Bits Bucket For September 28, 2010
Post off-topic ideas, links and Craigslist finds here
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Get up sleepy heads!!
Ugh! I miss the early sunrises of summer. It’s tough to get psyched for my morning rides when it’s still dark (and chilly).
Say, the S’NEWS says Rahm will decide if he wants to be our mayor or not by Friday. Ohhhhhhh, suspense!
Suggestion: TRY COFFEE!
“TRY COFFEE!”
lol- sounds like you’ve had enough
I actually was out on the East Coast last week, and have been waking up at 2.30a Pacific Time every day this week; no coffee needed.
First he has to establish residency. Power to the tenants!
Rahm Emanuel kept out of Chicago home by tenant?
September 28, 2010
BY MICHAEL SNEED Sun-Times Columnist
It’s Chicago politics at its best.
Sneed hears an effort by Chicago mayoral hopeful Rahm Emanuel to move back into his North Side home next month was axed by the man who leased it.
…
This is shaping up to be one heckuva winter here. There are many local groups seeking power this time out - Richie’s reign essentially pressed the pause button on change for twenty plus years. Despite his stature in national politics ol’ Rahm is going up against some opponents who’ve been waiting a long time for this chance.
Methinks that Rahm will find this out. The hard way.
I’d rather have a tall Ram than a tall Rahm.
http://www.theram.com/beer.shtml
Perhaps the most unsettling aspect of this is that “Michael Sneed” is apparently female (or a cross-dresser?)
Second cup, darker than a well diggers #^%$.
I thought the saying was colder than said #^%$.
So where do the recently announced departures of Summers, Orszag, Romer and TARP czar Allison leave Geithner?
Enquiring minds want to know.
Clive Crook - Clive Crook is a senior editor of The Atlantic, a columnist for National Journal, and a commentator for the Financial Times. He worked at The Economist for nearly 20 years, including 11 years as deputy editor.
The Ballad of Summers and Geithner
Mar 12 2010, 8:27 AM ET
Flights from London to DC via Frankfurt (don’t ask why, just learn from my mistake and never do it) put the recent Atlantic and New Yorker profiles of Tim Geithner in a good light. Longer than they needed to be, you say? I was wishing they were longer.
Josh Green was better on Geithner’s character, I thought, and John Cassidy more at home with the economics. Both pieces are well worth reading, regardless of your itinerary. But I have to say that neither really dispelled for me the big mystery about Geithner, which is the nature of his professional and intellectual relationship with Larry Summers.
When the appointments were first made, I foresaw trouble. Like many others, I assumed that Obama would have wished to make Summers Treasury Secretary, but recoiled at the difficulty of getting him confirmed. So Summers became chief economic adviser while his former subordinate Geithner (whose confirmation turned out to be no stroll in the park either) got Treasury.
A hazardous arrangement, I thought, though possibly workable, if Geithner was sufficiently self-effacing to accept the de facto number two position. Summers, I reasoned, never would. But if Geithner decided he was going to be in charge, there would be a fight for influence, the economic message would be muddled, and the loser would have to go. Adding to the danger was the milling profusion of other top economic talent-Volcker, Orszag, Goolsbee, to name just three-in or around the White House.
…
I’m looking forward with baited breath to seeing how well the economic forecasters nailed these “predictions”:
WSJ Blogs
MarketBeat
WSJ.com’s inside look at the markets
* September 27, 2010, 5:47 PM ET
On Deck Tuesday: Case-Shiller, Consumer Confidence Index
By Matt Phillips
Associated Press
Here are the main items that will be on the tape tomorrow.
* At 9 a.m., the S&P/Case-Shiller 20-city index of home prices for July is expected to rise 0.1%, from the previous year. The index gained 1% in June from a month earlier and was up 4.2% from the previous year.
* At 10 a.m., the Conference Board’s consumer confidence index number for September is expected to arrive at 52. In August, it rose 2.5 points to 53.5.
…
Ruh-roh, Scooby — consumer confidence is headed back into the depths of the toilet bowl. But cheer up — at least the stock market is shooting up like a rocket!
Sept. 28, 2010, 10:58 a.m. EDT
September consumer confidence falls
‘Quite grim’ outlook seen likely to stymie pace of economic growth
By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — Consumer confidence in the U.S. economy remains “quite grim,” the Conference Board reported Tuesday, as the group’s monthly gauge fell to 48.5 in September, the lowest reading since February.
…
The July-over-July number is (implicitly) seasonally adjusted.
Note how decreasing affordability is still an “advantage” and a housing price increase is a “pickup” in the MarketWatch lexicon — a sign that bubble-era denial regarding the pernicious effects of unaffordable housing prices has yet to die off in some quarters of the MSM.
Economic Report
Sept. 28, 2010, 10:08 a.m. EDT
Home price growth slows in July
Twenty-city Case-Shiller index reveals price pickup of 0.6%
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Home price growth in 20 major U.S. cities slowed in July, showing that both transactions and prices have been impacted by the expiration of a key tax credit.
The Case-Shiller index rose 0.6% in July compared with June in 20 major U.S. cities, according to the index released Tuesday by Standard & Poor’s. Prices have moved up 3.2% in the past year, while June’s advantage over June 2009 was 4.2%. The data are not seasonally adjusted.
…
In graphic form (that’s the seasonally-adjusted data)
Yoikes.
Worth reiterating Prime’s point below here - being that it’s from July and is a 3-month rolling average, that data is very lagging, and still mostly includes the effects of the tax credit.
Most interesting feature (IMO): The smooth second derivative from early 2006 through 2008. It appears to have remained at a roughly constant negative level over that period, then after a point of inflection, stayed at a constant level through 2009 up to the recent past.
Now we see another point of inflection, followed by the start of a downtrend (in the first derivative). Too early to say where this will lead going forward…
Too early to say where this will lead going forward
From a technical chart analysis - I agree. But given the still-record-inventory-overhang combined with the removal of the tax credit, and still-high unemployment - is there any doubt at least for the short term where it’s going?
“European Central Banks Halt Gold Sales
Financial Times | September 27, 2010 | 04:27 AM EDT
Europe’s central banks have all but halted sales of their gold reserves, ending a run of large disposals each year for more than a decade.
The central banks of the euro zone plus Sweden and Switzerland are bound by the Central Bank Gold Agreement, which caps their collective sales.
In the CBGA’s year to September, which expired on Sunday, the signatories sold 6.2 tons, down 96 per cent, according to provisional data.
The sales are the lowest since the agreement was signed in 1999 and well below the peak of 497 tons in 2004-05.
The shift away from gold selling comes as European central banks reassess gold amid the financial crisis and Europe’s sovereign debt crisis.
In the 1990s and 2000s, central banks swapped their non- yielding bullion for sovereign debt, which gives a steady annual return. But now, central banks and investors are seeking the security of gold.
The lack of heavy selling is important for gold prices [ XAU=X 1288.05 -8.0 (-0.62%) ] both because a significant source of supply has been withdrawn from the market, and because it has given psychological support to the gold price. On Friday, bullion hit a record of $1,300 an ounce.
“Clearly now it’s a different world; the mentality is completely different,” said Jonathan Spall, director of precious metals sales at Barclays Capital.
European central banks are unlikely to sell much more gold in the new CBGA year, according to a survey by the Financial Times.
Although many central banks declined to detail their sales plans, the responses of some, along with numerous interviews with bankers and consultants, suggest it is unlikely there will be a return to the trend of the past decade, when CBGA signatories sold on average 388 tons a year.
“The central banks of Sweden, Slovakia, Ireland and Slovenia said they had no plans to sell, while Switzerland reiterated a previous statement to the same effect.
The CBGA was first signed after gold miners protested that central banks’ rush to sell was depressing prices.
In previous years signatories haggled for individual allowances to sell under the CBGA, but the most recent renewal of the agreement in 2009 contained no such quotas, according to Darko Bohnec, vice governor of Slovenia’s central bank.”
Gold vending machine coming to a neighborhood near you…
http://www.cnbc.com/id/39381947
Sell low, buy high.
Coming soon to a neighborhood near you: Gold-dispensing ATM machines.
MarketBeat
WSJ dot com’s inside look at the markets
* September 27, 2010, 5:09 PM ET
Gold Surge: Here’s A ‘Sell’ Sign For You
By Matt Phillips
Devout MarketBeat readers know that their humble blog scribe has a skeptical view of old yeller, a.k.a., gold. And some of our more zealous gold-loving readers are not shy about reminding us that we’ve been wrong. We’ll concede that. For now. But if this story doesn’t convince you that we’re near a top in gold, we don’t know what will. Reuters reports:
I wonder if they have 1099 functionality built in.
Interesting we both chose the same wording to describe this article!
Brings to mind the (metaphorical) housing ATM machine in the period leading up to the housing bubble peak…
A house came on the market in Jan for $230 and there was a bidding war, lucky owner got it for $305. Now house across the street is asking $250 and no bidding war. Gosh, how long before those ‘lucky’ bidders stop paying the mortgage.
$8,000 tax credit = bidding war.
No tax credit = no bidding war.
In a logical world an eight-thousand dollar tax credit shouldn’t make all that much difference when transactions are measured in the hundreds of thousands of dollars.
But we don’t live in a logical world.
You have to spend money to mak…er, lose money.
The “Winner’s Curse” strikes again…
Fed Mulls New Bond Approach
Federal Reserve officials are considering new tactics for the purchase of long-term U.S. Treasury securities to bolster a disappointingly slow recovery.
Jon Hilsenrath discusses the likelihood that the Federal Reserve will act gradually if it decides to act again to stimulate the economy.
Rather than announce massive bond purchases with a finite end, as they did in 2009 to shock the U.S. financial system back to life, Fed officials are weighing a more open-ended, smaller-scale program that they could adjust as the recovery unfolds.
The Fed hasn’t yet committed to stepping up its bond purchases, and members haven’t settled on an approach. After its meeting last week, the Fed’s policy committee said it was “prepared” to take new steps if needed.
A decision on whether to buy more bonds depends on incoming data about economic growth and inflation; if the economy picks up steam, officials might decide no action is needed.
Maybe the Fed brass ought to rethink something a dead white male once said:
“Walk softly, but carry a big stick.”
Mouse mulls new maze approach.
dumbazz FED. low interest rates and QE do NOT stimulate the economy. they just make money cheap. cheap money doesn’t stimulate the economy, it just looks for a place to go. it looks for some ‘love’ so to speak. most often the place it finds to go is some bubble that damages the economy and helps to further devalue the dollar so everyone ends up being able to buy less. these so called ‘economists’ are really just keynesian minstrels.
…cheap money doesn’t stimulate the economy.
But how does this square with the popular notion that cheap money kindled and fueled the housing boom?
Joey, it did kindle the housing boom.
but rising prices doesn’t mean a strong economy. in certain circumstances it actually signals a weakening economy.
and the housing boom wasn’t good for the economy. it wasn’t good because it wasn’t sustainable, and now we are paying a heavy price for the bubble. good economics are sustainable for long term growth.
tj.. I appreciate the response, but I don’t see where it addresses my question.
Cheap money may or may not stimulate the economy, depending on people’s perceptions.
If people think borrowing will lead to increased wealth, it’s stimulative. When people think borrowing will not create wealth, it doesn’t work.
What people think is the key.
Cheap money may or may not stimulate the economy, depending on people’s perceptions.
cheap money never stimulates the economy. it does give the illusion that it does and that is why so many support a cheap money policy. they even do so while giving mouth service to a ’strong dollar’, ala W. but it’s all bad logic.
cheap money is paid for with a weaker dollar and price inflation. carried to the extreme, when the dollar is worthless it will buy nothing. this is the path of cheap money.
i’ll add that there is no such thing as an ‘overheated’ or ‘too’ strong economy. economies can be strong or weak, but never ‘too’ strong. strength is needed and desirable.
weak thinking economists equate inflation with a ‘too’ strong economy. but inflation is actually a sign of trouble, not strength.
in a strong economy deflation would be the norm and no one would complain. especially after they got used to it. just imagine. you could bury your money for ten years and when you dig it up again it would be worth more than when you buried it!
price inflation can occur for many reasons and i don’t think any of them are good.
————
If people think borrowing will lead to increased wealth, it’s stimulative. When people think borrowing will not create wealth, it doesn’t work.
the only time borrowing increases wealth is when it finances the start of a good business or increases the productive capacity of an existing business. borrowing for homes, cars and products that aren’t productive, don’t build wealth. what people think about borrowing doesn’t affect wealth in any way.
in the same way, not all jobs are productive. but many jobs that aren’t productive are necessary. jobs like police and the courts. jobs like barbers and such are for our convenience and pleasure, but they’re not productive either.
jobs like manufacturing are productive and they support ALL the other jobs. without manufacturing and creating things of use and value, there would be no wealth to draw upon for the other things we like. with all the said, we don’t need to manufacture things here in the states. wealth will percolate out from countries that make things and we could essentially work for them. but their standard of living would be higher than ours. and rightly so.
we don’t have to make a thing here in the states. but we won’t have the standard of living of those that do.
it is obvious to me then that we need manufacturing to have our standard of living keep pace. the way we get manufacturing is to make it profitable by reducing regulation and taxes. get the government our of the way and we will make many things here.
…the only time borrowing increases wealth is when…
I’m not saying easy money / borrowing actually increases wealth. The important thing is people THINK it will, so they take that step. They borrow and spend. That spent money stimulates the economy.
—
To me, if everyone emptied their bank accounts, sold their investments, borrowed whatever they were able to, and then spent every penny, that would certainly stimulate the economy.
Such spending being sustainable, or contributing to the health of an economy, or creating true wealth is another subject entirely.
I’m not saying easy money / borrowing actually increases wealth. The important thing is people THINK it will, so they take that step. They borrow and spend. That spent money stimulates the economy.
but i’m saying that taking that step isn’t always a good thing, so why try to induce anyone to take it? spending is only good if we can afford it. spending is best done from savings, not loans or credit. overspending certainly isn’t good for the economy. i’m saying economists and politicians have brainwashed us into thinking all spending is good no matte how it’s done or how much of it. i think that that’s very dangerous thinking.
—
To me, if everyone emptied their bank accounts, sold their investments, borrowed whatever they were able to, and then spent every penny, that would certainly stimulate the economy.
only for a very short time, and then they would be broke. then they are in a very weak position financially. the best economy is when everyone is in a strong position financially. of course that position is very hard to achieve, but it could be done and is worth striving for. the economy is only as strong as we people are collectively as a nation. the more broke we all are, the weaker the national economy is.
we’re veering off track.
simply put..
People blame the Fed’s easy money policies for causing the housing bubble.
Due specifically to that policy, innocent people were practically forced to borrow and spend themselves to death, and the theory branches off into any number of deliberate conspiracies.
However, we currently have even easier money policies and.. well.. it is not enticing anyone to borrow and spend.
Something don’t add up..
People blame the Fed’s easy money policies for causing the housing bubble.
it did. the bubble could have never got started if the FED hadn’t artificially kept rates so low. the government exacerbated the problem with policy, but it couldn’t have even started without the FED’s interest rate debacle.
————
Due specifically to that policy, innocent people were practically forced to borrow and spend themselves to death, and the theory branches off into any number of deliberate conspiracies.
essentially i agree with that.
———
However, we currently have even easier money policies and.. well.. it is not enticing anyone to borrow and spend.
well, now the economy is much worse and lots of people are afraid to spend. plus, with higher unemployment fewer people are able to spend. plus, lending standards have been raised (although they do appear to be slipping back in some instances). plus, people are afraid to borrow because they don’t know what the government will do next. i know this because i’ve talked with some business owners, and it makes sense.
in short, the government is crazy and the economy is getting worse. it’s a terrible combination for business. many people are trying to save instead of spend in this environment.
However, we currently have even easier money policies and.. well.. it is not enticing anyone to borrow and spend.
The answer is quite simple.
In 2005 - housing prices had risen at 7% per year on average for N number of years (essentially forever, as far as anyone knew) - way faster than inflation. Even in the worst of times they had never gone down. It was a sure bet.
2010: not such a sure bet.
Exhibit A:
1997:
Mortgage debt $3.7T
Consumer debt $1.3T
2007:
Mortgage debt $10.9T (194% increase)
Consumer debt $2.5T (92% increase)
economic health.. unemployment levels.. consumer confidence.. debt load.. lending standards..
It seems as though the impact of Fed policy depends on lots of other factors. The planets must be aligned.
On the other hand, a shift in Fed policy is itself a response to those other factors.
Is that a paradox?
tj & joey,
Excellent exchange here guys - I ‘m going to copy this thread and distribute it to many.
Cheap money stimulates bubbles…
As long as people believe in the bubble.
Structure of Excuses
By PAUL KRUGMAN
What can be done about mass unemployment? All the wise heads agree: there are no quick or easy answers. There is work to be done, but workers aren’t ready to do it — they’re in the wrong places, or they have the wrong skills. Our problems are “structural,” and will take many years to solve.
But don’t bother asking for evidence that justifies this bleak view. There isn’t any. On the contrary, all the facts suggest that high unemployment in America is the result of inadequate demand — full stop. Saying that there are no easy answers sounds wise, but it’s actually foolish: our unemployment crisis could be cured very quickly if we had the intellectual clarity and political will to act.
In other words, structural unemployment is a fake problem, which mainly serves as an excuse for not pursuing real solutions.
Who are these wise heads I’m talking about? The most widely quoted figure is Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, who has attracted a lot of attention by insisting that dealing with high unemployment isn’t a Fed responsibility: “Firms have jobs, but can’t find appropriate workers. The workers want to work, but can’t find appropriate jobs,” he asserts, concluding that “It is hard to see how the Fed can do much to cure this problem.”
Now, the Minneapolis Fed is known for its conservative outlook, and claims that unemployment is mainly structural do tend to come from the right of the political spectrum. But some people on the other side of the aisle say similar things. For example, former President Bill Clinton recently told an interviewer that unemployment remained high because “people don’t have the job skills for the jobs that are open.”
Well, I’d respectfully suggest that Mr. Clinton talk to researchers at the Roosevelt Institute and the Economic Policy Institute, both of which have recently released important reports completely debunking claims of a surge in structural unemployment.
After all, what should we be seeing if statements like those of Mr. Kocherlakota or Mr. Clinton were true? The answer is, there should be significant labor shortages somewhere in America — major industries that are trying to expand but are having trouble hiring, major classes of workers who find their skills in great demand, major parts of the country with low unemployment even as the rest of the nation suffers.
None of these things exist. Job openings have plunged in every major sector, while the number of workers forced into part-time employment in almost all industries has soared. Unemployment has surged in every major occupational category. Only three states, with a combined population not much larger than that of Brooklyn, have unemployment rates below 5 percent.
Oh, and where are these firms that “can’t find appropriate workers”? The National Federation of Independent Business has been surveying small businesses for many years, asking them to name their most important problem; the percentage citing problems with labor quality is now at an all-time low, reflecting the reality that these days even highly skilled workers are desperate for employment.
I’ve been looking at what self-proclaimed experts were saying about unemployment during the Great Depression; it was almost identical to what Very Serious People are saying now. Unemployment cannot be brought down rapidly, declared one 1935 analysis, because the work force is “unadaptable and untrained. It cannot respond to the opportunities which industry may offer.” A few years later, a large defense buildup finally provided a fiscal stimulus adequate to the economy’s needs — and suddenly industry was eager to employ those “unadaptable and untrained” workers.
But now, as then, powerful forces are ideologically opposed to the whole idea of government action on a sufficient scale to jump-start the economy. And that, fundamentally, is why claims that we face huge structural problems have been proliferating: they offer a reason to do nothing about the mass unemployment that is crippling our economy and our society.
“… all the facts suggest that high unemployment in America is the result of inadequate demand - full stop.”
And there it is. Demand was heavy when money flowed easily, now the money flow has slowed to a trickle.
Easy money = lots of purchasing power = creation of lots of jobs that soaks up this purchasing power.
Scarce money = little purchasing power = destruction of jobs that used to depend on lots of purchasing power.
A consumer-based economy is dependent on consumers consuming. If consumers don’t have any money then they can’t consume. If they can’t consume then the consumer-based economy screeches to a halt - “full stop”, as the it says in the article.
Money to fuel our consumer-based economy USED to be EASILY EARNED, then, because not enough was being easily earned, it became EASILY BORROWED. Now money cannot be easily earned nor can it be easily borrowed.
Interesting times.
Hence the need for stimulus that reaches Joe6pack, not that gives the banksters another round of bonuses.
Unfortunately a stimulus given to Joe6pack will end up in China.
Our consumer-based economy consumes what China’s production-based economy produces.
Don’t we have a rotting infrastructure with collapsing highway bridges, slow trains, bad internet access, and an inefficient, out-dated electrical grid? Those are some things we could spend on that wouldn’t end up in China.
You can pay Joe6pack to build a bridge but if he shops in Walmart then the money you pay him ends up in China.
We need to make what Joe6pack buys, and Joe6pack doesn’t buy bridges.
We need to make what Joe6pack buys
Wage disparity kills that thought. Widgets made overseas for $0.79 competing with
identical widgets made here for $4.38 is not
the answer. J6P needs his $30 an hour job
just to pay for his American necessities.
sarc alert.
“Wage disparity kills that thought.”
A wage disparity solution is well on its way, soon to be coming to a neighborhood near you.
Well J6P needs a $30 an hour job when homes remotely near an employer fetch $400 a s/f? ( That’s the real problem )
Morning Combo and Din! Laughing!
You guys act like the higher quality stores’ merchandise is not from Asia. As discussed many times here at the hbb, if you believe most anything we buy here is made here, the jokes on you.
The glass for the new “Freedom tower” is coming from China. There are evident no glass makers in the US.
You can pay Joe6pack to build a bridge but if he shops in Walmart then the money you pay him ends up in China.
Some portion of it would end up in China, sure, but plenty would remain here. To claim it would all end up in China is a silly talking point. And as it moved through the economy (because Joe6 spends on goods and services, not on bidding up commodities and other financial shenanigans) it would increase the velocity of money, something we very much need.
Yep, even my Dolce & Gabbana glasses are made in China!
it would increase the velocity of money, something we very much need.
We just need to get combo to stop hoarding his dollars. That’s the cause of this whole mess!
And of course people were happy to borrow however much the financial sector was willing to lend them. But we’re currently discovering that people are unwilling or unable to pay that money back.
A consumer-driven economy is not environmentally sustainable.
I am not saying this as some tree-loving namby-pamby (although I DO love trees, actually), but when you consider the number of people on the planet and the fact that they all pretty much want shiny, pretty trinkets and new cars…
….well, there IS a limit to how much growth the planet can sustain. Natural resources are finite.
9 billion people estimated by mid-century. Steady-state and sustainable no-growth economies are not even on the radar.
Capitalism must grow or die.
Steady-state and sustainable no-growth economies are not even on the radar.
Oh, but they ARE on the radar. And the slowly sinking, rudderless, super tanker of raw capitalism is desperately trying to figure out how to avoid them.
Topic of interest:
Are capitalism and steady-state economies mutually exclusive?
Are capitalism and steady-state economies mutually exclusive?
“American” capitalism yes. “Swedish” capitalism maybe not.
Are capitalism and steady-state economies mutually exclusive?
There is a third variable to be considered - the rapid growth of technology.
It’s quite possible that everyone can have trinkets and cars AND a clean environment.
With any luck, the singularity is right around the corner, folks*.
*If we don’t incinerate ourselves first.
Explain what you mean by Swedish vs. American capitalism.
Thanks
There is a third variable to be considered - the rapid growth of technology.
It’s quite possible that everyone can have trinkets and cars AND a clean environment.
Ohh, an optimist. I wish I had some more of that in me.
Explain what you mean by Swedish vs. American capitalism.
That “kinder and gentler” “Swedish” capitalism pays heed to the concept of “a steady state economy” more so than the savage (growth at any cost) “American” capitalism.
Moving Toward a Steady-State Economy
http://post.nyssa.org/nyssa-news/2010/04/moving-toward-a-steadystate-economy.html
For example, Sweden is now home to a number of ecomunicipalities. Led by economist Torbjörn Lahti and by Karl-Henrik Robèrt, founder of the Natural Step Movement, these formerly depressed industrial towns have made an official and deliberate commitment to “dematerialize” their economies and to foster social equity.
“For the half dozen or so countries that are approaching the goal of a steady-state economy,…Sweden has a footprint (4 hectares/person) significantly less than its biocapacity (10 hectares/person),”
There is a third variable to be considered - the rapid growth of technology.
It’s quite possible that everyone can have trinkets and cars AND a clean environment.
Many steady-state experts doubt that is possible. From the article I just posted a link to:
What about those optimists who maintain that we can keep the engines of growth firing on all cylinders by virtually decoupling the industrial process from natural resource depletion through technological advances in waste management, energy efficiency, and recycling?
Although they welcome technologies that increase energy efficiency and reduce waste, steady staters don’t buy the argument that we can invent our way onto a perpetual sustainable growth track. “You can’t escape the coproduction of waste in the production process, and you can never achieve 100% efficiency. This would violate the second law of thermodynamics,” says Brian Czech, author of Shoveling Fuel for a Runaway Train
“It’s a basic law of physics that we can’t do work without energy, and 86% of energy used globally is fossil fuels. It’s another law of physics that we can’t make nothing from something, so the energy used ultimately returns to the environment as waste. If we could use 100% renewable energy, we would still need to mine the minerals required to build the solar collectors and would be unable to avoid damaging the environment in the process.” Even if we dramatically reduce the environmental damage per unit of GDP, says Farley, a moderate 3% GDP growth rate will inevitably push us up against ecological limits within a generation or sooner.
sfrenter
“I am not saying this as some tree-loving namby-pamby (although I DO love trees, actually…”
I’m a fiscal conservative who is a tree hugger. Don’t mess with Mother Nature, she’ll win every time.Considering how many life saving drugs are made of natural components, we all need to respect nature. I am partial to oxygen (by- product), myself. Besides, trees are really pretty.
Yeah, but really I AM a tree-hugging namby-pamby (San Francisco values and all that), but no one listens when you say that.
Oh, the great divide, the conservative vs. the liberal stuff. I became a Political Atheist and threw all the labels and cr@p out the window. Hey, if you can afford No Ca, I’m jealous. So Ca is hot and a 3rd world cesspool these days.
I like the bay area. Oh and my bro went to Berkeley. He’s always been a little off (but smart).
Everything Krugman ever writes could be summed up with one sentence - “the government needs to borrow and spend more money”. Never mind that government is now spending $2 for every $1 they take in, borrowing the other $1. It’s not enough according to Krugman. The $2 trillion spent that created zero jobs? No explanation for why that happened, except it should have been more money. Where will the money come from? No explanation of that. Exactly how will we pay it back? No comment. What happens when interest rates go up and we have to spend 25% of US GPS on servicing the debt? No comment.
GDP not GPS, duh.
Very good summary of Krugman, a total blithering idiot.
He doesn’t know a thing about economics except that the government can tax and steal and print and spend, and redirect peoples energies as a result. Usually in unforeseen and negative ways.
Everything Krugman ever writes could be summed up with one sentence - “the government needs to borrow and spend more money”.
Ding! Ding! Ding! By jove, I think you’ve got it. It’s government stimulus to counter the deflationary forces of a collapsing credit bubble and the ensuing job losses, paradox of thrift, etc.
Unlike the simplistic, ‘tighten your belt’ philosophies, it actually has a track record of working.
Another simplistic idea is that since we have high unemployment, the stimulus didn’t save any jobs. Does it really need to be pointed out that unemployment could be much higher?
How will we pay it back? By growth and inflation, just like we had almost completely repaid our WW2 debts until a certain someone (RR) told us we could have more fun running up some credit bubbles. How would we repay the debt we already have in an even bigger crash, when revenues from taxes plunge?
Unlike the simplistic, ‘tighten your belt’ philosophies, it actually has a track record of working.
Oh yeah? How do you explain the second half of the Great Depression then?
Oh I see - you have to keep the stimulus going forever, or destroy the other nations in the world in a war, for it to work.
Much like housing stimulus - it works just fine - proving its case, until one day suddenly it doesn’t. But then it’s too late.
“How do you explain the second half of the Great Depression then?”
I think the credited response is that FDR tried to balance the budget…but that could be just more spin.
Yes… and?….
Allow me to cut to the chase. It was pretty much proven that the economy didn’t have the legs to stand on its own. So the Keynesian stimulus was thus continued and amped up, in the form of WWII (not on purpose, of course), until the economy could “stand on it’s own” only after all the competing economies in the world were physically destroyed.
Bottom line being: long-term there are two solutions to excessive debt:
1. Destroy the rest of the world, or
2. Stop borrowing and spending so much.
Oh yeah? How do you explain the second half of the Great Depression then?
I’ll let wikipedia explain it:
By 1936, the main economic indicators had regained the levels of the late 1920s, except for unemployment, which remained high at 11%, although this was considerably lower than the 25% unemployment rate seen in 1933. In the spring of 1937, American industrial production exceeded that of 1929 and remained level until June 1937. In June 1937, the Roosevelt administration cut spending and increased taxation in an attempt to balance the federal budget.[77] The American economy then took a sharp downturn, lasting for 13 months through most of 1938. Industrial production fell almost 30 per cent within a few months and production of durable goods fell even faster. Unemployment jumped from 14.3% in 1937 to 19.0% in 1938, rising from 5 million to more than 12 million in early 1938.[78] Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels.[79] Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937. As unemployment rose, consumers’ expenditures declined, leading to further cutbacks in production. By May 1938 retail sales began to increase, employment improved, and industrial production turned up after June 1938.[80]
—
The Keynesian stimulus of the war effort was what finally pulled us out of the Great Depression. I would prefer such stimulus be spent on peaceful, productive purposes, that would head off world wars, but some will accept stimulus spending in no other form.
The Keynesian stimulus of the war effort was what finally pulled us out of the Great Depression.
No.
World War II did not pull us out of the Great Depression. Winning World War II pulled us out of the Great Depression.
If WWII had ended as a draw, and with Europe’s and Japan’s and the USSR’s and China’s infrastructures intact - the U.S. economy would have been still very much mired in depression, but now with a huge new level of debt.
Wikipedia? You probably wrote that yourself!
“World War II did not pull us out of the Great Depression. Winning World War II pulled us out of the Great Depression.”
Packman is essentially correct. There is a really good book that covers that period in detail, “Lords of Finance”. Its an easier read than it first appears to be.
Oh I see - you have to keep the stimulus going forever, or destroy the other nations in the world in a war, for it to work.
You know, that probably true.
If you accept the premise that the destruction of the rest of the major economies via WWII allowed us to ultimately recover from the GD (which I do), is the only option really to do the same thing again? We recovered because we had better infrastructure than everyone else. Can’t we get a similar result by spending money to improve our infrastructure rather than spending money to destroy everyone else’s?
I agree if we had lost WW2, the stimulus would have been for naught. I’m not really sure what that proves, though.
The Great Depression did not last until the end of WW2, except perhaps in the Mises Inst. frenzied rewriting of history. Check any history book anywhere.
Or check this:
http://en.wikipedia.org/wiki/File:GDP_depression.svg
The Great Depression did not last until the end of WW2, except perhaps in the Mises Inst. frenzied rewriting of history. Check any history book anywhere.
Yeah and the history books will record June 2009 as the end of the housing bubble recession. What’s your point?
Sometimes people who have common sense know better. Most sensible people know that GDP growth and unemployment reduction as fed exclusively by a war isn’t true economic expansion. However history books tend to be written by people in ivory towers who don’t differentiate between the two.
Or check this:
…
Again - “economists” rarely if ever differentiate between government/military GDP and civilian GDP. In the case of WWII military spending was over 40% of our GDP. And that’s just direct military. Somehow that never gets broken out in charts like this.
Same thing for unemployment. It magically went from 17.2% in 1939 to 4.7% in 1942. Again - pure military, not because of actual economic expansion.
This is not to mention our Federal debt going from 44% to 120% of GDP. So even if one were to make a case that we had “economic growth”, one certainly couldn’t even come close to making a case it was fueled by any kind of sustainable production growth - no it was fueled exclusively by new debt, and as such was artificial growth - akin to Uncle Frank declaring his newfound riches when he buys a house he can barely afford with no money down.
(The same artificial growth BTW similar to the supposed 2009-2010 “recovery”)
Growth in what, exactly? That’s the part Krugman always skips. Isn’t inflation for the sole purpose of paying off debts something to be avoided? And saying “it could have been worse” means nothing, because it cost us $2 TRILLION that we now have to pay back. Perhaps unemployment would be less without the drag of stimulus debt around our necks. Disprove that.
And saying “it could have been worse” means nothing, because it cost us $2 TRILLION that we now have to pay back.
Why does saying ‘it could be worse’ mean nothing? Because you say so?
Perhaps unemployment would be less without the drag of stimulus debt around our necks. Disprove that.
Perhaps it would be less. Why don’t *you* prove *that*?
OK you spent $2 trillion, which may or may not have created any jobs. You can’t prove that it did. But $2 trillion is gone. That’s $2 with 12 zeros after it, a staggering amount of debt we took on. Money we do not have, that we had to borrow. At say $100K each, you should have created 20 MILLION jobs. But 100% of these jobs, all 20 million of them, apparently are difficult to prove. We just have to take it on faith that they are there. Now you say you need another $2 trillion or so. I say no, I don’t trust you.
Want to really “stimulate” the economy without spending trillions of dollars?
Limit copyright immediately to 10 years.
Allow patents only on NEW, FUNCTIONAL ideas. NEW ideas, not rehashes of existing technologies. Have a great idea and you patent it? If you don’t have a functional implementation in three years, you lose your patent.
This would ignite a firestorm of innovation and shoot us way out ahead of the rest of the industrialized world.
Copyright and the patent system are being severely abused, not to “To Promote the Progress of Science and Useful Arts“, but to stifle competition and shake down new entrants to established industries.
Oh my god. I’m SO glad you wrote that. You have no idea….
I thought I was the only one who could see how f’d up our patent/copyright system is and badly it is being abused. 100 year copyrights - ARE YOU F$%^KING KIDDING ME?!?!
Thanks for bringing it up - wish more people would write their congresscritters about it.
Oh my god. I’m SO glad you wrote that. You have no idea….
I thought I was the only one who could see how f’d up our patent/copyright system is and badly it is being abused. 100 year copyrights - ARE YOU F$%^KING KIDDING ME?!?!
Thanks for bringing it up - wish more people would write their congresscritters about it.
-RCR(formerly SeattleRenter)
PS Sorry if this double posts - last one got swallowed
As usual, Krugman is a moron. There is no such thing as a “consumer economy”. That is pure economic voodoo mathematics.
People like Krugman believe that the government can print it’s way to properity by simply providing more money for people to go out and “spend”.
It is clear when you think about it that this is a fallacy, but doesn’t prevent such clap-trap from being promoted.
There is only so much production at any given time in a local economy. It can be increased and decreased marginally.
It is usually balanced by spending and savings in an on-going movement of goods and services, less government theft for so-called “services”.
Over time, businesses find ways to reduce costs and increase production, making goods generally cheaper. Then enters government to “skim off” the surplus and provide “services”. The basic problem we are faced with here is not lack of “consumers”, but an excess of consumers that don’t produce. This has happened over time due to the many programs the Government has instituted.
Social Security/ medicare/ medicaid/ education/defense/welfare/etc. We are spending much more than we are producing.
That just makes wages go down relative to production, in other words, those with government checks leech off the system of produces and diminish their earnings.
This is not seen directly because Federal Reserve money printing and government borrowing work to hid the loss of incomes. It shows up in reports that we are not making any more money, inspite of massive increases in production.
KRUGMAN uses the World War II analogy to say the government can get everybody working at government expense. what he doesn’t say is that we spent massive amounts of human labor and capital to bomb the hell out of Germany while everyone was living on RATIONS.
There was no economic “boom” from War spending. Yes, everyone was working, but everyone was living poorly with food ration books and rationing for gas. There weren’t lots of new cars, except those used by the government. There was no “consumer economy”. It was all a police state run by Washington. Remember War Bonds. Hollywood propaganda films. This is no example of how to get an economy moving.
The boom happened later, when the war ended and government spending STOPPED. People diverted their energies to building houses and families.
Why anyone would listen to this idiot is beyond comprehension.
Keynesian economics has proven to be a fraud and these people should be pushed aside and their government checks taken away.
Perhaps he can find some productive work to do, rather than commenting on things that make no sense and stealing from the taxpayers for his “professorship”. I believe that’s his primary “job”.
I thought that Princeton was a private school.
And you are obviously much more deserving of a Nobel prize than that idiot, Krugman.
“The boom happened later, when the war ended and government spending STOPPED. People diverted their energies to building houses and families.
Why anyone would listen to this idiot is beyond comprehension.
Keynesian economics has proven to be a fraud and these people should be pushed aside and their government checks taken away.
Perhaps he can find some productive work to do, rather than commenting on things that make no sense and stealing from the taxpayers for his “professorship”. I believe that’s his primary “job”.”
My reading of history books tells me that as soon as the war ended and all of the related spending abruptly terminated, the depression returned for several years ( or at least a serious recession ) and lasted until the Japanese and European reconstruction started in earnest. And of course, the cold war heated up about the same time with related defence spending ramping up. Or perhaps it just took a few years to build to a civilian economy ?
thank you for this outstanding rant! i agree with every word of it.
The boom happened later, when the war ended and government spending STOPPED
And how do you explain the Marshall Plan? It was opposed as ’socialism’ and ‘waste’ by the usual suspects, whose intellectual descendants are clearly still amongst us, who can’t comprehend how stimulus can improve and even invigorate an economy.
If it was the world rebuilding that really got us out of the depression, then where do you think the world got the money *to* rebuild?
And those homes we were building back home that also saved us- were they not funded with various government benefits for veterans? And the highway system we built? Is that not more government stimulus? And our Cold War defense spending?
Low government spending fueled our post-war boom? Pshaw!
Government programs aimed at strengthening the middle class created our post-war economy, the most successful economy the world has ever seen.
first sentence is quote from Diogenes
And how do you explain the Marshall Plan? It was opposed as ’socialism’ and ‘waste’ by the usual suspects, whose intellectual descendants are clearly still amongst us, who can’t comprehend how stimulus can improve and even invigorate an economy.
The Marshall Plan wasn’t targeted at the U.S.
The Marshall Plan basically gave Europeans money to purchase US goods. It was enlightened self-interest.
The Marshall Plan wasn’t targeted at the U.S.
Did I say it was? It was an evil government stimulus/grant that allowed the rest of the world to rebuild, and made us a lot of money and customers in the process. I can see why such a thing would confuse you, since it disproves so much of your political and economic philosophy. I sure if you had lived then you would have told Europe to tighten their belt and suck it up.
I don’t understand. Wouldn’t any country that:
- Is now no longer being bombed into oblivion
- Is receiving billions of dollars from another country
naturally experience significant economic growth? I fail to see how this in the least parallels with Keynesian stimulus, which by definition is money spent by the country actually being stimulated.
KRUGMAN uses the World War II analogy to say the government can get everybody working at government expense. what he doesn’t say is that we spent massive amounts of human labor and capital to bomb the hell out of Germany while everyone was living on RATIONS.
This cannot be overstated.
It is the ultimate example of the folly of stimulus-fed recovery attempts. It results in money and resources being taken from one portion of society (in this case all civilians) and given to another (in this case the military). On the surface the net gain, in GDP terms, was positive. But when you look under the hood - it’s a horrible situation for those having their resources taken away; which is usually well over half of society.
Are you refusing your social security then?
If you belief theft is wrong that doesn’t mean you’re not entitled to get your stolen car back.
Or put another way - personally I’d gladly refuse to receive social security, if I was also able to refuse to pay it.
“High unemployment in America is the result of inadequate demand — full stop.”
And inadequarte demand is a result of the total debt burden, having rising from 200 to 350 percent of GDP, not marching on endlessly to 400, 500, 600, 800, 2000 percent of GDP.
Hey Paul, the shift of debt from the private sector to the public sector is going to “starve the beast” and wreck the latter, which I thought is what you don’t want either.
HIs reply would be that creating jobs would stimulate the economy and increase tax revenue. Certainly spending on jobs and infrastructure would have a much greater impact in terms of money flow and consumer psychology than say Bush’s tax cuts to the elite. They used this line of reasoning to justify the tax cuts. The money went into a hole or overseas.
If Bush’s tax cuts were only for the “elite” then why all the hooplah about extending tax cuts for the middle class? I thought they didn’t get any?
Trinkets.
If Bush’s tax cuts were only for the “elite” then why all the hooplah about extending tax cuts for the middle class? I thought they didn’t get any?
You really like framing issues in words like only, all, none and every when in fact issues rarely come down to only, all, none and every.
Notice how I used the world rarely instead of never.
As you know, the middle class did receive a much smaller percentage of the tax cuts than the rich. It’s complicated but some things are.
Thomas Piketty and Emmanuel Saez, two academic economists, provide data to back up Mr. Buffett’s view. They show that the proportion of income earned by the top 1 percent of American families was about 10 percent of the national total from 1945 to 1979. Since 1980, that share has doubled, reaching about 20 percent in 2008 — or more, if capital gains are included.
The growth rate has been even faster for the ultrarich — those in the top one-hundredth of 1 percent in income.
Other segments of society, meanwhile, are losing out, with their share of the total declining, and their real incomes remaining stagnant.
From today’s NYTimes.
income earned by the top 1 percent of American families was about 10 percent of the national total from 1945 to 1979. Since 1980, that share has doubled, reaching about 20 percent in 2008 — or more, if capital gains are included.
The growth rate has been even faster for the ultrarich — those in the top one-hundredth of 1 percent in income.
Yes but those super rich create jobs in China and on K street.
This is why we need Tea-Party rallies to fight to keep the super-rich’s wealth intact and growing.
We need to protect our Chinese jobs, So don’t tread on me.
Just getting back to the MN Fed’s comments, isn’t this the issue we encountered at the end of the dot.com boom? All these displaced techies w/ no place to call home?
No doubt, this time is ‘different’, but we need to focus on the few factors that ‘do’ look familiar! Kind of like cobbling together the events from a rough night? Hint: Check your driver’s license to see WhoTF you are?
all the facts suggest that high unemployment in America is the result of inadequate demand — full stop.
Complete and utter garbage. Demand is infinite. People’s desires for goods and services are infinite. Is there anything you would like to have that you don’t? Is there anything, right now, that you would like someone to do for you? Of course there is. And I bet there’s a price you’d be willing to pay, too.
High unemployment is the result of government strangulation of the economy, plain and simple.
“Is there anything you would like to have that you don’t? Is there anything, right now, that you would like someone to do for you?”
No. We actually asked for no wedding gifts because we already have enough. Desire is infinite? What a huge, unfillable hole in a life. How sad.
Economic DEMAND is infinite. This is a concept which encompasses far more than wedding gifts. This is all food and energy that you will want or need to purchase in the future, banking services, internet access, house repairs, clothes, etc., etc.
And there are billions of people in the world who desire working toilets, houses with real roofs, a decent stove/oven, and some shoes.
After they get all that, they all want cars.
They want everything we have here in the first world.
Back to the sustainability problem I posted earlier.
I see your point. Wedding gifts were just a quick example. Of course we will need goods until we snuff it. However, I don’t know about infinite. I could probably predict the amount of food that I’d need before I snuff it, if I really wanted to, within an order of magnitude, along with all of those other things.
My point is that if you can’t be satisfied, you’ll always have the blues, like Mississippi John Hurt would sing. Or vice versa. And even though I believe that the best things in life aren’t things, I am glad to have some PM these days! Just don’t need as much as Croesus.
MrBubble
“My point is that if you can’t be satisfied, you’ll always have the blues”</I.
Only sick neurotic people do. It’s just that there are so many it almost seems normal.
BTW, a recent study shows that most people are fairly satisfied with $75k a year.
Unfortunately, you are in the minority. As the Buddhists say,
“Desires are inexhaustible”.
“And I bet there’s a price you’d be willing to pay, too.”
And there lies the rub. Broke people aren’t willing to pay much.
“High unemployment is the result of government strangulation of the economy, plain and simple.”
Yeah, it has nothing to do with global wage arbitration. Funny how multinationals are hiring like crazy in India, even though they have even more onerous labor laws than we do in the US. The low wages paid there can’t have anything to do with it.
Colleges are cheaper in India as well.
And harder to get in than your typical IVY leagues.
Which is why I think that schools like the Indian Institute of Technology and Beijing University will start pursuing the overseas market in a big way.
Doesn’t mean that American kids will have to go overseas for school, but they’ll be able to do so via distance learning for a lot less than what U.S. institutions would charge.
“And harder to get in than your typical IVY leagues.”
Not a fair comparison. If you are middle of the road legacy at an Ivy or Stanford (for example), it is far, far easier to gain admission than if you are a poor kid with good grades, high SATs, the class president and a contrabassoon playing football captain. Money talks.
I cannot provide a data source for this information; however, I have seen evidence of bi-modal selection at both types of institutions, which is echoes by the use of stanine score “multipliers” used [from conversations with admission committee members at an Ivy league school that will remain nameless and Stanford].
The wage delta between the US and India has shifted quite a bit. I understand you used to be able to hire six Indians for the price of one American (tech workers); now you can only hire three Indians for the same price. That data is a bit old, and I would bet that it has shifted some more since then.
Given a little more time, the delta will be small enough that it will not be worth off-shoring jobs to India. Does that mean they will stop leaving the US? Maybe not–but they will be going elsewhere. And India had the lowest barriers due to the well educated and English-speaking populace. For most other countries, the barriers will be higher.
At some point this globalization tide will have run its course.
Prime_Is_Contained,
That’s my assessment as well. If… in fact it already hasn’t? We needn’t attain a perfect 1 for 1 Ratio for that to come to fruition.
And at some point, purchasing anything you intend to use ( more than ‘once’ ) will offset having to make constant purchases? One thing I ‘do’ know is that we’ve long since reached the saturation point of giving the rest of the world our jobs.
One other comment: this analysis is for tech and customer service jobs, for which my primary constraints of “well educated and English-speaking populace” applied.
Note that no such constraints apply to unskilled manufacturing jobs, and that thus the process of globalizing those jobs will _never_ stop until the wage differential is close enough to equal (minus some margin of friction) that there is nowhere cheaper to move them to.
Lesson to workers who are paying attention: you better move up the skill food-chain.
Skilled maufacturing jobs are much harder to move, since many of them require a more literate/educated work-force. For example, jobs doing custom parts on C&C-style tooling requiring programming are not likely to move to a place where the workforce is largely illiterate. But the mass-produced parts definitely will.
Wage differential will only change as workers in third world countries begin to unionize.
The fact that US workers began making decent wages in this country wasn’t due to the largesse of companies. They were forced to pay higher wages.
Once again, the often loathed unions are the ones who did indeed bring us the weekend.
“unskilled manufacturing jobs”
You’ve never worked in a factory, have you?
The low wages paid there can’t have anything to do with it.
the low wages there really do have nothing to do with it. we lost jobs to them because the value of our labor has eroded.
when the value of our labor goes down business stops hiring and unemployment rises. the value of our labor is going down because we are taxed and regulated too much.
we would have had no trouble with employment if the government hadn’t intervened in the markets. the jobs that moved overseas would have been replaced with high value jobs here.
we still have a higher skill set for labor here than in developing countries. the problem is that our skill set isn’t advancing now. we are losing ground and it’s going overseas or to mexico.
the value of our labor should be very high because of the skills we’ve developed through the years. through efficiency we can do more labor per person than in developing countries. when they develop skill sets and work cheaper, then we should move on to greater technology.
the problem isn’t low wages in other countries. the problem is that we have let the value of our labor erode. now we are paying the price.
the only thing government can do positively is for free markets is protect them with personal and property rights. the stronger personal and property rights become, the stronger an economy will become if all other things are equal.
stop the government from intervening in the markets. get government to protect free markets instead, and we will see the value of labor rise, which will mean more jobs with higher pay..
“the low wages there really do have nothing to do with it. we lost jobs to them because the value of our labor has eroded.”
And that happened because they do the same work for a fraction of the cost, not because they are superproductive, but becaus ethey are super cheap.
Even if US corporations were completely unregulated and paid no income tax it would still be cheaper to hire engineers in India and China. And there is only one thing Corporate America is infatuated with these days: cutting costs to boost the bottom line.
And that happened because they do the same work for a fraction of the cost, not because they are superproductive, but becaus ethey are super cheap.
it only affects you if you do the same labor with the same skills. if you do the same labor with higher skills (more efficiency) then your labor is worth more and you will be paid more for it.
———–
Even if US corporations were completely unregulated and paid no income tax it would still be cheaper to hire engineers in India and China. And there is only one thing Corporate America is infatuated with these days: cutting costs to boost the bottom line.
i never said there should be no tax. but the tax needs to be very small.
if we continue to increase our skill set as we have historically done, we will be able to be more productive per unit of labor. more jobs and higher pay will follow.
recessions erode skills in the market place. people out of work for long periods of time lose a portion of the skills they once had. this erodes the value of their labor. as a result they will be hired less and with less pay. in a free market which is a strong market, job skills naturally increase. the value of labor increases and the result is more jobs and higher wages.
“the low wages there really do have nothing to do with it. we lost jobs to them because the value of our labor has eroded.”
That is just about the dumbest thing I have heard all day. No, all week.
the low wages there really do have nothing to do with it. we lost jobs to them because the value of our labor has eroded.
It’s a lot more simple than all that, this that and another Cato thing.
We lost our good paying jobs because we dropped our tariffs and duties down to nothing to benefit the super-rich, we busted unions and then allowed illegals to steal American jobs.
Government HAS a role to protect the sovereignty of its economy and the well being of the people. A government is NOT a board of directors.
All this other “free-trade”, globalization and “freeing” Americans to do higher value added jobs is Heritage Institute, mind-control BS.
Government HAS a role to protect the sovereignty of its economy and the well being of the people.
people and countries are the things that can and should have sovereignty. economies have no sovereignty and when people try to make them sovereign, they reduce economic output at best or worse they wind up in trade wars. trade wars drastically cut economic output (production).
economies have no sovereignty and when people try to make them sovereign, they reduce economic output at best or worse they wind up in trade wars.
Cato/Heritage self-serving, claptrap bunk.
Tell China and Brazil and Germany and Japan and Sweden that “economies have no sovereignty.”
I don’t think they will listen to you and China might hang you.
“it only affects you if you do the same labor with the same skills. if you do the same labor with higher skills (more efficiency) then your labor is worth more and you will be paid more for it.”
Uh, they have universities too, hence they can acquire the same skills at the same time we do.
And they’re way cheaper.
they have universities too, hence they can acquire the same skills at the same time we do.
universities usually are just training for entry level positions with certain exceptions.
job skills are enhanced on the job, not in a classroom. that’s why experience if so valuable.
Experience is so valuable that most people over 45 are the first to get laid off and the last to get rehired.
Yet, that’s real valuable.
Experience has NO value in this country anymore. It costs too much.
Experience is so valuable that most people over 45 are the first to get laid off and the last to get rehired.
That doesn’t mean experience has NO value. It just means that companies may see 10 years experience as just as valuable as 20 years. So the person with 10 years experience is cheaper.
Broke people aren’t willing to pay much.
But broke people have skills that they could use to make money, if the government would let them.
Example. I need new glasses, not because my vision has changed but because the anti-reflective coating has gotten scratched up. I’m willing to pay for new lenses, but government regs say I also need a new eye exam, which I don’t need and don’t want to pay for. So I won’t get new lenses, and a lens grinding technician won’t get hired. The demand and supply are there, but the transaction doesn’t happen because of the government regs.
multinationals are hiring like crazy in India, even though they have even more onerous labor laws than we do in the US. The low wages paid there can’t have anything to do with it.
That makes no sense. More onerous labor laws would mean a higher minimum wage, not a lower one.
Yeah, I hate having to pay for a new prescription just to get a new pair of glasses.
Example. I need new glasses, not because my vision has changed but because the anti-reflective coating has gotten scratched up. I’m willing to pay for new lenses, but government regs say I also need a new eye exam, which I don’t need and don’t want to pay for.
If you have a copy of your prescription, you can take it to any optician and get new glasses made.
BTW, if you travel a lot, it’s a good idea to have that ’script along with you. There’s nothing worse than having busted glasses a long way from home.
If you have a copy of your prescription, you can take it to any optician and get new glasses made.
The lady told me the prescription has to have been written within the past two years, or it’s no good.
The lady told me the prescription has to have been written within the past two years, or it’s no good.
Well, mine is from 2001, and I know it’s no good. And, since I make my living based on how good my vision is, I’m going to be trundling off to the optometrist real soon.
I’ll ask for an extra copy of my ’script, just in case I end up busting my glasses during a trip out of Tucson.
“That makes no sense. More onerous labor laws would mean a higher minimum wage, not a lower one.”
Not necessarily. You don’t have to go far to find labor laws that are tougher than ours. Case in point: Mexico.
Believe it or not, labor laws in Mexico are much toygher than ours:
Whan a union goes on strike they lock down the plant, replacement workers (AKA scabs) are illegal.
Profit sharing (reparto de utilidades) is MANDATORY.
Year end bonuses (aguinaldo - 20 days pay) are MANDATORY.
Generous severance benefits are MANDATORY.
Paid holidays are MANDATORY.
Paid vacations are MANDATORY.
Yet minium wage is about 5 US dollars a day.
Yet minium wage is about 5 US dollars a day.
That’s way higher than the U.S., if you measure in pretty much anything besides US$ (e.g. if you measure in terms of Mexican GDP, average Mexican wage, etc.).
Doctors’ professional groups and medical equipment companies lobby congress and states heavily to pass legislation requiring people to get periodic examinations of every part of your body. Don’t forget that the regulations often benefit industry. Part of the damned problem with the unlimited lobbying we have in this country.
‘The lady told me the prescription has to have been written within the past two years, or it’s no good.’
http://www.eyebuydirect.com
“High unemployment is the result of government strangulation of the economy, plain and simple.”
Only indirectly. Employment is down because revenue of employers is down because individuals are spending less money because the MEW income stream died a sudden death. We had an economy largely based on home equity increases fueled by the government injuction of money “out of thin air”. The government was responsible for wrecking the economy by over juicing it in the first place.
Another canard. It was not just the credit alone.
The housing boom was fueled by the deregulation of the FIRE sector and the unsatiated appetite of Wall St. for securitization of packaged mortgages along with the millions of middlemen, each of whom were collecting their transaction fees and more than willing to be complicit in keeping the gravy train rolling at any cost.
Low interest rates are serving as a de-stimulus to J6P….
How about this idea? Have government savings plans be set up offering 5% returns on funds up to some maximum, say $250K. This would put money in the pockets of prudent savers, who can’t spend anything now due to low interest income.
Have government savings plans be set up offering 5% returns on funds up to some maximum, say $250K.
OR, rather than having the Fed or the federal gov’t manipulating the cost of money, we simply let the free market set the rates?
Free market? Again, there is no such thing.
Here’s a little geopolitical lesson 101: Other governments will do their best to manipulate your economy any way they can.
DennisN,
Good luck w/ that in front of this crowd? I’ve been advocating same for months now.
At least Joe/Jane would have the capability to run a hypo on their ret. acct. and calculate a hard and fast date when they would be able to leave the workforce.
If that were to become a reality, we wouldn’t have anyone left to torment?
My husband has his 403B (he’s a teacher) in an annuity vehicle that guaranteed 4.5% per year. We didn’t know that it was available until last year, when we moved out of bonds and into savings. And you don’t have to leave it there - after three months you can move it back into equities or bonds. We figure that that’s part of the reason that the state teachers’ pension plan is doing so poorly - that combined with bad real estate investments, etc.
My 403B is returning about 2.5% in a savings vehicle.
The only other person I know who is getting such nice safe returns is my mother, who put her IRA out of stocks and into 5-year CDs at 5% when my dad passed away three years ago.
“Thomas Piketty and Emmanuel Saez, two academic economists, provide data to back up Mr. Buffett’s view. They show that the proportion of income earned by the top 1 percent of American families was about 10 percent of the national total from 1945 to 1979. Since 1980, that share has doubled, reaching about 20 percent in 2008 — or more, if capital gains are included.”
I’ve seen numbers as high as 35% and more.
I haven’t heard one politician, or anybody with any political pull, mention one time the outsourcing of jobs and manufacturing, and the importation of cheap, oftentimes illegal, labor, and the CEO reward structure set up to promulgate this massive income annihilator, as the major contributor to our unemployment problem. Perhaps it’s because this issue was conveniently masked over by the most GIGANTIC bubble in history- the housing/credit bubble- which enabled millions upon millions of people to feast upon fake wealth to not only make ends meet, but to appear as if they were actually prospering.
Our entire economy is one giant lie, and that is why it is foundering, threatening the very stability of our entire nation. The middle class is being wiped out, to this day, at a rate never seen before. But we’ve got bailed out bankers with record bonuses, so it’s all good, right? Wrong, I can show you innumerable businesses and families losing it all, TODAY. The “crisis” is continuing, unabated, in my world. I just don’t see my world on TV, or in any popular MSM shill piece.
“…they’re in the wrong places, or they have the wrong skills.”
Did the architects of the policy to prop up housing prices recognize this would come at the expense of housing and labor market liquidity, as workers can’t afford to relocate and home owners have no incentive to sell for affordable prices when the government is intervening to prop up prices?
Always blame the poor. After all, what can they do about it?
Eat cake?
House Prices Need To Go Down: Vernon Smith
Monday, 27 Sep 2010 | 9:58 AM ET
By Lori Ann LaRocco CNBC
LL: How much more should real estate prices drop?
VS: Probably another fifteen to twenty percent. The best thing to look at is the relationship between home prices to income. That’s the thing that got really inflated because it was driven by credit and it was not sustainable.
Either that or other prices need to rise by that much. If other prices or wages rose by fifteen to twenty percent that would restore the balance. If not, house prices need to continue to fall.
LL: In terms of looking at the banks are you expecting a big wave of bank failures given the state of the economy?
VS: I think the regional banks are going to continue to see losses and that will likely continue into next year because its the regional banks that are into commercial real estate.
These strip malls are in trouble and they were already in trouble because of what was going on in the retail industry. You are seeing a huge decline in rentals and market values of those office and store facilities.
http://www.cnbc.com/id/39378367?__source=ft&par=ft
And then taxes and insurance will go up and take up all the slack in that monthly nut….meaning prices will have to drop some more.
True story: Vernon Smith used to be on the faculty of the University of Arizona’s business college. While he was here, he built one of the best experimental economics programs on the planet.
He asked the UA powers-that-be for more space to house said program. And he was turned down.
That annoyed him so much that when George Mason University came calling, he was outta here. After he went to GMU, he won the Nobel Prize. And the UA’s still smarting over that one.
BTW, he’s not the first guy who got the finger from the UA powers-that-be. I had a client who was a major grant-getter when he was here. The politics and bureaucracy drove him to another university, where he has built up one heckuva research program in his field.
Around here….If you were given the land and infrastructure for free, you could not build the completed facility for less than what you can buy it for today already complete…Thats how bad it has gotten around here…I never seen anything like it including 81-83 & 91-93
Just like we never previously saw anything like the number of unneeded houses in this bubble.
“Around here….If you were given the land and infrastructure for free, you could not build the completed facility for less than what you can buy it for today already complete.”
Apples and oranges comparison here (residential vs. university facility), but I do believe in my area we are a stone’s throw from the point where one could buy a residential lot and build for the same price or cheaper than one could buy the existing house next door. And we’re still not at “the bottom”. Lot/land prices seem to have been the stickiest of all real estate prices these past couple of years, but when they fell, they fell hard.
I’m not seeing any capitulation in raw land in WA state. It’s weird. In fact, I’m not seeing a lot of land available, period. It’s like it mostly disappeared- either built out, or on some mystery balance sheet somewhere. Methinks there’s a lot of land “waiting for house prices to come back.”
Praise the Lawd for the honest economists who are willing to put their views into print!
Foreclosure Flaws May Slow Home Price Fall, Delay Recovery
By Bob Ivry, Prashant Gopal and Jody Shenn
Sep 27, 2010 12:00 AM ET
Howard Cohen hasn’t paid the loan on his Tukwila, Washington, home in a year, and when he heard that Ally Financial Inc.’s GMAC Mortgage unit was suspending foreclosure evictions in 23 states, it gave him hope.
“Maybe I’ll stay in my house, too,” said Cohen, a 57- year-old commercial-loan broker.
An employee of Ally’s GMAC unit said in a December 2009 deposition that he signed thousands of foreclosure documents without verifying their accuracy. Attorneys general in Iowa, Illinois and Texas are investigating.
If uncovering such deficiencies halts thousands of pending foreclosures or renders void those that have already taken place, including repossessions of homes that have been resold, it could snarl courts for years and further postpone a recovery that can’t happen until real estate prices find a bottom, said Stuart Saft, a partner at New York-based Dewey & LeBoeuf LLP. Until home values start to rise, buyers will stay away, he said.
“You can’t get the economy moving until this whole situation gets straightened out,” Saft said. “Until we find the actual level of proper pricing, housing problems will persist. Dragging out foreclosures doesn’t help.”
http://www.bloomberg.com/news/2010-09-27/foreclosure-flaws-may-delay-u-s-recovery-by-slowing-drop-in-home-prices.html - 65k -
A year of free rent! For me that would be almost $20k!
Oh and I see our friend in the story is a loan broker which means we’re probably talking more like $30k or more seeing as he probably thought when he agreed to his own mortgage that the money flow would never end.
My neighbor next door has not paid on the mortgage of $1,400,000 since Feb 2009. It’s about $10,000 per month.
That’s free rent!
My ex-bil has not made a mortage payment on his home since Dec 09 in NC. The house has been for sale for over 2 years without a decline in price or even listed as a short sale. It is in pre-foreclosure, no one is hassling him about the payments so he just comes and goes, staying there whenever he wishes.
This mortage is with Wells Fargo… hey when it’s free it’s free until the finance/mortg co. finally does something about it….still waiting to see what happens…
Home Prices Probably Cooled, U.S. Consumer Sentiment Off
Gains in U.S. home prices probably slowed in July and consumer confidence this month cooled, restraining the biggest part of the economy, a pair of reports may show today.
Lol. Great start to my day.
I maybe, quite possibly, allegedly, is rumored to have, chit my pants.
Posted yesterday - Florida median prices would tend to agree - taking another dip down, in terms of the rate of decline accelerating again.
Toys R Us to hire about 45,000 employees for holidays, doubling its US work force
WAYNE, N.J. (AP) — Toys R Us will hire about 45,000 employees to help with the holiday season, doubling its U.S. work force.
The privately held toy company said Tuesday that it is hiring more workers than in the past three holiday seasons because of an additional 600 smaller stores located in malls and shopping centers. Those “pop-up” stores are called Toys R Us Express.
The news comes at a time when unemployment levels remain high in the U.S. and seasonal work is viewed as a potential opportunity for a full-time position.
“We’re pleased that we can create thousands of new jobs as we double our work force nationwide in preparation for another busy shopping season in our stores,” Dan Caspersen, executive vice president of human resources, said in a statement.
In the past the company, based in Wayne, N.J., has hired about 35,000 seasonal workers. The employees fill managerial roles as well as sales person positions and serve as stock workers.
Toys R Us is but another distribution outlet for Chinese made goods. The retail jobs being offered are low-paying and temporary. Also temporary is their renting of “pop up” stores in otherwise vacant mall spaces.
“Toys R Us” rents employees cheap and rents floor space cheap. Cheap and temporary.
“… seasonal work is viewed as a potential opportunity for a full-time position.”
This statement merits a careful read.
yep. We cannot have a stable economy based upon borrowing money to sell each other cr@p made in China.
Krugman was suggesting we start putting curbs on trade with China. This would be a huge inflationary force to counter the huge deflationary forces at work now.
Doesn’t putting trade curbs on them sound like a heavy lift for a government that cannot even bring itself to label them a currency manipulator?
I don’t see how that works out to be deflationary, if you mean lower prices.
Krugman was suggesting we start putting curbs on trade with China.
Those who say Krugman only advocates more stimulus are wrong of course.
But most of us knew that.
In other words, there is so much excess retail space in malls across the country that we can get the landlords to give us ultra short leases on the cheap. We will use this space to try to get people to buy from among the 200 or so extremely popular toys that we will stock in those stores (many fewer than in a full service store) rather than order them from Amazon.com. We will hire these employees at minimum wage and without benefits and fire them the instant the empty store is dumped back on the landlord. Merry Christmas.
I can’t imagine the other stores in the mall that sell toys will be too happy about this. Might this just put some of them out of business. It’s all about the short term gain.
There are no other toy stores in the mall.
That’s right. They’ve all gone belly up. WalMart has the popular toy market cornered while ToysRUs sells the niche stuff Wally World doesn’t carry.
And the online guys will respond with deals of their own. Even temporary brick ‘n mortar can’t beat a competently managed warehouse model. Now with real time inventory, decently reliable shipping time estimates, etc. online ordering will probably take another leap this year.
Even temporary brick ‘n mortar can’t beat a competently managed warehouse model. Now with real time inventory, decently reliable shipping time estimates, etc. online ordering will probably take another leap this year.
Preach it, edge!
BTW, one of my friends owns a fulfillment house here in Tucson. Now, before you guys get carried away with all sorts of smart ideas, let me explain what her business actually is.
It’s a warehouse. A big warehouse. And it stores merchandise offered by online merchants, mail order houses, and other businesses. My friend’s company takes the orders, packages them, and ships them to customers.
Her business has been good of late, and I predict that it will become even better.
D _ F L _ T I _ N _ R Y . . . _ N V I R _ N M _ N T
I’d like to solve it, Alex.
(Hint: Got cash?)
online ordering will probably take another leap this year.
especially given the ridiculous sales taxes some municipalities have come to have.
At a 10% sales tax rate, many are going to do everything they can to avoid paying it. Local businesses suffer because of stupidity from our lawmakers. At 5 or 6%, I really wouldn’t care, but when it tacks an extra $1 on a $10 purchase, sorry, but its hard to ignore.
drumminj,
One of the guys in my Guard unit worked for Musiciansfriend in Medford. He HATED it! One year the idea junkies decided they were going to implement a major re-structure… -during- the Labor Day weekend!
I’m the opposite of most younger players/shoppers. I’m not buying ‘anything’ sight unseen. I’ll go online for ‘ideas’ and THEN buy from AppleMusic or one of the other Portland shoppes. You can tell most of the purchases were a bad idea when tons of 1 yr. old gear winds up on CL.
But they got a helluva’ deal? In truth, just saying Fender Strat, doesn’t work for me. You can have 2 identical models (1) serial # apart and they will play totally differently. Can’t wait to see Jet City honor all those China-made amps on warranty!
I’m the opposite of most younger players/shoppers. I’m not buying ‘anything’ sight unseen
I’m the same way in general. I’m not really into musical equipment (used to tape shows, have a nice acoustic guitar, but don’t buy anything these days), but for outdoor gear, I’m definitely the same. I’d rather see it/try it in person. And in those cases, I buy local.
However, when it’s something like gun ammo, I don’t need to see it/try it (other than shooting it). So there’s no compelling reason. The local gun shop has good prices - just a tad higher than what one can find online - but the taxes just make all the difference, even taking shipping into account.
drumminj,
Right, and having that ‘choice’ Marshall amp for a song is small consolation for having to endure this whole debacle!
Of course, I’m in Oregon and we have no sales tax ( at least at present, give them time! )
“In other words, there is so much excess retail space in malls across the country that we can get the landlords to give us ultra short leases on the cheap.”
I see this all the time: Halloween costume stores that are open for only 2 months, Christmas decorations stores. There was once a store at our local “outlet mall” that opened one summer for a couple of months that sold leftover Disney paraphanalia.
There was a summer rental in the abandoned Circuit City store here in Boise for selling camping/hunting gear.
Our old Circuit City building became a Goodwill store. And it is always busy.
“Our old Circuit City building became a Goodwill store.”
Ours became a Halloween store. And its only occupied two months out of the year. Ouch.
In San Francisco at 2400 Irving street years ago there was a bank that became a Blockbuster that became a Goodwill store I’m guessing a soup kitchen in the future.
Also helps reduce returns when the store they purchased the product from isn’t there.
Judge ponders jurists’ role in Ally Financial foreclosure cases
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 9:37 p.m. Monday, Sept. 27, 2010
WEST PALM BEACH — Palm Beach County Chief Judge Peter Blanc is trying to decide whether judges can take a more active role in examining foreclosure cases after a meltdown in Ally Financial’s foreclosure proceedings last week.
Blanc said Monday that there has been an increase in requests by lenders and loan servicers to cancel foreclosure sales and vacate judgments following the disclosure that Ally was freezing portions of its foreclosure operation in 23 states, including Florida.
While judges granted those requests, Blanc said he was concerned about cases in which defective foreclosure affidavits aren’t being brought to the court’s attention, possibly because the borrower has given up or walked away from the home.
Also, he’s unclear on whether the court should scrutinize past cases for flaws.
“It puts us in an untenable position because we can’t both investigate and decide,” Blanc said. “We are supposed to act on things brought to our attention, but if no one files anything, I’m not sure what will or should happen.
This is a huge story IMO. I wouldn’t think about buying a foreclosed home under any circumstances, as ownership would be in question.
‘he’s unclear on whether the court should scrutinize past cases for flaws. Blanc said…’We are supposed to act on things brought to our attention, but if no one files anything, I’m not sure what will or should happen’
This is a continuation of the mers non-story. These FBs got the boxes, packed up what they wanted, left what they didn’t, tore out the dishwasher, punched a couple of holes in the walls and are better off financially for it. Now the sliding glass door is boarded up, the grass is 3 feet high and the HOA is broke. What are they gonna do, move back in?
Note the use of ‘meltdown’. People love that sort of thing.
I’m not saying that the FB’s are going to try to get it back. But if the bank that foreclosed on it and took the money when it was resold doesn’t own it, how can the guy who bought it from them own it? Doesn’t someone else really own it, probably some MBS investors?
The if the loan was part of an MBS, then the bank was acting as an agent of the MBS investors when it did the foreclosure. There are a few egregious cases where they sell a house that never had a mortgage on it, or where the owner was still paying on time, but those are very likely clerical errors, not overall business practices. The legal issues are whether the i’s were dotted and the t’s were crossed when all the paperwork was being shuffled - the original sale of the mortgage to the MBS pool, the securitization of the pool, etc. If those items didn’t happen properly at the start of the process, then the MBS owners didn’t have the right to foreclose and the bank can’t do it as the agent of the MBS owner.
The deficiencies of the paperwork never came up in the build up because no one ever defaulted, they just sold or refinanced. Everyone knows where the money is supposed to go. If they didn’t the MBS paper wouldn’t have been paying out during the boom. But since no one was looking into the details of ownership back then, the paperwork was allowed to go sloppy. They are paying for it now. It is just a delay. They will fix the paperwork eventually. But it may take a while. A long while.
I wouldn’t think about buying a foreclosed home under any circumstances, as ownership would be in question.
Not to mention the fact that you’ll have all sorts of repairs to do. Happened to my former landlady. She bought a property that had been foreclosed. Had two houses on it, and it took her the better part of a decade to bring them back up to snuff.
‘all sorts of repairs’
Well, this is the real problem, plus things you’d just have to live with like cracked slabs. Appliances/AC are often missing or a fridge so foul it has to be thrown away. Odors, soiled carpet, leaking roofs, frozen plumbing, busted drywall, etc. The FBs either never cared much or lost interest in preserving the value while they weren’t making payments. And don’t expect the lenders to disclose the defects or even worse, for example, I’ve had them ask me to paint over mold!
Most of this is fixable for a price. But there you are; if they aren’t willing to discount it enough, you’re paying too much. And if you don’t know what’s wrong, it’s a gamble. So do you get an indepth inspection on every REO you’d like to make an offer on? That ain’t free, and you’re still up against lender/govt-inspired delusion about what the house is worth.
So do you get an indepth inspection on every REO you’d like to make an offer on? That ain’t free, and you’re still up against lender/govt-inspired delusion about what the house is worth.
When my former landlady purchased the aforementioned property, she couldn’t have it inspected before purchase. And I don’t recall the reason why.
But the end result was that she bought a pig in a poke.
“When my former landlady purchased the aforementioned property, she couldn’t have it inspected before purchase. And I don’t recall the reason why.”
She probably bought it off the courthouse steps. Or maybe private auction, perhaps. Around here, houses going up on private auction blocks usually have an open house or two, so you could bring your home inspector at that time if you were planning on bidding. It requires money up front, though, with no guarantee of being the highest bidder.
You can inspect REOs and short sales.
She probably bought it off the courthouse steps.
That’s exactly what she did. Her boyfriend and I were there as witnesses.
I live in what most would consider a really pretty neighborhood, well-made 4 and 5 bedroom houses built in the late 80’s. Upper middle class I guess. Fortunately we’ve only had two foreclosures, but both houses were totally trashed by the people who were foreclosed on. And they weren’t investors or speculators, they lived in the houses for a number of years. 50 year old college graduates with children, totally tearing out the inside of the house on the way out. What could possibly be the value of a used sink or toilet on the street? What are they so angry about, did they think they could live here forever without paying their mortgage?
It’s just giving the finger to the bank I believe. What do people expect when they are foreclosed on? They have to move out and onward but want to destroy property in the process? Just makes me ill. Esp. after they probably had a free place to live for god knows how long.
‘What could possibly be the value of a used sink or toilet on the street?’
I think about this a lot when I see what they’ve taken. Dishwashers for example; I don’t see how you could get any price for a used, ripped out DW. And ceiling fans!
BTW, we read posters here saying how renters trash this, etc. You guys should see what terrible neighbors some of these FBs make, and how they leave their precious home. And remember the thing about being able to paint the walls? Well, some paint jobs (especially the kids BR) are so awful, it hurts your eyes.
‘What are they so angry about’
IMO, it’s because the media/govt have painted such a victim story around the foreclosure ‘crisis’. Where was the ‘crisis’ talk when regular people were being priced out of houses by the mania? Hey NPR, have you guys ever run a single story about renters who behaved responsibly and didn’t borrow too much during the bubble? When was the last time anyone in the media/govt mentioned affordable housing?
“Had two houses on it, and it took her the better part of a decade to bring them back up to snuff.”
Consider what you would have to pay a contractor to do the same work if you want a general idea of how expensive ’sweat equity’ really is.
Consider what you would have to pay a contractor to do the same work if you want a general idea of how expensive ’sweat equity’ really is.
It is indeed.
Take, in my landlady’s case, her other skills. She was a very talented computer programmer. Worked in programming back when it was done on mainframes. And she successfully made the transition to the microcomputer world.
Well, she got burned out on programming, and was interested in other career fields. Computer consulting for small businesses would have been a natural, and she was interested in going that direction.
I also recall that she was a very good photographer, especially when it came to botanical subjects. Matter of fact, she schooled me in that area.
Trouble was, she had no time to pursue other career fields because the rental house fixup/repair jobs sucked up so much time and energy.
‘About 55,000 foreclosure cases clogged Palm Beach County’s courts in the spring.’
A big Christopher Walken “Wow!!” on that one.
Want to add a copyright-like feature to a house, so you can get paid every time it gets sold?
Ta-da!
Resale fees.
lavi d,
All during the boom builders moaned that it was actually the flippers that were making all the money and they viewed it as money left on the table!
HUD has already declared this a violation ( but don’t think for a minute that will stand in a REIC’sters way! )
The lengths which mega-corps are going to to extract every last penny from every living person is disgusting beyond words.
Someone please stick a fork in this guy.
“I think it’s fair to say that a majority of economists believe that excessive private debt played a key role in getting us into this economic mess, and is playing a key role in preventing us from getting out. So, how does it end?”
~ P.Krugman
This is America’s favorite liberal economist saying that we consumers took on too much debt and contributed to the economic mess.
(Notice he doesn’t mention government debt!) Then he adds, “A naive view says that what we need is a return to virtue: everyone needs to save more, pay down debt, and restore healthy balance sheets.
Government hasn’t defaulted on it’s debt (yet?), many “consumers” have.
I’m tired of conservatives whining about government debt. The conservatives racked up as much government debt as Dems ever did — where was the whining then? And then they want to stop the game in the middle of the 9th inning, while they’re ahead and before the other team gets an at-bat.
The Republicans did, not the conservatives. Don’t confuse the two.
To expand on that - by “conservative” I’m referring to holding closer to the constitutional ideals of our founding, which is much closer to Libertarian than to Republican over the past few decades.
Talk about splitting hairs. Conservative financial ideas are fine, but “conservatives” seem to vote GOP, no matter what snake oil they’re selling. A true conservative would also wish to conserve the land, air and water, along with fiscal responsibility. Not sure we’ve seen that brand of conservatism since T.R.
but “conservatives” seem to vote GOP, no matter what snake oil they’re selling ??
Exactly why I left the Rep. party…
“Conservative financial ideas are fine, but “conservatives” seem to vote GOP, no matter what snake oil they’re selling.”
Fiscal conservative, social liberal here. I no longer vote for the GOP because they are neither.
Me too.
“The Republicans did, not the conservatives. Don’t confuse the two”.
100% correct, but that fact just won’t sink into some peoples brains.
Does it make a difference if “conservatives” vote for republicans??
zfacts.com/p/318.html
The time to be paying off the debt was when we were flush. Instead we started a couple of wars and gave tax cuts to the elite, and started a medicare prescription drug plan that forbids medicare from bargaining for lower prices.
tax cuts to the elite
I thought it was tax cuts to the rich. Did the DNC change the slogan recently?
I got tax cuts and I am happy for it. I am richer now and loving it. I was poor once.
The way I look at it more money for myself means less money for wars and government corruption and waste. Only if we could end the printing press…….
1. You probably are not richer because of it, even if you have more money.
2. The way I look at it more money for myself means less money for wars and government corruption and waste.
A: Have you seen the national debt? I posted a graph above. Have your heard of QE?
Instead we started a couple of wars and gave tax cuts to the elite
No, we gave tax cuts to EVERYONE who pays taxes.
Not the “elite” or “rich”. Everyone.
(Hopefully you can connect the dots that you can’t give a tax cut to someone who doesn’t pay taxes)
Instead we started a couple of wars and gave tax cuts to the elite
No, we gave tax cuts to EVERYONE who pays taxes.
OK whatever…… so I’ll fix it for you.
Instead we started a couple of wars and gave THE VAST MAJORITY OF ANY AND ALL tax cuts to the elite DRIVING DOWN THEIR TAX RATES TO THEIR LOWEST IN 60 YEARS. ENABLING THE WEALTH CONCENTRATION IN THE UNITED STATES TO RESEMBLE BANANA REPUBLIC, FASCIST THIRD WORLD DUMPS
packman,
More importantly ( perhaps a bit belatedly… ) Paul is finally coming clean about the consumer’s role in all of this and we give him both barrels?
Unlike The Gov., consumers can’t print their own money. Be nice…
I guess this was meant to go below (with my Krugman rant)?
Here’s the problem - what exactly changed with consumers that could have caused this bubble? The answer is - nothing. The consumer didn’t change; what changed was government/Fed policy.
Yes consumers had a role, but that’s kind of like blaming the extermination of 6 million Jews on Zyklon B (the gas often used in the gas chambers). Sure technically that’s what caused their death, but it was only doing what Zyklon B does, in realizing its potential. The real fault lies in those who control it, and use it for it’s unintended purpose.
Zyklon B wasn’t created to exterminate Jews - it was created as a pesticide. Mortgages weren’t created to enrich Wall Street - they were created to allow people to get into homes when they were in the 20’s and having kids, not having to wait until they could save enough money by their 40’s or 50’s.
“Mortgages weren’t created to enrich Wall Street”
( Sheesh, not if you listen to about 70% of the posters here? ) In so many of their minds, since the inception of the internet, we can now move freely both forward AND backward in time as suits our needs that particular day?
An event that took place in the 80’s carries the same weight as something that’s unfolding today.
The only thing I ‘will’ differ on is, the consumer ( or at least their attitudes and willingness to take on ever more debt ) really did change. Otherwise how could the majority of posters here find themselves feeling nothing but increasingly more stingy as this unraveled?
HBB posters = 0.0001% of the population (give or take).
The vast majority of people are “stingy” these days because they have to be - not because they want to be. If/when the credit floodgates are opened back up (as they are, slowly) - they’ll be out shopping in a heartbeat.
Personally I blame TV more than anything. I think this generally started in the 50’s. Yes consumerism was around before then, but it wasn’t nearly as prevalent, at least in my secondhand observation. Just the ability to see something that you didn’t have, easily and on a regular basis, took marketing to a whole new level.
Not saying it’s not the job of consumers to be prudent in their borrowing - it is. However it’s also the job of the lenders to be prudent in their lending. Taking away the sting of bad lending through bailouts short-circuits that mechanism, and we’re left to rely solely on consumer virtue. The problem is consumer virtue is in a neverending battle with marketing. Lending virtue is not.
“Lending virtue is not”
Here, here. I would say however even though the HBB crowd doesn’t constitute a rounding error nationally, let’s not break our arms off patting ourselves on the back, there are plenty of prudent citizens out there.
( And they’re as fed up as we are! )
As consumers, you’re right, it’s a constant battle to sit on your wallet. Temptation abounds! As for lenders, it’s NEVER a quandry, only thing is, how much int. to charge?
Personally I blame TV more than anything.
I agree 100%, packman.
Not only did TV constantly show people things they didn’t have, it gave them a sense of accelerated time. Most problems on TV shows are resolved in less than 40 minutes.
It also - through commercials - creates a subliminal sense of insufficiency while simultaneously offering legions of products to fill the void.
Give the decades-long hypnosis from a combination of instant gratification and endless desire, it was inevitable the American citizen would be turned into the American consumer, ripe for the picking by debt merchants of all stripes.
Personally I blame TV more than anything.
Which is why it’s wise for parents to limit their children’s TV watching time. Here’s a notable example of how this strategy can pay off.
Thanks for the link - a great story!
So $2 trillion doesn’t even count as an “at-bat”? How much is a beer and a dog at this game, a couple quadrillion?
…saying that we consumers took on too much debt and contributed to the economic mess.
(Notice he doesn’t mention government debt!) Then he adds, “A naive view says that what we need is a return to virtue: everyone needs to save more, pay down debt, and restore healthy balance sheets.
Wow! It’s like a paradox!
LOL! Right, be it a government OR a consumer, there still is such a thing as good debt and ‘bad’ debt. Whether you’re running up a tab @ $12 a day on latte’s or an ‘expedition’ is in the eyes of the debtor I suppose?
“A naive view says that what we need is a return to virtue: everyone needs to save more, pay down debt, and restore healthy balance sheets.
The problem with this view is the fallacy of composition: when everyone tries to pay down debt at the same time, the result is a depressed economy and falling inflation, which cause the ratio of debt to income to rise if anything. That is, we’re living in a world in which the twin paradoxes of thrift and deleveraging hold, and hence in which individual virtue ends up being collective vice.
What a f*******g idiot. He has absolutely zero concept of time horizons, probability spreads, and base support. “Economist” my ass. He’s an socialist (at best) Keynesian idiot media mouthpiece, pure and simple, and he’s intent on trying to wreck our country economically. He’s the single most vile creature in our country.
(ask me sometime how I feel about Paul Krugman)
He’s the good cop, we already heard from the bad cop. Their shared objective is simple, maintain the status quo and keep those people and institutions with power - in power.
The PTB has gotten itself into one heckuva pickle this time, and he’s part of their exit strategy.
1. If he is a true keynsian then he should have advocated paying down the debt when times were good.
You can’t argue that if everyone stopped spending and saving money that you might end up with a larger crash with tax revenues dropping off a cliff. Yes in the long run it would be better if we were saved more.
If he is a true keynsian then he should have advocated paying down the debt when times were good.
Whatever - this is a pointless and moot side discussion. Please provide me with an alternative term for “someone who proposes spending their way out of a recession” and I’ll use it instead.
1. If he is a true keynsian then he should have advocated paying down the debt when times were good.
everybody, not just keynesians advocates paying down debt when times are good. it’s like being against war and murder. who isn’t?
the problem is that even if you knews times we good, you don’t know when they will turn bad. so you may try paying down the debt just when things turn bad. or you may actually cause things to turn bad when you attempt to pay down the debt.
we need the commitment to pay down the debt regardless of what is happening. we need to be fiscally responsible all the time. we can’t spend like crazy with the idea that we’ll pay for it later. that’s the idea that we’ve had for the last 50 years and it’s been a disaster.
the only way out is to get the government out of the markets completely. no liberal or conservative is smart enough to manage the inclinations of the market. the market is self correcting when left alone.
i read your posts measton, and i know you don’t agree with much of what i said. but if we continue the pretense to knowledge that we are doing now, we will continue the decline to the detriment of everyone..
we need the commitment to pay down the debt regardless of what is happening. we need to be fiscally responsible all the time. we can’t spend like crazy with the idea that we’ll pay for it later.
You “pay down debt” people have your heart in the right place but you are wasting everyone’s time.
It can’t ever happen politically, socially or mathamaticaly.
Sorry but did you see the numbers?
There ain’t no stopping this train. Better to try to figure out the transition than to fix a system that can’t be fixed.
what amazes me is how he goes against common sense at a fundamental level.
you have a talent for putting things succinctly. and i already know how you feel about krugman. i feel the same way.
Someone please stick a fork in this guy.
but he’s obviously not ‘done’ yet. his advice can surely wreck america further. amazing that this nimrod actually took a nobel prize in economics.
Outside of the sciences, the Nobel people give awards to some dubious characters….
Woodrow Wilson, Le Duc Tho, Jimmy Carter, Yasser Arafat, Al Gore……
yes, it makes one wonder about just who is handing them out.
The irony of many of the recipients often dwarfs the irony of the award itself.
agreed.
Don’t forget Austin Chamberlain (we see how his peace policies worked out).
Austen Chamberlain was a good guy. The treaty of Locarno was a step in the right direction for 1925.
Or are you confusing him with his half-brother Neville Chamberlain?
Yes I am - thanks for the correction. I was thinking of Neville, who indeed didn’t win a Nobel.
(though Neville was Austen’s son, not half-brother)
(also note that I previously misspelled Austen as Austin)
(in other words - one big “nevermind”)
The Chamberlain family was multi-generational in British politics.
http://en.wikipedia.org/wiki/Austen_Chamberlain
I’m only surprised that Neville and Adolph didn’t split the 1938 Nobel Peace Prize for the “Munich Agreement”.
Peace! Peace in our time!
Chamberlien bought precious time for the Brits to arm up. Declaring war when you had little in the way of armaments would have been pointless.
You forget the Nazis were arming up at the same time.
The Nazi’s started from a much lower point - i.e. no military at all before 1935, due to the Treaty of Versailles. Chamberlain’s delay helped the Germans much more than the Allies (to be).
Plus the Czechs had a 1 million man army, well trained and equipped with the superior-quality VZ-24 Mauser, and highly motivated. The natural defensive boundaries in Czechoslovakia, namely the Sudeten mountains, were what Chamberlain gave Hitler at Munich.
I own one of those VZ-24s - it’s a real fine rifle with a huge nasty-ass bayonet.
At that time, the entire armed forces of the United States comprised about 400,000 men.
Rigoberta Menchú, Barack Omaba…….
Point to where he was advocating increasing debt when we were running a surplus. Take a look at the debt graph I posted above and tell me that Krugman was an instrumental voice in the accumulation of all that debt. ie Bush and Reagan years.
I don’t give a rat’s patootie about what he was advocating when we were running a surplus. I don’t know, and it’s irrelevant.
I know of no one who is a proponent of increased debts during a surplus period. If you can find anyone - please point them out.
Even Cheney’s infamous “deficits don’t matter” comment was in the context of the 2002 recession. He was, indeed, advocating Keynesianism stimulus at the time.
Do you honestly think that Krugman would advocate running a government deficit during a time of surplus? If so, then he’s an even bigger fool than Keynes (which may well be, but not for that reason).
The point being - even if one is a proponent of running a surplus during surplus years, it’s still wrong to propose running a deficit during recession years. The reason is because government generally just doesn’t have the ability to run a surplus, even during good years. Thus advocating deficit spending during bad years leads to only one thing - unsustainable debt growth long term. In other words - what we have now.
Government could run a surplus during a boom time if people didn’t get hysterical about it and insist that the only thing to be done with a surplus is cut taxes. There are other things to do with it. You can pay off already existing debt; you can properly fund future obligations to SS and employee pensions; and you can put it aside for infrastructure spending during the next downturn when you aren’t dealing with an overheated business climate which makes the cost of steel and cement and labor and other infrastructure inputs go up.
Please note, that people not getting hysterical is a big “if.”
Here’s the problem though:
Number of fiscal years we’ve had a surplus in the past 50 years: zero
It’s kind of pointless to make plans to set aside surpluses, when you never have them.
And it’s not because of any anti-Keynesian “Hey we have this extra money - let’s spend it instead of saving it” activity. Fiscal policies are simply not that flexible - spending plans are made long in advance of when the surplus is actually realized - usually 2-3 years or so at least. So by the time we start seeing an actual surplus (as usually triggered by some economic bubble; excuse me “business cycle”) then it’s too late - we try to cut back spending or increase taxes but by the time the measures actually take effect, they’re overwhelmed by emergency stimulus measures during the now-current economic downturn.
No, the problem is that general government spending levels are simply too high overall. In order to get back on track we have to keep spending flat during downturns, and cut spending during upturns. But we do neither.
Consumer debt outstanding:
1997: $1.28T
2008: $2.58T
2010: $2.42T
Yeah that’s quite the slashing there, Paulie. Not sure how we’ll survive that.
Moron.
Actually, packman, a minor decline _is_ significant.
What many people miss is that our economy does not have a “business cycle”—that is a myth and a misnomer.
What we have is a “credit cycle”. Look at any graph of debt outstanding over time, overlaid with recessions. CR has a good one that he posts from time to time.
What you will observe is that a decline in the growth of debt always precedes a recession. Debt does not even have to _decline_ to trigger a recession—all it has to do is flatten out, or grow at a slower rate.
It’s startling, but it’s true.
So the relatively small decline ($2.58T down to $2.42T) that you suggest is insignificant is actually highly significant. We would be in recession even if the 2010 number were $2.6T, as long as the rate of growth of debt had declined significantly.
You’re confusing causation with correlation. (As is Krugman)
The recession started in December 2007, by most measures. However consumer credit continued climbing until mid 2008. Q1 2008’s credit was 6% higher (annualized) than Q4 2007, in fact.
Recessions cause reduction in consumer credit - not the other way around. Consumer credit is very much a trailing indicator - it’s the very tip of the dog’s tail; with the head being mostly Fed monetary policy.
I became a Krugman fan in 2005 when I read this editorial in the NYT. You weren’t seeing much of this back then.
“That Hissing Sound . . .”
http://www.nytimes.com/2005/08/08/opinion/08krugman.html
Kudos to Paulie for seeing it before many others did.
He’s still a moron.
“we need to fundamentally restructure our economy and re-establish popular control over the private corporations which have distorted our economy and hijacked our government. That’s a long-term job, but one we should start now”.
~ Richard Trumka AFL-CIO
No, I don’t know what he means by “popular control” either. I’m pretty sure he doesn’t mean nationalization, if that’s what you’re thinking.
He means control by the union bosses, especially himself. He could give a crap about anyone else, including his members. They’ve done a wonderful job with GM and Chrysler, let’s have them run the country.
Is it just possible he meant share…holders?
Nah.
No, I don’t know what he means by “popular control” either.
But that’s the key question. There’s no shortage of people railing against corporate misdeeds. The problem is, who is going to fix the abuses and do a better job than the current management?
You know my answer. Somebody else say it this time.
The problem is, who is going to fix the abuses and do a better job than the current management?…..
You know my answer. Somebody else say it this time.
Get the government out of the way and cut taxes on the rich?
No. He doesn’t think there should be any corporations. No businesses either except those that can be funded with all equity investors accepting 100% unlimited personal liability for all possible debts of the business.
No. He doesn’t think there should be any corporations. No businesses either except those that can be funded with all equity investors accepting 100% unlimited personal liability for all possible debts of the business.
I know but Republicans argue that can’t happen unless we get the government out of the way and cut taxes on the rich.
FBI investigates prominent labor leader Andy Stern
By SAM HANANEL The Associated Press
September 28, 2010 09:34 AM EDT
WASHINGTON — People interviewed by federal agents report the FBI and the Labor Department are investigating prominent labor leader Andy Stern as part of a corruption probe involving the Service Employees International Union.
Two organized labor officials met with federal agents this summer to answer questions about Stern’s role in approving money to pay the salary of an SEIU leader in California who performed no work and a book contract that Stern landed in 2006.
Both officials spoke on condition of anonymity because of the sensitive nature of the investigation. The FBI and the Labor Department’s office of inspector general declined to comment for the record.
Stern abruptly resigned as president of the 2.2-million member SEIU in April.
we need to fundamentally restructure our economy and re-establish popular control over the private corporations
control happens through government. once government gets control, the vampires come out and capture it and do the very things that the ‘control’ was implement to prevent.
government should have less power, not more. corporations have no power except through government.
You’re right but not in the way you think.
Corporations *buy* public policy and have for decades now.
yes, i know they use their money to influence public policy. however, the actual power they get comes from capturing the government.
“however, the actual power they get comes from capturing the government.”
And they “capture government” by enormous campaign contributions to candidates who ultimately promulgate new law by which the contributors profit.
corporations have no power except through BUYING government.
And Trumka is right.
U.K. Growth Fueled by Jump in Government Spending
Officials revised up construction growth to 9.5 percent, the most since 1963, from the 8.5 percent prior result.
The U.K. economy’s fastest quarter of growth in nine years was fuelled by rebounding consumer spending and inventories and the biggest jump in government spending since 2008.
Gross domestic product expanded 1.2 percent in the three months through June from the first quarter, unrevised from a previous measurement, the Office for National Statistics said today in London. The result matched the median forecast of 27 economists in a Bloomberg News survey.
The International Monetary Fund yesterday cut its 2011 economic growth forecast for the U.K. and said the Bank of England should be ready to add more stimulus if the recovery falters. Britain faces the prospect of the biggest spending cuts since World War II to tackle its record budget deficit.
So their much-vaunted government spending cuts are all in the future, and in the meantime their growth is primarily being fueled by government spending. Should be interesting when they get around to actually implementing the cuts.
Case Shiller 10 city index: up 4.1%
20 city index: up 3.2%
from July 2009
Of note however - the rate of increase is slowing dramatically.
It’ll be interesting to see what the next few months brings. July, and even August and September, were still tainted by the remnants of the tax credit. E.g. I have a friend who is scheduled to close this week on a short sale, and is using the tax credit.
Of note however - the rate of increase is slowing dramatically.
Yeah, that meanie, the second derivative, is at it again.
The other thing to keep in mind is the Case-Shiller is reported as a three-month rolling average.
So this Sept release is for the July number, but the July number is really the rolling average over the May/June/July data-points.
The original deadline for closings under the tax-credit was July 1st, so most likely happened in that timeframe. In other words, fully two-thirds of the data-points included in this C-S report are for sales in the period of peak housing-credit influence.
Oct will be June/July/Aug, and only one-third “tainted” by the credit.
Nov will be the really interesting one to watch.
Yes - thanks, I totally forgot about that.
What were those parents in the 80s on any how?
http://www.uww.edu/advising/aaec/welcome/staff/sawyer.html
You’d think she’d go by Mary Jane…
“Marijuana Pepsi Sawyer”
Sounds like her parents liked to smoke pot and drink Pepsi. They left out ‘munchies’
Could have been worse.
Hi and welcome to U.W. Whitewater! My name is Quaalude Bong Hit Tall Boy Sawyer and I am thrilled to be working among the outstanding individuals in the advising center
lmao
Well we don’t have River Phoenix to kick around anymore.
“I apologize to readers around the world for having defended the emergency stimulus policies of the US Federal Reserve, and for arguing like an imbecile naif that the Fed would not succumb to drug addiction, political abuse, and mad intoxicated debauchery, once it began taking its first shots of quantitative easing.
“My pathetic assumption was that Ben Bernanke would deploy further QE only to stave off DEFLATION, not to create INFLATION. If the Federal Open Market Committee cannot see the difference, God help America.”
~ Ambrose Evans-Pritchard
Nonsense from the New Yorker
“A surprising number of high-profile economists, on both the left and the right, think that it’s time for the Fed to try one more extraordinary measure: injecting the economy with a healthy dose of inflation. Odd as that may sound, it’s actually not a crackpot concept.”
New York - the center of the universe. New Yorker Magazine - repository for a lot of nonsense, particularly when interpreting monetary trends. ~ Hyping Inflation
If anyone can find any serious episode of monetary inflation in all of history that did not lead to misery for the common man I’d like to hear about it.
High inflation with prolonged low interest rates? That seems to be what they’re clamoring for alright.
“…on both the left and the right…” = again good cop/bad cop
And you’re right, for the man on the street this will not end well.
Inflation after WWII didn’t lead to misery. In 1946 it was ~20%.
Talk to someone who was an adult in 1946. Ask them what life was like, compared to now. I’m not saying it was misery, but the road from here to there would bring tears to most.
Everyone had money to spend after the war. Plenty of pent up demand and limited consumer goods during the war. Inflation caused by demand is not necessarily a bad thing.
Talk to someone who was an adult in 1946. Ask them what life was like, compared to now.
I just did. They said it was better back then because they were so much younger.
Yesterday’s comments about the 70’s SF bay area were interesting reading since I was raised in San Jose. Remember the microprocessor’s arrival enabled educated women to enter the workforce into great paying jobs. This combined with LBJ’s expansion of the GSE’s likely led to bay area house prices tripling within a decade. Nixon’s axing of the gold standard was the cherry on top; there was no turning back.
How did the microprocessor accomplish this? Women are still scarce in the tech industry.
Most people who used computers at their jobs are not techies.
But why the increase?
Automation often eliminates positions(eg 1 payroll clerk instead of 10). I know of no case that drove an increase in female only employment.
FWIW, the marketing, accounting and other non R&D aisles at the cube farm where I used to work were loaded with women.
“Women are still scarce in the tech industry.”
I’ve lived in many places, and San Jose had lots of professional women, more than any other place I’ve been around. I’m not talking about Laverne & Shirley types who let their husbands fill in their voting ballot; these are independent thinking decision makers that make good money.
Flyover country has the submissive wife in a government clerical type job [with benefits] so the husband can walk through life on his knuckles with his buddies, use chewing tobacco and have a pickup with big tires.
+1 rms
2011 US budget (see CNN)
money in: 1.915 trillion
money out: 3.287 trillion
debt service: 210 billion
soc. sec. : 637 billion
medicare/caid: 662 billion
unemployment: 148 billion
total: 1657 billion
That’s not even counting 606 billion in defense and we’ve already spend 86.5% of the revenue generated on debt service and entitlements. Antoher way to look at this is that for every dollar spend we will need to borrow 42 cents. That’s right up there with the subprime, heloc, credit card queen shop-aholic that is maxing out every available line of credit.
How much longer can this go on? (years, decades, eons)
While it has to end badly, how exactly will it end? (austerity, printing press, default, other?)
It will end on Dec. 21, 2012.
U.S. Economy “Close to a Destructive Tipping Point,” Glenn Hubbard Says
Sep 28, 2010 by Aaron Task in Newsmakers, Recession
“America is very close to a destructive tipping point,” co-authors Glenn Hubbard and Peter Navarro warn in their new book Seeds of Destruction. “We must change how we conduct our politics and economics…or we will inevitably go the way of all once-great nations and suffer an irreversible decline.”
Hubbard, dean of Columbia Business School, joined Dan Gross and I to discuss the “major structural imbalances” facing America, chief among them being the government’s profligate spending.
Hubbard, you may recall, was chairman of the President’s Council of Economic Advisers during George W. Bush’s first term. As you might expect, he is a strong advocate of smaller government and lower taxes. But Hubbard and Navarro, a business professor at UC Irvine, are also harshly critical of Bush’s “gross mismanagement” of the fiscal stimulus bequeathed to his administration by President Clinton. Specifically, Hubbard chastises his former boss for the creation of a new unfunded federal mandate, Medicare Part D.
But if Bush was a big spender, President Obama is “taking it to a whole other level,” Hubbard says, citing the familiar critiques of ObamaCare and Financial Reform and “excess government spending” in general.
In short, Hubbard believes Obama inherited a mess but has made it worse with nearly every one of his major policy initiatives and general governing philosophy.
“We as a nation cannot resolve what have become deep and systemic structural imbalances in our economy simply by throwing more money and more and more regulations and more and more taxes at the problem,” Hubbard and Navarro write.
WASHINGTON – The income gap between the richest and poorest Americans grew last year to its widest amount on record as young adults and children in particular struggled to stay afloat in the recession.
The top-earning 20 percent of Americans — those making more than $100,000 each year — received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent earned by those below the poverty line, according to newly released census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.
A different measure, the international Gini index, found U.S. income inequality at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations.
At the top, the wealthiest 5 percent of Americans, who earn more than $180,000, added slightly to their annual incomes last year, census data show. Families at the $50,000 median level slipped lower.
This type of lumping the elite in with those making 180k- 3oo k (ie mostly wage earners who don’t get paid in stock and options) really hides what is going on. I suspect that those in the 180-300k lost ground, and those in the 2 million and up gained significantly. It certainly hides the effects of GW’s tax breaks for the elite.
Yes, this sounds like a divide-and-conquer stat cooked up by somebody at the top. The wage-earners at the bottom of that scale are getting whittled down in a dozen ways (wage and benefit cuts, rising taxes, the housing squeeze), and have no real security, either. It’s the serious megabucks crowd, the upper 2% or so — those pulling in millions and sitting on same in the bank — that we should should keep in mind when talking about Bush tax cuts.
The counter argument to this trend, for 30 years or more, is that while the distribution of income was becomming more and more uneven, and real wages were dropping for most Americans, the material standard of living of most Americans, directly measured, was going up.
Now we know how that was accomplished. Most Americans were getting in debt up to their eyeballs.
Since most of the highly paid get more than half of their income in stock options and so on, I have been always curious as to how much do they really earn when all settled? Do they really stick around long enough to rip the benefits of stocks options?
Is he related to L. Ron Hubbard?
That occurred to me too..lol/
Is a fool regardless.
85 Minnesota jobs experts bounced from jobs
Money to pay 85 Minnesota job counselors will run out on Thursday, so out they go.
Alan Hill taught, coached and cheered more than 3,000 laid-off job seekers during the last year at the Bloomington Workforce Center. Next week, he will be unemployed himself.
The 2009 federal stimulus money that paid Hill and 84 other job counselors to teach at the state’s 46 workforce centers ends Friday. Without funding, those workers must move on.
“The economic downturn is over, didn’t you hear,” Hill joked with a sad grin. The terminations come as the economy continues to sputter and unemployment remains stubbornly high.
I knew someone who did that…she was unemployed, newly divorced, went through the local “world of work” program to get back in workforce and probably also to qualify for foodstamps and stuff.
She was a pretty good student so when she was done with the program she was hired to teach the class herself. So it was basically people out of work given a job teaching people how to get a job. Seemed kinda circular.
Fed’s z1 data out the other day.
Looks like “the great unwind” is done already. After falling for a whopping 4 whole quarters, the total debt-to-GDP ratio starting climbing again in Q2.
We only unwound 5% of the debt built up during the bubble (in GDP terms, not nominal even).
5%.
I’d like to see that graph without the financial sector, or financial sector vs. everything else.
Sure -
Without financial sector
All sectors
Main changing components are financial sector - still unwinding fast, and Federal government, still building fast.
The others are pretty much flat (despite the NYTimes false implications to the contrary).
Looks like a lot of debt shifted from “financial” to “federal” with other debt drifting up.
More or less - some of the others drifting up, some drifting down; all nonetheless paled in comparison to the Fed & Financial dichotomy.
This begs the question of course - what happens next?
My thoughts:
- Fed debt is projected to slowly flatten, and settle at about 70% of GDP over the next 10 years. However this is with 4-6% GDP growth during the period. Not bloody likely; reality is Fed debt will probably end up at 80-90% of GDP in 10 years (note that this doesn’t include internally-held debt to SS/pensions/etc.)
- Financial sector debt will probably flatten out much quicker and begin to rise again. Bankers do what bankers do.
- In general Fed debt is just not as able to deleverage nearly as quickly as financial sector debt. Thus going forward I think we’re still in for yet more total debt rise as a % of GDP.
- To some extent the expanded level of debt over the past 13 years hasn’t been so bad, in that it’s also been accompanied by lower interest rates - and thus lower servicing costs per unit of debt. However being that rates are essentially at a physical bottom (0% on the front end), we simply don’t have this luxury going forward.
- I (unlike Krugman) hope that financial sector does continue down, and consumer, business, etc. sectors start going down again, and at a faster rate, and that Fed debt does level off, so that we can get back to a sustainable level of debt. Unfortunately I don’t see much chance in it.
Appears being a small town mayor south of the border is not the job you want.
Small-town mayor stoned to death in western Mexico
MEXICO CITY, Sept 27 (Reuters) - The mayor of a small town in western Mexico was found on Monday stoned to death in the third attack on a public official in the country in less than a week, local authorities said.
The bodies of Gustavo Sanchez, mayor of Tancitaro in Michoacan state, and an aide were found, officials said.
“It appears they stoned them to death,” a source from the local prosecutor’s office said on condition of anonymity.
Local media reported that the bodies were found in the back of a flat-bed truck.
There was no immediate indication whether the killings were related to drug violence. More than 29,000 people have been killed in violence between rival drug cartels and between cartels and state security forces since President Felipe Calderon launched his offensive on cartels in 2006.
On Friday, a mayor-elect in northern Chihuahua state was shot in the head and chest by suspected drug hitmen, leaving him in critical condition.
A day earlier, armed men killed the mayor of a town outside Mexico’s northern business city of Monterrey.
Nice. Of course, it’s all the fault of those lazy, heartless and racist Americans to the north.
Leagalize.
Steve J,
Right concept ( wrong Country! ) Going legal down south would cut the legs out from under the cartels. Seems we’re forever doing battle w/ these cartels huh?
They’ll find something else..after Prohibition ended, the mob finally came up with the heroin trade. Took awhile.
In MT,
Well, I don’t know what the Body Count was for the turf wars that arose from Prohibition ( but I’m pretty sure they weren’t flirting w/ 29k? )
So legalize Smack too, see if I give a hoot? I just found it an interesting twist since we tend to put all the blame on ourselves and resign to the fact that we have no control over what the Mexican gov. does?
Truth is, it’s failed narco-state.
“They’ll find something else..after Prohibition ended, the mob finally came up with the heroin trade. Took awhile.”
Banking?
“Banking?” LOL!
It’s about as addictive so WTF huh?
Being that those were stoned to death instead of merely shot I thik that the drug cartels had nothing to do with their deaths.
Your right, ownership of guns is prohibited in Mexico.
Your right, ownership of guns is prohibited in Mexico.
steve that used to be the case but that law was changed a few years ago. it’s still against the law to carry in public, but you’re allowed to keep a gun at home now.
palmetto,
Not long back someone here rec. BorderlandBeat and I’ve really gotten into it. They just debunk so many myths. Like, “we have to do away with poverty before we can address the drug/gang wars!”
No, they have to stop *killing* each other and provide a safe env. 1st! Other myths like “It’s all big businessman that drive the drug trade!” Wrong. Well worth the time.
They’re stoning people still? As in the Old Testament stoning?
Sounds like a a social conservative republican utopia.
Seems like it`s almost about time for a good old fashioned October stock market crash.
Mass psychology got us into this mess, maybe it’ll clear the decks and show us the way out, yeah! Looks gloomy outside: sell, baby, sell.
“sell, baby, sell.”
I did, a little to soon but did alright. Doubled my regular monthly automatic deposit into my mutual fund in Feb. 09 and got flamed for it here. Took it out and put it in the money market earning about 0 and cut my monthly auto deposit back in half in Feb. 2010
David Weidner’s Writing on the Wall
Sept. 28, 2010, 12:01 a.m. EDT
Did Stone go too far with Gekko?
Commentary: Stone wanted Gekko to ask himself tough questions
By David Weidner, MarketWatch
NEW YORK (MarketWatch) — For a generation of Wall Street bankers, the symbol of the perfect investment banker wasn’t any flesh-and-blood individual in the industry, it was Michael Douglas.
Oliver Stone on making ‘Wall Street’ sequel
Director Oliver Stone talks with columnist David Weidner about why he made “Wall Street: Money Never Sleeps,” revisiting the subject and the characters after 23 years, and assesses the appeal of antiheroes like Gordon Gekko.
Douglas reprised his role as Gordon Gekko in “Wall Street: Money Never Sleeps,” which opened last weekend and was the top box-office draw, grossing more than $19 million. The movie, like the industry in which it’s set, seems to have prospered from a lack of meaningful competition.
Reviews have been mixed. But there’s one thing the critics liked almost universally: Douglas’s Gekko.
Gekko, in the 1987 movie “Wall Street,” became the financial industry’s archetype not only in through his belief system — greed is good — but through his style of dress: contrast collars, slicked-back hair and suspenders.
Ellen Mirojnick, the original movie’s costume designer has said she tried to fashion a look that was a part Clark Gable and part Duke of Windsor. She said the director, Oliver Stone, complained to her that no one on Wall Street looked like Gekko. Soon enough, just about everyone did.
…
Bing!
(packman breathes on fingertips, rubs on shirt)
Very good…thinking of getting mine at lunch and heading for the exchange..
Yep, BB will call over to the printing office and have then fire off the turbos on the presses any day now. It’s good to be king, party on!
(packman breathes on fingertips, rubs on shirt)
Good job. Technically, I didn’t doubt you.
And now gold HAS broken out to the upside of the above mentioned “cup and handle” formation that began November 2009.
Comment by RioAmericanInBrasil
2009-09-11 12:12:14
Hey. How did you find those older posts?
Hey. How did you find those older posts?
I just remembered what I wrote and rewrote them verbatim.
Nahwwww, not really. go to inksex.com It’s rad hey! Isn’t it yours?
Drumminj’s Excellent Joshua Tree Extension for Firefox is cool too
Thanks to both of you.
Home Price Confusion Redux
CNBC
Here we go again on home prices.
Every time we get this report, we also get all kinds of questions from viewers/readers about why some media outlets report it one way and some another.
So here goes:
The S&P/Case-Shiller Home Price Indices report prices in the top 10 and 20 housing markets monthly, as well as a national number quarterly. The report offers year over year percentage gains and losses, then month to month gains and losses, seasonally adjusted and non-seasonally adjusted.
Why?
In a normal world, which we currently do not inhabit, home prices vary month to month due to the types of buyers. Families generally buy in the Spring, looking to move up to bigger homes and make the move over the summer, so as not to disrupt school. Older or single buyers, also first time buyers, tend to be the majority in the Fall; they buy smaller and less expensive homes, thereby skewing the prices lower, just by virtue of what they’re buying.
This is why I believe year over year is a much better indicator, since you’re comparing absolute apples to apples. The trouble is that in today’s world, the apples are mangled and mashed, thanks to all kinds of government intervention in the housing/mortgage market. The Feds have messed with taxes, mortgage interest rates and foreclosure inventories, which in turn make the usual seasonal shifts irrelevant. That’s why this report began offering the monthly data with and without monthly seasonal adjustments.
U.S. Consumer Confidence Fell More Than Forecast
Mounting gloom over the outlook for jobs and wages caused American consumers to lose confidence in September, indicating spending will take time to recover.
Texting Bans Fail as Drivers Ignore Rules, Insurer Study Says.
Bans on texting while driving fail to reduce crash rates, according to a study by the Highway Loss Data Institute, a group funded by the insurance industry.
Crashes increased in three of four states it surveyed where driver texting was banned, according to the group’s statement released today. The study focused on collision claims in the states before and after they enacted bans. Flouting the law is the likely reason the rules don’t work, researchers said.
Laws against texting from mobile phones have been enacted in 30 states since 2004, and almost half of them this year, the group said. The Obama administration has called for a federal law outlawing driver texting. More than 5,800 traffic deaths were tied to distracted driving in 2008, according to the U.S. Department of Transportation.
“Texting bans haven’t reduced crashes at all,” said Adrian Lund, president of the Highway Loss Data Institute and the Insurance Institute for Highway Safety, in the statement.
Rearending the Police Chief’s car while texting is even stupider…..
http://www.sfgate.com/cgi-bin/blogs/crime/detail?entry_id=73309
Census data: Marriages in 2009 at record low level
WASHINGTON – The recession took a dramatic toll on the institution of marriage in America last year, new figures show, with weddings for people 18 and older at the lowest ebb in over a hundred years.
A broad array of new Census Bureau data released Tuesday documents the far-reaching impact of a business slump that experts say technically ended in June 2009: a surging demand for food stamps, considerably fewer homeowners and people doubling up in housing to save money.
The new figures show, among other things, that marriages fell to a record low level in 2009, with just 52 percent of adults 18 and over saying they were joined in wedlock, compared to 57 percent in 2000. Many young people, at the same time, struggled to find work and achieve economic independence.
I blame The Honeymooners.
Why buy when you can rent?
LOL– Bill in LA will have some choice comments here…
I love the wifey.
Actually, I’d have more kids if we could (cough) afford a bigger place.
Vegas Hotel Pool ‘Death Ray’ Burns Tourists
Hotel Design Channels Sun Into a Powerful Beam, Scorching Swimmers
Forget sunscreen. At one Las Vegas pool, you might want to consider full-body armor to protect you from the sun’s powerful rays.
Guests at the new Vdara hotel have been complaining that because of an architectural flaw on the glass skyscraper, the sun’s rays are being magnified and reflected onto an area of the pool, causing severe burns. There have been reports that even plastic has melted from the heat.
Bill Pintas almost lost some hair from his experience with the hot spot.
After a recent swim in the pool just after noon, he went back to his lounge chair.
“I’m sitting there in the chair and all of the sudden my hair and the top of my head are burning,” Pintas told ABC News. “I’m rubbing my head and it felt like a chemical burn. I couldn’t imagine what it could be.”
Pintas shifted around and suddenly the back of his legs were burning. He ran to a nearby
….and I will use this giant “laser”…
LOL, an eeeevil hotel.
China to vault into top 3 at IMF under proposal
(Reuters) - China is set to leap-frog industrial powers Germany, France and Britain to become the IMF’s second or third most-powerful member under plans being discussed to give emerging nations greater influence.
The shake-up under discussion by IMF member countries would give many large emerging economies, including Brazil, Russia, India, South Korea and Turkey more voting power at the Fund, according to an IMF document obtained by Reuters.
Emerging market countries like China have become a major driver of world growth at a time when industrial economies are struggling to emerge from the global economic downturn.
Bigger voting power would give countries like China greater sway over IMF lending decisions and more influence over global economic policy.
More people are getting their news about the upcoming election from cable television than any other source, and from Fox News more than any other cable channel, according to a POLITICO/George Washington University Battleground Poll released Monday.
Ideology, Not Economics, May Be At Core of Tax Policy ~ CNBC
Tax cuts are good and tax hikes are bad for the economy. Or is it tax cuts are bad and tax hikes are good?
One of Washington’s most enduring policy dialectics is alive and well as Democrats and Republicans court midterm-election voters in the face of mystifyingly weak job market and threatening budget deficit.
Yet, for all of the political noise about the Reagan or Bush tax cuts, or the Clinton or Obama tax hikes, it may be hard to make a convincing case for either approach..
“I really don’t think you can,” says Dean Baker, co-director of the Center for Economic And Policy Analysis. “It’s really marginal.”
Baker’s analysis is rare for its candor and neutrality about a policy debate where cause and effect is usually one-sided and often over-simplified. Most participants can’t recommend one school of thought without castigating the other.
The conventional wisdom of tax-cut proponents, best known as supply-siders, is that they free up capital, sparking both spending and investment, which leads to higher economic growth and job creation, thus raising government tax receipts. Tax hikes, however, have the opposite effect.
Meanwhile, members of the tax-hike school say they allow the government to redistribute income, which spurs spending, and raises tax receipts, a plus for the budget balance and lower interest rates. Tax cuts, however, are more often giveaways to the wealthy and/.or corporations-failing to trickle down or through the overall economy–and only aggravate the budget deficit by lowering tax revenue.
CBO Chief Says Tax Cut Extension Would Hurt Economy
A permanent extension of Bush-era tax cuts would provide a temporary boost to the U.S. economy and then become a drag on growth by pushing up interest rates, the head of the nonpartisan Congressional Budget Office said.
Interests, not ideologies, are behind what the political parties do about almost everything.
Good day to be a renter: plumber just replaced the wax seal on the toilet and a leaking shower arm. Tomorrow he’ll dig up the sewer line and replace a busted piece.
Executions put on hold in U.S. because of national shortage of lethal injection drug. ~ By Mail Foreign Service
Executions in the U.S. have been put on hold because of a shortage of one of the drugs used in lethal injections across the country.
Several of the 35 states that rely on lethal injection are either scrambling to find sodium thiopental - an anaesthetic that renders the condemned inmate unconscious - or considering using another drug.
The shortage has already delayed an Oklahoma execution last month and led Kentucky’s governor to postpone the signing of death warrants for two inmates.
Arizona is trying to get its hands on the drug in time for its next scheduled execution next month and California said the shortage will stop executions on Friday - three hours after an inmate is scheduled to die - when its stock expires.
The sole U.S. manufacturer, Hospira Inc. of Lake Forest, Illinois, has blamed the shortage on unspecified problems with its raw-material suppliers and said new batches of sodium thiopental will not be available until January at the earliest.
Nine states have a total of 17 executions scheduled between now and the end of January, including Missouri, Ohio, Oklahoma, Tennessee and Texas.
“Nine states have a total of 17 executions scheduled between now and the end of January, including Missouri, Ohio, Oklahoma, Tennessee and Texas.”
I will build them 9 guillotines for the price of 1 African genital washing program. Who do I call?
Looks like we are gonna need mo stimulator money and home buyer tax credits…
Home prices to take hit next year in many markets
Small uptick in home values won’t last; prices in many areas predicted to fall into next year
WASHINGTON (AP) — Don’t take the latest snapshot of U.S. home prices too seriously.
The Standard & Poor’s/Case-Shiller 20-city index released Tuesday ticked up in July from June. But the gain is merely temporary, analysts say. They see home values taking a dive in many major markets well into next year.
That’s because the peak home-buying season is now ending after a dismal summer. The hardest-hit markets, already battered by foreclosures, are bracing for a bigger wave of homes sold at foreclosure or through short sales. A short sale is when a lender lets a homeowner sell for less than the mortgage is worth.
Add high unemployment and reluctant buyers, and the outlook in many areas is bleak. Nationally, home values are projected to fall 2.2 percent in the second half of the year, according to analysts surveyed by MacroMarkets LLC. And Moody’s Analytics predicts the Case-Shiller index will drop 8 percent within a year.
This is what we need to be doing over here, taking some Washington and wall street/banksters to court then prison. I know, never happen.
The Icelandic parliament, Althingi, just passed a parliamentary resolution with 33 votes against 30 to take former Prime Minister Geir H. Haarde to High Court (Landsdómur) on alleged negligence in office in the events leading up to the banking collapse in 2008.
If only…
Gold is getting lots of attention. It has risen in price 32 percent in the last 12 months. But silver has done better. As of this afternoon it fetches $21.72 per troy ounce. That’s up 34.37 percent for the year!! Your grandpa may be chuckling to himself as he recalls putting $1,000.00 worth of dimes, quarter-dollars, and half-dollars into a bank sack and stashing it under his bed back in 1964. The silver content of that bag of silver today is $55,529.80. But wait! Calculated in 1964 dollars that comes to only $7,835.00. Still - a nice return on that original $1,000.00!!
NEW YORK (AP) — Americans in both the living room and the boardroom are growing more fearful about the economy, creating a Catch-22 for the job market: Shoppers won’t spend until they feel more secure, and business won’t hire until people start spending.
The eroding views were revealed Tuesday by two separate surveys, one that found everyday Americans are increasingly pessimistic about jobs and another that found CEOs have grimmer predictions about upcoming sales.
“The economy is stuck in an unvirtuous cycle,” said Mark Vitner, an economist at Wells Fargo. “Consumers are waiting for more jobs to be created, and businesses are waiting for consumers.”
The monthly consumer confidence index from the Conference Board, a private research group, fell to 48.5 in September, its lowest point since February and down from 53.2 in August. Economists surveyed by Thomson Reuters were expecting 52.5 for September.
It takes a reading of 90 to indicate a healthy economy — a level not approached since the recession began in December 2007.
47 House Dems want to extend investment tax cuts
WASHINGTON – A group of 47 House Democrats are telling party leaders they want to continue Bush-era tax cuts on investment income, breaking ranks with President Barack Obama and exposing divisions among Democrats over their party’s pre-election message about taxes.
The lawmakers, led by Rep. John Adler, D-N.J., have sent a letter to House Speaker Nancy Pelosi saying they strongly support extending the current tax rates on capital gains and dividends.
“Raising taxes on capital gains and dividends could discourage individuals and businesses from saving and investing,” said the letter, dated Friday and released Tuesday. “We urge you to maintain the current tax rate for both dividend and long-term capital gains taxes.”
they are being forced to see the light. but the AMT needs to be repealed too.
they are being forced to
see the lighttrade their principals for campaign contributionsHow could punishing investors be among any sensible person’s principles?
How could punishing investors be among any sensible person’s principles?
ahhh, “punishing”…..one of the key buzzwords of the Tea-Party’s traitor masters. Punishing?
Raising taxes on capital gains is not “punishing” anymore than club dues to a private club are not “punishing”. How could they be?
If one wants to be a member of a private club, pay up for the structure.
If one wants to invest and profit in a free market system supported and enabled by the government, pay up for the structure.
Otherwise they are just a freeloading parasite who wants something for nothing.
Raising taxes on capital gains is not “punishing” anymore than club dues to a private club are
not“punishing”. How could they be?You get what you give incentives for. It has nothing to do with the teabaggers.
..Raising taxes on capital gains is not “punishing” anymore than club dues to a private club are “punishing”.
punishing.. discouraging .. use whatever term you prefer.
Tax those club dues at some higher level, and take some profitability out of the endeavor, and the club might close it’s doors.
If we don’t want clubs to exist, excess taxation is a good way to accomplish that.
it’s such a simple idea. Make investing less appealing by letting government confiscate the more of the profits, and there will be less investing.
it’s such a simple idea. Make investing less appealing by letting government confiscate the more of the profits, and there will be less investing.
Ahhhhh “confiscate” another buzzword pushed by the Tea-Party’s traitor masters.
Tell you what, set up your own government, your own history of laws and enforcement, regulations, your own base of wealth and productivity to suck off for your “investment” and charge whatever taxes you want, or none at all on your “profits”.
Then get back to me. Till then, buck up and pay your share like a franchised, responsible American citizen.
Nope.. This govt was designed around the concept of personal property rights. What’s yours is yours, and what’s mine is mine.
It is you who are the invader..
Nope.. This govt was designed around the concept of personal property rights. What’s yours is yours, and what’s mine is mine.
It is you who are the invader..
Your joke is old.
yeah.. it’s over two hundreds years old.
“No power on earth has a right to take our property from us without our consent.” - John Jay .. the first Chief Justice of the United States (1789 - 95).
No power on earth has a right to take our property from us without our consent.
Now that’s just stupid Joey. As a Republic we did concede to be taxed to pay for things.
If you or others don’t like it personally, too bad isn’t it?
Case Says Housing Will Grow Slowly After Free-Fall: Tom Keene
By Catarina Saraiva and Tom Keene
Sept. 28 (Bloomberg) — The U.S. housing market has reached
its lows and will expand slowly as the economic recovery remains
subdued, said the S&P/Case-Shiller index co-creator Karl Case.
The index of property values in 20 U.S. cities increased
3.2 percent in July from 12 months earlier, the smallest year-
over-year gain since March. The gauge is a three-month average,
which means the July data are still being influenced by
transactions in May and June that may have benefited from the
government homebuyer tax credit incentive.
“It’s bouncing along the bottom, it stopped that free-
fall,” Case said in an interview today on “Bloomberg
Surveillance” with Tom Keene. “The combination of the
tremendous drop in prices, the fall in interest rates, the
government going all in and buying mortgage-backed securities to
keep mortgage rates low, and the credit, of course — it’s not
surprising that it’s come to an end.”
A government tax credit of as much as $8,000 gave housing a
temporary lift in late 2009 and early this year. The incentive
required contracts be signed by the end of April and closed by
June. The closing deadline has since been extended to the end of
this month.
“I don’t think anybody is predicting that it’s going to go
up very much in the next couple of years unless we see a
resurgence of economic growth,” said Case, professor emeritus
of economics at Wellesley College in Wellesley, Massachusetts.
Case and Robert Shiller, a Yale University professor, created
the index based on research from the 1980s.
The Obama administration said last month it planned to
announce a proposal for an emergency loan program to help the
unemployed avoid default. The plan would also include a
government mortgage refinancing effort to lower monthly mortgage
payments for Americans facing foreclosure.
Click.
Yes. So, in a backwards way he is saying that if any of the legs of the stool break we will have August 2010.
It will be so “unexpected”.
I heard the entire interview at 9am on WBBR. The professor seemed to contradict himself throughout the interview. He consistently said we were at the bottom of price declines and then turned right around and mentioned the bloated inventory every single time. I have much appreciation for knowledge and advanced degrees and the guy is beyond smart but I don’t believe his discussion was founded on analysis. It sounded much more like double talk or a sales job.
Here is an utterly disturbing tidbit about Fannie. Many Fannie owned properties are being managed by various management companies. One management company is responsible for some properties in Ohio and Florida. The job of the management companies is to get at least 2 to 3 bids on various remediation projects. The managers at this particular management company are only taking 1 bid. Our franchisees are making a killing. What ever you bid on the project you win the bid even when you know the high price you are quoting is ridiculous. Fannie is also requiring third party verification to make sure that the projects have been done properly. The independent third party companies which are located hundreds of miles away from the project sites never bother to examine the work. They are taking the word of the people performing the jobs,issuing certificates, getting paid and clearing the jobs. A lot of made up bogus paper work on foreclosed houses is being generated especially in FL.
I think irresponsible (employees) tax payers don’t care and are sinking this country. I also find a lot of scam artists live in FL.
Shakes head. Peace.
Gee, that makes me want to run right out and by a foreclosed house from Fannie. I yearn to be responsible for re-doing what the remediation company didn’t do.
Oh, brother. Talk about a typing mind-fart. I meant to say “buy a foreclosed house…”
Oh btw it is not uncommon for a contractor make 5K to 15K in 2 to 3 days of work with less than 1K in labor and expenses. One guy by himself has made 68K in profits with Fannie just this month.
9K for removing a slightly bloody carpet and a mattress with a blood stains. The management company could not find a bio remediation company. This was in FL
11.3K for removing a few drug user needles in a back yard. The contractor played up the job by wearing hazmat suites. This was in AL
14K to rip a wall in NY.
Fannie sure hired some stupid companies to over see their vast real estate empire
The management company could not find a bio remediation company. This was in FL
Oh, for pity’s sake.
One of my former clients is in this business in Tucson. And has been for many years. All you have to do is listen to local radio and you’ll probably hear one of this company’s commercials.
BTW, the generic term for businesses like this one is “restoration service.” Google it, Fannie. Come on, I know you can.
My point exactly. There is enough profit even in this economy that he can advertise a lot if I read your comment correctly.
I’d like to see a source for this info. I never see any company spend anywhere near these numbers.
We manufacture the products and franchise and it is our own software that is used to generate these price reports. Please send me a link or a phone number and I will be happy to provide more info.
Just some general info is fine. Thanks.
thehousingbubble@gmail.com
It is on the way
I meant to write private email or phone number.
There’s a Paypal button at the top of this page that redirects to Ben’s e-mail account.
California May Seek $5 Billion From Wall Street, Lockyer Says
California is lining up a short- term loan of more than $5 billion from a group of Wall Street banks to tide the state over with enough cash after a record- long budget impasse, Treasurer Bill Lockyer said.
The state may borrow the money from Bank of America Merrill Lynch, JPMorgan Chase & Co., Goldman Sachs Group Inc. and RBC Capital Markets once a budget is enacted and would repay the funds with an estimated $10 billion of notes it will sell in October or November, Lockyer said today in New York. The state can’t issue those notes until a budget is signed.
California has been operating without a budget since the start of its fiscal year July 1 amid a dispute over how to erase a $19.1 billion deficit. The state is in danger of having to shutter school construction, roadwork and other public-works projects and force private contractors to put as many as 10,000 employees out of work because of the impasse, Lockyer said at a conference of the Securities Industry and Financial Markets Association.
“We need to get that done,” Lockyer said.
That reminded me of a tile man who did some work for the state. No recession or anything like that.. good times.
I don’t recall what sort of red tape delayed things, but he waited so long to get paid .. 8 months iirc.. that after gearing up just to accomplish the job, he couldn’t pay his bills, had to let everyone go and shut down the business.
never again says this guy..
If CA just cut back on 15% of all its employees and ask the rest to pick up the slack or find a new job, the budget would be solved. I could do the work of 3 civil service employees and still have time to Skype my friends and plan my vacations while at work. JUST DO IT!! CA has plenty of money.
just cause you fire them doesn’t mean you can stop paying them..
California’s $500-billion pension time bomb
http://articles.latimes.com/2010/apr/06/opinion/la-oe-crane6-2010apr06
California’s $500-billion pension time bomb
This is a key key factor in any solution. I’ve see some (very small) movement for states and muni’s to dial back promised pensions.
Is this legal and doable? Is there precedence? Polly?
What do you know? More money flowing into CNY:
Syracuse, N.Y. — The federal government is giving more than $4 million to Upstate Medical University and LeMoyne College to expand their physician assistant training programs.
The grants, announced today by the U.S. Department of Health and Human Services, are designed to help ease the nation’s shortage of health care workers.
Physician assistants are health care professionals licensed to practice under the supervision of a doctor. They can conduct physical exams, diagnose and treat illnesses, order tests, assist in surgery and write prescriptions.
*****************
Education and medical wins again….bet no one knew, while medical workers are being laid off in other states, that the country’s got a shortage of workers. I wonder when that infrastructure’s going to get some attention.
Oh, funny I should ask:
Gov. David Paterson announces nearly $6 million in rail, port projects in CNY
“Investing in transportation infrastructure improvement projects is essential not only to supporting a stable statewide economy, but also to helping grow that economy by allowing freight to be shipped and delivered more safely and efficiently,” Paterson said. “New York’s economic vitality depends on having a modern, effective transportation system, and this funding will help strengthen that system today, and contribute to the overall reliability of our transportation infrastructure in the future.”
http://www.syracuse.com/news/index.ssf/2010/09/gov_david_paterson_announces_n_1.html