milkchaser

Forget the 1930s; We're Reliving 1975 (Part 1)

Does it seem odd to anybody else to date the start of the recession to a single quarter of barely negative growth in Q407 that was followed by two quarters of mild positive growth?

Obama Basically Nixes Second (Third?) Stimulus

sethmcs -- I am convinced that this recession will not soon be forgotten, nor will Obama's misguided response to it.

Obama Basically Nixes Second (Third?) Stimulus

Keith Hennesy has an excellent response to Obama's Op-Ed here:
keithhennessey.com/200.../

He calls out Obama's use of "straw man" arguments.

Obama Basically Nixes Second (Third?) Stimulus

When he wanted this clunker passed, Obama said that it was absolutely and immediately necessary to save the economy now. Now he says that he always claimed that the stimulus would take time to work. Sounds like he is rationalizing its failure.

More Bad News for Retail Investors, Siegel Had It Wrong

TeresaE -- I take your points, but what kind of history teacher could gloss over slavery? Are you saying that they did not teach the Civil War? My experience (40 years ago) was that the Civil War was taught as the thing that ended the abomination of slavery, but the subsequent 80+ years of racism were glossed over. The states' rights argument was equated with racist slavery. It is only now that the issue of states' rights is beginning to re-emerge as legitimate having been separated from the ignominious history of slavery.

More Bad News for Retail Investors, Siegel Had It Wrong

GM is defunct. Should it have been excluded from indexes? Did no one profit from GM those many decades when it turned a profit?

Perhaps there was a "survivor" bias in Siegel's work, but that only diminishes his conclusion -- it does not reverse it. One can lose all one's capital in a year if one makes spectacularly bad investments. I suspect for all the rubber hat and canal stocks, one can find bonds that defaulted, as well. A fair study would examine stocks and bonds that accrued a heavy volume of investment, as blue-chip indexes do.

Zweig also makes a mistake of saying that, since we only have good figures from 1870 on, we only have 4 good 30 year periods in which to examine the performance of stocks vs. bonds. This is wrong. We have 109 30-year periods from 1870 to now, as each successive period contains the last 29 years of the previous period, plus the next full year.

To make things easier to count, I suggest looking for those few periods when bonds outdid stocks.

Back in the U.S.S.A.

I do not apologize for joining with my co-workers to help save a company imperiled by mistakes of former management. However, my personal circumstances at this time do not reflect the possibility that the American economy will revive and expand. I suspect that current Federal gov't policy is counter-productive, however, I hope I am wrong. I suspect Mr. Schiff agrees that the current course is mistaken, if I read the article correctly.

BTW, I second Mr. Schiff's approval of borshcht.


On Jun 22 04:47 PM User 357705 wrote:

> Whatever makes it easier for you to get out of bed and head to that
> no benefits no future job contractors job you are pretty sure you'll
> be sacked from in the fall.

Back in the U.S.S.A.

1. Obama was not born to particularly humble beginnings. His single mother was supported by fairly affluent grandparents.
2. How does one measure racism? What study can you find that measured the American population to be 25% racist?
3. The "ping pong ball" has a degree from Harvard and a higher GPA at Yale than his opponent in the 2004 race.
4. The expert he chose as Treasury Sec'y was either crooked or, by his own admission, confused by TurboTax. All Presidents surround themselves with experts. This is common practice and common knowledge.
5. As you point out, the term czar has been used for decades. The number of such positions is conspicuous in the Obama administration, however.
6. There are "bumper sticker" minds in both parties -- that would explain their popularity.
7. Obama may have inspired the Iranians with his Cairo speech. But then maybe having a democracy to their immediate east and west brought about by his predecessor contributed to their yearning to be free. Obama opposed much of that. One speech or the example of 40 million liberated, free-voting Muslims. I guess we will never know what did the trick.
8. You mis-characterize Bush and McCain supporters as morons. Do you find insulting those with whom you disagree to be an effective persuasive technique, or does it just make you feel good?
9. You distort the intention of those who advise Obama to speak out in support of the Iranian protesters. They merely point to the historic example of Vaclav Havel, Lech Walesa and Natan Sharansky who benefited from words of support from leaders of existing democracies. They advocate words of support, not interference. Tyrants often portray such words of support as meddling or interference -- that is testimony to its effectiveness. Why do what tyrants ask of us?
10. Don't knock sex with interns, staff, prostitutes or strangers in airport restrooms unless you've tried it.
11. When Republicans lost control of Congress in 2006, the nation was hardly at the abyss. That occurred with Democrats in Congress -- a situation that persists to this abyss-clinging day. If Democrats knew how to improve upon the poor record of their Republican predecessors, judging by the trend in the GDP, I would say they have yet to demonstrate it.
12. Obama has every chance to turn things around. Let us hope he succeeds. If he does not, be honest with yourself.

On Jun 22 05:15 PM Ed [e-mail] wrote:

> It is amazing how the criticism of Obama started almost immediately
> from the same people who screwed up the economy and foreign policy.
> I am a 56 year old middle class (whatever that is !) white man with
> a law degree who was not born into the humble beginings that Mr Obama
> was born into. Yet despite all odds this half white half black man
> became president in a country where 25% of the people are racists.
> True he was preceeded by a President who had the mentality of a ping
> pong ball but you have to respect Mr Obama's accomplishments. He
> is smart enough to surround himself with experts and listens to them
> and makes an informed decision. While Mr Schiff is not one of the
> experts it may account for his juvenile name calling and making an
> issue of the word czar. When the republicans appointed a drug czar
> I did not hear talk then like the juvenile bumper sticker mentality
> that is the Republican party. When Obama gave his Cairo speech and
> stated his desire to engage in dialogue with Iran it caused the glue
> that held the factions in Iran to come un-glued as the death to America
> crowd lost its rallying bumper sticker. Now the same morons like
> Bush and McCain want Obama to give the glue back to the death to
> America crowd by interfering in Iran's struggle and internal strife.
> These are the same morons who elected Bush and had control of all
> three branches of government and literally brought the world and
> the USA to the abyss. They should shut up and have sex with their
> interns or staff or prostitutes or with strangers in airport restrooms
> as that is they only thing they seem competent at. I believe that
> Mr Obama and his expert pool should be given a chance to turn this
> thing around.
>
> On Jun 21 10:02 AM Ferdinand E. Banks wrote:

Back in the U.S.S.A.

I am interested in learning more about any studies you may have read that have convinced you we are relatively less prosperous. I am fairly certain that you would prefer life as we live it today to life in the 70s as it was truly lived. But that is no substitute for a rigorous economic study.

I am not arguing my personal situation is better, nor how I feel. I am arguing that technology has improved life so much in the last 30 or 40 years that the comparison of mere income is insufficient. There was a time when poor people did not have TV or telephones. Now the percentage of households without one or both is small. Is that not a sign of affluence?

Cell phones used to be considered luxuries or affectations. Now they are common and disposable. Does this count for nothing?

Once long-distance calls cost $1-per-minute. Now they are too cheap to meter.

Joint disease used to leave people in wheelchairs. Now hip and knee replacement are commonplace. How many different body parts are now routinely and affordably treated with lasers? (eyes, teeth, fat and hair removal, etc). Arthroscopic surgery was the stuff of science fiction back in the 70s. How many heart attack victims died on the way to the hospital? Now paramedics carry portable defibrillators.

Is this factored into studies along with inflation-adjusted total family income? I suspect today's median income could support a 1970s era lifestyle if only people were willing as people actually lived back then.

On the issue of debt, apparently we agree.

On Jun 21 08:11 PM a5fung wrote:

> I am merely stating a piece of fact I have come across that suggests
> average prosperity have not increased; however, if you feel richer
> than more power to you.
>
> You're correct, debt is not bad, nor is it good. It depends on what
> you do with the debt that matters. If you use to to consume, you
> are merely using up your future consumption, technically borrowing
> from your future. On the other hand, if you use it to increase your
> productivity and invest it wisely, than you can say debt is good.
>
>
> Take a look at something like education. Can the average student
> afford his/her own education without a government subsidy these days?
> Most likely not. Working part-time or a summer job is just not enough
> to cover the costs college today. But of course, nothing some debt
> cannot solve right?
>
> No doubt we have had a lot of technological advancements, but this
> does not necessarily translate to being richer (well, depends on
> how you want to define "rich"). We will most likely continue to have
> new technologies despite our economic conditions.
>
> On Jun 21 02:51 PM milkchaser wrote:

Back in the U.S.S.A.

It is possible to disagree without being disagreeable. We may not agree, that is not evidence of delusion. Labeling an opponent's position is no substitute for a persuasive counter argument or contradictory evidence.


On Jun 22 04:37 PM User 357705 wrote:

> A bonifide true believer! Deacon of the 'Daddy Says Everything Is
> Just Great' Church of the Perpetually Deluded.

Back in the U.S.S.A.

Do you think that GDP will not rise beyond its 2007 record high? Granted, Obama's policies are not pro-growth, but over any 40-year period, the stock market has at the very least yielded 6%. Since 1980, it has yielded more than that.

I suppose it is a matter of perspective. If one's memory is no longer than the last 7 quarters, one sees no hope of future expansion. If one contemplates that current gov't policy mimics that of the stagflation years of the 1970s, one despairs of future expansion.

But if one hopes for an eventual return to sanity, the prospects of increased wealth is fairly good.


On Jun 22 04:23 PM User 357705 wrote:

> Events of the past year have proved him a poor prognosticator. Certainly
> found out the limit to corporate and bankster greed didn't we!<br/>

Back in the U.S.S.A.

I disagree. The quality and true cost of goods has declined. Yes, medicine is more costly, but it is of much higher quality? Would you choose to be treated using 1970s era medical technology? Yes, gasoline and cars cost more, but the cars are more efficient and much safer. The nominal cost is higher, but the true cost is lower. We have access to computers, TVs, digital recordings, search technology, video games, podcasts, online universities, etc that were unheard of -- almost unimaginable -- back in the 1970s.

The blood supply is safer. Surfboards, skis and skateboards are safer. The people of the world are safer (from nuclear war, from sickness, etc).

Moreover, having more women in the workplace is good for the country, for the family and for the women who are empowered. It increases GDP. It increases family income and makes families much less vulnerable during an economic downturn. Women work as much out of desire and opportunity as out of necessity and to begrudge them that opportunity is sexist and outdated.

Again, debt is not bad -- excessive debt is bad. I owe tens of thousands, but it is secured debt (a mortgage). Even that much unsecured debt is only bad if the prospect of repaying it is low. If it were spent on vacations and consumables, such debt is stupid. If it were used to start a successful business or a farm or to put a child through college, it is probably wise.

Moreover, I think the myth of the stay-at-home mom is overdone. My mom worked during the 50s and 60s. My wife stays at home with our kids. My grandparents were dirt poor. Maybe our experience is rare, but I think not.


On Jun 21 11:10 PM derryl wrote:

> In a typical 1970 household the husband worked and the wife raised
> the children. The house was about 1/2 the size of today's McMansions
> and wasn't filled with a lot of imported junk. But a single income
> could support a family in 1970. The only reason this typical household
> feels 'richer' today is that the wife is also working and the family
> has taken on tens of thousands of dollars of consumer debt.

Back in the U.S.S.A.

You're entitled to your opinion. I choose to help those I know and care about -- not faceless strangers, and certainly not via a faceless, dispassionate, overtaxing Federal gov't. That does not make me a sociopath. It is one thing to defend one's country in times of peril, as soldiers do. Quite another to mindlessly fork over ridiculous sums merely because other well-meaning people wish to perform charity with my money. That is not charity, it is a scam and a fraud. It is coercive.

P.J. O'Rourke put it this way: hellotxt.com/l/jp7APb

"Collectivism doesn't work because it's based on a faulty economic premise. There is no such thing as a person's 'fair share' of wealth. The gross national product is not a pizza that must be carefully divided because if I get too many slices, you have to eat the box. The economy is expandable and, in any practical sense, limitless." -- P. J. O'Rourke,


On Jun 21 02:51 PM User 357705 wrote:

> The duty comes from that place in the heart of non-sociopaths who
> recognize that when all are helped all are better off. Ya know, the
> things your grandmother taught you.

Back in the U.S.S.A.

Debt is not bad. It does not always crush. When someone loans me money for 30 years, I hope to be better off (depending on what I do with it, of course).

I cannot believe that the average American is worse off now than in the 1970s. I have lived through both as a fairly average American. We are richer today by a long shot. Everything we use (including, of course, the computers we are using to communicate now) are immensely better and cheaper and more accessible.

Who had microwaves in the 1970s? It was an era of toasters and Mr. Coffee. It was the era of the Gremlin, the Pacer and the Thing. Digital recording meant counting on your fingers.

On Jun 21 01:59 PM a5fung wrote:

> Thats not wat I read. I read that US weekly income peaked in the
> 70s even when using the government provided CPI. If you use real
> inflation (one that has not been altered over the years since), average
> income has been dropping dramatically since the 80s (using CPI shows
> more of a levelling off after a initial drop in the early 70s). Of
> course, with the flood of cheap credit in the past 30 years, it may
> be hard to tell between poverty and prosperity. Unlike parents of
> generations past, we now live in nice big houses with remodelled
> kitchens and drive two cars (at least pre-crisis) but with that also
> came the load of debt our parents never had. On top of the debt,
> this generation have also burned through the real savings of past
> generations, making this crisis that much harder to bear.
>
> On Jun 21 10:02 AM Ferdinand E. Banks wrote:

Back in the U.S.S.A.

Europe does not have and never has had anything like Glass-Steagall. Glass-Steagall is a red herring.


On Jun 21 11:55 AM Sunnsea wrote:

> Peter:
> Unless I mssed something, you did not mention the repeal of Glass-Steagall
> in 1999. Returning to this act and simply prohibiting banks from
> speculating in financial markets and enforcing it would end the inherent
> financial conflict of interest that has contributed mightily to the
> dotcom, housing and credit bubbles.