk tanked. Do you think you would take one unusual risk after another?
The market forces are deflected with the government being the white knight. If your risks are covered then you aren't really risking any capital at all. You can just go for cash flow and your percentage collected on each transaction and never worry about your losses.
The best system for is one where you haveto have a private insurer you haveto pay to cover your risk determine what they will cover. The insurer will take a close look at the risk and charge the proper rate or refuse to cover the risk at all. That is a market force prohibited by the goverment's cover everybody-because-its-too-big-to-fail system in place now. There are no market forces to moderate the risk taken.
Remove all government involvement in the mortgage system now and you will see sanity appear very quickly. If I have my a** covered with your tax money why should I have to care if your a** gets fried?
John:
It appears that "the cheesers" who try to play by the rules end up being categorized as:
"marginal even in the best of times and (having) a difficult time bettering their economic position no matter the conditions"
Big Cats don't play by rules, hence their enormous growth. The rules were not created for them. They were created for us.
As far as getting the better of the large cats, I believe that their house of cards is crumbling.
Their motives have become transparent and more and more people are waking up to the fact that "the maze" that we have been living in is made up of inequities, unbridled greed, and blatant falsehoods.
They can continue to sell their rhetoric, but this mouse isn't buying it anymore.
RBE:
I agree that the market is manipulated, my reference to speculators. However, politicians are politicians, be it Republican or Democrat, when it comes to money they are all prostitutes. THAT IS WHY i AM AN INDEPENDENT.
It may be time to let the Democrats take over after Bush's fiasco. However, i don't believe it will make a difference. Look how they didn't change things in Congress since they took over. All the problems you cited still exist and are getting worse!
avoiceinthewilderness, people who are unable to raise their economic level at any time fall into several classes of people. Some are disabled through no fault of their own and some are disabled through fault (drugs, alcohol, crime, etc.). Then there are people who are just too stupid to do anything-sad, but true.
Also sadly, the stupid make up a very large portion of the population making a very good education oh so important. But rather than get that education the stupid tend to be concentrated in districts that run programs that do not even attempt to insure that basic skills are mastered by the stupid before a certificate of graduation is issued.
The stupid then tend to fall prey to consiracy theories about plans to keep them in their place by the very people charged with their education. Again, sadly, the people keeping the stupid in their place are the very people telling them they have no chance because of the conspiracy. No need for a fat cat to put their boot on the stupid's neck-the progressive does it to the stupid on their own.
I drive through my city of Baltimore everyday and see young men and women involved in everything but increasing their economic value. They went to some of the worst schools run by progressives who held them down.
I have yet to run into a graduate of the Bmore School system who could write a coherent paragraph (or much less a sentence) or use simple arithmetic. And yet they have that graduation skin.
And the children know the progressives are not their friends. The video of the teacher being attacked in class was the visual proof of what goes on everyday in Bmore Schools. The kids don't trust the very people charged with educating
them.
We finally agree! I mean about the stupid people and all. Although it saddens me to see you call yourself as such.
Remember, stupidity, like recession is just a state of mind!
avoiceinthewilderness,...huh?
Personal attacks are beneath you and this forum.
Actually, personal attacks are not beneath me, but I do respect the dignity of this blog.
Still, though, you are not respecting the dignity of people who struggle financially by referring to them as "Stupid" and by implying that they are lazy.
I blame neither progressives nor conservatives for the plight of the working man in this country, but rather the sheep-like mentality that too many people display by blindly following an out of control, neoliberalism that is killing the common man. It is not the people who "take risks" who are rewarded, but rather those who exhibit unbridled greed and a strange inability to empathize with other people.
I will converse with the screen neame avoiceinthewilderness no more forever.
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