Where is the US economy headed?

@Cycloptichorn,

Quote:

How do you define 'demand side' and 'supply side?' Specifically.

I don't need to. I left it to Stendhal. Pork has to be raised before it's sliced up and dished out.

We know it doesn't matter to you Cyclo. You're on easy street.

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@cicerone imposter,

cicerone imposter wrote:

I think the us of the word "socialism" is being misused. Socialism is when the ownership of everything or most is owned by the government; that has never worked whether in Russia, China, North Korea, or Cuba.

All the other countries are a form of (democratic) republics, capitalism, and tyrants (repressive governments) and/or its combination.

No. My reference, to which Cyclo objected, was to the leaders of Socialist party governments in Greece. They practice a mixed economic policy with large scale (but far from complete) government ownership of enterprises, high levels of government employment, taxation and regulation of economic activity. They are largely democratic in their politics.

Though many become wealthy as a result of their access to government power and venality, they are not plutocrats in the usual sense of that word.

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@Cycloptichorn,

Cycloptichorn wrote:

]

Hopes and wishes ya got there, George. That's it. I know you have a special love for Ireland, so I'm not trying to knock the place; but I doubt what you say is true, very much. I guess we'll see in a few years whether the current trends reverse themselves, but I see no persuasive evidence that they are going to do so anytime soon.

Cycloptichorn

Well that is certainly true!

I was focusing on the observable fact that, even in the midst of their current troubles, they are far better off than they were 22 years ago, and, on average, still better off than the citizens of the UK or France. They are attempting to deal with their current problems by taking the hit now to eliminate government deficits - we shall both see what results.

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@georgeob1,

Quote:

on average, still better off than the citizens of the UK or France.

How did you work that out George?

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Updating a story I wrote about on this or one of the other threads we hang out at.
There is a law in California that says that lawmakers don't get paid for every day that passes after they don't adopt a balanced budget. The legislature did pass a bill, but Gov Brown vetoed it. The legislature argued that they should get paid (some $400 a day) because they did move a bill onto Brown. They did their job; it got vetoed.
The state controller ruled today that the lawmakers are not entitled to pay and, even if they pass a bill, they are not entitled to retroactive pay.
Lawmakers who voted for what they thought was a symbolic gesture are now quite unhappy. They have to tell their families that money is tight. Woe.
Any Californian know more about this? I am 3,000 miles away in VA.

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@realjohnboy,

As a result of a ballot initiative passed last year, state legislators will be denied their pay if they fail to pass a balanced state budget by mid June, before the start of the fiscal year. A budget was passed at the 11th hour, but it was replete with the financial tricks which have got the state into so much trouble (and which would put the CFO & CEO of any publicly traded company in jail). The comptroller issued a finding that the budget they passed was not in fact balanced, and the cessation of pay resulted. The fact that the governor vetoed the budget was not directly relevant to the pay issue.

In an unrelated budget initiative California voters also removed the redistricting authority from the State legislature for both state and Federal legislative districts, giving that authority to a citizen's commission.

So far neither of these actions has induced the legislators to change their irresponsible behavior. Perhaps hard to believe, but, sadly true.

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@georgeob1,

Give it a few weeks.

Cycloptichorn

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@Thomas,

Thomas wrote:

georgeob1 wrote:
Cycloptichorn wrote:
Sure they do. They can print all the Euros they want. They simply don't want to go that route, because it waters down the fortunes of the richest and most powerful.Cycloptichorn

Oh I think working class retirees in France wouldn't like it much either - it would take money (purchasing power) out of their pockets too.

I'm pretty sure the pensions or France's working-class retirees are indexed to inflation, just as Social Security recipients are in the US. Their purchasing power doesn't depend on how much money the ECB prints.

The question here is unbounded bailouts to Eurozone members whose budgetary policies threaten the financial stability and banking systems of all the members. Cyclo proposed the other members have unlimited ability to add to the money supply to remedy the situations of profligate members and can do so harming only "the fortunes of the richest and most powerful", and leaving working class people (somewhat of a euphamism in France) unaffected. I responded saying that this is an illusion: the effects will spread thoughout the economies of all member nations, with adverse consequences for all.

I think you are merely trying to score points here, without addressing the obvious real question.

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@georgeob1,

georgeob1 wrote:

I responded saying that this is an illusion: the effects will spread thoughout the economies of all member nations, with adverse consequences for all.

Nobody disputes that the effect---increased inflation because of the expanded money supply---would spread throughout the entire Euro-zone. The dispute is whether such widespread inflation would be adverse. And on this point, Cycloptichorn is simply right: An ECB commitment to moderate inflation will harm the coupon-clipping classes. But it will not substantially affect regular retirees, whose income comes mainly from public pension systems.

georgeob1 wrote:

I think you are merely trying to score points here, without addressing the obvious real question.

And I think you are merely wrong and out of substantive arguments. That's when you usually start attributing ulterior motives to the people disagreeing with your politics.

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@georgeob1,

Quote:

Cyclo proposed the other members have unlimited ability to add to the money supply to remedy the situations of profligate members and can do so harming only "the fortunes of the richest and most powerful", and leaving working class people (somewhat of a euphamism in France) unaffected.

This mis-represents what I said in 2 important ways. First, the ECB wouldn't be adding to the money supply to remedy the situation of Greece - they are in for a world of pain no matter what happens now - but to remedy the situation of German and French banks. Second, I never said that increasing the money supply would have NO affect on working class people; but the truth is that those it would MOST effect would be those who have gathered a large fortune together - coincidentally, those people who are most politically connected to the ECB and the people who will fight the hardest to keep it from happening.

Just like here in the US.

It is important to keep in mind, first and foremost, that it is banks being bailed out here; German and French banks who made poor decisions and now don't want to pay the price for their poor decisions.

Cycloptichorn

1 Reply

@Cycloptichorn,

Both the New York Times and PBS have offered recent articles on Greece's widespread tax-evasion problem ('massive' is the word they used, I believe). Other sources I've read have said it hasn't been that much of a contributing factor to their current woes. What do you think?

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@Irishk,

Irishk wrote:

Both the New York Times and PBS have offered recent articles on Greece's widespread tax-evasion problem ('massive' is the word they used, I believe). Other sources I've read have said it hasn't been that much of a contributing factor to their current woes. What do you think?

From what I've read, it's a time-honored and well-respected tradition there. One of the reasons I used the word 'plutocrats' above, is that there have long been allegations in the Greek media that the gov't intentionally looks the other way on tax collections for rich folks and big businesses in exchange for bribes; and that many of those who run the government, were formerly rich folks who paid little to no taxes.

Hey, once again, just like here in America! Maybe to a greater degree, but that's it.

Cycloptichorn

1 Reply

@Cycloptichorn,

I think it was the PBS video that had sources pointing out that it was prevalent all the way from billionaire shipping magnates down to local taxi drivers. They showed how local, ordinary doctors and lawyers, shopkeepers and restaurant owners operated to avoid the VAT and sales taxes.

Of course, what happens in Greece stays in Greece. I'm only curious as to how those practices (if true) would impact the attitudes of U.S. taxpayers who will be contributing to Greece's bailout.

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@Irishk,

Once again, I should point out that it's not a bailout of Greece so much as a bailout of French and German banks.

Cycloptichorn

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Back on the topic of America, Obama's admin announced today that they are going to release something like 60 million barrels of oil from the strategic reserve, in part to make up for oil which is being impacted by the Libya situation. While it's too early to say how this will affect gasoline, prices, crude oil prices are definitely falling - they are down 5% today already.

Working to reduce the price of gas would def. help Obama's re-election next year, and be sort of a stealth stimulus to the economy... or so I hear from people who drive.

Cycloptichorn

1 Reply

@Cycloptichorn,

Obama's economic ignorance continues to amaze me... gas prices have been going down for weeks and he suddenly
decides to give up a portion of this countries oil reserve thus making us even more dependent on foreign oil.
The release of our reserve will do nothing to reduce gas prices and it will cost more to replace that it could possibly save.
WTF is this hack thinking?

Obama is a complete and utter failure and this country can't wait to vote him out of office in the 2012 election.

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At least one member of Obama's regime can see the Obamanomics caused double dip in our economic future.

Rep. Ed Markey, D-Mass

Quote:

"With our economy teetering on the brink of a double-dip recession, and American families still struggling during peak driving season, this is the one tool America has at her disposal to immediately help drive down prices at the pump"

Of course their reason for releasing oil is flawed... the entire Obama regime is flawed.

The US should drill now and add a truly new supply of oil to
the world market, this would actually have a positive impact.

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@Thomas,

Thomas wrote:

georgeob1 wrote:
I responded saying that this is an illusion: the effects will spread thoughout the economies of all member nations, with adverse consequences for all.

Nobody disputes that the effect---increased inflation because of the expanded money supply---would spread throughout the entire Euro-zone. The dispute is whether such widespread inflation would be adverse. And on this point, Cycloptichorn is simply right: An ECB commitment to moderate inflation will harm the coupon-clipping classes. But it will not substantially affect regular retirees, whose income comes mainly from public pension systems.

georgeob1 wrote:
I think you are merely trying to score points here, without addressing the obvious real question.

And I think you are merely wrong and out of substantive arguments. That's when you usually start attributing ulterior motives to the people disagreeing with your politics.

You are still evading the point. The inflation associated with the suggested generous monetary bailout of Greece (with Latvia, Ireland, Portugual and perhaps Spain waiting in the wings), is likely to be more than "moderate" and to have adverrse effects on real economic growth and therefore the real value of tax collections and hence the governments' ability to fund social welfare programs of all kinds. There is, in addition, the moral hazard, which, even if you are inclined to discount its effects, is not negligible. All this touches on a fundamental contradiction built into the EU, and the Eurozone in particular, involving the establishment of a common currency in an association of nations each with independent bugetary, and to a large degree, regulatory authority. The sustem has worked so far because the individual nations have, to a large degree, kept the coordinated assurances and promises they made to the others. Greece has clearly violated those committments, and how the EU deals with that will have lasting effects on the union going forward. In my view, an easy bailout for Greece will threaten the foundation of the monetary union affecting everyone in it. I also think you understand all of this very well, but have instead chosen to adopt a niggling approach to details that cannot be separated from the larger effects.

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@georgeob1,

Quote:

You are still evading the point. The inflation associated with the suggested generous monetary bailout of Greece (with Latvia, Ireland, Portugual and perhaps Spain waiting in the wings)

ONCE AGAIN, it is not a bailout of these countries, it is a bailout of those who hold their debt - ie, German and French banks, as well as many smaller parties.

Quote:

There is, in addition, the moral hazard, which, even if you are inclined to discount its effects, is not negligible.

Now, here we completely agree. There is a moral hazard in bailing out banks who made foolish loans.

Cycloptichorn

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What is Obama's plan to help the economy exactly?

Has the Obama regime come up with a budget yet?

1 Reply

Where is the US economy headed?

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