| Submit your comments on this article |
| Economy |
| Dangerous Defeatism is taking hold among America's economic elites |
| 2010-09-07 |
| Goldilocks has played a trick on America. Growth is not warm enough to prevent hard-core unemployment climbing to post-war highs and sticking at levels that corrode the body politic, but not yet cold enough to overcome the fierce resistance of the Fed's regional hawks for a fresh blast of stimulus. ...This is the worst possible prescription. What is needed is fiscal austerity (slowly) before debt spirals out of control, offset by easy money or real QE for as long as it takes. This formula rescued Britain from disaster in 1931-1933 and 1992-1994. Damn the rest of the world if they object. They have been free-loading off US demand for too long. A weaker dollar will force the mercantilists to face some hard truths. So keep those helicopters well-oiled and on standby. |
| Posted by:tipper |
| #10 John Smith started the day early having set his alarm clock (MADE IN JAPAN ) for 6 am. While his coffeepot (MADE IN CHINA) was perking, he shaved with his electric razor (MADE IN HONG KONG) He put on a dress shirt (MADE IN SRI LANKA), designer jeans (MADE IN SINGAPORE) and tennis shoes (MADE IN KOREA) After cooking his breakfast in his new electric skillet (MADE IN INDIA) he sat down with his calculator (MADE IN MEXICO) to see how much he could spend today. After setting his watch (MADE IN TAIWAN ) to the radio (MADE IN INDIA ) he got in his car (MADE IN GERMANY ) filled it with GAS (from Saudi Arabia ) and continued his search for a good paying AMERICAN JOB. At the end of yet another discouraging and fruitless day checking hisComputer (made in MALAYSIA ), John decided to relax for a while. He put on his sandals (MADE IN BRAZIL), poured himself a glass of wine (MADE IN FRANCE) and turned on his TV (MADE IN INDONESIA), and then wondered why he can't find a good paying job in AMERICA AND NOW HE'S HOPING HE CAN GET HELP FROM A PRESIDENT ..... MADE IN KENYA. |
| Posted by: Besoeker 2010-09-07 19:58 |
| #9 The banks and the big corporates never stimulate the economy during these types of times. That can only be accomplished by small and medium sized businesses. The worst economic number I have seen is that US self employment numbers are at a 10 year low. Which means small business is doing worse than any other sector. |
| Posted by: phil_b 2010-09-07 19:46 |
| #8 Anonymoose #3 "Instead, they should be working towards mitigation and soft landing, followed by recovery." Unfortunately, this is not the way modern pols operate. Witness the response of our political class to globalization of labor markets. Instead of having the cojones to recognize the issue and be honest with the public about the consequences and then work towards a "mitigation, soft landing and recovery" from those economic consequences, they did the most cowardly and cynical thing possible - look the other way regarding illegal immigration and hope that said illegal immigration would be the means of dealing with globalized labor markets. Result? Epic fail. I see no reason why the response to the economy and its woes will not take the same cynical and emasculated path, given that the political class, not just the prez and congress but the entrenched public sector lifer bureaucrats, have no desire to stick their necks out and tell the citizenry the hard truth about what must happen to fix things. lex #7 "But neither the banks nor the big corporates are doing anything to stimulate real growth in teh real economy, and the GOP doesn't seem to have any better clue than the Dems as to how to get these colossal players off the sidelines and into the game again." The banks and the big corporates never stimulate the economy during these types of times. That can only be accomplished by small and medium sized businesses. If you are waiting for big business, big banks, and big financial firms to lead the way out of this, you'll be waiting until the sun burns out. And more credit isn't the answer either. As a small business guy, I can tell you that neither me nor any of the other small business owners I know are all that hamstrung by the lack of lending. WHat we REALLY need is less taxes, less threat of whimsical future taxes, a reduced regulatory burden, and government agencies which understand that many regulations desgin for bigt companies with whole departments dedicated to compliance may not be appropriate for a small business who cannot even dedicate someone full time to compliance issues. To that end, the way to get us off our butts is to greatly reduce the overt taxation and also reduce the covert taxation (regulatory burden) on small to medium sized businesses. Right now, most regulations passed for huge businesses are applied in a like way to small ones who are less able to comply. Pass no regulations on the little guys going forward and reexamine any existing ones which were designed fo companies with thousands of employees to see if they really make sense when applied to smaller firms. |
| Posted by: no mo uro 2010-09-07 18:31 |
| #7 C!sco, Appl3 etc are sitting on tens of billions-- just these two companies + G00gle have over $100 billion in cash-- and they are not doing significant hiring here in the US. Add in the cash hoards of the rest of the non-hiring Fortune 500 and you have trillions of dollars that are neither being invested nor being used to hire people. Where is that money going? To the Fed, of course, parked in purchases of treasurys. In other words, funding our shambolic government which then turns around and lends it to a corrupt financial sector which uses their own trillions to speculate on proprietary trading activities and to con investors as to the soundness of their balance sheets. But neither the banks nor the big corporates are doing anything to stimulate real growth int eh real economy, and the GOP doesn't seem to have any better clue than the Dems as to how to get these colossal players off the sidelines and into the game again. |
| Posted by: lex 2010-09-07 15:54 |
| #6 Nothing like throwing money into a money pit instead of fixing the floor. |
| Posted by: miscellaneous 2010-09-07 15:51 |
| #5 "easy money or real QE" - yes, we do need to get banks lending again. But how? Most of the banks are broke. They are still refilling the vast holes in their balance sheets. Regardless of their accounting tricks and this country's lax reserve requirments, many of the biggest banks-- esp Citigroup-- are de facto insolvent. The only thing that would work now would be something that is directly tied to HIRING-- eliminating the payroll tax altogether, for instance. Also, taking on some portion of health care cost burden from the employer. Is that socialist? Who cares? Reduce taxes, please the GOP; let the state absorb some employer healthcare costs, please the Dems. But g0ddamnit, get some consensus, cease with the national pi$$ing match already and MOVE FORWARD. Get this nation's big employers to stop sitting on their trillions in cash hoards (CSCO |
| Posted by: lex 2010-09-07 15:49 |
| #4 The solution is obvious, cut spending and entitlements. Reform spending and entitlements in areas you can't cut. Cut the size of government in general and pass a lot of responsibilities back to the states (who should pass a lot of stuff down to the counties). Problem is, like Japan, no politician wants to deliver blood sweat and toil news to the people. |
| Posted by: rjschwarz 2010-09-07 14:09 |
| #3 The problem is that they are trying to force the economy to continue forward without decline, while all the market forces are forcing decline. They're gonna lose. Instead, they should be working towards mitigation and soft landing, followed by recovery. The trouble is that the longer they try and hold out against the inevitable, the worse the crash is going to be. When Hoover was trying to fix the depression, the Democrat congress did everything in their power to stop him, making things much worse. For their part, when Clinton was busy destroying the economy, the Republican sweep actually saved his chancre-covered rear end, for which he took all the credit. This time, with a Republican victory, they are going to once again try to save the economy by thwarting Obama, and once again, Obama will try to take credit for it. |
| Posted by: Anonymoose 2010-09-07 10:43 |
| #2 When you can be defeated in argument at the public square by Glenn Beck, you know you've got a problem. Defeatism always takes hold when you know you're going to loose your job. Buh-bye elites. |
| Posted by: Nimble Spemble 2010-09-07 05:40 |
| #1 In layman's terms - Print lots of money, but don't let the government spend it. And IMO, debt has already spiralled out of control for the majority of developed countries. BTW, China is the big loser. |
| Posted by: phil_b 2010-09-07 05:26 |