Posted on 02/26/2009 3:49:40 AM PST by Scanian
Are we headed to something like the Great Depression?
There is clearly much to be worried about. Most of America's private retirement 401(k) accounts have significantly decreased in value since last autumn's crash. Home equity has plunged. The unemployment rate is above 7 percent and climbing.
We had negative GDP growth last quarter. Stock prices are the lowest in 10 years. Almost daily some company announces layoffs. Some big banks may be nationalized. The American auto industry will not survive as we have known it for nearly a century.
Abroad, the news is worse. European banks have lost trillions of euros in bad loans to Eastern Europe and Asia. Countries like Iceland, Ireland and Greece are teetering on insolvency. China's export industries may have to lay off millions of workers.
Given all that news, we are in a funny sort of depression. Our spiraling national deficit is being financed by China, Japan and other overseas concerns at almost no interest -- saving the United States trillions of dollars in debt service costs.
Nearly 93 percent of those Americans in the workforce are still employed. The difference between what the banks pay out in interest on depositors' savings and what they charge borrowers for loans is one of the most profitable in recent memory.
The sudden crash in energy prices may be hurting Iran, the Gulf monarchies, Russia and Venezuela. Yet Americans, who import 60 percent of their transportation fuel, along with natural gas, have been given about a half-trillion-dollar annual reprieve. The reduced price of energy could translate into more than $1,500 in annual savings for the average driver, and hundreds of dollars off the heating and cooling bills for the homeowner.
(Excerpt) Read more at tmsfeatures.com ...
http://www.freerepublic.com/focus/chat/2136635/posts
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Oh jeez...this guy and others have to just stop whining...the situation he describes is michigan the past 5 years.....time to just toughen up
“In relative terms, it is no longer 2005, but that does not mean it is 1932 either.”
Let me be clear that I recognize much personal tragedy in the Socialist fabricated economic downturn of today, but it most certainly isn’t worthy of the idealogical distortion the current lot of wealth redistributing, Freedom grabbing, Gun grabbing Socialist control-freaks are implementing under the guise of fixing what they broke.
The Political crowd in D.C. are like children whom broke the statue of Liberty, and with glue and papier mache are rebuilding it in their perspective.
Wondering why it looks more like Stalin than Lady Liberty.
Oh brother. That old canard again. As the percentage of people making their mortgage payments dropped from 98% to 90%, the stock market in half, our national debt shot into the multi-trillion-dollar range practically overnight, the economy plummeted into the worst recession in 25 years, and the national unemployment rate doubled.
Hey Vic, want to double-down on what the economy will look like when 85% of people are still paying their mortgages on time?
The U6 unemployment rate is currently around 13.6%.
Let me know if you want in or out.
Links: FR Index of his articles: http://www.freerepublic.com/focus/keyword?k=victordavishanson
His website: http://victorhanson.com/
NRO archive: http://www.nationalreview.com/hanson/hanson-archive.asp
Pajamasmedia: http://victordavishanson.pajamasmedia.com/
Remember MAD, mutually assured destruction of cold war? Well our MAD world economy says we can borrow money endlessly and use it to buy foriegn procts and expand government and there is nothing foriegners can do about it.
The longer BoB keeps the economy in a recession the more of a mandate he has to do anything he wants and the more foreigners avoid investing in US private industry/stock market (your retirement funds) and instead buy T-bills for him to spend. What about 2010 election? Maybe his goal is to get enough government employees, and voters on federal contracts, like public school teachers, nurses, UAW, Mexican immigrants to win the elections so that it doesn’t matter how the economy looks for everyone else. Of course he can never reduce the deficit with this strategy no matter how high he raises taxes.
I’ll join in...VDH is always interesting!
Yeah ... we're laughing so hard we're crying Hanson.
Sheesh ... this guy must have one heck of a parachute, and a safe landing spot all picked out.
Read the article. What you call “whining” is someone pointing out that things aren’t nearly as bad as everyone is saying they are.
The U6 doesn’t measure unemployment, though. It’s a bit of a misnomer because it’s used to compare with other measures of joblessness. The U6 measures underemployment.
Not only foreigners not investing in US stocks, but what person in his right mind would invest with the threat of nationalization hanging over so many industries and the complete lack of clarity regarding constantly changing government rules and regs. How does the auto industry conduct R&D if they are forced to make 20 different flavors of a single model car to satisfy the states’ whims?
Yes. In!
So you’re assuming that all these people who are “discouraged”, “underemployed” etc are in that position voluntarily ?
Sold to you.
“Discouraged” shows up in U5, which is fairly close to U3, so that’s just a red herring. “Underemployed” is an economic problem, but if someone is working only 25 hours a day, instead of 35, that’s very different than reporting him as if he were working 0 hours a day, which is what you were doing by referring to U6 as if it were unemployment.
And, yes: SOME “underemployed” people are in that category rather voluntarily. Case in point, while I was working on my Master’s degree, I was “underemployed.” Had an ideal job come along, I would have slowed down my degree work. I even applied for several jobs. But I was unwilling to take a full time job outside of my career path because I was getting the bills paid, and having the opportunity to work towards a better career.
Lots of working moms have been in similar situations.
THere’s a reason that the news media and the government have never widely reported U6 data, and that’s because it’s not very economically meaningful.
Straw man. U5 does not get reported as a headline; U3 does, and it’s highly misleading. The reason they show U3 is that it doesn’t include contract workers, or the long-term unemployed (once they drop off the unemployment rolls), just to name 2 important categories of employees.
U3 is a dream number, not reality. I happen to think that if you consider 25 hours a week as “full employment” not worthy of being considered in U3, you are again hiding the sausage. Someone who wants, is looking for, and likely NEEDS a full paycheck isn’t getting it because the jobs aren’t there. So if you’re using U3 to measure employment, it’s fundamentally flawed.
That about sums it up.
>> Straw man. U5 does not get reported as a headline; U3 does, and it’s highly misleading. <<
Straw man, nothing! I stated that “U5 is fairly close to U3.” It is. The number of “discouraged” workers is only 700,000, up only 270,000 since the start of the recession. That’s out of a labor force of 150 million. U3 is reported because it’s best at comparing apples to apples, not because anyone is playing “hide the sausage.” (Which incidentally is the most hideous malapropism I’ve heard in a long time!) The government proclaims the U3 data the loudest, because it’s the most valid. The government can has a fairly hard count of how many people are actively looking for work, but can only infer how many people are discouraged from looking for work.
Yes, U3 is a little bit of an under-count. Most people have the erroneous belief that it only counts those who are collecting unemployment insurance; this is not true.
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