114
   

Where is the US economy headed?

 
 
Cycloptichorn
 
  -1  
Reply Thu 22 Sep, 2011 03:01 pm
@realjohnboy,
Quote:
It is easy to hate banks, isn't it?


Well, it's hard to see how they are still acting in a fashion which benefits the public. Their prime purpose seems to be to take gigantic risks with their depositor's money, on behalf of the very rich, to make leveraged bets on investments, and then soak all of us with the fallout when those fall flat.

Cycloptichorn
spendius
 
  2  
Reply Thu 22 Sep, 2011 03:08 pm
@Cycloptichorn,
Dearie me Cyclo. What a fatuous analysis that is.
0 Replies
 
Cycloptichorn
 
  -1  
Reply Thu 22 Sep, 2011 03:41 pm
Quote:
September 22nd, 2011
The Power of Political Narrative
by Michael Cohen

Greg Sargent, whose Plum Line blog is really one of the best political blogs on the Interwebs, has a good post up today poking holes at Matt Bai’s latest effort at High-Broderism. Bai makes the following assertion about Obama’s support for tax increases on the wealthy:

Quote:

No matter how popular such a tax increase may be in isolation, Obama’s proposal is very likely to affirm the fears of some sizable contingent of voters who pulled the lever for him last time — fears that he is, at bottom, a conventional liberal of the 1970s variety.


As Greg wisely points out, this argument is contradicted by a whole mess of evidence. A) Obama ran for President on a platform of raising taxes on the wealthy in 2008 B) There is tons of public opinion data (nicely assembled here by Sargent) that suggests voters want Congress and the President to raise taxes on the wealthy. Indeed, if there is any issue on which Obama is probably vulnerable of being defined as a conventional liberal of the 70s variety it is on spending – and not taxes. Hence the White House’s almost maniacal focus on achieving a grand bargain with Republicans during the debt limit negotiations.

But having said all that Bai has a point (ish). Public opinion polls that suggest voters want higher taxes are certainly powerful, but what’s even more powerful, particularly for low-information voters, is the dominant political narrative around taxes. And let’s face it; if there is one narrative that defines our national discussions about taxes and spending it is that Democrats like to raise taxes and Republicans like to cut them.

For example, as the President likes to say all the time, during his first two years in office he cut taxes for 95% of Americans . . . and yet poll results showed that less than 10 percent of Americans knew their taxes had gone down, while a third think they went up. (The rest think their taxes stayed the same). In addition, six in ten Americans think the country is over-taxed . . . even though taxes are at their lowest level since the 1950s. Part of this is no doubt a result of low-information voters being low-information voters – but it’s also a result of Democrats being generally perceived as the party of higher taxes.

So while Sargent is right that Obama ran on raising taxes in 2008 – and it didn’t seem to hurt him very much – his tax proposals were heavily constricted. Only those making more than $250,000 would pay more under Obama’s plan; and of course the President repeatedly bragged that most Americans would pay less in taxes even though US tax rates are historically low. There are of course all kinds of reasons why Obama took such a position, but I’ll go out on a limb and argue that it’s because he was afraid of being tarred as a tax-and-spend liberal. Only by threatening to soak the rich (albeit quite tepidly) and offering to cut middle class taxes was he able to neutralize the tax issue.

It’s also worth remembering that in the Fall of 2010 when Obama wanted Congress to have a vote on ending the Bush tax cuts for the wealthiest Americans and extending it for the middle class he couldn’t even get a Democratic Congress to hold a vote on it because they were afraid of being attacked by Republicans as “tax hikers.”

So the narrative is nothing if not powerful and pervasive.

But here’s why I think Bai ultimately gets this wrong – Republicans have fundamentally weakened the power of their tax narrative by adopting such an extreme position on taxes. As I wrote over the summer, it’s not some form of political hyperbole to accuse Republicans of keeping tax rates low to be their number one priority – it’s a fact. If you look back at the debt limit debate the one issue on which Republicans absolutely refused to bend was tax cuts – even if it meant sending the country into default. Of course, it wasn’t even a 1-1 ratio of spending cuts to tax hikes that they rejected. By some accounts, more than 80 percent of the cuts would have come in spending and the rest in revenue increases. Yet, that was still unacceptable to Republicans.

As a result it has become much easier for the White House and Democrats to portray Republicans as handmaidens of the plutocratic class; because it actually happens to be true!
Democrats now have a handy response to charges that they want to increase taxes on everyone – they only want to raise them on the rich. And while they’ve used such defenses in the past because of the GOP stubbornness on the issue today — and because of the sense that the deficit is a serious national crisis — the Democratic counter-argument resonates far more deeply than it has before.

Indeed, a very similar thing happened with the Republicans and national security. For years, the GOP was by far the most trusted party in keeping America safe and standing up to the country’s enemies. Then the Iraq War happened and the Republican advantage was squandered – so much so that a Democratic presidential nominee who opposed the war in Iraq would not only suffer from taking such a position, but in fact prosper. That the Democrats and GOP are today reasonably evenly matched on national security (indeed at this point Democrats probably have the advantage) is a testament to the extent to which the GOP threw away perhaps the most powerful advantage in all of American politics.

Now granted in order to “win” on national security Obama felt the need to escalate on Afghanistan so clearly this isn’t a done deal yet – and on taxes, Obama’s “class warfare” approach of taxing the wealthy is a nod to the continuing power of the GOP’s tax rhetoric.

Nonetheless, it’s important to remember that while political narratives are powerful things, they are not immutable.


http://www.samefacts.com/2011/09/uncategorized/the-power-of-political-narrative/

Cycloptichorn
0 Replies
 
realjohnboy
 
  1  
Reply Thu 22 Sep, 2011 04:21 pm
@Cycloptichorn,
Quote:
It is easy to hate banks, isn't it?


I ended my post abruptly, Cyclo. It was getting too long. The Fed's twist - which, if effective - could hurt bank profits. Lower long term interest rates could also have an impact on:
> Brokerage firms: many of them offer mutual funds which are not performing well. Some of them are are cutting or even waiving management fees in order to keep clients from pulling out money
> Insurance companies assume a certain rate of return on investments. A sustained decline in long term interest rates could cause them problems
> Pension funds could well be in the same boat. That might be huge.

I am still thinking that deflation is unlikely but a worldwide recession is more likely than it was a few months ago.
hawkeye10
 
  1  
Reply Thu 22 Sep, 2011 04:24 pm
@realjohnboy,
Quote:
I am still thinking that deflation is unlikely but a worldwide recession is more likely than it was a few months ago
Really? Most people have watched their balance sheet deflate over the last few years, as their 401k's and homes lose value....the deflation shows no sign of ending either. For most people we are in a deflationary depression, the official numbers dont relate to our lives.
roger
 
  1  
Reply Thu 22 Sep, 2011 05:26 pm
@hawkeye10,
General agreement of general official numbers, but on deflation that might be the number to keep an eye on.
0 Replies
 
parados
 
  2  
Reply Fri 23 Sep, 2011 07:17 am
@hawkeye10,
Quote:
Really? Most people have watched their balance sheet deflate over the last few years, as their 401k's and homes lose value
A
And now their pile of gold is losing value too.
Gold is down another $50 this morning after losing $70 yesterday.
roger
 
  2  
Reply Fri 23 Sep, 2011 01:52 pm
@parados,
Is that all?
hawkeye10
 
  1  
Reply Fri 23 Sep, 2011 02:01 pm
@roger,
roger wrote:

Is that all?
Exactly, like where is the point?
hawkeye10
 
  1  
Reply Fri 23 Sep, 2011 02:13 pm
@hawkeye10,
Quote:
Gold fell more than $100 to below $1,650 an ounce as some investors sold the metal to cover losses in other assets.

Commodities plunged this week on concern that policy makers are running out of tools to avert another global recession. More than $3.4 trillion has been erased from equity values this week, driving the MSCI All-Country World Index of shares into a bear market. Before today, gold dropped 9.5 percent since touching a record $1,923.70 on Sept. 6.

“People are selling gold to meet margin calls,” Marshall Berol, co-portfolio manager of the Encompass Fund, said in a telephone interview from San Francisco. “We may see interest return. Gold has fallen significantly from its peak.”


http://finance.yahoo.com/news/Gold-Declines-More-Than-100-bloomberg-2611280917.html?x=0&.v=1

This is not exactly good news, and it will be temporary.
tenderfoot
 
  1  
Reply Sat 24 Sep, 2011 11:47 pm
@hawkeye10,
hawkeye 10
When you buy shares do you get a actual piece of the company or a piece of paper that says you do ??????????
When you buy gold do you get a actual piece of gold or a piece of paper that says you do ???????????
When you bet on a horse they give you a piece of paper that say you made a bet.... That makes it the same as above, just gambling ???????????
I never gamble or buy shares and have a piece of paper that my bank says I have a certain amount of money in it ???????
roger
 
  2  
Reply Sun 25 Sep, 2011 12:37 am
@tenderfoot,
tenderfoot wrote:

I never gamble or buy shares and have a piece of paper that my bank says I have a certain amount of money in it ???????


Do you even have cash in the pocket???????? Has it occured to you that dollar bills are just more pieces of paper that don't even promise anything in particular?????????
0 Replies
 
spendius
 
  1  
Reply Sun 25 Sep, 2011 06:03 am
@tenderfoot,
Quote:
When you buy shares do you get a actual piece of the company or a piece of paper that says you do ??????????
When you buy gold do you get a actual piece of gold or a piece of paper that says you do ???????????
When you bet on a horse they give you a piece of paper that say you made a bet.... That makes it the same as above, just gambling ???????????
I never gamble or buy shares and have a piece of paper that my bank says I have a certain amount of money in it ???????


All of which, tf, makes your presence on an economics thread inexplicable unless it is so you can tell your friends that you participate in refined discussions on the internet concerning this arcane science in order to impress them.
izzythepush
 
  0  
Reply Sun 25 Sep, 2011 06:44 am
@spendius,
Didn't you say gold would bottom out at $150 a lump?
0 Replies
 
Miller
 
  1  
Reply Sun 25 Sep, 2011 08:50 am
@tenderfoot,
tenderfoot wrote:

hawkeye 10

I never ... have a piece of paper that my bank says I have a certain amount of money in it ???????


Are you like Whitey Bulger and keep your cash in a living room wall?
0 Replies
 
Brandon9000
 
  1  
Reply Sun 25 Sep, 2011 09:22 pm
Quote:
A record 15.4 million suburban residents lived below the poverty line last year, up 11.5% from the year before, according to a Brookings Institution analysis of Census data released Thursday. That's one-third of the nation's poor.

And their ranks are swelling fast, as jobs disappear and incomes decline amid the continued weak economy.


http://money.cnn.com/2011/09/23/news/economy/poverty_suburbs/index.htm?source=cnn_bin&hpt=hp_bn5#init/fpc=7639673-1326b32f827-30cee3b7-15/sessionID=1317004114171.59369/publisher=b8241a5c-6fa7-404a-9989-13f94cdfff16/tracking=true/onhover=true/autoclose=true/autoPosition=true/embeds=false/doneScreen=true/minorServices=true/theme=1/textRightToLeft=false/shorten=true/popup=false/newOrZero=new/services=/pUrl=http%253A%252F%252Fmoney.cnn.com%252F2011%252F09%252F23%252Fnews%252Feconomy%252Fpoverty_suburbs%252Findex.htm%253Fsource%253Dcnn_bin%2526hpt%253Dhp_bn5/title=Poverty%2520pervades%2520the%2520suburbs%2520-%2520Sep.%252023%252C%25202011/stLight=true
0 Replies
 
joefromchicago
 
  1  
Reply Mon 26 Sep, 2011 10:13 am
@hawkeye10,
hawkeye10 wrote:

GOLD HITS $1900!

I'm rich, I tells ya! RICH!!!


Aw nuts.
hawkeye10
 
  2  
Reply Mon 26 Sep, 2011 10:55 am
@joefromchicago,
Quote:
Aw nuts.
Don't panic, the selling is said to be due to Hedge Funds needing to sell the only asset that has been doing well in order to raise money and because margins for contracts just got raised a bunch because the market has been so volatile (for instance it has moved in a $90 range so far today)...most everyone expects gold to go up a bunch from where it is now as the Fed does QE3 and as the global economy continues to crash. Neither the European nor American political system freezes show any sign of thawing, as the Europeans again trot out the nonsense that Greece will not default and as the Americans again threaten to shut down the government by way of refusing to fund operations. If government does not work then the depression can not be avoided, and Gold will do very very well.
joefromchicago
 
  1  
Reply Mon 26 Sep, 2011 11:11 am
@hawkeye10,
It's so cute that you'd think I'd ever, in a million years, consider taking investment advice from you.
hawkeye10
 
  2  
Reply Mon 26 Sep, 2011 11:14 am
@joefromchicago,
joefromchicago wrote:

It's so cute that you'd think I'd ever, in a million years, consider taking investment advice from you.
As I would expect, as you have never shown any ability to separate the wheat from the chaff...
0 Replies
 
 

Related Topics

The States Need Help - Discussion by Robert Gentel
Fiscal Cliff - Question by JPB
Let GM go Bankrupt - Discussion by Woiyo9
Sovereign debt - Question by JohnJD
 
Copyright © 2025 MadLab, LLC :: Terms of Service :: Privacy Policy :: Page generated in 0.04 seconds on 07/17/2025 at 07:37:45