Are we in a depression?!?

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Are we in a depression?!?

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cornopean
Forum Elder

Joined: 20 Dec 2006
Posts: 3576

Posted: Fri Apr 03, 2009 1:21 am Post subject: Are we in a depression?!?

Obama predicts that GDP growth for this year will be 1.2 percent and that the avg growth for 2010 will be 3.2 percent? So..........how are we in a depression? 3.2 percent is pretty respectable growth. Not great but certainly not depressionesque.

http://www.businessweek.com/ap.....4TG5O0.htm

Timetheos
Known Associate

Joined: 10 Apr 2008
Posts: 469
Location: Seattle

Posted: Fri Apr 03, 2009 3:17 am Post subject:

Quote:

Employers have slashed their payrolls over the past year as weak demand forces production cutbacks. Employers cut almost two million jobs between December and February alone. Wall Street forecasters expect Friday's government report on March employment to show job losses topping February's 651,000 positions shed. Several economists expect payrolls to decline by 700,000 or more, with the unemployment rate rising to as high as 8.5% in March from 8.1% the prior month.

http://online.wsj.com/article/.....82133.html

Yeah Corno, there's no economic difficulties...

(BTW: if we were to measure employment like we did in the 30s, we would be very close to Great Depression levels)

cornopean
Forum Elder

Joined: 20 Dec 2006
Posts: 3576

Posted: Fri Apr 03, 2009 12:12 pm Post subject:

Timetheos wrote:

Yeah Corno, there's no economic difficulties...

(BTW: if we were to measure employment like we did in the 30s, we would be very close to Great Depression levels)

You totally didn't address my point. Obama says that GDP for 2010 will be 3.2 percent. Those are good numbers. Is that a depression?

and yet we are told that we are in the greatest depression since the Great Depression. ??

Timetheos
Known Associate

Joined: 10 Apr 2008
Posts: 469
Location: Seattle

Posted: Fri Apr 03, 2009 3:46 pm Post subject:

cornopean wrote:

Timetheos wrote:

Yeah Corno, there's no economic difficulties...

(BTW: if we were to measure employment like we did in the 30s, we would be very close to Great Depression levels)

1) We've had this discussion before on GDP. You can't eat it, and it's only one metric.
2) It's my understanding that there isn't a technical term for Depression. It's not like a recession that has a specific meaning.
3) Many feel that Obama's GDP forecast is overly rosy.
4) I believe we are because of the practical effects on society (massive layoffs, reductions in benefits, Bushvilles, foreclosures, bankruptcies).

cornopean
Forum Elder

Joined: 20 Dec 2006
Posts: 3576

Posted: Fri Apr 03, 2009 4:01 pm Post subject:

Timetheos wrote:

1) We've had this discussion before on GDP. You can't eat it, and it's only one metric.

You're guy is saying that we are in the greatest financial crisis since the Great Depression. Then he tells us to expect 1% growth this year and 3.2% next year. Is that consistent?

Quote:

2) It's my understanding that there isn't a technical term for Depression. It's not like a recession that has a specific meaning.

I would at least expect some years of negative growth.

Quote:

3) Many feel that Obama's GDP forecast is overly rosy.

as do I. what about you?

Quote:

4) I believe we are because of the practical effects on society (massive layoffs, reductions in benefits, Bushvilles, foreclosures, bankruptcies).

I believe we are in a recession as well. My point is that Obama is very confused.

Timetheos
Known Associate

Joined: 10 Apr 2008
Posts: 469
Location: Seattle

Posted: Fri Apr 03, 2009 4:21 pm Post subject:

>
You're guy is saying that we are in the greatest financial crisis since the Great Depression. Then he tells us to expect 1% growth this year and 3.2% next year. Is that consistent?
<
Probably not

>
I would at least expect some years of negative growth.
<

It depends. With todays economic system versus the last Great Deppression, things tend to be more acute.

>
as do I. what about you?
<
Yes, although the massive stimulus might kick it up there.e

>
My point is that Obama is very confused.
<

And yet he is so much better than anything the Republicans offered.

BTW: "Congressional Budget Office compares downturn to Great Depression"

http://www.mcclatchydc.com/251/story/60822.html

cornopean
Forum Elder

Joined: 20 Dec 2006
Posts: 3576

Posted: Fri Apr 03, 2009 9:33 pm Post subject:

Quote:

And yet he is so much better than anything the Republicans offered.

The republicans offered tax cuts which are a more powerful stimulus, reduce the size of govt, and is far quicker to take effect than govt spending.

Also, all govt spending is inefficient. Anyone who is not spending his own money is bound to do it carelessly and at worst corruptly.

Timetheos
Known Associate

Joined: 10 Apr 2008
Posts: 469
Location: Seattle

Posted: Sat Apr 04, 2009 1:50 am Post subject:

God Corno, you %&*&^@ing broken record.

cornopean wrote:

Quote:

And yet he is so much better than anything the Republicans offered.

The republicans offered tax cuts which are a more powerful stimulus, reduce the size of govt, and is far quicker to take effect than govt spending.

Tried that during the last Great Deppression and it didn't work. If the tax cuts go into savings, debt, foreign investments, and outsourcing, they have very little stimulative effect.

cornopean wrote:

Also, all govt spending is inefficient. Anyone who is not spending his own money is bound to do it carelessly and at worst corruptly.

Then everyone that works at corporations that are not shareholders will do the same. Your logic is flawed. Corporations themselves are planned economies, just like the government. The difference is the job of government is to serve the people. The job of corporations is to make money for the shareholders, even if their actions harmful to society at large.

cornopean
Forum Elder

Joined: 20 Dec 2006
Posts: 3576

Posted: Sat Apr 04, 2009 1:09 pm Post subject:

Timetheos wrote:

Tried that during the last Great Deppression and it didn't work. If the tax cuts go into savings, debt, foreign investments, and outsourcing, they have very little stimulative effect.

Taxes were never cut during the great depression. Taxes were tripled during the great depression. Tariffs were hiked as well.

Quote:

Then everyone that works at corporations that are not shareholders will do the same.

don't get your point here.

Quote:

Your logic is flawed. Corporations themselves are planned economies, just like the government. The difference is the job of government is to serve the people. The job of corporations is to make money for the shareholders, even if their actions harmful to society at large.

this is pretty simplistic. true....corps try to maximize their profits but the way they maximize their profits is by meeting people's needs and making a better product. If they don't, then the customer can choose another product which means the corporation has a HUGE incentive to serve that customer better than the next corporation.
The govt is supposed to serve the people but b/c they have no competition, they don't have the same incentives that corporations have to serve people better.

Timetheos
Known Associate

Joined: 10 Apr 2008
Posts: 469
Location: Seattle

Posted: Sat Apr 04, 2009 5:17 pm Post subject:

--
Taxes were never cut during the great depression. Taxes were tripled during the great depression. Tariffs were hiked as well.
--

No, they only led to it:

Quote:

Prior to the start of the Depression, Hoover's first Treasury Secretary, Andrew Mellon, had proposed, and saw enacted, numerous tax cuts, which cut the top income tax rate from 73% to 24%. When combined with the sharp decline in incomes during the early depression, the result was a serious deficit in the federal budget. Congress, desperate to increase federal revenue, enacted the Revenue Act of 1932. The Act increased taxes across the board, and the percentage increased with income, to near pre-1928 levels for top income earners. It also implemented a 13.75% tax on corporations.

http://en.wikipedia.org/wiki/Herbert_Hoover

---
Anyone who is not spending his own money is bound to do it carelessly and at worst corruptly.
--

Corporate flunkies don't spend their own money. They spend the shareholders and customers money.

--
but the way they maximize their profits is by meeting people's needs and making a better product
--

Not necessarily true. Take a patent troll company. They have no incentive to work for the people at large. Take a coal mining company; they may try to lower their cost, but destroying the nearby property of neighbors is par for the course.

---
The govt is supposed to serve the people but b/c they have no competition, they don't have the same incentives that corporations have to serve people better.
---
They do have compition: it's called elections. Don't like what the current government is doing, elect a new one.

cornopean
Forum Elder

Joined: 20 Dec 2006
Posts: 3576

Posted: Sat Apr 04, 2009 8:26 pm Post subject:

Taxes were cut all thru the 20s. The first revenue act after the '29 crash was a tax hike. You can find all the revenue acts here:
http://en.wikipedia.org/wiki/Revenue_Act

All the revenue acts from 1928 onward were tax increases. It's just foolish to say that anyone cut taxes after the crash of 1929.

Quote:

Corporate flunkies don't spend their own money. They spend the shareholders and customers money.

Do you really disagree with the idea that people who aren't spending their own money do so more carelessly than those who are spending their own money? This proposition is so obviously self-evident that........I am not really sure how to go about defending it.

Quote:

Not necessarily true. Take a patent troll company. They have no incentive to work for the people at large. Take a coal mining company; they may try to lower their cost, but destroying the nearby property of neighbors is par for the course.

I have never heard of a patent troll company. a coal mining company that destroys the neighbor's property would be subject to civil penalties. Not to mention the very bad press they'd receive.

Quote:

They do have competition: it's called elections. Don't like what the current government is doing, elect a new one.

That's not competition. Competition is that I can go to McDonalds if I don't like Burger King. With the govt, the only choice I have is who is the manager. I can elect a new senator or president but I still have to use the govt.

Timetheos
Known Associate

Joined: 10 Apr 2008
Posts: 469
Location: Seattle

Posted: Sun Apr 05, 2009 3:00 am Post subject:

cornopean wrote:

I didn't say that. I said that taxes were cut immediately preceding the depression.

If you look at charts such as
http://books.google.com/books?.....#PPA526,M1

you will see that GDP was going down while they were cutting taxes.

cornopean wrote:

Quote:

Corporate flunkies don't spend their own money. They spend the shareholders and customers money.

Then read what I said. Related to work, only small business owners spend their own money. Employees in general spend other peoples money.

When a worker at Boeing buys a piece of equipment, they are not spending their own money.

--
I have never heard of a patent troll company.
--

Then educate yourself.

---
A coal mining company that destroys the neighbor's property would be subject to civil penalties.
--
1) The torte reform that conservatives love so much make it harder to get compensation.
2) Often, the profit involved is greater than the penalites.

--
Not to mention the very bad press they'd receive.
--
They don't give a damn, that's what they have marketing and legal departments.

READ THE FUCKING NEWS!

Quote:

Sure it is. First, if you don't like it, you can move to a different country or state.

Second, the manager is everything. Taking the extremes, is there no difference between a Fascist manager and a Jeffersonian-Democratic manager?

cornopean
Forum Elder

Joined: 20 Dec 2006
Posts: 3576

Posted: Mon Apr 06, 2009 6:46 pm Post subject:

Timetheos wrote:

I didn't say that. I said that taxes were cut immediately preceding the depression.

If you look at charts such as

you will see that GDP was going down while they were cutting taxes.

Something is obviously fishy here. According to this chart, the 30s were a great decade. I think the generally agreed on figures are better represented by the charts here:
http://en.wikipedia.org/wiki/Great_depression

These charts certainly show that FDR's stimulus (New Deal) caused some growth. they also show that when the New Deal ran out of gas (1937-3 Cool

, the economy tanked again. That is the conservative/libertarian argument. govt stimulus does stimulate but it is a chimera. It isn't real stimulus. When the spending is over, and the bills come due........then the real problems begin.

Quote:

technically you're correct but you're obviously fighting a losing battle here. Don't be stupid. The worker at Boeing is going to be held accountable for that purchase in a way the govt worker is not. Again, this is so obviously self-evident that my fourth graders can understand this. You got to go to college to be this foolish.

Timetheos
Known Associate

Joined: 10 Apr 2008
Posts: 469
Location: Seattle

Posted: Mon Apr 06, 2009 7:26 pm Post subject:

Quote:

These charts certainly show that FDR's stimulus (New Deal) caused some growth. they also show that when the New Deal ran out of gas (1937-3, the economy tanked again.

No, that's when FDR allowed himself to temporarily cut back on spending because of deficit concerns.

Look it up.

Finally, it was the massive govt stimulus of WWII that put the nail in the coffin of the GD.

Quote:

technically you're correct but you're obviously fighting a losing battle here.

I am right. You're the one losing the battle.

Quote:

Don't be stupid.

You're the fucking moron here.

Quote:

The worker at Boeing is going to be held accountable for that purchase in a way the govt worker is not.

Bullshit. My family members in the Fire Department and other branches of government have been very frugal. I've worked at Boeing and seen the inside, have you?

Obviously you have no concept of service you selfish bastard.

cornopean
Forum Elder

Joined: 20 Dec 2006
Posts: 3576

Posted: Mon Apr 06, 2009 8:18 pm Post subject:

Timetheos wrote:

No, that's when FDR allowed himself to temporarily cut back on spending because of deficit concerns.

ok...so when the govt spending went away, the economy tanked again. that isn't real stimulus....or at least sustainable stimulus.

Quote:

Finally, it was the massive govt stimulus of WWII that put the nail in the coffin of the GD.

ok...so do you think we should return to those kind of levels of spending as during WW2?
http://en.wikipedia.org/wiki/F....._Chart.png

of course that is silly. that is another thing with govt stimulus spending. It never is enough. Krugman has been saying all along that Barack isn't spending enough. Smile

Quote:

The worker at Boeing is going to be held accountable for that purchase in a way the govt worker is not.

Bullshit. My family members in the Fire Department and other branches of government have been very frugal. I've worked at Boeing and seen the inside, have you?

your own family anecdotes are precious but not terribly relevant here so dump them. The fact that every 4th grader can grasp and the college educated can't is that people spend their own money more efficiently than when they spend another's. The worker at Boeing is not spending his own money. granted. but he is spending the company's money and so when Boeing spends money (via its employees), then Boeing is spending Boeing's money. and they will do this more efficiently than a govt agency. If they don't, the market will punish them. There is no such mechanism for inefficient govt spending. they will just spend more to cover their inefficient spending.

Quote:

Obviously you have no concept of service you selfish bastard.

the liberal idea of service is for them to take other people's money and to distribute it as they please. now they are even doing one better....they are taking the money of the NEXT generation and spending it. Again, college educated types think this is all fine and dandy. any red neck can see that this is just foolish and childish.

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