The Glade 4.0

http://www.bls.gov/news.release/empsit.nr0.htm

So, who said we were out of a recession? With unemployment at a stated 10.2%, another 2.4% in dissuaded workers, and 8% economically underemployed (very conservative figure), using government numbers were over 20% unemployment.

Really, we're out of a recession? We're in recovery? By the way, manufacturing and retail cutbacks during the lead up to the fall consumer season is a leading indicator that all this horseshit about recovery is exactly that: horseshit.

_________________

Khross always makes me feel hopeful.

_________________
"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Not that I believe it, but the party line is that employment recovery lags behind economic recovery.

Xequecal:

When manufacturing and retail post job losses in October and September, that means that there's no seasonal hiring for the Christmas consumer season. That's a horrible sign.

_________________

As I said, I don't believe it. We had like ten banks fail just last weekend, too. Then again I haven't supported Obama's economic crap for awhile, I supported it when I thought the original $700 billion bailout bill was going to be the end of it, to gracefully wind the economy down rather than a massive crash. I never imagined he'd go and spend $12 trillion in a year to try and force inflation in a recession and bail every failing company out left and right.

What is so different or significant about the original bailout plan that was different and the subsequent bailout and TARP packages that makes it worthy of support but the others not?

_________________
"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

The first time it happened, it was Hope and Change. After that, it was the status quo.

_________________
Buckle your pants or they might fall down.

The original $700 billion package was spun as an emergency measure to wind the economy down gracefully and prevent a massive crash/panic leading to a depression. It wasn't sold as bailing out companies left and right. The fact that Bear Stearns and Lehman Brothers were allowed to fail gave them credibility. I know Bear Stearns got some kind of federal loan but the losses were cut pretty fast. I never expected this kind of massive $12 trillion debt disaster, even from Obama.

Although, what I find really amusing is that Obama is essentially mirroring Reagan's strategy at the beginning of his Presidency. Unemployment hit 11% in 1982, and he jacked up the debt by a few trillion. Apparently to conservatives running massive deficits is only OK if you're using the money to make bombs.

Except allocating "emergency stabilization funds" doesn't do anything like that. A recession is inevitable in the wake of an inflationary driven asset bubble; after malinvestment, losses must be realized.

Trying to "wind down the economy gracefully" through such measure just delays and exacerbates the underlying economic imbalances. It's literally like taking a few more shots so you don't get a hangover.

Why is a recession so bad? A recession forces people to be frugle and save; interest rates go to where they should (were it not for The Fed) and credit is disciplined. These are the tools by which a strong economic foundation is built. To get there, you have to go through some pain. I'd rather go through a little than a lot.

_________________
"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

The idea is to prevent a massive selling panic that feeds off itself and makes the economy shoot way past the equilibrium point, not to prevent a recession.

The irony being that the stimulus packages and TARP did exactly that, right?

_________________

Wait, what? It did prevent a selling panic. Of course spending $12 trillion is causing massive inflation and wrecking the economy, but $700 billion from TARP alone wouldn't have done that. From all I hear stocks are massively overvalued at this point, and the DJIA is going to crash soon.

The idea that we can "program" the economy like you can program a control-feedback compensator in an analog feedback system is highly laughable and arrogant. When we design PID compensators for simple machines, we know in terms of mechanics, exactly the way things behave in order to program the compensator to get the right response for a variety of inputs and conditions.

There is no Pole-Zero Plot for the American Economy. No one knows where the radius of convergence is to say at what values an emergency funds pacakge where force the system to converge to a desired value, nor do they know it in the context of all the different ways the package can be structured and delivered.

The most fallacious tenet implicitly assumed by any central economic planning school of thought is that such complex system can be represented analytically to achieve such an effect. It's more laughable than the pundits of global climate change models.

_________________
"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

Xequecal:

TARP and the Stimulus Packages failed to prevent the selling panic. The major trading markets shrank 60% in 9 months. Beyond that, bank failure and deposit failure rates are exceeding the Great Depression numbers.

_________________

This is the part that is really going to hurt the USD and the average American. This is the part that has FDIC's balls in the vice.

_________________
"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

Well yes, that's the case now. After Obama spent trillions. My whole argument is that this would not have happened if the "bailout" had been limited to the original $700 billion. Even when you guys opposed TARP, you straight up agreed with the assertion that not passing it would cause a massive crash followed by a major depression, you were just OK with that happening.

It's not "not passing a TARP" that would lead to a recession. No one "straight up" agreed to that at all. A corrective recession is the effect of a price bubble when the bubble occurs in a large asset market (IT's in the NASDAQ).

All TARP did was delay and exacerbate the magnitude. We haven't felt the pain because of the USD's unique status (well, that's coming to an end), the US has been able to export its inflation. Unfortunately, that time delay is what is going to compound the problem into a major currency crisis, rather than just a recession. Then you will have high interest rates and a weak currency during a depression. That will be extremely painful.

_________________
"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

Ok first, hindsight is 20/20. I can easily agree that TARP made the recession worse now. The fact is, back when this was being considered basically every economist in the country except the Austrian School ones were shouting as loud as they could that if this didn't get passed a depression was certain. I don't get economics. I pretty much have to take their word for it when say 90% of all economists are saying we need this bill.

Second, even given that, you can't possibly argue that TARP was somehow so much worse than the other $11.4 trillion dollars Obama has spent. I really fail to understand how we wouldn't be far better off and probably out of the recession if government spending had been $700 billion instead of $12 trillion. I blame Obama for spending money left and right when it was clear TARP wasn't working to try and borrow our way out of recession, which is retarded.

Because when companies go bankrupt, the buildings don't get destroyed. Their assets don't get burned. It doesn't work like that. Their debt gets liquidated, their creditors tighten their belts after getting made whole (if there is that much left over) and the investors must learn from their mal-investment.

It has nothiing to do with hindsight. This is easily forseeable, in fact, several prominent voices were mocked in the media for bringing light of the fact that most of the bank/financial giants were a shell with no real bedrock assets. And even if it was hindsight, Japan just did this in the 80's and is still suffering the consequences. The only problem is, they actually had high rates of savings, a production based economy and more sound (though not sound in an absolute sense) monetary policy.

No one argued that the 700B initial TARP package was worse. It's equally as bad. Neither one accomplished what was hoped because it doesn't work like that. All it does is allows malfeasence to fester, and real capital assets to be tied up so that actual productive ventures have a harder time acquiring them.

It's akin to need based financial assistance for scholarships.

_________________
"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

It has everything to do with hindsight. I can't really argue with your logic, but the vast majority of economists said TARP was needed. Are they all stupid or bought? You can't possibly claim that, that would be a conspiracy larger than the crap the 9/11 truthers spout.

Second, regardless of this, TARP was "only" $700 billion of wealth-draining government spending. The economy would be a lot better off if government spending on the recession had been 5.7% of what it currently is, this is obvious.

Third, I fully agree that Obama is "just another politician." He's not particularly dishonest, at least when you compare him to other politicians, in fact he's doing exactly what his voter base wants. And right now, the voter base wants lots of free government money. They also love the fact that Democrats are in both houses and Obama is President, now is our chance to push through huge amounts of health care, education, and other spending and make the rich pay for it! People making over $250k should be happy to pay for my health care, seeing as to how much money they already have!

Now you're getting it. This is the failure of Keynesianism, Central Economic Planning models, Moneterism and Supply Side thought.

First, half the "pundits" on shows like Fast Money, Mad Money or whatever on CNBC, MSNBC, Fox, CNN (Jim Kramer is just a plain idiot) are there to sell stocks. Stocks brokered by large firms. They have to talk of these equities which means talking up the dollar and talking up the US Economy. Are they outright lying? No, as I said before, economics is not a study of objectivism. It is a study of how components behave in the context of a given framework. However, time tells that their rationalization of all the "doomsday signs" didn't hold up, did it? Jim Kramer should be out of a **** job.

Secondly, well, Khross is probably more apt to answer the Keynesianism part than I am, at least concisely. The idea of supply side is ludicrous when you reduce economic activity what it really is: to the trade of goods and services between individuals. Finacial goods, centralized banking, and the use of currency may make it seem logical, but that's not the case.

Also, it's dishonest to give the voters free government money, becauase no such thing exists. You might as well promise them their own oral sex dispensing Lucy Liu bots (points to the first person who can reference where this allusion comes from).

_________________
"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

Xequecal:

The Selling Panic happened before Obama had the opportunity to spend trillions.

_________________

Bingo. Ask yourself Xeq if they are all stupid for following a model that proved itself wrong yet so strongly and assuredly argued for it. Many of their premises on macroeconomic theory are incorrect.

_________________
"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Futurama.

_________________
"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

That in my opinion, is more accurate.