Weekend Topic Suggestions!
Please post ideas for topics this weekend 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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In each region I posted on this past week, I found references to the expiration of the tax credit for buying houses, and how that would result in lower comparable sales numbers. Are we entering the post-tax credit double dip?
I think we are entering the let’s-get-real-the-RE-fantasy-has-ended-and-the-FBs-are-really-screwed dip.
I second combotechie’s motion.
I did see something posted on line about a “double dip” recession, but I didn’t even bother to click on it, I just laughed. Wasn’t aware we’d come out of the first “recession”, if you could call it that.
I meant a double dip in housing. And this refers to the perceived “bounce” that we were told the housing market had experienced, even though foreclosures have run at all time highs the entire time.
But the recession issue raises another point; IMO, the economy will recover when, among other things, house prices fall to affordable levels. It then follows that economic recovery will occur with continued declines in house prices. This is something that the media and many economists can’t grasp, but the possibility is real.
“the economy will recover when, among other things, house prices fall to affordable levels.”
“Among other things” being the operative phrase. A buddy of mine forwarded this to me. Oil and food prices are the next bubble, housing now having been abandoned. The image of full oil tankers doing a conga line at sea until the speculators/traders “allow” them to land is both funny and disgusting, but it sort of harks back to the whole Enron scam.
Of course the difference between housing and commodities such as oil and food is that it isn’t so easy for the public to participate in the commodities bubble.
http://english.aljazeera.net/indepth/opinion/2011/04/2011415143212280315.html#
I’m not suggesting that lower house prices will fix the US economy. Rather that it would help quite a bit if we had resources left free to spend on other things, and if the capital going into this sector went into more productive areas of the economy.
‘D.R. Horton Inc.’s fiscal second-quarter profit more than doubled mostly because of a large tax benefit, but the homebuilder reported lower revenue, fewer closings and a decline in orders.’
‘Builders got a spring sales lift last year thanks largely to federal tax credits that helped spur sales. But once the government incentive expired at the end of April, home sales cratered for much of the year.’
Then we get this line:
‘Homebuilders are a bellwether for the housing market and the economy. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, by some estimates.’
“Each new home built creates, on average, the equivalent of three jobs for a year”
Don’t get me started on who works those alleged “three jobs”. And don’t get me started on how taxpayers have subsidized not only the holder of those three jobs, but their “families”.
if we had resources left free to spend on other things
dotcom Debacle =
Home-equity citizen-splurge Debacle
“TrueAnger™” + “TrueReducetheDeficitNow!™” + “TruePathtoProsperity™” =
Monie$ Mi$$ing from eCONomic engine$:
Medical Industrial Inc. Complex = coming soon!
Military Industrial Inc. Complex = coming soon!
Financial Innovation Inc. Complex = coming soon!
IDK Mr. Ben,…Hwy’s anxiously awaiting the next: “vastly over sold National debacle”
‘three jobs for a year’
Assuming this is even correct, what do they do after that year? Build another house? It isn’t likely they will build a car or a computer.
These theories don’t get challenged; that we here know. But if housing is going into another nose-dive, something comes to mind: we wasted a bunch of money and valuable time trying to prop the housing market up and it failed. I would argue it’s been counter-productive. Isn’t it time we stopped?
“we wasted a bunch of money and valuable time trying to prop the housing market up and it failed. I would argue it’s been counter-productive. Isn’t it time we stopped?”
Interesting parallel to wars in the Mid-East, IMO.
“it failed”
And, what we are looking at, IMO, is massive failure of global and national systems, across the boards. Housing is just a part of that, added to failed wars, failed education, failed legal systems, failed political parties, failed legislation, failed immigration policies, failed economic policies, failed products, failed energy policies,etc.
I think there is massive systemic failure, across the boards, nationally and internationally. It’s too much for most people to confront, but this sucker’s goin’ down, and a useful thread would be what individuals can do about it. Seriously. After the little incident across the way from me the other evening, I am now in the process of looking into arming myself, after talking about it for years.
is massive failure of global and national systems, across the boards
and yet people want the government involved in even more!
I agree with you. There is massive systemic failure. We probably disagree on why that is, but I do think it leads to a good topic as you suggest.
There’s “Where do we go from here?” in a political sense/as a country. I think it’d be interested to talk about it in a more individual sense. We’ve touched on this before - how to protect assets, yourself, your job, your family. How can we as individuals survive and even thrive in this situation.
I am now in the process of looking into arming myself, after talking about it for years.
btw, this topic has come up on the HBB before. You can get some good suggestions here if you like - just let us know what you’re looking for (home defense, a weapon you’ll concealed carry, etc) and I’m sure you’ll get pointed in the right direction
Armed defense against the Sons of Aztlan is racist.
http://www.denverpost.com/news/ci_17345713
A coworker of mine bought a house in San Marcos, CA (Nice box) in 2003 or thereabouts for $450k and sold in mid 2005 at peak to some poor schmuck for $950k, pocketing a net tax free profit of $500k for the two years he lived in the property. With the money he moved out of state and paid cash for a more modest home and went to law school which he had wanted to do for many years being sick and tired of writing code…
So while there ARE many losers who do not have cash to spend someone ended up with the profit on the upside of the curve, and that money is available to spend. In effect since I am all but certain the home he sold would have been foreclosed by now, the money he received was at tax payer expense. Nice eh? $500k tax free in just two years!! That is like winning the lottery.
“is massive failure of global and national systems, across the boards… and yet people want the government involved in even more!”
The breakdown of government was exactly that — the breaking down of governing. Governing includes, but is not limited to:
1. Regulating the heck out of corporations who take advantage of human needs.
2. Breaking up monopolies before they become too-big-to-fail.
3. Ending the public/private partnerships which coporations use to rob the taxpayers and enrich themselves.
In other words, if you want to break down the breakdown of government, you need to restore government. See how that works?
oxide, you’re assuming the failure is simply a result of the government not effectively regulating private entities.
Failed education. Failed foreign policy. Failed wars. Failed regulating agencies (they simply didn’t do their job)…
Failure of government is simply failure to deliver on its promises and responsibilities. If it can’t deliver on what it’s promised to do right now, why would one expect it could deliver on EVEN MORE?
A strong, centralized government simply isn’t capable of doing all the things the citizens of this country demand. And when it fails, for some reason the citizens demand even more.
Think if you were running a company…if an employee failed in their daily tasks, would you give them additional, more important tasks to do as well? Or would you fire them/lighten their load to re-evaluate what they really were capable of delivering on?
It’s hard to say that the government has failed foreign policy. Can Obama somehow make the leaders in North Korea sane? Is Hillary going to solve several thousand years of religious unrest in the Middle East? Can Robert Gates make a road through the mountains in Pakistan?
Failed schools is a function of failed parents. Failed parents is a function of failed jobs, in a country where nobody is home to watch the kids because both parents have to work. Failed jobs is a function of failed corporate good will, where entire factories are shipped overseas to save a buck, leaving behind a wake of destroyed families. Is it any wonder that the kids are hopeless and uninterested?
Failed regulation is a function of cutting funding of regulators, as mentioned today, or eliminating deregulation to where the regulators have no teeth.
The systemwide failure didn’t happen overnight. The failure began the moment that a regulator didn’t stop a merger, that a construction manager passed up the union carpenters for the uneducated but cheap guys in a parking lot at the local Sherwin Williams, that a Congressman needing re-election funds penciled an earmark or a tax break for somebody that didn’t need the money, that a company got ahead by shipping work to a country which offered sweatshop labor, that a government program was cut and the jobs and innovation along with it, or the moment that it became standard for two parents to HAVE to work and ship the kids to daycare. This has been unraveling since about the mid-70’s.
Your example of the bad employee is not relevant. In your view, if there’s one bad employee we should shut down the entire company. But even if all your employees are bad, does that change the blueprints for the original product? Does it destroy the infrastructure is still good.
Don’t throw the baby out with the bathwater.
Great post, Oxide.
Local vs. national governmental power would be a good weekend topic. How is power residing in local government better/worse than power residing in national government?
oxide, it’s clear you feel you know the cause of every problem and that it’s not government’s fault. If you take that position there’s really no discussion to be had here. In your eyes, the government can do no wrong, and is not responsible for its actions. The only reason you feel my example is irrelevant is because in your eyes it’s not possible for the government to be incompetent - it’s always the private sector’s fault.
We do agree on one thing - this has been “unraveling” for a long time.
I think it was not a failure of government regulation as much as the multi-nationals have outgrown the capacity of national governments to regulate.
“the new food derivative markets have reached supranational proportions, beyond the reach of sovereign law.”
From Sammy’s post at the end of 4/29 bits bucket
http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis?sms_ss=twitter&at_xt=4dbac976ca5c4cd7,0
Goldman-Sachs and the investment banks have been involved in the financial woes of local (small cities in Norway) and national governments (Iceland and Greece, among others).
Goldman-Sachs and the investment banks have been involved in the financial woes of local (small cities in Norway) and national governments (Iceland and Greece, among others).
I suppose the question is who you choose to “blame” here.
If the governments are choosing to get involved with these organizations and make interest rate swaps, etc, they must be held accountable to some degree. Sure, GS is often screwing them over, but the gov’t is walking itself to the front door of the slaughterhouse.
In many ways, the power of GS stems from the government itself. The gov’t gave them life as a corporation. The government created the Federal Reserve, which they can borrow money from at below-market rates. And the government bailed them out when they might have otherwise failed.
“I suppose the question is who you choose to “blame” here.”
It is not a question of blame. I have no faith in private industry to do the “right” thing. I expect that they will always do the expedient thing that makes their numbers for the next quarter. I suspect you have no faith in government. I expect you believe that elected officials (except Ron Paul) will always do the thing that will get them re-elected.
“Sure, GS is often screwing them over, but the gov’t is walking itself to the front door of the slaughterhouse.”
At the point at which they walked in there, they didn’t know it was a slaughterhouse. Until it fell apart, most of the CDS mess was hidden from view. Due diligence by local governments in Norway or Alabama would not have uncovered it. I think the argument can be made that the US federal government should have known and acted, but the Treasury and Federal Reserve were controlled by folks who believed in rational markets - who believed that the banks would not act to their own detriment. At the time, the Executive branch was dominated by free market thinkers.
“The government created the Federal Reserve, which they can borrow money from at below-market rates. And the government bailed them out when they might have otherwise failed.”
The bailout is problematic. I urged my representatives to vote against it, but I am not so sure that would have been the best course. I suspect that most of Congress were sold the idea that massive bank failures could cause catastrophic collapse of the economy, with domino effects to local, state, and the federal government of much greater magnitude than we have seen to date.
The difference in destruction caused by a 2 foot tsunami is much less than that caused by a 200 foot one. The treatment for some diseases (Hanta virus) is supportive care to give the patient a chance to recover. It doesn’t always work, but without support the chances of death are greater.
I am dismayed with the way the bailout was handled and that the Federal Reserve is still bailing out the banks. I am angered at the unrepentant attitude of bankers who may be setting us up for even bigger disasters.
I am not convinced that we would have been better off to let them collapse. I think it is a grave mistake to let them continue as if nothing had happened.
What is your way forward? End the Fed? Unincorporate GS? Are you prepared to risk your good job if the whole economy collapses? How long will the disruption last? Will there be a period of martial law?
“…even though foreclosures have run at all time highs the entire time.”
The robo-signing debacle and ensuing slowdown in foreclosures has muddied the picture a bit. But simple consideration of an ongoing high rate of mortgage defaults (the front-end of the foreclosure process) coupled with a slowdown of NODs, evictions, etc (the back-end) suggests a case of constipation which will eventually produce a larger-than-expected dump of for-sale inventory.
“Are we entering the post-tax credit double dip?”
Yes, and your return to the multiple posts per day format has invigorated me and reminded me that Q3/4 of 2010 and Q1/2 of 2011 were my own little “lost year.”
I am ready for round two. Bring it. Get me popcorn, bring back Alad, Combo can say, “poof” Eddie/NYC can pop some more corks.
Bring. It.
I am going to pop a cork here. My little slice of the bubble grow or die business has wound down to the point of being no fun for my employer. They like me but other jobs they would have for me involve the word “cubicle”.
I am going to release the FU money, if I can remember where it is burried, and make the big life change. Been preparing for it so long I feel like I’ve been procrastinating.
Bring it on.
and make the big life change
what change are you looking to make, if you’re willing to share?
Good on ya, by the way. What good is the FU money if you never use it? (okay, it still gives one peace of mind and options….which are certainly valuable).
If your, ahem, FU plans involve travel, be sure to visit Tucson. We could go for a housing market collapse bicycle tour around town. Which could include a stop at a local microbrewery.
HBB suggested questions to ask Ben Bernanke on his next press conference
I understand that people in the US are upset with higher prices for certain goods like gasoline. Not that long ago we were told by the Fed that it had to battle deflation. Does the chairman suggest that, for instance, $4/gallon gas is a good thing, and if he has his way, it’s here to stay?
“Not long ago we were told by the Fed that it had to battle deflation.”
Of this I am agreement.
We had a decade or so of inflation - we borrowed into existence a few trillion dollars - and we sent much of this inflation - some of these trillions of borrowed dollars - overseas.
Now the dollars are emerging, from where ever they were lurking, and are pushing up prices. Note: It is not the current EARNED dollars that are pushing up prices, it’s the previous BORROWED dollars that are pushing up prices.
Today’s earned dollars are in short supply to pay the increased prices and no more borrowed dollars seem to be springing forth (at least for Joe6pack) to pay these increased prices, so that means … that means we (the collective we) are hosed.
So it is deflation that is the problem, deflation in the form of high unemployment, high under-employment and lots of wage cuts. Deflation in the form of a shrinking supply of circulating cash. IMHO.
Deflation in the average American household’s standard of living sure sux. Is that what so terrified Bernanke?
“I understand that people in the US are upset with higher prices for certain goods like gasoline.”
Now that’s sort of an interesting aspect of the phenomenon of bubbles. People in the US are upset with higher prices for certain goods. But on the whole, there wasn’t that sort of massive upset accompanying the higher prices for housing, was there? The only people who seemed to be upset were the folks on this blog and other, similar blogs. To the MSM, government, Wall Street and the masses, higher housing prices were all good. But you can’t eat a house or put it in your tank, so higher prices of certain goods are bad.
Whatever the case, it comes down to speculation and manipulation. The masses cannot, for the most part, participate in the commodities bubble, so it’s a bad thing. Trust me, if the sheeple could flip (or thought they could flip) oil or precious metals contracts, it would be all good.
“But on the whole, there wasn’t that sort of massive upset accompanying the higher prices for housing, was there?”
You can’t flip your hamburger for a sizable profit.
“Trust me, if the sheeple could flip (or thought they could flip) oil or precious metals contracts, it would be all good.”
I’m missing the point. Are you suggesting that individuals cannot own gold or oil stocks?
Aside: My maternal grandfather, an english teacher at a Midwestern preparatory school of modest means, invested heavily in Occidental Petroleum shares during the Great Depression. He died in his mid-50s, but my grandmother never ran out of money up until her death forty years hence at age 97.
For housing, the supply control was decentralized. Anyone could buy, or build, or flip a house. Not only could the public participating on the demand side, the public was also growing the supply.
On the other hand, the new bubbles are nearly purely natural resource based — food/oil/water/gold. Because these sources are controlled by only a few parties, the supply is fixed and manipulated. The public can only participate on the demand side.
If we could all buy an oil well at Home Depot and grow the supply ourselves, nobody would care if OPEC decides to cut production.
This hearkens back to a conversation on HBB about why power companies do not like solar panels on houses. Unlike an oil well, you CAN buy your own power source (solar panels) at a retail outlet. Big power companies don’t like that, because now consumers can grow their own supply, which decentralizes the supply control normally reserved for a handful of power companies. (Just today I read about the pending merger of Exelon and Constellation.)
“For housing, the supply control was decentralized.”
I question whether that was universally the case. Consider the unholy alliance between national home builders (Toll Brothers, D R Horton, K B Homes, Lennar, etc) and Wall Street. When a few big banks with monopoly power and free (Fed-funded) bailout insurance finance rampant, nationwide McMansion tract home development, supply is highly centralized and vulnerable to group think among those at the top of the mania pyramid.
This hearkens back to a conversation on HBB about why power companies do not like solar panels on houses. Unlike an oil well, you CAN buy your own power source (solar panels) at a retail outlet. Big power companies don’t like that, because now consumers can grow their own supply, which decentralizes the supply control normally reserved for a handful of power companies. (Just today I read about the pending merger of Exelon and Constellation.)
I was just in a bookstore, buying a Mother’s Day card. During the daylight hours, this bookstore is 100% powered by the sun. And they sell their excess power to our local centralized electric utility. At night, they’re plugged back into the grid.
“…so higher prices of certain goods are bad.”
higher prices are bad for ALL goods if you are a purchaser of those goods.
Does the chairman suggest that, for instance, $4/gallon gas is a good thing, and if he has his way, it’s here to stay?
No - Obama does. Listen to the “one” yourself:
CNBC’s John Harwood: So could the (high) oil prices help us?
Barack Obama: I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing. But if we take some steps right now to help people make the adjustment, first of all by putting more money in their pockets, but also by encouraging the market to adapt to these new circumstances more rapidly, particularly U.S. automakers…
2008 Election Campaign - http://www.youtube.com/watch?v=5M1WlV7vafk
And are you complaining?
“If you’re complaining about the price of gas and you’re only getting 8 miles a gallon, you know,” Obama said laughingly. “You might want to think about a trade-in.”
http://www.heraldnews.com/business/x675823241/Obama-Expect-little-short-term-relief-on-gas-prices#ixzz1KvkwHzjO
I don’t hear him saying “it’s a good thing”, but rather we need to adapt, perhaps a polite way of saying that 6000 lb, 400 HP pickup trucks don’t make the best commuter vehicles.
I remember when I briefly had a 1996 Ford Bronco (the full sized one). I got a dismal 14 mpg driving it, but even though gas was about $1 a gallon back then it still hurt to fill up the tank, and I got rid of it (for what I paid for it) 2 years later.
It simply floors me that anyone would drive one of those behemoths today, even at last year’s much lower gas prices. Yet when I walk the dog every other driveway has one of those 4 door monster trucks parked on it, with their gas guzzling badges standing out proudly (Hemi, Triton 5.4, etc.)
So I fill up my four banger and happily watch the trip computer’s average MPG display oscillate between 33 and 34 mpg. It’s a beautiful thing.
What happens to home prices once F&F stop making federally-guaranteed, low-downpayment loans at $729,750? (PB’s hunch: Affordability will improve…)
I’d be interested in hearing people’s thoughts on a “Plan B” for how to cope with a changing economy. To me it seems something has profoundly/permanently changed and all the evolving and contradictory information makes it hard to formulate a (flexible but) strategic plan for going forward.
Steps/plans that an average middle-class person can.should take, short of preparations for the apocalypse…
+1
Professor Bear
F&F - Great topic.
I read some history on those two. Fannie was founded in 1938 and Freddie 1970. Now both are a mere business model of their original intent (now the wild west).
BTW, there is a Farmer Mac.
whyoung
“Plan B” Great topic. Thanks for suggesting it and staying on topic.
It’s not that I don’t have occasional apocalyptic fears, it’s just that it’s not terribly realistic way to plan on a personal level for most of us.
Not sure I’d want to live in a “mad max” world, but want to figure out a better way of feeling that I can have a better chance of navigating the continuing turbulence.
“BTW, there is a Farmer Mac.”
Which didn’t blow up, like cousins Fan and Fred, YET…
BTW, there does appear to be an agricultural land bubble…
“…Steps/plans that an average middle-class person can.should take…”
-Stop buying
-Start walking
-Learn to sew, plant, repair, cook, repurpose, DIY.
-Eat two meals a day instead of three
-At home
-Lose fifty pounds and take responsibility for your own health maintenance
-Dump the gashogs, make do with one vehicle
-Buy a bike
-Teach your kids to ride it
-and share a room.
-Get ready to move in with them when you “retire.”
-Don’t buy stuff that comes in packages
-Unplug half your electronics, appliances, furnishings
-Stop using plastic garbage bags–they encourage blind waste.
Realize that you’re no better than anyone else on the planet, deserve no special entitlements just because you’re An American, got a free ride for two generations on the rest of the planet’s back, got paid three times what you were actually worth, insisted on your cynical little wars, your unfettered consumerism, and your “buy now-pay never” expansionist policies.
That’s over now.
-Stop blaming “The Rich,” “The Poor,” “The Bankers,” The Builders,” “Everyone but yourself.” (You DO vote, don’t you?) and
-Get used to it.
Cheers
Great response. However, if I lost 50 lbs I’d probably be in bad shape. Perhaps if I amputated a leg or two it’d be doable
What kind of disaster zone would be a worse place to own?
Tsunami/subduction/volcanic (e.g. Seattle)?
Big quake (SF/LA/SD)?
Tornadic? (Anything south or east of Denver)?
Hurricanic? (Gulf Coast / South Eastern Seaboard)?
Flood zone? (Mississippi flood plain cities)?
Blizzard zone (Canadian border states)?
Makes me feel rather safe here in southern Oregon.
I’m tellin’ ya them injun’s was on to something:
nomadic-horses-tipi’s-prairies
Ya gotta consider rate of probability and then roll the dice.
And just a reminder: True blizzards are only tough on people trying to drive in them or those that forget to leave a certain amount of food in the cupboards. Unless the electricity goes out for an extended period there’s really little danger beyond the roads. There’s boredom in being housebound but that’s not gonna kill ya.
Ice storms are probably more dangerous. If they last long enough the trees start coming down around you.
Is Trump a racist?
About (Late) Last Night: David Letterman calls Donald Trump ‘racist’[Video]
April 29, 2011 | 8:34 am
On Thursday night, Dr. Phil stopped by “The Late Show” to promote his talk show, but David Letterman had only one thing on his mind: Donald Trump.
Apparently, Dr. Phil is friends with the incendiary real estate tycoon, and Letterman asked what he thought of Trump’s recent behavior. Dr. Phil tried to laugh it off, joking that maybe Trump was hoping to convert the White House into a condo. Letterman, who clearly had a bee in his bonnet, wasn’t having it.
“It’s all fun, it’s all a circus, it’s all a rodeo, until it starts to smack of racism. And then it’s no longer fun,” he said. Letterman was particularly troubled by Trump’s latest line of inquiry — how President Obama managed to transfer into Columbia, then gain acceptance at Harvard Law School. (For what it’s worth, Trump, also transferred into an Ivy League school, the University of Pennsylvania.)
…
are you suggesting this as a weekend topic?
Seems to fall in the “Bread and Circuses” column…
It’s scary to watch the MSM entertain the prospect a guy like this could be the next prez.
Trump gives Las Vegas Republicans an earful
In a speech peppered with expletives, the billionaire and possible presidential hopeful continues to go after Obama, but gets the most applause for foreign policy ideas such as demanding oil and payment from nations where the U.S. plays a big role.
but gets the most applause for foreign policy ideas such as demanding oil and payment from nations where the U.S. plays a big role.
“The sT
rump!” stole that idea,…from me! What the heck, it’s free,… anyone can use it that wants to.I personally believe
Trump is more fitting.I imagine a Trump term in office would be one brinkmanship event after another. I want a leader that will allow this country to face facts but there’s got to be some sense of finesse. Mono dimensional psychological bulls in china shops need not apply.
If Trump decides to run, he will have my vote. In Vegas, he said a lot of what I’d like to say, F-bombs and all. However, I think he was being kind. I would have added descriptive terms like greedy, vile, perverted, whores, pimps, etc. All with F-bombs.
So what if he has a bad comb-over. Have you taken a good look at some of the other characters in Washington lately?
But it is probably a publicity stunt. You can’t buy the kind of publicity he’s getting, and he knows it. And he did get Bammy to release the birth certificate, after Bammy spent a couple million to preven it. Which is really kind of odd. Bammy took the bait and now here’s Trump taking the credit for bringing it about. Love it. At least Trump is entertaining, and I appreciate that. The stupid Washington clowns aren’t even entertaining.
David Letterman is a crashing bore anymore and his mugging is getting real old. He doesn’t have such a great rug either.
That is the beauty of Obama - If you are white and you don’t like him you are obviously a racist. For the record I did not like the last guy almost as much and he is white so go figure.
Trump is an interesting wild card, and an interesting person, but President? Maybe he is exactly what we need, or maybe he is exactly what we do not need.
Seems we are in a situation where each swing is harder left or right. Bush basically opened the door for Obama to walk through and Obama is doing a fine job of making sure the next election puts the presidency, congress and the senate firmly in Republican territory. This would be worse IMO than what we have now which is pretty bad.
What, exactly, is a “strong dollar policy,” and do we have one yet?
U.S. NEWS
APRIL 28, 2011
Officials Unfazed by Dollar Slide
BY SUDEEP REDDY AND JON HILSENRATH
The U.S. dollar fell Thursday to its lowest point since the summer of 2008, but officials aren’t showing signs that they are alarmed by the currency’s descent or acting to stem it.
In recent days, the nation’s top two economic policy makers—Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner—have publicly expressed their desire for a strong dollar. But there is little indication of a change in policy from either the Fed or Treasury—or in underlying economic conditions—that would alter the currency’s downward course.
The dollar has dropped almost 8% against a trade-weighted basket of currencies this year.
…
If you are out of work, is it Obama’s fault?
Brett Arends’ ROI
April 29, 2011, 12:34 p.m. EDT
True unemployment rate could sink Obama
Commentary: It’s far worse than Bernanke admits
By Brett Arends, MarketWatch
BOSTON (MarketWatch) — When President Ford ran for re-election in 1976, the unemployment rate was 7.7%. He lost.
When Jimmy Carter ran in 1980, the rate was 7.5%. He lost.
And when George H.W. Bush ran in 1992, it was 7.3%. He lost, too. As Clinton strategist James Carville said, “It’s the economy, stupid.”
Now take a look at the Federal Reserve’s latest unemployment forecasts, unveiled on Wednesday by chairman Ben Bernanke.
By the fourth quarter of 2012, the Fed believes, unemployment is forecast to be between 7.6% and 7.9%. That’s barely moved since January, even though inflation has picked up. The Fed says that its most optimistic member sees unemployment no lower than 7.2% by late next year, and one member thinks it will still be as high as 8.4%.
I checked the data at the U.S. Department of Labor. According to the department, no president since the World War II has won re-election with unemployment anywhere near this high.
…
I checked the data at the U.S. Department of Labor.
Hey where do ya think they’ll hang a picture of “The sT
rump!” on their dept. walls, the one that’s have half “pucker-lips”, half “$mirking”?I personally do not like Obama, but obviously he did not cause the current mess. My problem with him is that he is not putting much energy into finding ways to help solve things. If this was the Exxon Valdez heading towards a rocky shore, one could blame the previous captain. That does not mean the current captain can go downstairs and work on the ships menu. Obviously health care is a big issue in America, but the bigger issue before that one could be addressed and really the elephant in the middle of the living room is the economy which has seen very little in the way of presidential work. A bit of lip, but very little work. Contrary to popular press, the “recovery” supposedly underway is no recovery at all. The math is really easy on this one and mark my words we are heading for the next leg down.
the economy which has seen very little in the way of presidential work. A bit of lip, but very little work.
I think it’s a mistake to think that something can be done to fix the current mess we’re in. Positive changes can be made (by Congress and the office of the President), but those changes are ones that would avoid us getting in this situation in the first place. No bailouts, no moral hazard, no fannie and freddie, and no Federal Reserve. If you’re going to have regulations on the books then enforce them. End the nanny state and make people personally responsible for their actions rather than playing the victim.
Your point stands, though. There is no leadership from the white house in this direction. Instead it’s been lip service towards making people feel better here and now, while the fundamental issues still exist.
“I think it’s a mistake to think that something can be done to fix the current mess we’re in.”
You may be right. We might be better off to spend our energy figuring out how to pick up the pieces after it collapses.
“End the nanny state and make people personally responsible for their actions rather than playing the victim.”
I have no problem being held responsible for my actions. I have a problem being held responsible for damage caused by others, either to me or someone else. A drunk driver should be held accountable for injuries or property damage. A company that produces a defective product should be held accountable.
Interesting stat. Did it have to do with a final number or a trend?
Gerald Ford - President from 8/1974 - 1/1977. Unemployment in 1974 was 5.5%. It peaked at 9% in August of 1975 before dropping into the 7-8% range for most of 1976. Did this have a bigger impact than the Nixon pardon in the election results? Did an inability to control inflation have more to do with the outcome?
Jimmy Carter - President from 1/1977 - 1/1981. Started and ended at about 7.5% with a significant drop into the 6% range from 7/1978 - 1/1980. Conventional wisdom is that the Iran hostage situation was instrumental in his defeat.
George HW Bush - President from 1/1989 - 1/1993. Started under 5.5%. Trended up from 7/1990 to 7/1992, with a slight recovery between July and November. Desert Storm had ended a bit inconclusively with Hussein still in power in 12/1991 and was not a campaign issue. So Clinton was able to run on the economy.
Barack Obama - President from 1/2009. Unemployment started at about 7.7% and peaked at about 10% in summer 2010. Now under 9%. If it continues to trend down, will it be a campaign issue?
The first 2 examples are inconclusive at best as to whether unemployment was the key factor.
I still say the key to the 2012 election is who gets the Republican nomination. But there could be other factors that influence the outcome - more wars, another economic crisis, bursting of a bubble in China.