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Obama killing the economy and stock market? Huh? (pg. 10)
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| delobbo |
I know, I know, who cares what anyone else thinks.
http://www.timesonline.co.uk/tol/ne...icle5882695.ece
Britain's most senior civil servant has complained that Downing Street is finding it “unbelievably difficult” to make arrangements with the United States for the crucial G20 summit.
Sir Gus O'Donnell, the Cabinet Secretary, reportedly said that the handover to the Obama Administration was hindering discussions about the meeting in London next month.
The Prime Minister hopes that the summit on April 2 will produce a co-ordinated global strategy to tackle the economic downturn.
So far, his attempts to get his Washington and European allies to agree to a coherent common platform for the meeting have proved frustrating.
The G20 nations, which represent about 90 per cent of world economic activity, include not only the traditional G7 members but the European Union and emerging economic powers such as China and Brazil.
Mr O'Donnell said that No 10 was having trouble even getting in touch with key personnel at the US Treasury department. “There is nobody there,” he told a civil service conference in Gateshead. “You cannot believe how difficult it is.”
His comments come after Downing Street was left frustrated by the White House’s chaotic handling of Gordon Brown’s visit last week. No 10 aides were left scrambling when the President's staff changed press arrangements at the 11th hour.
Sir Gus's remarks appear to confirm the problems Mr Obama has faced in getting his administration staffed and up to speed during the worst economic crisis in decades.
The Times reported last week that Tim Geithner, the Treasury Secretary, had been forced to operate virtually on his own without any of the 17 deputies his department is supposed to have.
Sir Gus criticised the US system of new administrations appointing their own senior civil servants as “absolute madness”. |
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| Clovis |
Great read, thanks. |
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| Clovis |
| quote: | Originally posted by delobbo
I know, I know, who cares what anyone else thinks.
http://www.timesonline.co.uk/tol/ne...icle5882695.ece
Britain's most senior civil servant has complained that Downing Street is finding it “unbelievably difficult” to make arrangements with the United States for the crucial G20 summit.
Sir Gus O'Donnell, the Cabinet Secretary, reportedly said that the handover to the Obama Administration was hindering discussions about the meeting in London next month.
The Prime Minister hopes that the summit on April 2 will produce a co-ordinated global strategy to tackle the economic downturn.
So far, his attempts to get his Washington and European allies to agree to a coherent common platform for the meeting have proved frustrating.
The G20 nations, which represent about 90 per cent of world economic activity, include not only the traditional G7 members but the European Union and emerging economic powers such as China and Brazil.
Mr O'Donnell said that No 10 was having trouble even getting in touch with key personnel at the US Treasury department. “There is nobody there,” he told a civil service conference in Gateshead. “You cannot believe how difficult it is.”
His comments come after Downing Street was left frustrated by the White House’s chaotic handling of Gordon Brown’s visit last week. No 10 aides were left scrambling when the President's staff changed press arrangements at the 11th hour.
Sir Gus's remarks appear to confirm the problems Mr Obama has faced in getting his administration staffed and up to speed during the worst economic crisis in decades.
The Times reported last week that Tim Geithner, the Treasury Secretary, had been forced to operate virtually on his own without any of the 17 deputies his department is supposed to have.
Sir Gus criticised the US system of new administrations appointing their own senior civil servants as “absolute madness”. |
If you want to discuss an issue, make a thread where we can discuss that issue. It serves absolutely no one for you to sit here posting random links about unrelated issues while everyone else is discussing something. |
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| Capitalizt |
| quote: | Originally posted by pkcRAISTLIN
great article.
capitalizt, you should read it. every day. |
Hoover actually began his own "new deal" years before he left office and FDR simply kept the ball rolling when he took over. It's very likely that Hoover's meddling and interventions are what tipped us from a recession into the depression. Roosevelt stretched it out 8 years but Hoover was definitely the cause. I know most historians overlook this fact, so here in turn is some homework for you:
Herbert Hoover's Depression
How the Business Cycle Happens
Economic Depressions: Their Cause and Cure
Failure of the New Economics |
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| pkcRAISTLIN |
| quote: | Originally posted by Capitalizt
Hoover actually began his own "new deal" years before he left office and FDR simply kept the ball rolling when he took over. It's very likely that Hoover's meddling and interventions are what tipped us from a recession into the depression. Roosevelt stretched it out 8 years but Hoover was definitely the cause. I know most historians overlook this fact, so here in turn is some homework for you: |
that's fantastic. it just proves you didn't read occrider's link.
this was a riot! :haha: if he were a real economist he wouldn't need so much rhetoric. |
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| Capitalizt |
| Indeed I read it and it is full of the same revisionist claptrap we've seen elsewhere. The depression was caused by through Hoover's ACTIONS (new tariffs, taxes, subsidies, wage/price controls, etc), NOT through his inaction. In the face of a slowdown he did exactly what the interventionists wanted him to do. He did what FDR continued in the following years and what our government is doing now. Philosophically he might have favored a "hands off" approach (and I know people love to quote him on that), but what he did in practice was quite another story. Actions speak louder than words pk. |
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| Lebezniatnikov |
| quote: | Originally posted by Capitalizt
Indeed I read it and it is full of the same revisionist claptrap we've seen elsewhere. The depression was caused by through Hoover's ACTIONS (new tariffs, taxes, subsidies, wage/price controls, etc), NOT through his inaction. In the face of a slowdown he did exactly what the interventionists wanted him to do. He did what FDR continued in the following years and what our government is doing now. Philosophically he might have favored a "hands off" approach (and I know people love to quote him on that), but what he did in practice was quite another story. Actions speak louder than words pk. |
I'd take a much closer look at that graph that occ posted before going off on that angle. You might find it a lot more difficult to explain the numbers. |
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| Capitalizt |
| quote: | Originally posted by Lebezniatnikov
I'd take a much closer look at that graph that occ posted before going off on that angle. You might find it a lot more difficult to explain the numbers. |
Well the chart sorta reflects the obvious doesn't it? GDP = consumption + gross investment + government spending + (exports - imports)
Government spending is part of GDP, so when you borrow and inflate trillions the GDP will rise to reflect that.. If you are using growing GDP as an excuse for government intervention however, why are we only stopping at a few trillion for these bailouts? Why not borrow an extra $9-10 trillion this year to ensure we get out of the mess and get worldwide unemployment down to 1%? Possibly because even the most hardcore Keynesians realize they can't defy economic law forever.. They can't float the economy indefinitely on nothing but debt and credit expansion.. Everyone agrees that the bill will come due one day. I'm just of the opinion that we should pay it now..take the pain up front and allow the correction to happen..rather than postponing it with more spending and record levels of debt. What we are doing now may create temporary (and artificial) prosperity..but this will come at the cost of very painful inflation in the future. |
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| occrider |
| quote: | Originally posted by Capitalizt
Indeed I read it and it is full of the same revisionist claptrap we've seen elsewhere. The depression was caused by through Hoover's ACTIONS (new tariffs, taxes, subsidies, wage/price controls, etc), NOT through his inaction. In the face of a slowdown he did exactly what the interventionists wanted him to do. He did what FDR continued in the following years and what our government is doing now. Philosophically he might have favored a "hands off" approach (and I know people love to quote him on that), but what he did in practice was quite another story. Actions speak louder than words pk. |
And PHD level analyses that are published in peer reviewed economic journals with supporting economic data and credible references page tend to speak louder than blogs. Friedman, Schwartz, and Bernanke are probably the most preeminent experts on the great depression and their analyses differ largely from yours. If you don't want to read Friedman and Schwartz's study, here is a relatively shorter paper published by Bernanke ...
http://fraser.stlouisfed.org/docs/M...Fs/bernon83.pdf
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Well the chart sorta reflects the obvious doesn't it? GDP = consumption + gross investment + government spending + (exports - imports)
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Yes but when consumption and gross investment are stagnating/decreasing sharply it is economically beneficial to use government spending to take up that excess capacity thus stimulating the economy.
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Government spending is part of GDP, so when you borrow and inflate trillions the GDP will rise to reflect that.. If you are using growing GDP as an excuse for government intervention however, why are we only stopping at a few trillion for these bailouts? Why not borrow an extra $9-10 trillion this year to ensure we get out of the mess and get worldwide unemployment down to 1%? Possibly because even the most hardcore Keynesians realize they can't defy economic law forever.. They can't float the economy indefinitely on nothing but debt and credit expansion.. Everyone agrees that the bill will come due one day. I'm just of the opinion that we should pay it now..take the pain up front and allow the correction to happen..rather than postponing it with more spending and record levels of debt. What we are doing now may create temporary (and artificial) prosperity..but this will come at the cost of very painful inflation in the future.
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Sigh ... first, Keynesians don't advocate defying economic law forever by constantly pumping fiscal stimulus into the economy. You must be confusing them with the Bush administration. Unlike the Bush administration, true Keynesians argue balancing the deficit inducing recessionary troughs with surpluses during boom peaks.
Second, stop being obtuse with the strawman to spend "$9-10 trillion" a year until we solve all our problems. It seems like you're regurgitating ideological talking points, or "claptrap" as you like to call it, that are ignorant of all economic data on the ground that might suggest otherwise. Much like the great depression in the 30's it's not inflation that is ing us over, it's deflation. Read the minutes from the last two FOMC meetings:
December 08
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In the United States, headline consumer prices declined in recent months while core consumer price inflation slowed further. With energy prices falling sharply and the rate of increase in food prices moderating, headline PCE prices fell in October, and data from the consumer price index (CPI) indicated that the decline extended into November. Core PCE prices were unchanged in October, and based on the CPI, appeared to have been unchanged again in November. The recent slowing in core consumer price inflation was widespread and likely reflected not only the weak pace of economic activity but also the easing of some earlier cost pressures as the prices of crude oil, gasoline, and other commodities declined. Excluding food and energy, producer prices rose modestly again in November, as prices at earlier stages of processing continued to retreat for the third consecutive month. Measures of inflation expectations continued to fall or hold steady during the intermeeting period. Measures of nominal hourly labor compensation continued to increase moderately in the third quarter.
http://www.federalreserve.gov/monet...tes20081216.htm
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Late January 09
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In the United States, overall personal consumption expenditure (PCE) prices were estimated to have fallen in December, largely reflecting significant reductions in energy prices. Increases in consumer food prices began to moderate toward the end of 2008. Excluding food and energy prices, PCE prices appeared to have decelerated over the final three months of the year. The moderation in core PCE prices was widespread across categories of goods and services. After rising rapidly during the first nine months of the year, producer prices excluding food and energy fell sharply in the last three months of 2008. Measures of longer-term inflation expectations edged up in early January, but remained lower than they had been in all but the last few weeks of 2008. In December, average hourly earnings moved up moderately.
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Participants agreed that inflation pressures had diminished appreciably in recent quarters, and they expected significantly lower headline and core inflation during the next few years than during recent years. Indeed, most anticipated that inflation will slow for a time to rates somewhat lower than those they judge consistent with the dual goals of price stability and maximum employment, initially reflecting the recent declines in the prices of energy and other commodities and later responding to several years of substantial economic slack. Many participants noted some risk of a protracted period of excessively low inflation, especially if inflation expectations were to move down in response to lower actual inflation and increasing economic slack, and a few even saw some risk of deflation.
http://www.federalreserve.gov/monet...tes20090128.htm
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And as I mentioned before, our ability to finance our deficits to pull out of this economic slump are never better because the dollar has established itself as the premier flight to safety:
This is a GLOBAL depression ... where the hell else are people going to go??? Haha do you think they're going to flock to the euro when eastern europe may default on their debt? The Yen when Japan has barely recovered from its lost decade to enter an even WORSE recession? I mean what current macroeconomic factors are you basing your opinions on? |
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| pkcRAISTLIN |
| quote: | Originally posted by occrider
You must be confusing them with the Bush administration. |
:stongue: awesome. |
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| Capitalizt |
Wow..talk about the fox guarding the henhouse! These so-called experts have had free reign over policy for the past 70 years...absolute world dominance by the Keynesian school of economic thought..complete dominance. And look where it has led us...to a global financial catastrophe and the near bankruptcy of every major government. Forgive me if I don't have much respect for their opinions.
I noticed all these academic economists are quick to criticize the fed's actions after the crash, but they never mention the fact it was the expansionary policies of the Federal Reserve during the 1920's that led to the collapse of the banking system in the early 1930's. The low margin requirements and easy money policies are what led to the huge levels of speculation and malinvestment. The fed's solution to every recession since has been the same...bail out the economy by printing more money. Paper over the mistakes with credit expansion.
Always in the past, there has been a recovery after a recession. Always in the past, the bailouts have worked to cover up the underlying malinvested capital. Always in the past, the Federal Reserve has inflated, and the economy revived. We are doing this on such a huge scale today however that I don't think it is going to work much longer. We have reached the upper limits of the fed's abilities and the system is eventually going to collapse under it's own weight.
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Yes but when consumption and gross investment are stagnating/decreasing sharply it is economically beneficial to use government spending to take up that excess capacity thus stimulating the economy.
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Ah yes, Geithner stated the same thing a few weeks ago...that government should replace the demand lost by the private sector. However, those with even a marginal grasp of economics know that demand is unlimited. It is the ability to spend that is not. While Americans still want all the things they wanted years ago, they have made the rational choice that they can no longer afford to buy at the same levels they once did. Using a printing press to replace this lost demand will simply cause consumer prices to rise. Printed money does not create new purchasing power, but merely redistributes it from savers to borrowers. The one thing we know about Keynesians is that they loathe savers and love people who borrow and spend.
I don't discount some of their ideas completely though. I do think infrastructure and investments in science and technology are fantastic ideas for the long run. Unlike some hardcore libertarians, I recognize that some things are unprofitable for private industry and the government has a role to play for the long term benefit of the country. Unfortunately that is not what we are seeing today. Only a tiny part of the trillions spent over the past year is going to things like these. Most is being blown on corporate welfare, wasteful pork projects, and nationalization. The spending we've seen amounts to capital consumption...not investment. It is taxpayer money being sent into a black hole.. Savings and private investment are the only foundation for healthy economic growth..and we are not going to get that with people like Bernanke in charge.
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Sigh ... first, Keynesians don't advocate defying economic law forever by constantly pumping fiscal stimulus into the economy. You must be confusing them with the Bush administration. Unlike the Bush administration, true Keynesians argue balancing the deficit inducing recessionary troughs with surpluses during boom peaks.
Second, stop being obtuse with the strawman to spend "$9-10 trillion" a year until we solve all our problems. It seems like you're regurgitating ideological talking points, or "claptrap" as you like to call it, that are ignorant of all economic data on the ground that might suggest otherwise. Much like the great depression in the 30's it's not inflation that is ing us over, it's deflation. Read the minutes from the last two FOMC meetings:
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Well first of all, I'm never going to defend Bush.;) He did more to grow the government than any president since FDR, but Obama is acting no better. As for deflation being our problem? Frakkin ridiculous in my opinion. What we are experiencing not true deflation.. It is a correction back to normality from dramatically OVERINFLATED levels. You know that the world economy of the past decade (or two) was built on rapid credit expansion and overleveraging.. It was a phony economy, so bubble popped prices began to fall. This was to be expected. It is a natural process..a healthy process. The Keynesians disagree with this.. For reasons known best to themselves, they think things should be kept at a constant upward trajectory at any cost..borrow borrow borrow spend spend spend inflate inflate inflate...keep prices going up..otherwise terrible things will happen! I couldn't disagree more. Falling prices send vital signals through the economy that make people and businesses change their behavior...but Bernanke & his comrades around the world refuse to let this happen. I get the impression that they want their little lemmings to be on a constant spending spree from birth till death to keep the cogs of the state running smoothly. They only have one tool at their disposal to fight the correction and keep people spending, currency devaluation. They view market correction at the primary enemy..but I see devaluation as the greater of two evils.
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And as I mentioned before, our ability to finance our deficits to pull out of this economic slump are never better because the dollar has established itself as the premier flight to safety:
This is a GLOBAL depression ... where the hell else are people going to go??? Haha do you think they're going to flock to the euro when eastern europe may default on their debt? The Yen when Japan has barely recovered from its lost decade to enter an even WORSE recession? I mean what current macroeconomic factors are you basing your opinions on? |
Yes...the old flight to safety trade is still in effect (for now). But I'm afraid there will be nowhere to hide in the end. With trillion dollar deficits adding up over the next few years, our debt will eventually reach the point where it simply can't be paid down in strong dollars. We will have no choice but to let the fed monetize the debt, and many other governments are in the same situation. We're all in the same boat now. All governments have embraced the ideas of interventionism and fiat money..and we all are swirling down the toilet together. I believe Keynesianism is in it's death throes and we are witnessing it's last great hurrah today...One more multi-trillion dollar party..perhaps one final decade of artificial prosperity built on a mountain of debt and credit expansion..and then the game is up. The next flight to safety will not be paper. It will be gold, oil, food, and guns. Hopefully we can learn from our mistakes and a new system will rise from the ashes before too much damage is done. |
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| Shakka |
| quote: | Originally posted by occrider
Sigh ... first, Keynesians don't advocate defying economic law forever by constantly pumping fiscal stimulus into the economy. You must be confusing them with the Bush administration. Unlike the Bush administration, true Keynesians argue balancing the deficit inducing recessionary troughs with surpluses during boom peaks. |
This is KEY and is so often overlooked or completely forgotten when people discuss Keynesian economics. Sadly, the U.S. hasn't had a real surplus in decades. |
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