Where is the US economy headed?

@old europe,

Quote:

No reputable historian would call Hitler a "conservative", just as nobody in his right mind would call Stalin a "liberal".

But okie is in his right mind.

Or rather.. his far right mind.

1 Reply

@parados,

Hitler was a conservative when he wanted to be and Stalin was a liberal when he wanted to be. The two categories are not applicable to men in those positions.

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@parados,

Not at all, and I have never done that.
I blame Bush for his policies, and I blame Obama for his policies.
I cant blame Obama for any of the Bush policies, since he didnt create any of the Bush policies.

However, I can and do blame Obama for his policies, especially when his policies have compounded the problem.
Obama said that his policies would keep unemployment under 8%.
It has since his swearing in been as high as 10% and is now still over 9%.
His defenders have said that is because the study they used to make that original prediction was flawed, but whose fault is that.
Those were Obama people doing the study, not repubs.

And since then Obama and the dems have made several claims about how the economy is "turning the corner" and getting better, yet each time they make that claim it gets worse.

http://www.aolnews.com/opinion/article/opinion-where-did-all-those-green-shoots-go/19591619

Quote:

In an Aug. 2 op-ed headlined "Welcome to the Recovery," Treasury Secretary Timothy Geithner said that "we are on a path back to growth." Eight days later, the Federal Reserve issued a report saying the "pace of recovery in output and employment has slowed in recent months." The next day the Dow tumbled 265 points, and on Thursday initial jobless claims hit a nearly six-month high.

snip

Quote:

In February 2009, for example, President Barack Obama released his first budget, predicting unemployment that year would be 8.1 percent -- actual result, 9.3 percent. In February this year, he said the economy had turned a corner, and in June said it "is getting stronger by the day." (In June, the economy lost 221,000 jobs.)

So, While there may be some leftover economic problems from the Bush admin, the fact that the unemployment rate has gone UP since Obama was sworn in is solely the fault of the current admin.
So I stand by what I said, when the unemployment rate gets down to less then what it was when Obama was sworn in, I will give him all of the credit.
However, since it is higher now then it was when he was sworn in, he does not get credit for bringing it down.

Unless you want to give Bush credit for lowering the water level in New Orleans after the post Katrina flooding also.

1 Reply

ftp://ftp.bls.gov/pub/suppl/empsit.cpseea1.txt
Year……TOTAL US CIVIL EMPLOYMENT
1980……………..99 million [CARTER]
1988…………… 115 million [REAGAN]
1992…………….118 million [BUSH41]
2000……………137 million [CLINTON]
2007………..….146 million [BUSH43]
2008………….. 145 million [BUSH43]
2009,……….....140 million [OBAMA]
2010.……………139 million [OBAMA] (as of June)

Year.…….PERCENT OF CIVILIAN POPULATION EMPLOYED
1980…………………………………….59.2 [CARTER]
1988…………………………………….62.3 [REAGAN]
1992…………………………………….61.5 [BUSH41]
2000…………………………………….64.4 [CLINTON]
2007…………………………………….63.0 [BUSH43]
2008…………………………………….62.2 [BUSH43]
2009…………………………………….59.3 [OBAMA]
2010…………………………………….58.5 [OBAMA] (as of June)

It won't be too long now before we get the as of July numbers for total employed and % employed.

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@mysteryman,

Quote:

However, I can and do blame Obama for his policies, especially when his policies have compounded the problem.
Obama said that his policies would keep unemployment under 8%.
It has since his swearing in been as high as 10% and is now still over 9%.

So, you can tell us which of his policies made the unemployment go to 10% as opposed to which were residual Bush policies that continued?

Quote:

So, While there may be some leftover economic problems from the Bush admin, the fact that the unemployment rate has gone UP since Obama was sworn in is solely the fault of the current admin.

So, you are saying businesses decide to lay off workers on the spur of the moment?

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@parados,

The govt bailout of GM was one, IMHO.
Part of that deal forced GM to close dealerships, some of them profitable.
That put those people out of work, and the "ripple effect" through the economy also put more people out of work.

Sending TARP money to states, without consideration for those states p0pulations hasnt helped.
That money was supposed to help states put people to work, but it hasnt done so.
I read recently that states like ND got about 3 times as much, per capita, as did states like NY.
How does that help put people in NY back to work?

But since his own economic studies when he was sworn in said, and he said in his first SOU, that he would keep unemployment at no more then 8%, and he hasnt delivered, nor has he even come close,I cannot blame Bush when Obama made the studies, and made the promise.

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@mysteryman,

Quote:

The govt bailout of GM was one, IMHO.
Part of that deal forced GM to close dealerships, some of them profitable.
That put those people out of work, and the "ripple effect" through the economy also put more people out of work.

Dec 2, 2008 - GM submits viability plan to US Congress that includes cutting 1600 dealerships by 2012.
http://banking.senate.gov/public/_files/GMCongressionalSubmissionFinal.pdf

On December 19, 2008, Bush announced that GM would receive $13.4 billion in loans from the Troubled Asset Relief Program fund

Obama becomes President on Jan 20,2009.

On May 16th GM announced it was going to close 1100 dealerships which leads to speculation that GM was close to filing bankruptcy.

On June 1, the Obama administration said it would provide 30 billion to GM in the bankruptcy that is filed the next day.

The GM bankruptcy lists 20 billion from Feds and the 30 billion promised.

So, it's Obama's fault that GM closed dealerships? I think you are rewriting history badly MM. GM announced those closures before Obama was President.

1 Reply

@parados,

parados wrote:

So, you are saying businesses decide to lay off workers on the spur of the moment?

You have chosen a somewhat perjorative phrase with which to describe it. However, the fact is that companies, particularly in labor intensive businesses are very quick to lay off employees when demand and sales fall. Profits are a very small fraction of costs & revenue, and when revenues decline costs must be quickly reduced to avoid hemmorhaging cash.

The unemployment effects of the market crash were mostly in place when Obama took office, though some layoffs continued as the economic effects continued to spread through the economy. The issue today is the lack of job creation and recovery, which I believe is directly attributable to business uncertainty regarding new government regulations and intrusions in private economic activity and the immediate prospect of higher taxes. These do not create a climate of business confidence, optimism and a willingness to take financial risks. On the contrary the uncertainty in the future behavior of increasingly intrusive regulators and tax rates at both the Federal and Local government levels (exacerbated by the lack of any detectable effort to contain or limit government spending in any but a few places like New Jersey) all make reliable forecasts of future economic activity and opportunity very hard to calculate. The result is business caution, the hoarding of cash and a reductioin in investments. All things considered a perfect formula for continued recession.

Meanwhile our King Knute Obama continues to search for a reliable method of regulating the tides.

1 Reply

@mysteryman,

mysteryman wrote:

The govt bailout of GM was one, IMHO.
Part of that deal forced GM to close dealerships, some of them profitable.
That put those people out of work, and the "ripple effect" through the economy also put more people out of work.

Hey, that's interesting. If the government hadn't bailed out GM and the company had had to declare bankruptcy like e.g. Lehman, a whole lot more people would have been out of work.

Do you suggest that the conditions of the government bailout of GM were not generous enough, mysteryman?

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@georgeob1,

Quote:

You have chosen a somewhat perjorative phrase with which to describe it. However, the fact is that companies, particularly in labor intensive businesses are very quick to lay off employees when demand and sales fall. Profits are a very small fraction of costs & revenue, and when revenues decline costs must be quickly reduced to avoid hemmorhaging cash.

And?
Let's see..
http://www.dol.gov/compliance/guide/layoffs.htm

Hmm.. they have to give 60 day notice for major layoffs according to the law.

Quote:

The issue today is the lack of job creation and recovery, which I believe is directly attributable to business uncertainty regarding new government regulations and intrusions in private economic activity and the immediate prospect of higher taxes.

What you believe and what economists believe seem to be quite different. If consumers were growing their spending by 6%, businesses would be creating jobs to fulfill the demand no matter how uncertain the regulations were.

1 Reply

@old europe,

In fact GM did go through a modified bankrupcy process. It was modified from the usual legally established process by the Administration to give its plitical supporters (The United Auto Union) special beneficial treatment, at the expense of the company's bondholders. Still, GM managed to shed a lot of trailing liabilities and emerge stronger as a result.

However, potential buyers of corporate bonds are now more reluctant to invest for fear that the covernment may again premptorily void their contracted collateral security; and GM is still infected with the UAW parasite that previously brought it down. (It is interesting that none of the - equally large - non-union U.S. auto manufacturers needed bailouts from ther government).

1 Reply

@parados,

Read your link for the specific definitions of "mass layoffs". These regulations are very easily (and commonly) avoided by more frequent smaller layoffs - something that most companies do regularly. (In the continuing war between bureaucratic regulators and self-interested economic individual actors, the individuals win almost every time. It isn't hard to be a bit more imaginative or agile than a bureaucrat.) If it were otherwise the Bureau of labor statistics would be able to provide accurate 60 day forecasts of future unemployment - they can't.

What I wrote about the uncertainties facing businesses also applies to individual consumer spending. They aren't very optimistivc either. Economists differ in just where they imagine the beginnings of trends occur - with the consumers or with the producers & employers. The fact is that today both are in a major funk.

In any event your implied claims about "most economists" are bunk.

1 Reply

@georgeob1,

Quote:

These regulations are very easily (and commonly) avoided by more frequent smaller layoffs - something that most companies do regularly.

But they can't do such layoffs quickly without running afoul of the law. Either way, corporations require a few months to announce and implement layoffs.

1 Reply

@old europe,

IMHO the govt should not have bailed out GM at all.
If they make an inferior product, amass huge debts, and because of their own stupidity cant compete, they should have been allowed to fold, just like any other business.

Unless you are suggesting that the govt should also bail out buggy whip makers.

The assets of GM would have been picked up by another auto maker, and their employees would still be working, but for a different company.

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@parados,

Quote:

So, it's Obama's fault that GM closed dealerships? I think you are rewriting history badly MM. GM announced those closures before Obama was President

WHAT!!!!!

Your own timeline shows that statement to be false...

Obama becomes President on Jan 20,2009.

Quote:

On May 16th GM announced it was going to close 1100 dealerships which leads to speculation that GM was close to filing bankruptcy.

So Obama becomes President in January of 2009.
In May of 2009 GM closes dealerships.

What calendar are you using that puts May of 2009 BEFORE January 2009?

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@georgeob1,

I do see your point.Your quote; [However, potential buyers of corporate bonds are now more reluctant to invest for fear that the covernment may again premptorily void their contracted collateral security; and GM is still infected with the UAW parasite that previously brought it down. (It is interesting that none of the - equally large - non-union U.S. auto manufacturers needed bailouts from ther government).
The main factor that made me change my investments were due to a lack of transparency in the market place.
I think this is caused by our " the sky is the limit mentality. [ ethics have seemed to be left behind]

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@mysteryman,

mysteryman wrote:

The assets of GM would have been picked up by another auto maker, and their employees would still be working, but for a different company.

You're saying that more people who were directly or indirectly working for GM and who lost their jobs would still be employed if GM had folded instead of getting bailed out by the government?

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@old europe,

oe, Some people's imagination exceeds their intelligence. hmmmm....

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@mysteryman,

Quote:

The assets of GM would have been picked up by another auto maker, and their employees would still be working, but for a different company.

GM announced the closing in December of 2008 in a paper they submitted to Congress on Dec 2.
If you want to argue dates, then let's look at the correct dates MM.

As for the argument that GM would have been picked up by another auto maker, we only need to look at their attempt to sell of Saturn to realize they would not continued as the same company.

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@parados,

parados wrote:

Quote:
These regulations are very easily (and commonly) avoided by more frequent smaller layoffs - something that most companies do regularly.

But they can't do such layoffs quickly without running afoul of the law. Either way, corporations require a few months to announce and implement layoffs.

Nonsense. Well-managed companies of all types, ranging from law & consulting firms to manufacturing and engineering construction companies and retailers do layoffs on a more or less continuous basis without government intervention or 60 day notification periods.

Your comments suggest that you both didn't read the provisions of the law addressed there and don't have any meaningful experience in managing a business.

0 Replies

Where is the US economy headed?

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