Comments on: You Are Here: In the Pit of a Depression

By: halfwaytoconcord

halfwaytoconcord — Mon, 06 Jul 2009 17:56:49 +0000

Nom de Plume may be right.

The shooting turned into Cold War and the Allies can no longer prop up Breton Woods.

By: nrafter530

nrafter530 — Mon, 06 Jul 2009 12:46:41 +0000

The issue with this is that when Obama was elected and his was putting his plans together, the number he came up with for the stimulus was the same as what Krugman said he needed…in the weeks and months that followed, Krugman upped the number, the President didn’t, because he couldn’t…a higher number would’ve let to a “WTF, how much does this new President want to spend?!?!” war before he even took office.

Krugman also underestimated how bad the economic situation was…in the meantime, we have a country that hates spending, and we need to spend.

By: becca656

becca656 — Mon, 06 Jul 2009 12:21:21 +0000

There was an article in my hometown paper this weekend about the Stimulus jobs.

So we got a lot of money to do road re-paving in Connecticut. Because we are a northern climate, we can really only do this work for about five or six months a year, starting in April. The money and the projects for the re-paving were all released. But the State forgot to put out the bids for the asphalt milling, which is a preliminary step to re-paving. They didn’t do that until all the contracts for the re-paving were awarded.

Nothing has been done for ANY of the State repaving projects and we’re in the middle of July. The union for paving is livid, because these projects would put a lot of their workers into paid jobs. Instead, now, they’re all sitting at home, unemployed, waiting. And we’ve lost half the calendar of available time.

My point is this: don’t blame everything on the Obama administration. If you know your State has had money released to them, check to see that the State government is actually distributing it and not being thoroughly incompetant, as they are in Connecticut.

By: jessicayogini

jessicayogini — Mon, 06 Jul 2009 08:26:28 +0000

“It is not possible for China, Saudi Arabia, and other under-developed nations to withhold the fruits of global growth from their populations forever.”
The shift to a consumer economy from one geared for ever increasing production is not easy. The proof is that none of the recently developed economies has succeeded in doing so. Japan has known since the mid-80s that it had to do this and had failed utterly.
Part of the difficulty is that all the power arrangements are organized around maximizing production at the expense of consumption (a model that was not possible until export dependence became possible), so to shift the economy means the powerful yielding some of the power to the powerless. That happened in the West in the 30 and 40s only because the powerful were scared of socialism and communism.
Another part of the difficulty is that if China, Korea, etc. stop sucking all the money away from consumers and handing it over to industry as cheap capital, then would have to allocate capital efficiently. They do not have proper capital allocation mechanisms. And those are not easy to create.
Saudi Arabia is a different case entirely. Saudi Arabia is not an economy, it is a shake-down racket, or as Sterling would put it, pure rent collection. But in their case, it is not even collecting rent for anything they ever did in the past. Pure Jed Clampett.
Has any previously poor economy become rich through oil revenue? Oil does not develop a nation. It just provides the funds for the toughest local crew of thugs to buy foot soldiers and weapons and to buy off potential opposition. The ferocity of the hold on power of the security apparatchiks in Iran is about control of the oil shake-down franchise.
Russia too.
The same is true for any natural resource that can extracted without needing to develop a full complement of economic functions. Diamonds are another good example.
So neither the export-dependent economies nor the petro-economies will spread the wealth from the top to the rest of society until their elites are replaced.

By: eggroll

eggroll — Mon, 06 Jul 2009 07:13:50 +0000

I find it difficult to reconcile the message of the Happy Planet Index with the hope that traditional American jobs will return. Right now the American Economy operates on an externality assumption of 4.7 Planet Earths. That is, well, unsustainable as the Brundtland Commission might say. Worship of an opulent minority without dealing with the economic challenges facing the bottom four quintiles cannot continue. I know three people (none American) who actually toil in a nanotech factory, the type of futuristic worksite supposed to save the US economy. Two have PhDs and one has dicked around with his dissertation for 12 years. The “Help Wanted” sign at their “factory” assumes at minimum fluency in three languages, as well as good foundations in physics, materials science, nanotech concepts, writing computer code and circuit theory. Perhaps we could all be a bit more charitable to President Obama, who is expected deliver futuristic jobs while facing down an entrenched kleptocracy and an assortment of semi-literate mobs that range in beliefs from the only good “book learnin’” is learnin’ from the Good Book to investment advice from sell-side CNBC is trustworthy.

By: wigwam

wigwam — Mon, 06 Jul 2009 06:17:00 +0000

Stephanopoulos is being hypocritical since he along with the rest of the MSM was questioning the wisdom of such a “big” stimulus at the time. I remember that when the stimulus was being worked on I ran the numbers and figured that a trillion a year would be needed. As conditions have worsened that number has gone up.

Exactly! Per Paul Krugman, 2/7/09:

According to the CBO’s estimates, we’re facing an output shortfall of almost 14% of GDP over the next two years, or around $2 trillion. Others, such as Goldman Sachs, are even more pessimistic. So the original $800 billion plan was too small, especially because a substantial share consisted of tax cuts that probably would have added little to demand. The plan should have been at least 50% larger.

Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.

My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans employed over the next two years.

The real question now is whether Obama will be able to come back for more once it’s clear that the plan is way inadequate. My guess is no. This is really, really bad.

IMHO, Obama has shot his credibility wad in terms of economics.

By: nrafter530

nrafter530 — Mon, 06 Jul 2009 01:11:40 +0000

This is very true…also a stimulus bill had to get 60 votes because of a stupid part of the Budget Act of 1974 that requires 60 votes when spending on the deficit…so we had to deal with Republicans even if we didn’t want to.

Of course we don’t need to now…but in February we did…we needed 2 Republicans…we got 3 I think?

By: MarkH

MarkH — Mon, 06 Jul 2009 00:34:28 +0000

The stimulus bill went through the House fine (Dems have a big advantage there), but only got by the Senate with 2 Repub votes. They couldn’t have gotten more spending and got it passed into law.

Adding in California where they have a Republican governor and a Legislative Assembly restrained by Republicans and …

Republicans are the anchor holding back America.

By: MarkH

MarkH — Mon, 06 Jul 2009 00:27:43 +0000

It isn’t stimulus we need just yet. We need the regular economy to start going strong again.

By: MarkH

MarkH — Mon, 06 Jul 2009 00:24:40 +0000

There are a lot of subsidies we should end — at least we should consider it.