Washington's Dilemma: This Isn't a Recession, It's a Collapse [View article]
i suspect you are correct that at some politically motivated point, the federal government will step up and bail out the states. they will want the states to work their damnest in the meantime to correct the shortfall by as much as possible.
why should the citizens of wyoming be on the hook because california does not want to cut its services to save money? whatever happens, there will be a backlash from the states who do not need help.
Coming Soon: Banking Crisis of Historic Proportions [View article]
this is the ticking time bomb beginning in 4Q 2009. for sure it will increase public debt (FDIC funding shortfalls). how much private wealth will it wipe off of the table? the bigger this crisis becomes, the more recessionary its effects.
Recession Is Over; Depression Has Just Begun [View article]
Edward, you have put a lot of accurate thought into this.
if you put me in charge of steering the US economy out of this mess, i would concentrate on jobs and job creation. this is a real problem which structurally destroys any solution to fire up the economy.
as long as economists believe their report card is a rise in GDP, we will remain in a failure mode. a country is not defined by GDP but by the life of its citizens.
the metrics are: employment, earnings, wealth, health, and infrastructure, living conditions.
Coming Soon: Banking Crisis of Historic Proportions [View article]
You don't think the change in accounting standards will exasperate this crisis? Maybe if we change the accounting standards again, the crisis will go away. Or maybe the banks can make extra money by selling smoke and mirrors in their lobby.
"Debt as a percentage of GDP ended up at %120 in 1946, which is about where we'll be when the bailout is complete. The world in 1946 looked shaky, but things turned out fine, as it happened."
whenever you look back on things you say things turned out fine. there was little consumer debt after wwII - today it is mind blowing. the masses had nothing and were committed to building something better than the depression life.
2009 we want to maintain what we have. the future is not viewed as being brighter than today. it is not the same as 1946 - and the results will be different. it is more like 1929. our economy will reset to a new level. this will cause some hardship. we will not enjoy the prosperity of the past.
Recession Is Over: Long Live Depression [View article]
the sad truth is we would be better off calling this a depression. a depression ends when we resume economically where we left off. this would put a longer horizon on planning and stop the shrot term economic manipulations.
Forget 'Cash for Clunkers': Try 'Dough for Dumps' [View article]
Cash for Clunkers was an overwhelming success for foreign car makers who increased market share at the expense of Ford, GM, and Chrysler. We now have more fuel efficient autos reducing our dependancy on oil, and less people with jobs to drive them.
our government has killed two birds with one stone.
Six Signs Economy Is Turning the Corner [View article]
although i agree there are signs of the economy getting ready to turn the corner, i am not sure bank profits can be used as one example. banks are artificially being pumped with cheap fed money, accounting smoke and mirrors, innovative and hopefully transitory fed programs, and nearly complete blackout on the status of paper they hold.
they are making money by being allowed to run over my back by a government whose interests is to serve them and not me.
There Are No Good Choices for the Fed [View article]
"They are supposed to maintain price equilibrium and also set policy that will encourage full employment. At that point, they will have to choose one over the other."
I am thrilled at the opportunity to comment real time on your articles.
The Fed has not approached full employment since 2000, and the meltdown last year demonstrated they were not in control of prices either. This is no Sophie's Choice - they are not deciding between the two.
what the Fed is doing is attacking deflation with all the unconstitutional powers it can muster in the face of a spineless congress. they believe the economy will contract in the face of deflation.
Less Government or Lower Wages? You Choose [View article]
our current path leads through higher taxes and lower buying power. you may not see it today, but it is coming.
the methods used to fight this crisis has placed a debit crisis time bomb into the future. while everyone pats each other on the a$$ how we dodged the bullet, we have placed power into the hands of the creditors. this severely limits future options.
Employment: Minimum Wage, Maximum Stupidity [View article]
even worse is the export of the jobs - including ones like telephone solicitors.
you cannot deny companies access to cheap labor. you are only fooling yourself if you think it is possible. our declining employment statistics since 2000 is evidence of the problem.
i am not arguing against a minimum wage - but i am arguing against one which changes the employment dynamic.
and raising a minimum wage during a recession is comparable to throwing gasoline on a forest fire.
Reality Is at Odds with Policymakers' Optimism [View article]
"Most urgently, we need a Fed chairman willing to administer the tough love that our economy so badly needs....... Contrast Bernanke’s popularity to the contempt that many had for Fed Chairman Paul Volcker in the early days of Ronald Reagan’s first term."
Peter, you make an excellent point. If Bernanke was doing his job he should be unpopular with the powerful in washington. he should be resisting the growing debt to stop the spending.
maybe this is a concession to stop the audit the Fed movement.
We almost have $2 trillion of excess liquidity complements of the Fed - that is over 15% of GDP. This has never happened before in our economy. Kick in a shotgun stimulus, a Fed which has vowed to inflate, and desperate politicians which must face the people in 2010.
Face this off against the velocity of money (deflation). Does anyone have some evidence which economic force is stronger? I have also argued also we may be faced with a deflationary cycle.
My hero Peter Schiff is arguing we are facing an inflationary cycle. If it were as simple as taking a vote, more people are arguing deflation is the larger threat.
Quite honestly, i could build a case for either way. But I 100% agree with John that real recovery and deflation will not sleep in the same bed.
Washington's Dilemma: This Isn't a Recession, It's a Collapse [View article]
why should the citizens of wyoming be on the hook because california does not want to cut its services to save money? whatever happens, there will be a backlash from the states who do not need help.
No One Saw This Economic Crisis Coming? [View article]
if they did not see this crisis coming, i have no confidence they can steer us out.
Coming Soon: Banking Crisis of Historic Proportions [View article]
Recession Is Over; Depression Has Just Begun [View article]
if you put me in charge of steering the US economy out of this mess, i would concentrate on jobs and job creation. this is a real problem which structurally destroys any solution to fire up the economy.
as long as economists believe their report card is a rise in GDP, we will remain in a failure mode. a country is not defined by GDP but by the life of its citizens.
the metrics are: employment, earnings, wealth, health, and infrastructure, living conditions.
Economic Fault Lines Emerge [View article]
Coming Soon: Banking Crisis of Historic Proportions [View article]
The Scariest Chart Ever [View article]
whenever you look back on things you say things turned out fine. there was little consumer debt after wwII - today it is mind blowing. the masses had nothing and were committed to building something better than the depression life.
2009 we want to maintain what we have. the future is not viewed as being brighter than today. it is not the same as 1946 - and the results will be different. it is more like 1929. our economy will reset to a new level. this will cause some hardship. we will not enjoy the prosperity of the past.
Recession Is Over: Long Live Depression [View article]
Forget 'Cash for Clunkers': Try 'Dough for Dumps' [View article]
our government has killed two birds with one stone.
Six Signs Economy Is Turning the Corner [View article]
they are making money by being allowed to run over my back by a government whose interests is to serve them and not me.
There Are No Good Choices for the Fed [View article]
I am thrilled at the opportunity to comment real time on your articles.
The Fed has not approached full employment since 2000, and the meltdown last year demonstrated they were not in control of prices either. This is no Sophie's Choice - they are not deciding between the two.
what the Fed is doing is attacking deflation with all the unconstitutional powers it can muster in the face of a spineless congress. they believe the economy will contract in the face of deflation.
Less Government or Lower Wages? You Choose [View article]
the methods used to fight this crisis has placed a debit crisis time bomb into the future. while everyone pats each other on the a$$ how we dodged the bullet, we have placed power into the hands of the creditors. this severely limits future options.
Employment: Minimum Wage, Maximum Stupidity [View article]
you cannot deny companies access to cheap labor. you are only fooling yourself if you think it is possible. our declining employment statistics since 2000 is evidence of the problem.
i am not arguing against a minimum wage - but i am arguing against one which changes the employment dynamic.
and raising a minimum wage during a recession is comparable to throwing gasoline on a forest fire.
Reality Is at Odds with Policymakers' Optimism [View article]
Peter, you make an excellent point. If Bernanke was doing his job he should be unpopular with the powerful in washington. he should be resisting the growing debt to stop the spending.
maybe this is a concession to stop the audit the Fed movement.
Deflation Looms [View article]
Face this off against the velocity of money (deflation). Does anyone have some evidence which economic force is stronger? I have also argued also we may be faced with a deflationary cycle.
My hero Peter Schiff is arguing we are facing an inflationary cycle. If it were as simple as taking a vote, more people are arguing deflation is the larger threat.
Quite honestly, i could build a case for either way. But I 100% agree with John that real recovery and deflation will not sleep in the same bed.