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A Few Clouds ~ High: 48°F ~ Low: 29°F Friday, Feb. 10, 2012 |
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Recession ??Posted Friday, July 11, 2008, at 2:52 PM
It seems McCain's economics adviser may have opened his mouth and inserted his foot. Phil Gramm said the economic recession is a "mental problem" and we are a nation of "whiners." Well I recognize we have quite a few whiners in the Country and they infest ever geographical region, but a "nation of whiners" is a bit too much.
As to a recession being a "mental problem," I think there is a good bit of truth in that admonition. A recession is a well defined term as it applies to economics. That is two consecutive quarters of negative growth. We have to date, not experienced one quarter within this necessary parameter. That the economy is less that robust and is in a slowdown is obvious to everyone and may extend into recession in the future. I also recognize to those directly affected to a point of significantly altering their life styles it may seem like a recession or worse, terminology be damned. Back to the "mental problem," I have maintained for years that economic "swings" up or down are fostered by the populace's attitude. At any given time, there are the same number of dollars available and the same number of people, so why is one day great and the next day, metaphorically speaking, a recession? I have come to believe it is caused totally in this Country by the press reporting gloom and doom as expressed by academics and/or politicians. If enough of these people say we are in a recession, and enough people believe them, then we are in a recession. Likewise, if they say the recession is over, it is over. This is why I aver it is an attitude, read mental, problem since nothing changes but peoples feelings about "things." No hard economic or monetary phenomena occurs, just people deciding it's a recession or a recession is over. While not an apologist for McCain's staff, as many of your know Phil Gramm is a former long time Senator from Texas who has a Ph D. in economics, so at least academically if not ideologically, his utterances concerning economic matters probably should be considered with that in mind. Comments Showing most recent comments first [Show in chronological order instead] |
Near lifelong resident of Bedford County. Will comment on the issues of the day in, hopefully a cogent and certainly an honest manner. Will propose discussions not usually fully addressed in the mainstream media.
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Quote from above "Phil Gramm said the economic recession is a "mental problem" and we are a nation of "whiners."
They do say the best defense is a good offense Mr. Gramm co-authored the critical legislation that has enabled our financial institutions to practice the more .........creative......forms of bookeeping that has brought about our path to economic destruction.
Gramm-Leach-Bliley Act signed into law by former Pres Clinton in 2000. Source - whitehouse.gov and http://www.govtrack.us/congress/bill.xpd...
This is very true :) I agree with both of you! Perhaps a Congress and President who has to run the country the way every American is expected to run their own house, within their means... It's no wonder we're losing it all, because we have never had to pay for our debts.
Darrick......I will accept your data as factual, but I will have to think about it before I totally buy some of your conclusions, but your major thesis mirrors mine that I have tried to promote in my blog.
To wit: Until we can forget Party labels, be they liberal or conservative or Democrat or Republican, and select the best leaders at every level, we will continue a downward spiral in every area that is good for the human condition.
So long as we have a two "party" system and each has a vested interested in tearing down anything the other does of a positive nature, we will never fulfil the promise that should be the destiny of our great Country. As I mentioned before, the problem, and the solution can be seen by all by looking in the mirror. Until we each and every one can get past "bitching" and get involved and make things happen, nothing will ever change.
If you ask investment analysts and economists outside the US, they'll tell you that Americans can expect a 30-40% decrease in the standard of living. That will be worse than anything we've ever experienced, save the few who remember the great depression. The shift of economic power will be to Europe and most especially to the east.
Interesting you should bring up Keynes since many of his theories have been used by the government to quell normal business cycles which would have been corrective in small steps. Now we're in for a great big corrective enema.
And yes those zeros do make a difference. Unless you work for the Fed :(
If you ask investment analysts and economists outside the US, they'll tell you that Americans can expect a 30-40% decrease in the standard of living. That will be worse than anything we've ever experienced, save the few who remember the great depression. The shift of economic power will be to Europe and most especially to the east.
Interesting you should bring up Keynes since many of his theories have been used by the government to quell normal business cycles which would have been corrective in small steps. Now we're in for a great big corrective enema.
And yes those zeros do make a difference. Unless you work for the Fed :(
That debt total should be, $9,500,000,000 (those extra zero's make a huge difference)
U.S. debt= $9,500,000,000
- Today's inflation is highest in 17 years
-We now import over 60% our needs. Energy inflation appears as a 'ticking time-bomb.'
-88% erosion of "purchasing power" and rising...
-Real wages falling at their fastest rate in 14 years
-In 2006 the poverty rate for minors in the United States was the highest in the industrialized world, with 21.9% of all minors and 30% of African American minors living below the poverty threshold.[5] Moreover, the standard of living for those in the bottom 10% was lower in the U.S. than in any other developed nation except the United Kingdom, which had the lowest standard of living for impoverished children.
example 1: a postage stamp in the 1950s cost 3 cents; today's cost is 41 cents - 1,266% inflation;
example 2: a gallon of 90 Octane full-service gasoline cost 18 cents before; today it is $4.05 for self-service - 2,150 % inflation;
example 3: a house in 1959 cost $14,100; today's median price is $213,000 - 1,400% inflation;
example 4: a dental crown used to cost $40; today it's $1,100 - 2,750% inflation;
example 5: an ice cream cone in 1950 cost 5 cents; today its $2.50 - 4,900% inflation;
example 6: monthly government Medicare insurance premiums paid by seniors was $5.30 in 1970; its now $96.40 - 1,889% inflation; (and up 70% past 5 years)
example: several generations ago a person worked 1.4 months per year to pay for government; he now works 5 months.
And in the past, one wage-earner families lived well and built savings with minimal debt, many paying off their home and college-educating children without loans. How about today?
Like Tim Said... Few citizens know that a few years ago government changed how they measure and report inflation, as if that would stop it - - but families know better when they pay their bills for food, medical costs, energy, property taxes, insurance and try to buy a house.
How true is this? "There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." Lord John Maynard Keynes (1883-1946), renowned British economist.
We should cease the arguing and begin the process of fixing what is broken.
Liberal media, Conservative media... w/e. Facts are facts. Is it the "American Way" to deny any possibility of an economy in distress? Or should we take the terms "liberal" and "conservative", throw them out the window and DO SOMETHING about this.
I've been reading Peter Schiff's "Crash Proof" about the coming economic collapse of the US. The GDP and the CPI are poor indicators of economic health since over the years politicians have monkeyed with the formula to suit their needs. The CPI for example doesn't include fuel or food prices. The fact is the US economy is built on a house of cards. It depends on consumerism to stay a float. Since our manufacturing base has been seriously eroded, we no longer have the capacity to trade goods for our mounting debt. Since the Fed has been pumping out dollars like water, the value of the dollar has sunk. Consequently, when you take into account the money we borrow to finance our buying plus obligations to our own people (social security, medicare etc) we're looking down the barrel of a 50 TRILLION dollar shortfall over the next few years.
Folks, it's gonna get ugly.
Good blog. Everyone has good ideas. Like greasemonkey said, "When the media says we are good or Bad" that is our mood. It depends on which Media you believe.
The official definition of a recession is 2 consecutive quarters of negative GDP. We are not there yet. Americans are still working too hard. However, the Fed and the "Money People" are still at work stealing Americans productivity. And also, remember, it is not only happening in the U.S., it's happening all over the world. TROUBLE!
Here is a website that I look at most everyday to see what is happening, Globally. It indicates the "Social Mood" of the people.
Website is here: http://www.socionomics.net/index.aspx
Carl, you are correct about Phil Gramm. He should have said nothing, only for the benefit of the American people. About older blogs, bring them back. History does repeat itself, and people can gauge where we are now, from where we have been.
a recession is generally associated with a decline in a country's real gross domestic product (GDP), or negative real economic growth
Gas prices: up
Groceries prices: up
Clothing prices: up
Home foreclosures: up
Employment is: down
Housing prices: down
Value of the US dollar: down
Businesses closing
City Budgets are tightened
Jobs outsourced
Major companies laying off employees due to lack of sales *see auto industry for one example
Trucking Companies that deliver our daily needs spending more on fuel which leads to higher prices for everything we use. Smaller companies being forced out of business.
With all these increases people who are lucky enough to still have a job, have to be happy with little to zero rises and be pleased they even have a job. The same $20 to fill your gas tank is now $50...the same $50 at the grocery store is now $70 with no increase in wages. Most of us are not fortune enough to be on a "fixed" income where the government gives us a rise at the beginning of each new year.
Are we in a recession? Yes indeed we are but we aren't in a depression, yet!
Just like a depression won't effect everyone, neither will a recession.
A depression starts with a recession and if things don't turn around soon that's the only way we are headed.
I guess recession is a term that only crazy liberals use to get their way?
I do not know if it is a recession... But I do know that we have to watch our money and our paycheck is not going as far as it use to....We are spending alot more in gas for my husband to go to work...and I really have to watch our money at the gorcery store also...What we usually spent every 2 weeks for food and shampoo and soap etc....is not going as far as it did last year at this time....I know it is not all in my head...
About the only think slowing us down is gas prices. Our business is actually doing better than forecast for this time of year. Of course gas prices has many other things going up so those obviously affect us as well.
I agree with your analysis. The mindset of the people set the temperature of the economy. That is not saying there is not a slow down, but it is probably intensified by our mindset.
I think everyone is just saying its a recession, because I went to the mall the other day and it was full of people shopping. If you look in Wal-Marts parking lots they stay full, all the restaurants stay busy.People are still spending money. We do have an economy that has slowed down, but its not as bad as its portrayed. Some people that were maxed out in debt are probably having problems, but it was gonna happen anyway. Kind of like "fiscal natural selection". You are right though, when the media says the economy is better, it will be better.