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More on Q4 GDP: Defense spending falls 22% - the biggest drop in 40 years - leading real federal...

More on Q4 GDP: Defense spending falls 22% - the biggest drop in 40 years - leading real federal spending -15%. State/local spending -0.7%. Personal consumption expenditures +2.2% vs. 1.6% in Q3. Nonresidential fixed investment +8.4% vs. +1.8%. Stock futures dipped and then bounced on the soft print. as traders look at calendars and realize we're halfway to 2013 Q2. (full report)
Comments (70)
  • The right numbers are pretty you know what they are??
    30 Jan 2013, 08:40 AM Reply Like
  • Yes, this is all great. Another 3 - 4 quarters like that and the economy will be out of the woods ... and into the marshes.
    30 Jan 2013, 03:25 PM Reply Like
  • nice report, income, income, income
    31 Jan 2013, 02:35 AM Reply Like
  • Decrease in government spending - isn't that what we want?
    30 Jan 2013, 09:01 AM Reply Like
  • The military is just another regulatory agency, and we way overspend on all of them. It would be like spending on a space fleet. The real waste is the time and the resources that could have gone into something that would sustainably increase our standard of living.
    30 Jan 2013, 09:49 AM Reply Like
  • Military spending is inflationary - build things that blow-up or blow-up other things - nothing the consumer can use and create commerce.
    30 Jan 2013, 11:15 AM Reply Like
  • But just creating things that get consumed instead of things that lead to increased productive capacity is the same thing as just blowing them up. If you build a road that winds up being in the wrong place and costs way more than it returns, the result is capital erosion, just as sure if you had blown up your capital.


    Anyways, a military is just the ulitmate expression of a gov's regulatory power. If a foreigner fails to comply with our preferences for how we think they should live, then we bring the gov's coercive power to bear against those people. If a domestic citizen fails to live according to the prescribed preferrences of the gov, then the gov brings its coercive power to bear against that individual. The result is they both tend to start hating that gov. Of course with the domestic person you try to create a gov school to teach them to be compliant, but the problem with being compliant does not translate to being productive.
    30 Jan 2013, 11:33 AM Reply Like
  • Good conversation. Actually, consumer produced goods are desired and paid for by the person receiving them, creating commerce. When you drop a bomb on someone you are not getting paid for the cost of the bomb and getting rid of the "consumer". No repeat sales there! I'd say there was a big difference.
    30 Jan 2013, 01:01 PM Reply Like
  • "consumer produced goods are desired and paid for by the person receiving them,"


    It just depends. It depends on whether the project actually leads to more consumption. You could have a road that people use and creates commerce, but if the cost to maintain the road exceeds the economic benefits of the commerce it creates, then the goods aren't paid for by the person receiving them. All the other taxpayers wind up paying for something they aren't using. The "consumer" good winds up being a blackhole that winds up making everyone else poorer and enriching the people using the good. In that case then the road becomes just like a useless war. The road builders and the road users benefits at everyone else's expense, just like the weapons makers and contractors.


    You just can't make the assumption that every road a gov builds is automatically a money maker. In fact, even if it is a money maker, what you also can't do is assume that those resources would not have been used for something even better than a road, like maybe a train. The problem is even compounded by the rule of "diffuse costs and concentrated benefits". The road and weapons builders pay for the politicians that keep the money pits going, and because the politicians wields gov guns, the money pit can go on for a much longer time than it would in a coercion free market. The ultimate market check against violence is more violence, which is why govs settle their disputes that way and private commerce just stops associating with each other.


    This is why you don't want gov involved in roads or medicine, because the ultimate market correction is violence.
    30 Jan 2013, 02:11 PM Reply Like
  • I don't think I want the private sector in roads - there's not enough room for competition. All roads would be toll roads and we would be beholden to the road war-lords!
    Hey, I agree, if all the defense money went to building infrastructure, there would be a lot of mistakes (probably some deliberate) and a bit of wasted money - but you will see a lot of wasted money in industry. I have to shake my head with a few things I see around my place of employment!!


    There's no perfect world, jhooper - neither outright socialism or outright capitalism. Hey, we humans muck everything up, there wouldn't be any laws if we didn't. We need some regulations for the same reason we need laws.
    30 Jan 2013, 05:31 PM Reply Like
  • You are clueless!
    30 Jan 2013, 05:46 PM Reply Like
  • "I don't think I want the private sector in roads - there's not enough room for competition."


    The problem with these types of assertions is that they are just assumptions. What you are doing is just taking what exists now and assuming that is exactly the way it would look if it went private. There is no reason to assume that. There are all sorts of alternative to toll roads. The reality is that you are paying a toll at the gas pump, and talk about a lack of competition, there is only one vendor.


    I don't exactly what it would look like and that's the point, nobody does, so we can't say there would not be enough competition. Think about this. Gov builds roads, roads are a subsidy for cars, so we wind up with lots and lots of cars that need lots and lots of gas, so much so that the profit margins become worth killing over so we do.


    If gov didn't build roads what you might get is a lot less cars and a lot less roads, more localized roads and communties and trains running longer distances. You would also get rid of speeding tickets, drunk driving, and law enforcement would focus on other things besides traffic enforcement.


    In fact, what you might also get is more of a Walt Disney World. Disney had to incorporate two municipalities in Florida so they could have their utilities, and if you've ever been to Disney World, its an impressive place.


    So you can't say that gov does it better, because we have no way of knowing. What we can do is engage in a logical consideration of gov incentives, and deduce what incentives they have to do it better. Gov is coercion. Coercion means that the ultimate check against mistakes is more coercion. That is not the basis you want for people to have when they are engaged in capital creation. Coercion means you are price blind, but without coercion you have to be price sensitive. Price sensitive is nature's way of telling you what is the best capital creation and what is not.


    Socialism means using gov coercion, and capitalism means creating capital free of coercion. Capitalism is used to build assets and gov coercion is used to stop others from using coercion to interfere with your capital creation. There is no hybrid between coercion and voluntarism for capital creation. The relationship betweent the two is you let coercion regulate coercion and you let price sensitive voluntarism regulate capital creation.
    30 Jan 2013, 06:17 PM Reply Like
  • Now now, tell me why you think that.
    30 Jan 2013, 09:20 PM Reply Like
  • You make some good points, thanks for a great conversation. I don't see socialism as coercion, but more like babying. But hey, unfettered capitalism practiced by humans can be mightly flawed, beacause, as I've said before, we are human. You want an unregulated food industry? No government involvement in the drug industry? Do you want to get rid of the CDC and let industry track food poisening outbreaks? Heck, if I was unregulated and my product sickened the public, I'd just start slapping a different label on it.
    30 Jan 2013, 09:50 PM Reply Like
  • There is no such thing as an unregulated market. It's just a question of who regulates. If fraud were a guaranteed success, I could sell broken pieces of cardboard as iPads and people would pay the same price as a real iPad.


    Socialism requires coercion because they don't leave it voluntary. They will hurt you and your family if you don't pay what they say you should pay. All human interaction should be voluntary. That's when we learn the most and that's when our standard of living is highest.
    30 Jan 2013, 10:21 PM Reply Like
  • I want the gov't to regulate many things, food being one of them. The gov'ts role/objective is to encourage market growth in a safe and economical way. Not to make gov't bigger nor make socio-economic policies the people must live under, like EPA and coal. The mindset that the gov't is smarter than the people, is crazy.
    31 Jan 2013, 07:51 AM Reply Like
  • "food being one of them"


    Well think about that. You are saying you want safety to be a component of the food you buy, and that if gov didn't regulate food, then nobody would make safe food. What this says is that the gov employees know how to make safe food and everyone wants safe food but no one will make safe food without the gov. This means the gov employees have knowledge to make a product that everyone wants but that no one will provide. Do you have any idea how much that type of information is worth? Its worth billions and billions and billions. A gov job is worth only a few million. So why would these gov employees that have information worth hundreds of billions if not trillions settle for a gov job worth millions?


    The only logical answer is that they don't have the knowledge they claim they do and that they can't regulate for safe food better than a coercion free market can regulate for safe food. If they could make this better food and its equal to or lower in costs, they would capture 100% of the market and that would be worth trillions.


    The logic for having gov regulate for safe food just can't be, "well we want safe food and no one will give it to is". That's illogical. If you want the gov to regulate for safe food, the logic for them doing that can't just be we want safe food. A logical reason has to be offered based on human nature and the incentive laws found in nature that will give us a good reason for WHY gov can actually do that task.
    31 Jan 2013, 08:36 AM Reply Like
  • I work in the food industry and we were just audited by the FDA. The inspector started off by saying "I am here to help you with the success of your company." And she was true to statement. Though we had all our ducks in order, she had some good suggestions to improve our process. There are a lot of small producers that do not have the knowlege to follow proper protocols for food safety. Yes, they have to be coerced into doing so, for cutting corners for profit seems to be inherent in mankind.
    Food is safer today because of government involvement. It is safer still because companies with deep pockets that can be picked protect themselves from lawsuits by having stiffer internal regulations than the governments. It is the little guys who don't have a clue that scare me.
    31 Jan 2013, 10:13 AM Reply Like
  • "Though we had all our ducks in order, she had some good suggestions to improve our process."




    "There are a lot of small producers that do not have the knowlege to follow proper protocols for food safety."


    Again, think about that logically. That means that FDA employee has knowledge how to run your business better than you do and better than all the suppliers. It means they have knowledge of how to produce a product that none of the people in the industry know how to produce. A person with such knowledge could enter that market and capture a 100% market share. I wonder how much a 100% market share in the food industy is worth? Would you say its more than a gov salary? If so, then why is that person a gov regulator who has a worth of a few million giving up a worth of a few trillion?
    31 Jan 2013, 10:20 AM Reply Like
  • One must acknowledge that there exists smart people who do not want to take risks. They are called 'risk-averse'.


    Is there anything morally, ethically, and legally 'wrong' with such folks? Some of these folks choose to stay in government jobs because at least it (the government job) gives them the illusion of 'job security'.


    So it all depends on each individual. Some say that being an entrepreneur is being fraud with compromising a lot in life as well (like having to telling educated lies). An extreme example is the fictitious Mr. Robert Miller of Miller Capital, Inc., played by the irresistible Richard Gere in the September 2012 movie 'Arbitrage', who lies, cheats, steals, plunders, loots, fucks, sucks, and even kills, at will. But then, of course, government tells lies too!


    LOL! ROFL! Double ROFL!
    31 Jan 2013, 10:37 AM Reply Like
  • "They are called 'risk-averse'."


    That's what I find so illogical about the faith we should put in gov regulators. The reason we should have faith in them is because they know more. In fact the reason they should control someone else is that they know more than that someone else. If that's the case, then there is no risk. So if these people that stay in gov are so risk-averse, then they are passing up the sure fired outcome of becoming a billionaire with their superior knowledge.


    The point of risk is to avoid loss. By staying in gov with their superior knowledge they are giving up billions. In other words they are loosing billions. So staying in gov is the guaranteed loss. As such, if they are risk-averse, then staying in gov is the biggest risk, if indeed they do have this superior knowledge.


    A market is just a 24/7 election. People elect products and business based on which one they believe will solve their problems. They continue to vote for the things that do solve their problem, and they stop voting for things that don't solve their problems. In other words the trial and error help them learn. Fraud is an example of something people haven't learned yet. Eventually they will. The more they learn the less fraud there is, but ultimately the amount of fraud is at a cost the market can bear. Its also why fraud is never the dominate force in the market. Simply put the market couldn't afford for fraud to be the dominate force. If that were the case, then no business, anywhere, would ever fail, but just try and start a business and see how hard it is to fool the market.


    Now, granted, you would like a market to be free of all force and fraud, and hence a FREE market, but you have to figure on the cost. If using gov to eliminate that force and fraud costs more than force and fraud itself, well then you haven't helped yourself. The problem is that we don't know where that crossover is.


    What we do know is that coercion can be stopped by superior coercion. What we also know is that coercion is dangerous. Thus, to properly control all coercion, we place limits on the people that get to use that coercion. One of these limits is divided gov. We create multiple levels of gov that all compete against each other, and presto, you create a market for gov. Govs then compete with costs for controlling coercion, and the competition breeds innovation, and then people vote with their feet and go to the govs that do it best (its why people move from state to state and why people immigrate to the US - they are manifesting the dynamics of a market for gov).


    Only when you have coercion under limits do you begin to remove its costs from society, and it has the same effect as removing dead weight from a race car. You want coercion limited in private transactions and in public transactions. The FDA is an example of centralized coercion, and if they get it wrong, then there is no practical place to retreat to. If they know so much, then proof would be they have 100% of the market share without their coercion, food would be 100% safe, and there would be no other competitors in the market. The proof of their success is not they have a few good ideas, and I think food is safer now.
    31 Jan 2013, 11:13 AM Reply Like
  • @jhooper


    I don't dispute your spirited arguments.


    It is just that some folks, by virtue of their own preference or mental making, would choose to join and remain in government jobs. They feel it giving them a 'safe haven' from a world of greed, lust, plundering, instant layoff, and instability engendered by entrepreneurship.


    Admittedly, it is a very defensive move, and unfortunately, many bureaucrats and their offspring often pay a hefty price later in life.


    'Not all Men were created Equal'. What could I say?
    31 Jan 2013, 11:41 AM Reply Like
  • I could agree that there might be a few exceptions that would turn down a certain gain of billions, but doesn't that suggest we don't build policy on the few exceptions?


    The risk-averse mindset is also a good point. For a gov regulator as opposed to a free market regulator (businesses don't regulate themselves, their customers and competitors do that), the incentive is to play it safe. Their access to gov coercion allows them to impose that unelected opinion on those they have control over, and thus opportunities are missed, productivity is damaged, and our standard of living wanes. Since a regulator can live off the wealth of others and not be responsible for creating wealth, they bias the society away from opportunities. The result is we all wind up suffering.


    A regulator actual has a pretty tough job. A regulator is a manifestation of legislative cowardice. The politician creates the nothing ever goes wrong regulatory agency. Their job is to make sure nothing ever goes wrong. They have power to write whatever rules they need to, to make sure nothing goes wrong (notice the politician doesn't have to do this), so when something does go wrong, and it inevitably will, because playing it safe is not moving forward and things break in that scenario, the politician will point to the regulator and say, "see I told them to write rules to make sure nothing ever goes wrong, things went wrong, so its their fault not mine". They basically have an impossible task, so no matter what they do, they are going to get the blame, because this is what the politician wanted in the first place.


    You see this everytime BB has to go before Congress. He suggests they need to do something, and they jump down his throat. His job is stable prices and full employment. Heck, why not just let him be responsible for the weather as well.
    31 Jan 2013, 12:05 PM Reply Like
  • @jhooper


    You made good points. And as I alluded in my last post, bureaucrats, because of their mindsets you described, tend to succumbing to self-denial and bracing for covering-up just to mitigate any failures, at all cost. Such tendencies more often than not lead to tragedies.


    Case in point, reference Hillary Clinton recent testimony to Congress, it is so hard next to being impossible just to fire three State Department employees!


    Myself came from four generations of bureaucrat families, and there were a lot of pains and agonies untold.
    31 Jan 2013, 12:22 PM Reply Like
  • Indeed. There is a sort of fundamentalist dogma that goes on for gov regulators. If someone is unhappy about a transaction, then there is just this blind assumption that gov's coercive power can just magically fix it. As such, if a business fails, why, then we need regulators to keep that business from failing. Of course, the question is, "How are the gov regulators going to do that?". The response is, "we will just write rules that require safety and soundness". OK, well if you guys know what those rules are, and those are the rules that customers want, then you don't need to impose it on failing businesses, you just go out and start the competing business with all the peferct rules or even better rules, and you will capture all those customers and have a business that will never fail. Has anyone thought to consider what capital markets might be willing to pay for a management team that has knowledge about rules that will ensure that a business never fails? It will be huge multiples of a gov salary, but yet no one ever talks about this. It just, "theres a problem, higher a gov regulator to make sure nothing ever goes wrong, and problem solved".


    Maybe its our gov schools. Doesn't it seem logical that a gov school would have incentives to teach people to never be skeptical of anything a gov does?
    31 Jan 2013, 12:34 PM Reply Like
  • You assume she knows how to develop a product, research the production of it, knows how to design labels and aquire other packaging, knows how to aquire change parts for the existing equiptment, aquire the ingredients, blend and do the QA on the product.
    No, she knows the foundation safe practices and the critical areas we should be watching.
    You don't work in production, do you?
    1 Feb 2013, 08:02 AM Reply Like
  • There are plenty of people working in industry who fly under the radar.
    1 Feb 2013, 08:04 AM Reply Like
  • At any point along the supply change, safety could be compromised. If she doesn't know any of that, then she doesn't know safety.


    You can't tell me she knows nothing of your production practices, but then tell me she knows how to make your production practices safe because safety is a separate component of production.


    The whole point of designing a product is so it solves someone elses problems. If its hurting them or killing them, then they aren't going to buy your product and you will be finished. So you have to design the product from start to finish with the safety component in mind. If you regulation knows nothing about the production change, then she is useless, because anywhere along that chain the problem could be created.


    You are supposed to be the one that is doing that. Are you saying, you would design products that would kill your customers if not for your regulator?


    Everybody works in production. We all produce something, unless you are a looter.
    1 Feb 2013, 08:39 AM Reply Like
  • "There are plenty of people working in industry who fly under the radar. "


    It depends on what you mean by "radar". A black market is just another name for free market. If there are some people that get away with hurting others, they will always be a small part of the market. If hurting others made you rich, then we would all be rich, because hurting people is easy. The only way hurting others last for any length of time, is when a monopoly on coercion is in place, like in the case of a gov.
    1 Feb 2013, 08:43 AM Reply Like
  • I mean people in big corporations that do nothing but get lost in the woodwork. Happens more than you think.
    1 Feb 2013, 01:33 PM Reply Like
  • The same thing happens in the regulatory agencies. They actually have names for them. They are called either "chicken littles" or "ostriches". The chicken littles are the ones that want to move up. So they have to find problems under every rock. The more they scream the more excuses there are for legislators and dept heads to gain more power. That's an important investment. It allows for more ability to pick winners and losers, and that ability is extremely valuable. It means a posh do nothing job down the line somewhere.


    The ostriches are just those that want to go through the system without making any noise and just get to their pensions. The ostriches will tend to out number the chicken littles, and its why they let real estate bubbles develop right under their noses. Then when the collapse comes, the chicken littles come out, the turf wars begin, and the struggle for who will find the most problems to create the most power begins.


    It happens every time.
    1 Feb 2013, 01:45 PM Reply Like
  • No, everyone does not work in "production", not in the true production line sense. There are people here who are not involved with the "production line", and I envy them.
    You are getting product and process confused, so I have a feeling you are a little unaware how manufacturing works in the real world. We do not design a product to solve a problem, but to enjoy. You cannot design a food product that is inherently safe, unless you make it out of pure chemicals. Foodstuff is organic and can go bad before or after it is in the package. We have to design the correct process, not the product, for saftey. Sure, the FDA gal knows very little about our product, but she knows the potential problems with foodstuffs.
    There are things that a small food producer does wrong and may not even be aware of, such as grow lettuce under power lines where the roosting birds poop bacteria down on the salad greens. A small cider maker may not know the correct pasteurization units (or calculate them) to keep his product from killing a kid. Yeah, he won't be selling cider anymore, unless he closes for the season then opens up the following year and starts sellling in another market. Whose going to shut him down? There are no regs, so he can do whatever he wants. Heck, do you know how easy it is to create and print labels these days? Kill someone with your soda and just rename it and slap another label on it. Whose going to stop me? Do you know how many companies have produced dangerous products and have done quite well? If a large company puts out a product that kills say, 500 people throughout the country. Well, YOU don't want the government looking into it, none of their business, they'll do more harm than good. So, the outbreak is country wide without anyone putting two and two together to figure out why those people are dying.
    1 Feb 2013, 01:49 PM Reply Like
  • "No, everyone does not work in "production", not in the true production line sense."


    There is some semantics going on here. Granted not everyone is out on the floor, but everyone is involved in production, and part of that production is designing a product that meets the market requirements for safety. This is how you solve problems. The problem everyone has is that they want their standard of living improved. This means they want their consumption to go up. You solve that problem by providing them with a product that helps way more than it harms. If it develops a pattern of not helping, you develop a pattern of not helping. Then you must live a costly life of clandestine behavior.


    "We do not design a product to solve a problem, but to enjoy."


    The problem everyone has is not enjoying. Feeling good is everyone's goal. Its a guide to survival. Its what compels us to consume. Providing a product for people to consume, is how they live and that feels good. All products are designed to solve that problem. The ones that do it best win the market election.


    "We have to design the correct process, not the product, for saftey."


    The process is part of the product. You can't have one without the other. From beginning to end, it all has to be designed to create something for people to consume. By doing so, you solve their problem of not consuming.


    "Sure, the FDA gal knows very little about our product, but she knows the potential problems with foodstuffs."


    Your process should have someone like this on staff. You will find that people want products that allow them to consume. Killing them, ends their consumption. If you provide a product that meets the equilibrium of what they can afford for the risk they are willing to take, then you have solved their problem of not consuming, and they will vote for you in the market.


    "Whose going to shut him down?"


    If its so easy to kill kids and never be shutdown, then everyone would be doing it. But here is a place for gov, you can have laws and enforcement for people that made products that implied the normal standards of everyone else, but then you must have process to protect the innoncent. My problem with your approach is that you want to punish the innoncent, because one person did something bad.


    "There are no regs, so he can do whatever he wants. "


    No, clearly there are market regs, because he has to hide his behavior. If he could doing whatever he wants he could just keep killing kids and people would still line up to buy his kid killing product. By you detailing how he must hide his behavior, you are illustrating the very regs you deny exist.


    "Do you know how many companies have produced dangerous products and have done quite well?"


    But that's the point. If a dangerous product does well, then they should all be making dangerous products.


    "kills say, 500 people throughout the country. Well, YOU don't want the government looking into it"


    No. All I am saying is that the gov shouldn't punish the innoncent people because others have intentionally harmed other. There is definitely an argument for gov making force and fraud expensive, but it is specious to assume gov can eliminate all force and fraud. That's the problem here. The cost of elminating it all, could never happen, and the attempt would bankrupt us all. The problem is nobody knows the equilibrium between the costs of reducing force and fraud and the benefits. That's why you have multiple levels of gov, and never let this function solely reside with only one of them. By splitting it up you create a market for govs that must compete for citizens by experimenting to find where this equilibrium exists. The ones that do a better job, win the market election. Its why you have immigration.


    "So, the outbreak is country wide without anyone putting two and two together to figure out why those people are dying. "


    This could only happen if the gov controlled most of the market. This is another version of the Malthusian argument. What Malthus ignored was the issue of price. It would be extremely expensive in a free market for everyone to die or for most of the people to die, so the market wouldn't allow it. It would just be too expensive to allow all those customers to die, and to pass up the opportunity to create a product that would save all of their lives. If there was no solution, then neither the market nor the gov could stop it anyways.


    The whole point of all this is to be rational. We use our reason to determine what gov CAN regulate, and what it CANNOT regulate. If you get this basic premise wrong, then nature will punish you with austerity because nature doesn't care about intentions.
    1 Feb 2013, 03:57 PM Reply Like
  • So basically, you are an anarchist. Abosolutly no need for government, everyone on their own.
    1 Feb 2013, 08:55 PM Reply Like
  • Well they Anarchists do have a logical case, but I'm not quite sure if I agree with them yet. Anarchists don't believe in chaos, they just believe it is gov that causes they chaos. They do have a point. The only way to get a monopoly is with coercion, and gov is a monopoly of coercion. Such a monopoly allows those with access to it, to be very arbitray, and arbitray is chaos. Watching gov regulators, you see how arbitrary they are, and thus you can see the chaos.


    For me, I still think there is a role for an entity that has a monopoly of coercion, because coercion is the only thing in society that can garner a 100% vote. Everyone would vote for stealing, but as soon as they are stolen from, they would vote against stealing. A 100% vote against stealing is the foundation for good public policy.


    Thus, I just think we should use our brains and make a distinction between what gov can do and what we wish it could do. I see your position as one of tyranny. You don't want a presumption of innocence. You want to use the fact that everyone is a potential thief and conflate that with they will be a thief. As such, the coercive power of gov is going to be used to stop everybody from ever doing anything wrong and we are going to make the assumption that we can afford to do that. So you want gov poking into everyone's private lives with things like the Patriot Act or the FDA or the FDIC, and we are now going to have subjects in a state wheel instead of free born citizens.


    There are several problems with your approach. First to attempt such a thing, you have to give amazing powers to the very people you think will be thieves, but you attempt to mitigate that by saying we can trust them because they have good intentions. Then you assume that the people in these roles will never have any incentives to ignore their good intentions, and you assume they will have all the perfect incentives to provide them with the correct knowledge to control everyone. Then you assume the society will be rich enough for all these people with power to afford to create the processes to control every aspect of everyone's lives in order to ensure they never do anything bad. Finally you have no logical basis for any of your assumptions, your position is basically "if we could only just".


    Well sure, if we could only just pass a law for a genie in a bottle, all of our problems would be solved. A genie is the ultimate problem solving product. However, we live in a real world, and our goal is to have the highest standard of living possible. To that end we need the highest level of production possible. To that end we need to be as price sensitive as possibe. To that end we need to be as free from coercion as possible. To that end we create a gov, grant it coercion to stop coercion, but to keep gov and its coercion from becoming the source of coercion, we limit it. To that end the people retain all the rights, the gov is divided into many different levels in many different locations, and at each level it is required to use process and not be arbitrary. By doing so, you create a market for govs, and people vote with their feet for the areas that create the best gov product.


    So while I can see a role for gov, I can't embrace your view for a role for tyranny, and giving gov power to assume you will be guilty if you are not controlled is tyranny. Tyranny is simpling controlling people, and to control business, you must control people.
    2 Feb 2013, 07:21 AM Reply Like
  • @Jhooper,


    Thanks be to you. With your articulation it helped me to gaze deeper into the mindset of a bureaucrat, which is that of an ultimate 'regulator'.


    Obama and BB are bureaucrats and ultimate regulators. Obama sought to regulate for 'economic recovery'; and BB even set a 6.5% Unemployment rate as target for his 'easing'.


    Mind you, regulators as such will end badly imparting a lot of pains and agonies on the lives of billions around the world ultimately.


    Epic Tragedy Shakespearean style!
    6 Feb 2013, 07:51 PM Reply Like
  • Spin it folks, spin it!!


    Increase payroll tax of 2% is gonna kill 2013 GDP..You folks will see!!
    30 Jan 2013, 09:08 AM Reply Like
  • Yup, IT, that is the 2% so-called growth! LOL! ROFL!
    30 Jan 2013, 12:17 PM Reply Like
  • Isn't the payroll tax just returning the the regular rate? If incomes begin to rise, doesn't that provide an offset?
    30 Jan 2013, 12:42 PM Reply Like
  • "Isn't the payroll tax just returning the the regular rate? If incomes begin to rise, doesn't that provide an offset? "


    But we have such archaic notions about how our taxation system works anyway. Taking Fed notes out of the economy and delivering them to the US Treas, eliminates those notes from the economy, and thus they don't exist anymore to bid up asset prices. As such, the potential for incomes to rise when savings assets begin to decline becomes problematic.


    The other question that is more relevant would be, "How much better would the economy be if incomes went up and those extra Fed notes were still left in the economy?"


    All these different trusts and taxing schemes are really just accounting fictions. The US has a monopolized money medium that allows the Fed gov to basically spend at will. It doesn't need to collect Fed notes from the economy to spend like in the days when money mediums were gold and you actually had to up end peasants to collect it. So all this needling about debts and deficits isn't really the issue. The problem is that we are incurring debt for the express purpose of making our society less productive. That's the real problem.
    30 Jan 2013, 12:53 PM Reply Like
  • Re: "...The problem is that we are incurring debt for the express purpose of making our society less productive..."


    USA had been in the self-hypnotize, self-mesmerize, and self-congratulate mode for the past 4 years!


    If this contracting rate continues for the 4 Quarters of 2013, and debt is growing at 7%, we will be in deep SH*T by year's end.


    Welcome to the Obama Economy!
    30 Jan 2013, 01:03 PM Reply Like
  • Cause weez a war economy! heehaw!


    Look at the bright side: long term it's another fail for Keynesianism.
    30 Jan 2013, 09:16 AM Reply Like
  • PCE is up that's 2/3 of our economy. 2% tax is just back where we were before Obama cut it. The big tax is going to be the additional ObamaCare requirements and that'll be added to taxable income for individuals. Look at your W2.
    30 Jan 2013, 09:18 AM Reply Like
  • Pump is being primed, making the market ripe for a steep and rapid selloff on or around February 14th.
    30 Jan 2013, 09:57 AM Reply Like
  • It was very amusing to watch economists and pundits trying to downplay the negative GDP this morning. None of them got it right, so all they could say is that it is a fluke and something nobody should pay attention to. Buy, buy, buy. For me, this is a warning sign. You have to take these things seriously. Data is data. If your beliefs go against the data, change your beliefs, don't try to spin the data. I have been long this market for a while now but recently started hedging and will continue doing so.
    30 Jan 2013, 10:21 AM Reply Like


    You made my point.You will now see more SMART people actually reading in between the lies and doing what is right for their families..


    Negative GDP is never good, no matter the spin...Time to get defensive and look at the metals..The unraveling started a year ago and continues..


    I laughed when Germany asked for their OWN gold and were told to take a walk, you will get it in 8 years !! Yet it got very little attention. If you are waiting for BEN to bail us out you might as well go to a casino..Rigged markets kinda bother me with my money..


    But thats just me, I stopped playing musical chairs years ago!!
    30 Jan 2013, 10:30 AM Reply Like
  • You do realize you're criticizing spin with more spin... right?


    Aside from one sector (that is overly bloated to begin with... it needs cutting and was only cut this large due to anticipation of the fiscal cliff), the report was pretty positive.


    That's the truth. You're the one left spinning.
    30 Jan 2013, 11:01 AM Reply Like
  • NER


    Positive, serious? I have a bridge for sale...Like i said some will keep their heads in the sand as more DD Might be needed!! Your choice..


    When they expect a 1.2% GDP and get a negative one , sorry to me that can be spun but i don't buy can..


    Love spinning with the metals breaking out ! Investing hoping for BEN to bail you out is just plain foolish...
    30 Jan 2013, 11:23 AM Reply Like
  • "Like i said some will keep their heads in the sand as more DD Might be needed!!"


    Right, what this says is that the rest of the economy is not strong enough to pick up the slack.
    30 Jan 2013, 11:35 AM Reply Like
  • Time will tell if you are correct. But this negative news cannot be good for consumer confidence. While military should get cut, if we have a couple of more quarters of this kind of negative growth we're in recession. As Japan has been (in and out of recession) for the last 20+ years. That's what the USA is looking to repeat.
    30 Jan 2013, 05:12 PM Reply Like
  • RAY


    Do you honestly think we ever came out of the last recession? What improved? Unemployment? inflation? Is food and energy more?


    Or was it the money printing??


    I know what i think, and todays GDP is just the tip of the iceberg..
    30 Jan 2013, 09:25 PM Reply Like
  • @Interesting Times: "Do you honestly think we ever came out of the last recession? What improved? Unemployment? inflation? Is food and energy more?" - NGDP improved and is now greater than pre-2008. Unemployment and total employed is worse, inflation is same. Productivity has to be greater--since NGDP is greater with fewer people working. If I was a cynic, I'd say the unemployed today were doing unproductive work during boom times (and a lot where--that includes Wall Street bankers). The only real bad negative IMO: debt now will soon (or already does, stats are ambiguous) exceed the crucial 100% debt-to-GDP ratio where Rogoff et al point out 'bad things happen'--bad things like hyperinflation or default. Strap your seatbelts on,and buy some gold IMO.
    31 Jan 2013, 03:28 AM Reply Like
  • The only worthwhile spin, is turning the TV knob to off
    31 Jan 2013, 07:53 AM Reply Like
  • RAY


    I agree with some of your points.However inflation is worse than 4 years ago..Not the way the govt reports it, but energy and food cost way more today then 4 years ago!!


    I agree with you on gold and silver though!!
    31 Jan 2013, 05:15 PM Reply Like
  • Gold since 8/22/11...or Silver since 4/28/11
    30 Jan 2013, 10:53 AM Reply Like
  • BBRO


    Own mine way before those dates...Knew the govt would manipulate it with naked shorts..


    Remember when silver hit $49 bucks ? It was a bank holiday so we got a true read of what it could be worth..It was Good Friday i believe..


    The following week they hammered it right back down and the Commision did nothing !!


    Pull up a 10 year chart of gold and i dare you to show me a more bullish one!! Keep the spin coming !! ,,,
    30 Jan 2013, 11:01 AM Reply Like
  • Ah, don't get upset..You also can change....good luck to you as well..
    30 Jan 2013, 11:07 AM Reply Like
  • Consumer spending and investment up, gov spending down. Neg gdp growth never good, but overall this isn't too bad.
    30 Jan 2013, 11:21 AM Reply Like
  • Don't forget Sandy and Cliff and Japanese earthquake after shocks. Labor dept reported (another)almost 1.5 million new jobless claims in Dec in this recovery. Maybe just maybe that had something to do with? Maybe they can appoint a panel of experts to look into it
    30 Jan 2013, 11:31 AM Reply Like
  • Like a "Jobs Commission"?
    30 Jan 2013, 07:47 PM Reply Like
  • JUNE


    Yeah, he will appoint it when Congress is out of session...Courts will throw that out as well...


    Meanwhile Treasury yields are rising!! Would love to be a fly on the wall around Ben right now !!
    30 Jan 2013, 11:38 AM Reply Like
  • Isn't that what Tealibans wanted all along: private consumption and investment growing, government spending down?


    Now that is happening, why do they keep whining?
    30 Jan 2013, 01:26 PM Reply Like
  • Wondering the same thing - if government spending is cut, the number will show up as a negative - don't expect the private sector to immediately take up the slack.
    30 Jan 2013, 01:35 PM Reply Like
  • "why do they keep whining?"


    They want GDP without the gov spending. They want the gov spending that just wastes people time but does improve GDP to go away, which does mean GDP goes, but as the time stops being wasted and is redirected to actions that will sustain GDP, then what the want are sustainable increases in GDP.


    So yes, when you let go the gov spending GDP goes down. This just proves the spending doesn't create sustainable GDP because its wasteful gov spending. They want sustainable spending and thus sustainable GDP, that's why they are upset at the lower GDP because it illustrates the gov spending is just wasting time because it is directing resources away from activities that will allow GDP to increase and for that increase to be sustainable.
    30 Jan 2013, 03:27 PM Reply Like
  • Well, we wanted reduction in spending there you go. I think that's a positive. That extra money we are not spending bombing the Taliban can use at home to build schools and help small business.
    30 Jan 2013, 02:05 PM Reply Like


    Don't hold your breath on that one!!


    A negative GDP is never good thing....This POTUS won't build schools...He will just give it away!!
    30 Jan 2013, 02:09 PM Reply Like
  • I don’t think it could be more officially confirmed: politics trumps economic principles (theory). Today with the news that the 4th quarter GDP took a nose dive, and that a very large portion of the loss was due to a reduction in government defense spending; Rush Limbaugh’s condemnation turned more Keynesian then Paul Krugman on opinion day, and a good many on the left are using the arguments of the Austrian theory’s Hayek and Mises to say don’t worry about it….. I give up….It seems hypocrisy knows no bounds, “Next up in the news, Pravada uses capitalism’s invisible hand to explain why the loss is actually a gain while Fox news quotes Marx to explain why it is indeed a loss”!!!
    30 Jan 2013, 03:00 PM Reply Like
  • Virtually every dollar spent on defense ultimately flows to people (including engineering, manufacturing, technology jobs). We've outsourced most of the rest of those jobs.
    We apparently don't need defense, or protection of US interests oversees anymore (more jobs).
    So I guess we need to retrain our engineers and technicians and artisans to just do things that make us feel happy.
    30 Jan 2013, 07:41 PM Reply Like
  • If you really wanted to make people feel happy, take the option away from the IRS to use guns (military style or otherwise) to make people turn in their Fed notes to them.
    30 Jan 2013, 08:28 PM Reply Like
  • JH


    Don't even get me started with this gun conversation...All i will say if we lose the 2nd amendment we will lose the 1st as well..


    Do you know in NYC the Police CAN'T even have more than 7 bullets in their magazine...WHY WHY WHY on earth are they limited..I can't put in print my reasons but i would add everyone should join the NRA!!


    They take an inch now, they go for a foot later..I mean POLICE can't pack more than 7 rounds?? Seriously ?? Something is really really wrong with this...Using Sandy Hook as an excuse is deplorable!!
    30 Jan 2013, 09:32 PM Reply Like
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