In a post yesterday, I noted the difference between two Republican candidates in respect to the state of the economy during a debate in October. I thought that the contrast between Fred Thompson’s rosy outlook and Ron Paul stating that the economy was in trouble would be a conversation starter.
Well. As with everything else in this election cycle, it boiled down to Thompson supporters saying he is correct and Paul supporters saying he is correct (one Paul supporter, mty, made very detailed arguments for his guy). And the usual take that all of my sources were liberal rags that can’t be trusted to present accurate information. Nothing surprising there but I must admit to being surprised at the dismissal of Chairman Benanke’s concerns.
So, here we go again. Is the economy of the U.S. in need of a few tweaks to get it moving? Or, is it rolling merrily along, robust and rosy? Let’s look at a few different sources of information, all of which someone will certainly say are biased if they disagree with them.
That prospect now looms larger than even a few months ago. The unemployment rate has jumped to 5 percent and new jobless claims are rising, the manufacturing sector is slowing, forecasts of auto sales are being revised downward, house sales are down and foreclosure and delinquency rates are up, banks are being forced to write-off more billions in bad loans than even pessimists had anticipated and to cut back on lending, and profits are falling (Thomson Financial, which in October predicted profits would rise in the last quarter of 2007 by 11.5 percent, now guesses that the final tally will show a drop of 10.7 percent). If that isn’t enough to rattle the powers-that-be, Moody’s added the prospect of a loss of America’s triple-A credit rating, granted to U.S. debt ever since it was assessed in 1917, if the nation’s politicians didn’t soon fix the health care and pension systems.
These assessments were driven largely by the dismal December jobs figures released on January 4th. America’s jobless rate is now 0.6 percentage points above the cyclical trough reached in March 2007. At no point in the past 60 years, the Merrill economists point out, has the unemployment rate risen by more than half a percentage point from its trough without the economy slipping into recession.
The US economy is heading for a recession and the downturn is expected to last until next year, the chief economist for Standard Chartered bank said Tuesday.
A US slowdown will hurt Asia’s export-led economies but the region is in a better position to cope with the situation because of its huge currency reserves and improved finances, Gerard Lyons said.
‘The US economy in our view is heading into a recession,’ Lyons said at a conference organised by the London-based bank.
Unlike previous US recessions which typically last 10 to 11 months, Lyons said the world’s largest economy will stay weak into next year.
The Federal Reserve will cut interest rates to 3.0 percent by June to shore up growth, he said.
In his view, ‘they should go even lower,’ said Lyons.
A slew of economic indicators are pointing south, and President Bush told Reuters’ interviewers on January 3 that he is “considering all options,” including an economic stimulus package to address deepening concerns. Two weeks ago, the markets took a dive after a rise in the unemployment rate and a small increase in jobs. The Institute for Supply Management reported that its index of factory activity–a key measure of U.S. manufacturing health–dropped to its lowest reading since April 2003, suggesting a contraction in manufacturing activity. The housing market’s volatility continues as home prices fall and foreclosures rise. Residential construction spending is down 17.5 percent from a year ago. To the subprime problems we can add concerns about prime-credit solvency. Oil flirted briefly with $100 per barrel. The rise in the core inflation rate was larger than expected, and consumers are feeling the pinch. Gasoline prices have been high, and a new report from the Department of Labor shows the biggest jump in food prices in seventeen years. The cost of a dozen eggs has risen 38 percent since last December, and milk 30 percent.
The U.S. is probably in or about to enter a recession, former Federal Reserve Chairman Alan Greenspan said.
The odds are “not overwhelming but they are marginally in that direction” of recession, Mr. Greenspan said in an interview with The Wall Street Journal.
“The symptoms are clearly there. Recessions don’t happen smoothly. They are usually signaled by a discontinuity in the market place, and the data of recent weeks could very well be characterized in that manner,” he said.
Specifically, he cited a drop in the Institute for Supply Management’s purchasing managers index to 47.7 in December after several months just above 50, the dividing line between expanding and contracting manufacturing activity. While “by no means conclusive, … [that] is the type of thing, if we were going into recession, we’d observe.”
Another sign, he said, was the jump in the unemployment rate to 5% in December from 4.7% in November.
If you read each of those sources thoroughly, you will find a scattering of people that say the downturn will be short lived or minimal and that nothing needs to be done. But rosy?
I highlighted the lines in the AEI quote purposefully. These are the items that affect the vast majority of Americans. The impact of these basic items is offset in the calculations typically used to discuss inflation. But families cannot offset these basic necessities. Come November, people are going to be voting, as usual, their pocketbooks. Rosy? For which party?
Filed Under Front Page · · · · 
Print This Post
··
Comments
106 Responses to “Recession? Rosy?”Search
Our Sponsors
Poll
Loading ...
Jumped to 5%
5% is not considered a recessionary number more like 10% is
so from 4.7% to 5% is not a jump
And its been above 80 for two years and the economy has absorbed the price just fine
In fact its going to go way up this year as well
2008 will be a record year say 120 dollars a barrel
This is when economist cannot explain thecore principles of human spending behavior
So, BL, is that a vote for rosy?
5% unemployment is not bad. Only up from 4.7%. This economy is strong. The housing thing is a blip, because not of predatory lending but uninformed buyers buying too much home. The falling dollar will make US products more attractive to foreign buyers. We are a strong.
The inflation of food costs is because we are driving on our food. Ethanol and rising fuel prices are to blame for that. When the a$$hats declared that corn gas was our savior, that inflated the price of corn. Everything we eat, eats corn. So, corn costs more, the cost of feed goes up. The price of getting the food products to consumers goes up. Still, we are in good shape. This will pass.
Rosy….
BJ,
I quickly perused the posts yesterday. It seemed like most of the “ain’t no problem” folks were looking out their window at cranes working or their own checking account and projecting these observations outward to the national economy. It seems to me that we are probably most certainly in a recession that is exacerbated by credit issues, debt, oil prices, the falling dollar and other issues.
My own support for the good Dr. aside, it does seem he is the only candidate who is saying things the others dare not mention.
I just flew nearly 40,000 miles in three weeks 11 flights
every damn one was packed packed to the gills
theyt were hanging people in the closets and luggage racks
I flew alot in 2002
empty planes - flights cancelled
I also bought these tickets 7 months ago
Hawaii - Packed
london tourists everywhere - someone forgot to tell em about the weak dollar
Los Angeles - not just for illegals anymore
So the beer drinking lazy union types are in Michigan listening to a certain preacher say he’s going to protect them from the MAN (Romney)
And we are treated to economic navel gazing posts
Please someone shoot me
Two things are 100% certain: 1) We will have another recession. 2) We will recover from it.
If we are heading towards a recession, I think it has more to do with bad fiscal policy in the government and poor business decisions with respect to credit. More transparency in government spending, along with a plan to reel in spending and taxation would be a good start from their side. On the business front, I think the only thing that will help them is if we have a serious recession and they are forced by share holders to be more discriminating in how they issue and use credit.
To All,
The writings of various economic experts are targeted to a select reading audience; namely other economic “experts”. The eyes of the average man (or woman) will glaze over after listening to some of this stuff for more than a minute. Hell, my tolerance level is only about 3-4 minutes and I consider myself fairly above average.
I do belive we are in a recession..OK so what? If you are prepared, then a recession is no more worrisome than a cloudy day.
The problem is that neither party wants to say the commonsense things that will make a recession tolerable. Each party wants to blame the other. The truth is far more simple. We have found the enemy and he is us.
Simple’s cheap and free advice.
1. Save money.
2. Focus on what you need instead of want.
3. Don’t carry debt unless there is no choice.
4. Plan for the worst and hope for the best.
We cannot go on as a mighty power if we have an economy based upon selling services to each other to pay for goods. WE NEED TO PRODUCE QUALITY GOODS THAT THE WORLD NEEDS AND WANTS AT A CHEAPER PRICE THAN THE COMPETITION. We used to do this and I fear we have lost our way.
Simple
Hmm, and the views of the rest of the GOP presidential candidates on the economy in October were what?
How do we provide financial assistance to the illegal workers who are here? If the housing and other construction projects slow down these people are not just going to pack up and leave. This might be an additional drain on our financial resources that will require large tax increases to cover our costs.
We allowed them to enter our country and took advantage of their
cheap labor costs, we owe them assistance.
Simple, I’m agree - I’m not worried personally about a recession. Hamous is right, one will come and it will go.
What concerns me is the solutions being put forth. Do we really want interest rates reduced below inflation? If that is what we get, your #’s 1, 2, 3 and 4 are out the window. People will continue to buy, buy, buy.
Taxes won’t be lowered because we “weathered” the storm. Spending won’t be cut.
In other words, we’ll just put off the inevitable for another day. At some point, we have to address the future liabilities.
Dang, if you are gonna troll, don’t make it so obvious, man.
Adee,
If you click on the link in the original post, you can read what the others say. I think 2 or 3 more responded to the same question.
IMHO things are not good and getting worse. How does DJ see things? When I go to the grocery store and get nothing for $100 bucks. Thats how I decide how good the economy is.
My wife is a teacher. Most if not all are talking about the same thing. Their dollar is buying a whole lot less these days.
Its pretty simple and you dont have to be an economist.
DJ, If you can’t buy anything for $100 at the grocery store, maybe you should switch grocery stores.
Bigjolly person I do not understand your comment, what is a troll?
We have allowed these people into our land so as to take advantage of their cheap labor, President Bush has
admitted that fact many times. So if the economy slows down how do we treat these people? Round them up and dump them over the border? Or providing them the assistance they will need?
I must now go shopping and help improve the economy.
Sigh.
No, we haven’t. We have laws that they didn’t respect. True enough, our leaders turned a blind eye for economic reasons. But we did not allow them to come.
We didn’t bring them here, we don’t need to provide transportation home. Although some around here would happily pay for the bus ticket. They can get home on their own.
BigJolly,
How about including the comments of the top 3 Dems in your comparison as well…
I just went through the transcripts of the last 2 debates and there was no discussion of a recession and only one off-hand comment about an ‘economy that’s in trouble’ by Chris Dodd.
No discussion, no details.
Wouldn’t you think the out of power party would be playing a recession to the hilt?
Funny you should ask that Hous Bin.
Just yesterday…..
http://www.abc.net.au/news/stories/2008/01/14/2137499.htm
Oh, don’t you worry, they will once the primary is over. Since Iraq is improving they will resurrect Willie’s tired old “Its the economy, stupid” slogan. count on it.
(I’m sorry BJ, God help me I can’t stop myself)
Abel,
Is “Allowed” now the definition for these folks paying to be smuggled over the border? Using your definition, if I break into your house and hurt myself stealing your TV, it’s your fault and you should pay my medical bills because you didn’t have a dolly waiting there for me to use.
Let’s turn it around a bit - these people illegally entered our country to take advantage of our great economy and abundant resources. Everyone from the President of Mexico on down has admitted that numerous times. So, if the economy slows down and they don’t like it, why don’t they get the h..l out and go back where they came from.
And Hillary says….
http://www.hillaryclinton.com/news/release/view/?id=5132
That’s okay, FA, I couldn’t either.
And Lil’ Johnny was out in front.
http://www.johnedwards.com/news/press-releases/20071222-stimulus-plan/
dumoose
I am heading out to the yard with my shovel. I am going to dig a huge hole and bury my head just like you have.
BigJolly,
Thanks! That’s better.
It’s a shame that both of their ‘plans’ only involve more spending rather than less.
And I only skimmed them, but I saw now discussion of monetary policy either.
now = no
bigjolly
The illegals are never leaving!
DJ, are grocery prices up, sure. Part of that is because of government influences, but part of it is also market forces. You have to take the good part of capitalism with the bad.
#30 So what’s that loud sucking sound in AZ and OK?
“….we owe them assistance.”
Owe them for what? Shoddy construction and depressing wages?
“So what’s that loud sucking sound in AZ?”
McCain
DJ:
If you can’t shop for groceries for less than $100 dollars, try Food Town instead of Central Market!
Seriously dude, try cutting back on luxuries a bit. Are things perfect? No. Are they getting worse? Maybe a little. Will it last for long? Probably not. Try this solution:
1. Throw away all your credit cards. (Except 1 for travel and emergencies.)
2. If you don’t have the money, don’t spend it.
3. Put 10% of your pay in savings.
4. Put 10% of you income in a charity (or your church)
5. Live on the rest. Cut back if you need to. “Neither a borrower or a lender be”. Try frugality.
You’d be surprised how happy and content you can be doing this. And a lot less vulnerable to economic disasters!
DJ don’t even work! He’s a house husband ; - )
…and he doesn’t even have a Drivers license, much less a credit card.
fat albert this is linked above. BTW, I shop at HEB. I suggest you throw down the shovel along with dumoose. The dirt in your nostils cant be good for you.
“”The rise in the core inflation rate was larger than expected, and consumers are feeling the pinch. Gasoline prices have been high, and a new report from the Department of Labor shows the biggest jump in food prices in seventeen years. The cost of a dozen eggs has risen 38 percent since last December, and milk 30 percent.”"
hamous
Turn off the TV. Stop reading the government propaganda leaflets. There is no sucking sound. Ask aw if the numbers are down at the work centers she protests. Instead of saying the illegals will never leave I should be saying your government will never do the right thing. Wheres the wall? Wheres the funding? Wheres Waldo?
Go blame the democrats. It easy and effective.
Happy and content thats the answer. :0
I shouldnt worry abut the country going down in flames. God Bless ya man.
One more time…
Department of Labor shows the biggest jump in food prices in seventeen years.
I wonder if Limbaugh will talk about this?
I am heading out to learn how to dance. All monkeys need to dance and dance well.
Dancing monkeys again? I thought you were changing your ways.
#38 - That’s because Texas has not passed the tough laws AZ and OK have.
OK DJ have it your way -
Everything’s turning to crap and we need someone to save us. Who? And what?
My experience is that ANTHING the government does to affect the economy is counter-productive. The best thing that any of them can do is as little as possible. Economic cycles have been happening for 1000’s of years. Trying to stop or control them is like trying to affect the weather. If a recession is coming (and it probably is) then get ready and ride it out.(See #35 above). Vote your conscience and smile, you could live in France!
DJ, turn off Alex Jones radio. Stop reading Paranoia.
Ya just had to ask that, didn’t ya?
Actually hamous it was a rhetorical question. The vast majority of our political problems stem from the fact that as a country we keep wanting to see our government as our savior. That’s my chief complaint about Huckabee and many of the other more liberal candidates.
The fact is, the government can’t save you, from whatever your problem is. It never could and it never will! At best the government makes it more complicated, at worst it makes it impossible. Stop looking at government for assistance, help salvation, or anything else and you’ll be far happier and less frustrated.
LST is becoming a downer. Lots of Chicken Littles running around telling us how civilization is about to end - all negative, no positive (let alone any solutions).
Sounds a lot like the Democracts. Sounds a lot like Jimmy Carter in 1980.
Eight recessions since I was born in 1955.
Yawn.
I’m with DJ on the groceries. A hundred bucks doesn’t fill too many bags anymore.
fat albert
We are the answer!
bigjolly
I got the dancing monkeys from the OC.
Rickg
LST isnt becoming a downer. Facts are facts. You either confront them or act as if they dont exist. I simply responded to the question posed in the thread. Things are NOT ROSY!
Go Ron Paul!
#42 hamous
The numbers are not down. Thanks for admitting that.
Daniel, so all of the local people in AZ and OK are making it up? DJ knows better than the residents of those states?
#47 - a sort of blog malaise, huh?
#48.
Amen! That made me chuckle.
The economy has to get rid of the bad credit. We’ve been riding an invisible wave of fake money and bad credit. It’s gotta shake out and it wasn’t going to happen over night. Heck, the housing marketing just started its collapse a year ago, with the numbers down in May of last year. That’s my memory … is that accurate?
Don’t spend more than you have, don’t buy too much house, and diversify.
And don’t count on Mama Liberty bail you out for your bad choices. Suck it up!
Having just visited for the first time in 3 years we noticed a few things.
1 - Grocery prices are up without a doubt.
2 - Gas is still cheaper than bottled water or milk and much cheaper than overseas.
3 - A huge increase in the number of people in Houston stores that now speak Spanish first.
What I missed most was the Houston friendliness I grew up with where people say hello when just walking by you. Maybe it’s gone or I just didn’t see it, but you can always tell native Houstonians as opposed to the imports.
49.
Facts are indeed facts. However, simply saying the economy sucks (or is about to suck) doesn’t impress me at all. Spreading gloom and doom is far from “confronting” anything.
Everyone here is probably thinking, ” I’m ok, but I’m worried about my neighbors?” That’s the way the liberal media spreads fear. Good grief, we made it through Carter and the 80’s. Remember gas lines? Remember home interest rates upwards of 16%? Not too many home buyers back then. I can look at what I buy now, and what I bought 28 years ago. The prices haven’t gone up to the point where I can’t eat. And on that note, Americans aren’t starving. We are fat. ( we speaking collectively) a woman does have her pride.
AW - Many of these whippersnappers don’t remember those things. They don’t know what hard times are. Heck, I don’t know what hard times are and I’m almost as old as you!
“The best thing that any of them can do is as little as possible. Economic cycles have been happening for 1000’s of years. Trying to stop or control them is like trying to affect the weather.”
You do realize that those sentiments embody a rejection of Keynesian economics and the basic premise for having a central bank - right?
I’m on my blackberry, so no sermon on economics. Just refer to BJ’s thread from yesterday - my sentiments are the same.
#56 - we’re not fat - we’re fluffy
See there, fat albert, you really DO love RP ; - )
Hamous, lol……yes, we have enjoyed prosperous years. I’d like to point out, except for the weaklings who killed themselves, when the market crashed, people made it through the depression. No one wants to go back there, but most made it. I might ad, during WW2 we had rashioning, we made all kinds of sacrifice. We are strong. We will survive.
shaking my head as I write this. Nancy Pelosi has transformed the government cafeteria to be gourmet. When everyone needs to tighten their belts, she decides to fix their food intake. And, ya’all think government is wise, can fix things, and cares how much your grocery bill increases. 1. Less government. 2. Lower taxes 3. close the borders.
http://www.politico.com/news/stories/0108/7888.html
here is the link, sorry
#62
A tempest in a teapot. While I am certainly in favor of cutting spending, let’s not get wrapped around the axle. They can eat gold dust in place of pepper if they’ll do something about our ridiculous burden related to military spending and unfunded entitlement obligations…. While it might leave a bad taste in your mouth, from a practical standpoint it’s not even worth the time it would take to read the article. Trimming waste will not right this ship. We must redefine our premise about what we can afford to do, or the World Bank/IMF will define it for us as part of an austerity plan after we default on our debt obligations.
#64 Yes it’s a stupid story, But, it comes from those who determine how our money is spent, and how much they take from us. It just proves to me, how out of touch the beltway politicians are. It’s like John Edwards crying about two americas while living in a monster of a home and enjoying haircuts that are more than my house note.
I agree that it symbolic of the flippant attitude towards the fiduciary responsibilities of our legislators, and as such should move us to “throw the bums out”. Unfortunately, bringing in a new set of eyes whose only goal is to trim ‘waste’ will be tilting at windmills. A structural deficiency requires a structural fix.
I’ll purposefully avoid launching into a diatribe about the basic immorality of taxation in concept. Even a simplistic utilitarian argument that considers only expedients and exigencies (as opposed to philosophical or ideological arguments) illustrates the untennable nature of the fiscal track we’re on.
hamous -
I like some of his ideas - guilty as charged. As mty might point out, Keynesian economics doesn’t work very well, Im much more a fan of the Von Mises school of thought. So is RP, so in that sense we do agree. I also like his take on many of the constitutional issues we confront.
In foreign affairs however, he is a fool, and a dangerous one to boot.
As far as the economy goes, the biggest problem that we have is the federal government taking my money and giving it to someone else - for ANY reason. Our only way out of the mess is to stop with the giveaways, Social Security, Medicare, Welfare - all those things we refer to as “entitlements”. The only thing you’re entitled to is what you earn.
It took me longer to repudiate the neocon global occupation agenda than it did to figure out that “compassionate conservatism” was just a euphimism for socialism foisted upon us by self-proclaimed conservatives.
But not much longer. Both are morally and functionally bankrupt, and we’d be wise to repudiate both. Our global empire will collapse under it’s own weight, just as the soviets collapsed under a crushing international slate of deployments. Wouldn’t it be better to reign it in willingly, and to redeploy our forces in a manner consistent with defending our own borders from foreign invaders?
I’m just askin’.
#67 fat albert, I was kidding, but we are pretty much in agreement.
#68 mty - Why then is it so difficult for RP and his supporters to repudiate the support of the American Nazis (National Socialists) here in this country?
DJ - What do you suggest that the government do about the price of milk and eggs in a market economy???
Prices have been too low for too long
time to cull the herd - higher prices are coming 2008 8% jump in retail prices
Right now I pay over 7 dollars for a gallon of milk
Milk prices in the US were realatively unchanges for DECADES
Putting family farms and smaller producers out of work
Time for the spoiled bretheren to get on the stick and actually pay for consumer goods
Then see Tax reform come real real quick
See if Klein ISD passes another 750 million dollar bond issue
The lazy blissfully ignorant electorate’s going to wake up fast when their beer and doritos are out of reach at the checkout at Kroger
jimb
Milk and eggs arent expensive, the dollar is just worth less. I would stop printing paper/frn’s aka cash infusions. That would be a good start.
I am not an economist and wont play one. There are so many things wrong here it makes my head spin.
We are beyond broke. Our leadership is void and the future doesnt look promising.
fat albert
What if the gov doesnt stop giving your money away and as I suspect doubles up on you? What then?
Sarged it. Dang.
It was the EPJ curse
Becareful BJ. According to conservatives, pointing out the facts will throw the economy into a recession.
According to liberals, the whole world smells like poop. Baby poop. The worst kind. And its all Dubya’s fault.
Oh, and Halliburton.
And Houstondhimmi chimes in with the unsupportable, nonsensical, liberal position of the day…
#69
“Why then is it so difficult for RP and his supporters to repudiate the support of the American Nazis (National Socialists) here in this country?”
We reject the premise that we have to go around rejecting people who profess support for our agenda. Were these ‘National Socialists’ claiming that Paul supported their agenda, it might be a reason to repudiate what they say. Only a willful idiot believes that Ron Paul supports what the neo-nazis support – and even they don’t make such a claim.
Does Huckabee need to point out that while Eric Lynn Rudolph and he might share a similar objection to abortion, he repudiates any implied support for Rudolph and his methodology?
Sharing a common viewpoint on a single issue cannot be intellectually interpreted to imply commonality on other, non-related issues. Just because these Hitler-afficianados share Paul’s viewpoint on the subject of Federal power doesn’t mean it logically follows that he supports their agenda. The opponents of Ron Paul would love for him to run around repudiating everyone who they’ve found to fail the political orthodoxy test. It’s simply a technique intended to smear his good name, and to give any merit to the tactic would be a disaster.
#70
“What do you suggest that the government do about the price of milk and eggs in a market economy???”
While the question wasn’t lobbed at me, I’ll take a stab at the fallacious grounds supporting your nested assertions.
It is true we have a market economy, but it is not a free market. By virtue of undertaking the task of intervening in the free market, the government decidedly bears the responsibility for the problems that arise. I’m not implying that they regulate the production of milk per se (though I can make a very compelling argument for just that) – but they alone regulate the supply of the commodity that is traded for milk.
The main thing to understand is that the basic economic constructs that would cause the price of milk in a free market – increased demand/decreased supply – are not factors in the rise over the last 2 years or so vis a vis milk. So why the increase? Because the relative value of our wealth and purchasing power – that being measured in US dollars has been ravaged by both increasing supply and falling demand. The price of milk goes up not because the milk became intrinsically more valuable, but because the commodity for which you propose to trade has become less valuable.
The most basic problem with most people’s understanding of rudimentary economics is that they fail to view money as a commodity, assigning to it some peculiar role. This specialized role is the direct result of intervention in the free market, and as such is properly lain at the feet of the government.
Hmmm. I thought that is exactly what they were doing.
Oh, and I’m not sure I heard you. You, the big libertarian Ron Paul supporter actually think that the government should regulate the production of milk?
I’m pretty sure a big contributor to the price of milk is the cost of the corn which the cows are fed with. That, my friend, basically means that it costs more to produce milk, and that increased cost is an artifical situation created by misguided government policies that state that food should be used as fuel for automobiles.
So there is more to supply/demand at work, and I admit that government is contributing to the cost of many foods, but I’m not sure your argument that I don’t understand some basic economic principles washes very well.
So I answered my own question better than you did, and I’m not at all sure my initial assertion was all that fallacious.
NOT ROSY!
Go Ron Paul!
I am glad I live in Texas. I just watched Lou Dobbs in Michigan. They are importing 425,000 manufacturing jobs a year out of the good ole USoA and Michigan is taking the brunt. I am not supposed to think this matter though.
Whatever the case…people are hurting.
Manufacturing jobs, particularly in clothing, electronics, and a few other sectors, do not pay enough to live in the USA.
Ron Paul cannot fix that.
LOL, ain’t that the truth! I had no idea. You and I disagree on 99% of things but you got this one right. Wow.
jimb
I am pretty sure they were manufacturing automobiles. Whatever. Who gives a sh-t?
Please, somebody tell me who said that pointing out facts about the economy in and of itself will throw the economy into a recession?
There’s not even a lot of agreement on when or if a recession is on, so why is disagreement on the issue so bad?
OK, let’s go with autos. Can Ron Paul induce a turnaround in the auto industry that will bring US manufacturing jobs in the auto sector back?
Don’t forget - the Japanese companies are opening factories here.
And why the “whatever”? Why the “who gives a s***”? Just because I don’t think things are as bad as you do means I don’t care? I really don’t get it.
#62
“Hmmm. I thought that is exactly what they were doing.”
No, at least not anything I’ve read publicly.
“Oh, and I’m not sure I heard you. You, the big libertarian Ron Paul supporter actually think that the government should regulate the production of milk?”
God forbid - you certainly didn’t hear that from me. My comment meant that I can make a compelling case that they do intervene in the production process, causing maldistribution and thwarting the free market.
“I’m pretty sure a big contributor to the price of milk is the cost of the corn which the cows are fed with. That, my friend, basically means that it costs more to produce milk, and that increased cost is an artifical situation created by misguided government policies that state that food should be used as fuel for automobiles.”
True enough. It is a contributor. Just as increased access to US food commodities through the auspices of NAFTA are a contributor. The overwhelming majority is caused by the relative decline of the dollar relative to other currencies. Were the price to be mandated to stay at the current level, we would soon see shortages as farmers shipped more product to our neighbors where they could get a better relative price in another currency. Another illustration of how intervention in the free markets cause malinvestment, distortion of market forces and a just a lot of general unintended consequences.
“So there is more to supply/demand at work, and I admit that government is contributing to the cost of many foods, but I’m not sure your argument that I don’t understand some basic economic principles washes very well.
So I answered my own question better than you did, and I’m not at all sure my initial assertion was all that fallacious”
Logic is not a subjective exercise. If you require, I can pull up some historical data for the US, Canada and Mexico in relation to milk prices and easily demonstrate that the relative price inflation is much greater in the US than either of our neighbors.
What I called fallacious was your assertion that we have a ‘market economy’, and by implication, a free market economy (the implication is clear when you feign incredulity that the government might have some responsibility in the increased price). If you truly believe we have a free market economy - even on the limited basis as it applies to only milk production - I can easily demonstrate that precept to be fallacious if you would like.
jimb,
Dude, you just have to browse the two posts I did on this. I’m gabber-flasted!
I never said we have a free market economy. However, we do have a market economy that, despite often burdensome taxes and regulation, is still a lot closer to free than socialistic.
But we’ve gotten away from my original question: What can Ron Paul do as president that will lower the price of commodities such as milk? I assert that he can do little or nothing.
Oh, and the “white nationalists” quite clearly support Ron Paul because they strongly believe he will further their interests. I’ve read statements from those who actually think he believes as they do but just can’t come out and say it for political reasons.
“Can Ron Paul induce a turnaround in the auto industry that will bring US manufacturing jobs in the auto sector back?”
No, nor should it be his role. He is to conduct the affairs of state as delineated by our Constitution.
The government can create an atmosphere where we might begin to manufacture things here once again by radically changing our thinking about intervening in the economy and punishing producers for success.
The auto industry isn’t on the skids because the government didn’t do enough. A compelling case can be made that the opposite is in fact the case.
#88 jimb
I am just tired. Ron Paul can not reverse these things by himself. I guess I am not as big of a fighter as I thought. I cant take on more day of the liars talking about how much they care about people. They could care less. Seeing McLiberal in Michigan talking about how much he cares about those people after he tried to sink the ship via amnesty is too much for me to bear.
Things are bad. Real bad. You just arent feeling it yet.
Loonie or not one mans message has never changed. Ron Pauls, but now hes a bigot. Oh well.
Liar?
Bigot?
Traitor?
Tough choices…..
90 - You mean the comments or the articles?
The comments. I thought, hey, this will stimulate conversation. I was right. Unfortunately, it was all aimed at me for saying it. That’ll teach me.
BTW, for anyone reading, recession does not equal depression.
“Oh, and the “white nationalists” quite clearly support Ron Paul because they strongly believe he will further their interests.”
Exactly my point. No candidate should ever fill his day looking for people who support him to repudiate. That is an asinine concept. Does Hillary need to repudiate scientology because Tom Cruise is a campaign contributor? Does that in any way suggest that she’s waiting for L Ron to come back on the Mothership too? This is a ridiculous concept that should be clearly illogical to any dispassionate and reasonably intelligent person. I’m not suggesting a lack of intelligence on your part, but do see a clear agenda.
“I’ve read statements from those who actually think he believes as they do but just can’t come out and say it for political reasons.”
And I’ve read headlines while waiting inline at the grocery store that say Hillary is an alien. Does she need to clear this matter up publicly? Doesn’t she then have to address every article that makes a ridiculous claim, lest she appear to tacitly admit it’s accuracy since she didn’t repudiate ‘this one’ as she has the others.
If that’s what you want in a candidate…. fine. It isn’t however, a reasonable standard.
The domestic auto industry is on the skids primarily due to the following factors, IMO:
* The Big 3 caved to unions which cost them big and made for much loss of efficiency.
* Cutting too many corners in an effort to bolster profits made for a poor product compared to the imports
* Japanese automakers not being dragged down by the same unions.
* protectionist trade regulations on the part of the Japanese, which we responded incorrectly to
* complacency on the part of US automakers which held that “buy American” was enough to make up for their other shortcomings
* the EPA and various eco-weenies
Most of these things cannot be controlled by Ron Paul, and for the most part, the failures of the US automakers are self-induced.
96 - there comes a point where a politician has to come out and say “I stand against these things”. Comparing Tom Cruise’s support of Clinton is pretty weak. It is easy to dismiss Scientologists. Paul didn’t have to scour the planet looking for these racists, they came to him.
Basically, repudiating the National Enquirer and the Flying Spaghetti Monster worshippers is a waste of time.
Repudiating the support of child molesters and racists who advocate for the extermination of non-white races, that is well worth a candidate’s time.
“But we’ve gotten away from my original question: What can Ron Paul do as president that will lower the price of commodities such as milk? I assert that he can do little or nothing.”
The argument over whether a president can (or should) have any effect on milk prices misses the nature of what Ron Paul’s message is about. He doesn’t claim to even want to bring prices down. What he offers is a plan to strengthen our currency (reduce spending and turn off the magic dollar machine) and legalize an objective storage unit of value. If we can stabilize the currency, prices will necessarily stabilize, affected by only one dynamic data-set (the collective market pressures of supply/demand for milk ) rather than two (the additional dynamic data-set for the value of a dollar).
We’re using an elastic ruler (the dollar) to measure the relative value of a commodity (in this case milk). That means a change in the relative metric of the ‘ruler’ will be just as likely to impact the value as a change in the market supply/demand for that commodity.
Complete price stability can never be achieved because markets are dynamic. We can however limit the swings by using an objective ruler that doesn’t vacillate.
99 - “there comes a point where a politician has to come out and say “I stand against these things”. Comparing Tom Cruise’s support of Clinton is pretty weak. It is easy to dismiss Scientologists. Paul didn’t have to scour the planet looking for these racists, they came to him.”
“Repudiating the support of child molesters and racists who advocate for the extermination of non-white races, that is well worth a candidate’s time.”
Surely you’re not serious. You haven’t heard Paul say countless times that he doesn’t support what they stand for, and that they don’t do him any good? Here you go…..
http://www.youtube.com/watch?v=G7FwULXnM_E&feature=related
What it comes down to is that you simply don’t believe him when he says it. That is your prerogative, but just be honest about it.
mty
When it comes down to to it jimb disliked him anyway. Nothing Ron Paul could say would change his mind. Nothing.
Keep posting. I am learning a good bit about economics from you.
mty,
Agree with DJ, keep posting. No biggie if your guy gets mocked, I know the feeling.
Thank you both.
__________________________
“your guy gets mocked”
I can handle it - but I reserve the right to correct it.
The problem, though, is that Paul wants to establish the non-vacillating dollar on the foundation of the value of an ounce of gold, which itself vacillates.
Gold, in itself, isn’t really *inherently* valuable. Its value is determined like the value of other commodities: some of the value is in industrial uses (conductors etc) some is in decorative uses (jewelry, etc.) and the rest is its perceived value as an inflation hedge. In fact, its practical utility is less than other commodities — you can’t eat it (pork bellies, corn), build stuff with it (wood, steel) or burn it for fuel (oil, natural gas).
Damn near all of gold’s value is in the notion that it’s pretty and there’s not a lot of it. I see no reason that “Ooooh…shiny” should be the basis of the world economy.
There’s nothing magical about gold that should make it The Standard. We might as well use lead or helium.
What we should use is what the market demands. Paul’s platform doesn’t call for the illegitimacy of the federal reserve note necessarily; it does however call for the legalization and facilitation of currencies made of gold and silver. Why should the government have anything to fear? (that’s rhetorical, unless you wanna take a stab)
A lead-based currency? Seems ridiculous given it’s low relative value and high weight to mass ratio….. not to mention the health hazards. Helium has a similar problem in that it requires a bulky device to transport it, plus the mechanics of transferring it to make a purchase seem awful clumsy. But hey - I’m glad your thinkin!
Don’t you suspect that the market might dictate that certain commodities would serve a more suitable vehicle for holding wealth? Maybe some pretty, rare metals that are maleable to aesthetically pleasing shapes?
You of course would retain your right to trade with whatever medium of exchange you choose, but good luck finding someone to take your helium. Gold has become a standard historical medium of exchange because it fulfills the desired roles for a commodity to serve as a medium of exchange perfectly.
Of course, people would be able to - and probably would - use federal reserve notes for every day transactions. But if you want to store your wealth or make larger purchases, gold coins or reserve notes would be perfectly acceptable. Or silver. Or copper. Or even helium.
__________________________________
Your basic premise is partly right, in that gold only has value because we agree it has value. But it is an objective yardstick against which to measure transactions, with some intrinsic value (however ephemeral) - not based on a promise of good tidings & happy tomorrows (full faith and credit) or because we said (compulsory monopoly currency).
What is the good faith and credit of the US worth? Bolivia? Argentina? If it is that great, wouldn’t that be as good as gold? Why should consumers be prevented from having a choice?
The underlying evil at the heart of most gold bugs’ (I am not one - but do advocate allowing competing issues if the government refuses to produce a suitable commodity money) concerns is the dangerous power you give to those with the power to print fiat money.
Letting me be the banker in life’s Monopoly game is a sure fire way to make sure I end up with all the property. We have a government forced monopoly over the production of currency, in the hand of private bankers.