Very easy for you to suggest that the economy is doing well, Dr. Sanity. You obviously don't run a liberal newspaper with plunging revenues and disappearing readership.
Gagdad Bob | Email | Homepage | 12.11.05 - 8:40 pm | #

Good point. Capitalism strikes again..bwahahahahahahaha
Dr. Sanity | Email | Homepage | 12.11.05 - 8:47 pm | #

Looks like another major case of Bush Derangement Syndrome.
Shoprat | Email | Homepage | 12.11.05 - 9:15 pm | #

Those cartoons are a total laugh riot, especially the second!

I just updated with a TB.
Tom Blumer | Email | Homepage | 12.11.05 - 10:18 pm | #

My Liberal Dem/Left family and friends warn me about the impending depression while I rack up nice gains on the stock market this year, once-again. The clearest indicator I have that the stock market is undervalued is the number of Lefty Dems that refuse to invest their money because Bush's economy just has to be on the verge of collapse. It's a great time to buy low, my friends, because eventually they, too, will come around.
Danny Lemieux | Email | Homepage | 12.11.05 - 10:56 pm | #

Danny:

We do have some major problems that, should they strike, would probably cause a recession. One of them is the national personal savings rate--this is currently negative. This is related to unsecured consumer debt, which is extremely high ($7k/person or so). Then there's the massive trade deficit and the debt that causes. China and other nations buy our debt so we can keep on buying stuff from them.

A very conservative friend of mine worries about these matters a lot.

Recessions happen. That's the reality of the business cycle. They happened long before we had central banks and the regulatory environment of the 20th century.
JonBuck | Email | Homepage | 12.11.05 - 11:52 pm | #

Oh, another note...

My conservative friend is turning his investments to non-dollar based areas and precious metals. I hope he's made a killing on gold...
JonBuck | Email | Homepage | 12.11.05 - 11:53 pm | #

Jonbuck:

Sure, a recession could happen (no sign of it, though...economic fundamentals are pretty good) and we could get hit by a meteor tomorrow(no sign of that either). Hiding under the bed won't change these "maybes". As far as negative "savings rates' statistics go, those figures are way misleading. Although "gross private savings" have climbed as we've come out of the recession, they have declined as a percentage of GNP. However, this figure does not measure money put 401-K retirement plans, stock market investments and real estate value. For a large portion of Americans, the majority of their savings are put into their home equity value. Given what has happened to the real estate market over the last few years, sounds as these Joe and Jill Average Consumers have been pretty smart investors. Smart investors don't put their money into bank savings accounts, anymore.
Danny Lemieux | Email | Homepage | 12.12.05 - 9:33 am | #

Why should folks put money into bank savings accounts? Started up one for the little guy a couple of months back - and it pays a whopping .5% (And no, that's not a typo - not 5%, but 0.5%) interest. That'll sure get your heart racing, won't it?

Heck, my PayPal account pays over 4%! Where's the upside to keeping your money in a traditional bank?

J.
JLawson | Email | Homepage | 12.12.05 - 11:57 am | #

Someone needs to go back to school on the famed 'trade deficit' because had we produced all that stuff HERE, (hence not traded with China for it) it would have cost the American consumer 3 or 4 times as much for the same stuff...which means, less stuff would have been bought, thus less economic activity.

Certainly it'd be great if the rest of the world bought our stuff but realistically few nations can afford our stuff... because relatively few nations have a growing middle class consumer market (which is why democratization and investing in the 3rd world such that it becomes the 2nd world is so vital in the long run.)

As for debt...well that's tricky. The Brits raised a half penny tax on their American colonies to pay for their debt from the French-Indian war....only to incur ANOTHER WAR. Did that bankrupt England? Not really because soon after our revolution the French had theirs and the bankers (debt holders) were wiped out.

Think of it this way: if China and India owns our debt, i.e. hold such a colossal IOU card, what's the chance that they'd nuke us for polico-military reasons and hence never get paid back? Not likely. No, it's more likely they'd want us to be around for a long time to come so we can eventually pay them back!

Yes, doom and gloom is always on the horizon but so is a boom time. Sure, it's good to live within your means but it's also a fact that wealth is created out of thin air by human ingenuity...if America ever invents a better mousetrap, PC, fusion device, spray on-solar array... alternative to oil....we'll create all the wealth we need to pay off the debts we owe.
John | Email | Homepage | 12.13.05 - 12:47 pm | #

> They happened long before we had central banks and the regulatory environment of the 20th century.

... but those things did do wonders for the size of the corrective actions required... the entire decade of the 1930s, for example.
Oh Blutige Hölle | Email | Homepage | 12.13.05 - 5:23 pm | #

> Heck, my PayPal account pays over 4%! Where's the upside to keeping your money in a traditional bank?

The banker gets lots of money for investing it wisely.

*Oh You meant the upside for you...?
Oh Blutige Hölle | Email | Homepage | 12.13.05 - 5:26 pm | #