It's the policies, stupid!
Posted on 11/25/2009 8:16:47 PM PST by CutePuppy
Edited on 11/26/2009 6:35:25 AM PST by Admin Moderator. [history]
Beyond fiscal stimulus and government bailouts, the economic recovery that appears under way may be based on little more than self-fulfilling prophecy.
Consider this possibility: after all these months, people start to think it
(Excerpt) Read more at conceptualguerilla.com ...
Self-fulfilling prophecies and positive/negative feedback loops work both ways, on the upside and downside, usually creating higher velocity of economic waves / dips and volatility. Part of the theory is the basis for already proven positive economic effect of supply-side ("trickle-down") economic model.
Article provides good historic overview and psychology of depression, recession and "business cycles" which are becoming more and more often distorted and overwhelmed by [Keynesian] government meddling in the economy.
Shiller has been pretty good on behavioral studies of markets in general and real estate in particular, and has developed several useful indices, such as popular Case-Shiller repeat-sales index. He is ranked in the world's top 100 influential economists - Robert James "Bob" Shiller
As an aside, Robert C. Merton, son of Robert K. Merton mentioned in the article, is a Nobel Prize Laureate in Economics who was a co-founder of ill-fated and now infamous Long-Term Capital Management (LTCM).
It's the policies, stupid!
It only hurts when it doesn’t show up on your dinner plate.
Positive thinking works fine when reality cooperates. The Obamao organization is destroying any chance of that happening.
The guv’ment focused on JOBS !!! WPA, CCC, etc. It also rewarded businesses with tax breaks and THIS is what put people back to work. People back to work pay down debt and EVENTUALLY spend more.
Even so, the Depression/Recession was still in full swing until WWII.
NOW, in the midst of a recession - the guv’ment IS going to tax the hell outta you.
For individuals: Healthcare, Cap n’ Trade, a possible tax on stock investing, tax on over $250K, etc.
Add the front-loaded tax on employers (starting 1 Jan 2010) for THEIR healthcare contributions and what do you get ???
LESS individual spending, employers laying off workers so they can pay the front-loaded tax, MORE unemployment, LESS bank lending ...
In other words - WE'RE SCREWED !!!
Hopey-Changey Thingy Right?
Problem is, These Libtards Want To DESTROY this Nation !
Get-It ?
Little thing called supply and demand has a way of throwing water on that crap.
The only thing left to try on the governments part is a fake recovery!!
They'll print more money in the short and long run.
The “think your way out of the recession” thing doesn’t work when unemployment is so high that people have no money to spend, when those who do are being taxed into the poor house, and the deficit has exploded to the point that the currency is terminally damaged.
This is going to get worse, far worse, not better.
However, there are great limits to it, and one of them is simply... well, the real world.
"You can avoid reality, but you cannot avoid the consequences of avoiding reality" - Ayn Rand
"Don't underestimate your power to change yourself; don't overestimate your power to change others" - Wayne Dyer
"Nothing that begins in such division is likely to end well - King Charles II of England
Throw in a mountain of regulations and you see why the analogy breaks down. The only reason it is not more visible is that there is a larger, more pervasive underground economy, and people are more mobile.
Good points. Just a small example why there is a good chance for it get worse - thanks to "stupid human tricks" by federal, state and local governments:
US Firms Hit by Payroll Taxes at Exactly the Wrong Time - Reuters via CNBC, 2009 November 24 The reason? With Kansas joining the ranks of U.S. states scrambling to shore up a near-insolvent unemployment insurance fund, Huston's business is facing an almost certain rise in state payroll taxes in 2010. It's a hit his business cannot afford — and one that virtually ensures he will not be hiring new employees anytime soon, even as the economy does slowly pick up. "I've lived through a couple of these recessions but this is by far and away the worst I've had to put up with," said Huston, whose Olson Manufacturing was started in 1917 by his grandfather to produce drafting products. Welcome to the jobless recovery. Unemployment claims have hit states so hard that they are raising taxes on businesses at a time when employers can least afford it. At least 33 states will experience some form of unemployment insurance tax increases in 2010, according to the National Association of State Workforce Agencies. The result is a vicious cycle that discourages businesses from hiring new employees and severely strains both states and job seekers. ..... Karen Campbell, policy analyst in macroeconomics at the conservative thinktank The Heritage Foundation, said policy makers need to be lightening the burden on businesses — not adding to it — if job creation is to get a jump-start. "What we need now is an employment policy not an unemployment policy," Campbell said..... Dave Huston's Kansas-based plastics company is down to 34 employees from 63 a year ago. With the U.S. recession starting to retreat, he would like to add back workers but will likely buy new equipment instead.
first it was the ‘cash for clunkers’ that gave a slight increase in the economy ... next it was the $8000.00 for first time home buyers that got a push and resulted in another uptick.
It apparently occurs when the government has provided incentives. Fairly large incentives. This is not really an indication of economic recovery when thought through. MO
It’s even worse, “cash for clunkers” only shifted pent-up demand for those who were considering to buy a new car already so the expensive, ill-considered and poorly executed program simply “borrowed” from the December fiscal quarter (Q4) the revenue that auto dealers would get from usually discounted sales at this time of year.
Meaning, net revenue to the annual GDP was nil, at best, but whatever the generated economic activity (let’s charitably assume $15B overall, which is little more than 0.1% of annual GDP) was shifted into Q3, at the taxpayers expense, purely for padded quarterly economic stats and resulting government’s “psychic income”. If the program were not actually harmful, it would be continued as any successful program would in private sector.
But the “stimulus” pot is very large and very little of it has actually been spent yet; the real kicker is scheduled to start in February, as the political Drs. Feelgood and Feelwell are trying to time the effect of spending few months before the elections, when the “non-political” people are locking up in their minds who they are going to vote for.
Bears repeating ten million times, and they're escaping policies created by the same economically illiterate (mostly) Democrats who decry them for leaving the country.
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