A recovery of two steps forward, one and a half steps back
Oct. 2 (Bloomberg) — U.S. job losses accelerated last month and the unemployment rate climbed to the highest level since 1983, stark reminders of how the worst financial crisis in a generation may undermine consumer spending and economic growth in the months ahead.
The figures from today’s Labor Department report sent stocks tumbling for a fourth day and yields on benchmark 10-year notes to the lowest level since May. The report underscores forecasts for the Federal Reserve to keep its benchmark interest rate near zero through next year, and may spark calls for stronger government efforts to shore up jobs.
“You will see the economy pulling back,” Richard Yamarone, head of economic research at Argus Research Corp. in New York and most accurate forecaster surveyed for the payrolls loss, said in a Bloomberg Television interview. Payrolls may not return to their previous peak for years to come, he added.
Overall, the number of jobs fell by 263,000 last month, considerably more than expected. That wasn’t the morning’s only sobering economic news. As the AP reports:
New orders to U.S. factories fell in August by the largest amount in five months, as American manufacturers struggle to emerge from the recession.
The Commerce Department said Friday that demand for manufactured goods dropped 0.8 percent, much worse than the 0.7 percent gain that economists had expected. The August decline reflected plunging demand for commercial aircraft, a category that surged in July.
Investors had apparently already priced a lot of the news into the market, however. As of 10:53, the Dow was off just 19 points. At roughly 9500, it’s still well above its March 9 closing of 6547.
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73 comments Add your comment
Gandalf, the Wise
October 2nd, 2009
11:02 am
First!
Gandalf, the Wise
October 2nd, 2009
11:03 am
“The ships only half full of water” Captain of the Titanic….
Can I get a Damn Skippy 
Just curious
October 2nd, 2009
11:04 am
Still gonna blame this on Bush?
booger
October 2nd, 2009
11:04 am
I’m sure that $787 billion in stimulus money will kick in any minute now.
Gandalf, the Wise
October 2nd, 2009
11:04 am
Shouldn’t we just spend some more? Cash for starter homes maybe? Nothing a few trillion can’t fix…
Gandalf, the Wise
October 2nd, 2009
11:05 am
Barry fixes economies almost as well as FDR!
Just curious
October 2nd, 2009
11:06 am
Mrs. Godzilla
Taypayer
USinUK
TnGelding
Bosch
Please spin this economic news for me without blaming Bush/Cheney.
Gandalf, the Wise
October 2nd, 2009
11:07 am
Remember…
“BARRY! HE’S VERY SCARY!
Gandalf, the Wise
October 2nd, 2009
11:07 am
just curious, they can’t!
N.J.
October 2nd, 2009
11:08 am
The problem is that Obama relies too much on “free market” solutions. Health reform should be single payer, and the government should stiffen up regulations, including taxes on businesses that make profits greater than inflation but fire employees. Hit companies that place large profits before employment and the economy will improve very quickly. It will “trickle up” money to the company.
This is basic to Adam Smiths theory of economics. Keep employment high so you do not lose customers is the basis of Smith’s idea of capitalism. Don’t worry about the rich, Smith asserts. The rich can take care of themselves. Worry about the bottom base of the capitalist economy, not the apex of the pyramid. A pyramid cannot stand on its point. It becomes unstable and falls over.
Gandalf, the Wise
October 2nd, 2009
11:11 am
That’s funny!
Goldie
October 2nd, 2009
11:15 am
Bush and the Repubs are the main cause of this unemployment mess we’re in today — the bank failures and Wall St. crash began over a year ago, all because of the rotted out, unregulated and tax-cuts-for-the-wealthy policies put forth by the Repubs! So there.
N.J.
October 2nd, 2009
11:17 am
Oh yes the Republicans assert that FDR didnt fix the economy.There is no evidence, which they assert, that suggests that simply leaving the economy alone, “the free market” would have fixed everything.
What would have occurred, was a communist revolution, like the one in Russia 15 years earlier. The U.S. was on the brink of either a socialist or outright Communist revolution. So much so that FDR offered Stalin’s Russia official recognition in exchange for Stalin to stop giving his support to the Communist Party, U.S.A.
Republicans are good at rewriting history. No sane economist thinks that the conservative solution would have worked. Even Hoover, the arch conservative, realized that it was his own conservative tax CUTS that cause the market bubble and bust of 1929 and finally raised the top marginal tax rate from the 25 percent he lowered it to up to 65 percent which his own conservative economists finally had to suggest. And he didnt do that until his last year in office, His economy went down, down, down, as long as he kept conservative economics in place. For three years, the GDP collapsed by 25 percent. He applied the tax cut, the next year GDP dropped by only 2.4 percent. FDR came into office, the first positive growth occurred in the economy. Its much harder to restore an economy than to destroy it. Just like its easier to drop a ball off of a skyscraper than to throw it up to the top.
N.J.
October 2nd, 2009
11:18 am
I defy ANY of these right wing anti bailout and stimulus troglodytes to go out and spend 787 billion dollars in 8 months.
N.J.
October 2nd, 2009
11:21 am
Also they cannot explain why Socialist Europe, which far more left leaning economics is out of recession and into economic growth and why the U.S. is stumbling along.
We need more socialistic type methods, not free market ones. The free market does not work. Every time regulations are relaxed and taxes are lowered, the economy fails. Every time. Like clockwork.
jconservative
October 2nd, 2009
11:28 am
“U.S. job losses accelerated last month and the unemployment rate climbed to the highest level since 1983…”
Let’s see, Reagan was inaugurated in Jan 1981 & in 1983 had unemployment at the highest level since the Great Depression.
That’s correct but besides the point. Employment is always the trailer in an economic recovery. Maybe we are in a recovery, maybe we are not.
We were losing 750,000 jobs a month, now down to 263,000. Are we making progress? Maybe, maybe not.
Consumer spending is still down. Until that goes up jobs will stay down.
Me? I do not spend a dime I can get out of spending. I’m part of the problem.
N.J.
October 2nd, 2009
11:29 am
Also they cannot explain why Socialist Europe, which far more left leaning economics is out of recession and into economic growth and why the U.S. is stumbling along.
We need more socialistic type methods, not free market ones. The free market does not work. Every time regulations are relaxed and taxes are lowered, the economy fails. Every time. Like clockwork.
Its no mistake that the “Red Menace” politics of the United States went full steam in the U.S. The U.S.S.R did not experience the Great Depression. The opposite. Between 1929 and 1932, the average industrial growth in the Soviet Union was 38 percent per year. Scared the hell out of American Industrialists. We had to divert that internal spending by injected an external military threat. Even Reagan’s own economists were scared, Detente started under Nixon allowed the Soviets to cut military spending and divert to domestic spending and their economies started growing .By enough for Reagan’s economists to suggest that the Soviets would become the number one economic power within 25 years. Enter Star Wars.
jt
October 2nd, 2009
11:33 am
Go preach to 38 million Poles N.J.
As Obama and the statists try to micromanage our failing economyand raise taxes, freedom-loving Americans can learn much from the brave Polish people who have been in our situation.
Solidarity’s Wiktor Kulerski had sketched the outlines of Polish resistance a few years before when he wrote, “This movement should create a situation in which authorities will control empty stores, but not the market; the employment of workers, but not their livelihood; the official media, but not the circulation of information; printing plants, but not the publishing movement; the mail and telephones, but not communications; and the school system, but not education.
Thirty-eight million Poles were thumbing their noses at the State. They knew from painful experience that, as dissident Stefan Kisielewski put it (and was arrested and beaten for saying), “Socialism is stupidism.” They had had enough of it.
http://www.thefreemanonline.org/columns/ideas-and-consequences/a-tribute-to-the-polish-people/
stands for decibels
October 2nd, 2009
11:34 am
Me? I do not spend a dime I can get out of spending. I’m part of the problem.
Me too, pretty much. And I actually am conflicted, a bit, about this–sometimes I think we probably ought to open up the taps a bit, but there’s nasty ol’ reality looking us in the eye and, well, (for example) we’ll splurge on that ski vacation some other year, methinks.
Jay
October 2nd, 2009
11:34 am
To expand on jconservative’s point a bit:
If, after nine months in office, an unemployment rate of 9.8 percent is Barack Obama’s fault, whose fault was it when unemployment hit 11.4 percent in January 1983, when Ronald Reagan had been in charge for a whole two years?
Again, Obama: Nine months in office, 9.8 percent
Reagan: Two years, 11.4 percent.
We now resume your original programming.
@@
October 2nd, 2009
11:34 am
I wish I had a better grasp of “the economy” as such. I was watching a Wall Street type talk the other day. What he basically said was the stimulus we’re seeing (small as it is) was creating out of nothingness in that it came from the federal reserves printing presses.
At the time it made sense. My inability to put it into his words may not for some.
All I know is there was a time when our kids came to us for financial help when needed. Now it’s as though we’re borrowing from our kids to make ends meet. This to me is the shame of it all.
I find myself saving more so that I can shore up, for my daughter, the tremendous debt the stimulus has placed on her future earnings.
We surrendered our kids to the hostage takers. Our American Dream has turned into their American nightmare.
Unforgivable in my opinion.
getalife
October 2nd, 2009
11:34 am
Well the Olympics would help but Chicago is out.
Dave R.
October 2nd, 2009
11:35 am
Jay, please highlight the “two steps forward”, if you can.
Retail down.
Consumer confidence down.
Auto sales down, especially the government-subsidized ones GM and Chrysler).
Employment down, unemployment possibly at 17% when you figure in part-timers and those who have given up trying to find a job.
A nearly $2 trillion deficit this year alone.
How’s that Hopey-Changey thing working out for us? Not very well.
Turd Ferguson
October 2nd, 2009
11:35 am
And there is even more good news as we continue to suffer at the hands of our president/MR INEFFECTIVE…
“Chicago loses bid to host 2016 Olympics. Winner still to be announced.”
AHHHH HAHAHAHAHAHAHAAHA!!!!
Dr. Alan Phillips
October 2nd, 2009
11:36 am
There is a great truthful article in Today’s NY Times by Paul Krugman, Mission Not Accomplished, a superb piece. Thanks to him for pulling the cover off such buzz phrases as “many shoots.” Shoots and sprouts with 52 percent unemployment, among youth,Fresno California farm owners and workers facing unemployment at the 40 percent level do not make a recovery and fail to support a mission accomplished, and irrational braggadocio that is incomprehensible to understand.
The data summaries Krugman presented is the true reality. It contrasts with the various spins being placed upon a dying national economic performance. Two trillion in lost production, employment and growth may be just the beginning. The soothsayers remind me of President Hoover’s comment in 1932 that “hobos are eating well, in fact one had ten meals in a single day, or people are giving up their jobs preferring to make more selling apples.”
The complacency he refers to can be found everywhere. I recently read about a Republican potential candidate for the presidency in 2012. The thrust of the article included his assembly of a strong team of technology, major players and big party officials. I searched this candidate’s profile for a simple action statement to address the under and unemployed without income in this nation. He could have at least thought out of the box and made a few suggestions like;
* Elimination or reduction of state corporate taxes through increase of jobs in states, thus providing payroll tax growth, which has been unavailable this past year, through new jobs,
* Establishment of a strong jobs now, task force composed of corporate CEO’’s, economists, bankers, workers, state officials and other designated individuals, which exists solely for the express purpose of job creation-restoration,
* Establishment of a strategic plan for growth in American jobs, including recent high school/college graduates, over the next three years, with measurable targets and objectives.
* Development of a reporting system to the American people listing the number of jobs created, their location, their occupational emphasis, and a list of companies hiring. on a monthly basis.
The time is long overdue for this administration, the congress, and the nation to focus on the main problem, the true elephant in the room. We need jobs in America now, the nation’s economy is at risk of being destroyed, let us make this priority one ahead of, Olympics, cap and trade, healthcare reform. let’s fix this dying economy with its massive job losses. It still is the economy, we need these jobs now more than ever but a complacency which has promoted a lack of rationality is preventing a solution. I agree with Krugman, The Mission is not accomplished.
Dr. Phillips
Bloomington, IL
Joe Biden
October 2nd, 2009
11:36 am
Hmmm…well that doesnt seem correct. Lettuce spend another 25 trillion!! YEA!! That should do it.
Barry, get those printers moving round the clock.
N.J.
October 2nd, 2009
11:36 am
…But the genius award undoubtedly goes to Lester Thurow, economist and well-known author, who, as late as 1989, wrote, “Can economic command significantly … accelerate the growth process? The remarkable performance of the Soviet Union suggests that it can. Today it is a country whose economic achievements bear comparison with those of the United States.”
Wise men tend to be impatient with dummies, and thus we can understand the tone of indignation with which Strobe Talbott, a senior correspondent at Time and later an official in the Clinton State Department, faulted officials in the Reagan administration for espousing “the early fifties goal of rolling back Soviet domination of Eastern Europe,” an objective he considered misguided and unrealistic. “Reagan is counting on American technological and economic predominance to prevail in the end,” Talbott scoffed, adding that if the Soviet economy was in a crisis of any kind, “it is a permanent, institutionalized crisis with which the U.S.S.R. has learned to live.”
Equally scornful was Sovietologist Stephen Cohen of Princeton University, who wrote in 1983: “All evidence indicates that the Reagan administration has abandoned both containment and détente for a very different objective: destroying the Soviet Union as a world power and possibly even its Communist system.”..
Reagan’s “tear this wall down” was the result of years of externally threatening the internal domestic economy of Russia. That is because Reagan understood the negative relationship between defense spending and economic growth. Reagan had to borrow and borrow hard to accomplish that, but he knew that the Soviet Command economy could not be left to work its very powerful ability to grow economies. We had to make the powers that be in Russia divert as much money as possible from improving the life of its citizens to defending its borders and regimes.
This is occurring in Iran today. The U.S. and Europe fear Iran not because of its nuclear ambitions, but because it has the potential of becoming an economic superpower that can wrest control of petroleum from the United States and London and into a Middle Eastern economic market that controls the flow and the price of oil.
I Report/ Vast White Wing Conspirator :-) You Whine :-(
October 2nd, 2009
11:37 am
These are the people we should trust with our health care?
Puh leeze.
They think the economy is kicking ass, it is, our ass.
Gandalf, the Wise
October 2nd, 2009
11:38 am
Jay, Carter was to blame, he was and still is an idiot!
stands for decibels
October 2nd, 2009
11:38 am
I defy ANY of these right wing anti bailout and stimulus troglodytes to go out and spend 787 billion dollars in 8 months.
I’d just be happy if some of those righties would at least acknowledge, for a change, that a good chunk of their precious $787 billion went to tax cuts to the vast majority of Americans.
But anyway, it might be worth noting that, apparently, the righties have a friend in the Socialist Workers Party, who seem to have similar concerns.
Joe Biden
October 2nd, 2009
11:39 am
Jay, That was Reagans fault…the 11.4%. He intentionally ran the Country thru some short term pain for long term gain. Is this what Barry is doing…possibly, possibly not.
Just a wait and see game and my $$$ are on possibly not.
@@
October 2nd, 2009
11:39 am
DANG! that was fast. It was a risky venture for the President.
OUCH!
Now clean up Grove Parc. Those people deserve better.
N.J.
October 2nd, 2009
11:44 am
We need jobs now, but the problem is the top personal income tax rate in the U.S. is one of the lowest in the world. Business taxes, real, not the imaginary top rate, are also among the lowest in the world. Yet our economy cannot compete, not with China, not with Germany, not with the European Union. The top marginal income tax rate in Germany is 54 percent. Germany is doing better than the U.S. lots better.
The conservative assertion that blanket reduction of the top marginal rate WILL result in creation of more businesses and jobs is at best a maybe and at worse, false. The historical record is that lowering the top income tax below 50 percent has not had good results. The best way to handle this is to guide economic behavior not by simply lowering taxes, but by lowering specific taxes and giving preferences to certain ways of using money to avoid having it taxed.
A flat across the board tax cut has never resulted in job or business creation, Never. Raising the top tax rate and allowing businessmen to avoid taxes by creating new jobs and new businesses has been very effective in growing the economy. That is how Clinton did it. He did not simply RAISE taxes by 10 percent. He offered a way to avoid paying them depending on how the money was used.
Dave R.
October 2nd, 2009
11:44 am
Wow! Looks like the international community is beginning to see what we in the U.S. have a tough time seeing:
Hope & Change isn’t so persuasive after all.
Spends a couple of million taxpayer dollars in a failed effort to get the Olympics to his Chicago cronies, can’t get Cap & Tax passed, can’t get health care passed (both in a Democrat super-majority), his polls are going down, can’t get employment up with his “stimulus package”, his car companies are doing worse than those without government bailouts, his enablers in the ACORN community are under constant fire,
and he’s kicked out in the FIRST round of voting at the IOC !
The bloom is off the rose that many of us knew never really existed.
@@
October 2nd, 2009
11:50 am
‘Ya know, Obama hasn’t done much to organize the community. Nor has he been successful at organizing his priorities as Dr. Phillips ^^^ points out.
He sux!
I eagerly await the opportunity to say something positive about him but he’s gonna have to come down out of the clouds first – down here on earth where THE PEOPLE reside.
N.J.
October 2nd, 2009
11:53 am
And conservative are saying that Obama has to focus and create jobs.
Can’t do that unless you create an international view of the United States as a place that one is willing to come and created them. In a global market, you need global demand. The United States economic and industrial capacity has been such that our economy cannot create jobs, at least ones that pay well enough for there to be a middle class, on our own steam any longer. Without the world coming to the United States to open businesses or at least branches, this country is dead and buried. And will never recover. Bush saw that our image was so tarnished that other nations don’t want to breathe the air around us for fear of catching our economic disease.
Again, Conservatives have no vision, and certainly no understanding of how markets work. Their one size fits all “low taxes and small government” is good for a a place where the only businesses are butcher shops and bakeries, but not for huge industrial nations. You cannot be an industrial superpower without having big government in every arena of life. That’s just the way it goes.
The examples are third world countries. A small number of wealthy, a lot of poor workers, low taxes for the rich, no businesse regulation. All third rate nations.
Pokey
October 2nd, 2009
11:54 am
Not so fast JB…we were sold a bill of goods that if we didn’t pass THIS “stimulus” bill, unemployment would exceed 8%. WHY has BHO and his advisors so wrong?? And don’t lean on your claims that thousands of economists of all political leanings said that the “stimulus” plan as it was constituted had to be passed.
Why should we believe their claims about healthcare “reform”? Why should we believe their claims when most of their claims are contradicted by the CBO??? Why should we believe them?????
BTW, how can you be writing a book on AF and your have never been there???
Dave R.
October 2nd, 2009
12:00 pm
NJ, maybe if we didn’t have such a high tax rate for businesses, the “world community” might think about us every now and again when it came to business.
But of course, you’re against the one bill in Congress that would eliminate ALL business taxes, so maybe you’re just full of a lot of hot air.
Jay
October 2nd, 2009
12:01 pm
It’s not a book about Afghanistan, Pokey. It’s a book about the increasing importance of public opinion in deciding the outcome of wars.
McChrystal “mchrystallized” it pretty well yesterday in London:
“We don’t win by destroying the Taliban,” he said. “We don’t win by body count. … We win when the people decide we win.”
N.J.
October 2nd, 2009
12:02 pm
Why was Obama so wrong about stimulus. He wasn’t he and his advisors said that if we didnt pass a stimulus package that was at least a trillion dollars, and probably more. Obama did not get it. He accepted what he could get, but the majority of economists stated it would not be sufficient, and would also result in higher unemployment and a longer recession. When an economy LOSES more than a trillion dollars, you need an equal countervailing economic force to stop the inertia of the economic fall. Didnt get it, and the private sector was too scare to risk putting it back in.
The best way to have made them do so was to tax the hell out of money they pulled out of business in salaries, bonuses and profits. Then they would have kept the money INSIDE of businesses so as to avoid losing more in taxes than they were losing in the value of their businesses.
Gandalf, the Wise
October 2nd, 2009
12:03 pm
So, when Obama kills off all the old folks, will the economy improve?
@@
October 2nd, 2009
12:04 pm
Polish Finance Minister Jan Rostowski said Oct. 2 that it is “totally unacceptable” that Europe’s poor countries should help its rich countries finance climate change for the world’s poor countries, DPA reported. The European Commission has estimated that the poorer countries will need $145 billion by 2020 to adapt to climate change and said roughly $22 billion of that total should come from EU taxpayers. Rostowski said Poland would not agree to an “unjust proposal.”
I was watching a video over at Stratfor (can’t bring it here) which basically showed China’s initiatives towards green energy. Wind turbines…yada yada yada. The thing is, the video then talked with those technocrats who were heading the initiatives. What were they saying? It will have virtually no impact on CO2 emissions (miniscule results). They will continue to mine and burn coal as their source of fuel.
Why are we pursuing Cap&Trade again?
I didn’t like Al Gore before his Global Warming hysteriantics [sic]. I, for one, am not looking to make some former politician wealthier than he’s already become in his “service to the people”.
N.J.
October 2nd, 2009
12:05 pm
Lets look at the stimulus Obama said was NEEDED to fix the economy:
Barack Obama unveils $1 trillion economic stimulus package
President-elect Barack Obama has warned that “things are going to get worse before they get better” as he outlined details of an economic stimulus package that could reach $1 trillion and is designed to lift the United States out of recession.
http://www.telegraph.co.uk/finance/financetopics/recession/3662063/Barack-Obama-unveils-1-trillion-economic-stimulus-package.html
Of course like cars, you screw with the engineers design, the car just does not perform to the original engineering standards.
Of course we just saw an increase in unemployment. Why. The Cash for Clunker program is gone.
Even Wall Street analysts are stating that the surge of economic activity in August was in a large part the result of all that spending on cars.
Gandalf, the Wise
October 2nd, 2009
12:06 pm
Less Towelheads in Afghanistan, more chance of Victory. That’s a hard place to win a war. Kinda like playing Green Bay in December up at Lambo Field, really difficult to win there.
Gandalf, the Wise
October 2nd, 2009
12:07 pm
NJ? where do you pick up your Leftist Talking Points? Silly Leftist Talkin’ points daily dot com?
John-Boy
October 2nd, 2009
12:09 pm
All I can say is we never had these type of problems on Waltons Mountain.
Pokey
October 2nd, 2009
12:10 pm
JB, you didn’t answer all of my questions…
and…
You have written about Iraq and AF for years as if your are the resident expert. If I am not mistaken, you are supposed to be THE national security editorialist. I am curious why you have never ventured to either Iraq or AF. Why?
You better believe that destroying the Taliban has a lot to do with victory in AF. You can’t have a successful counter-insurgency without those “people” feeling secure.
N.J.
October 2nd, 2009
12:10 pm
The Obama team were right on the money with cash for clunkers, the economy and job growth during July and August came to exactly what they predicted it would do before the program was passed.
They estimated that there would be a 0.3 to 0.4 percentage point increase in car sales because of the increased car sales in July and August. An estimated 42,000 jobs would be created or saved during the second half of the year, the White House said. It occured.
I am listening to reports from IHS Global Insight right now and they are linking the majority of economic activity in July and August stating that cash for clunkers was the prime reason for the economic increases in those months
N.J.
October 2nd, 2009
12:11 pm
To prove it, go to any New Car Dealership and ask to see a 2009 model for a year end sale. Gone, gone , gone, gone. In many cases you would have been able to find a few remaining 2008 cars in the past. Not now.
George W Bush
October 2nd, 2009
12:11 pm
No Jay, we win when I say we win. Im the Decider!!
RW-(the original)
October 2nd, 2009
12:13 pm
Enter your comments here–
How can you quote two stories saying things are getting worse and label it two steps forward, one and a half back? At the very best it would be one and a half forward and two back.
Kanya West
October 2nd, 2009
12:14 pm
George Bush hates black people.
George Bush caused Katrina.
George Bush caused my “Billion Dollar Man” tour to be cancelled.
N.J.
October 2nd, 2009
12:15 pm
Defeating the Taliban will create a sense of security. By all reports the people are more afraid of the people we have put in charge than the Taliban.
Numerous reports coming from NATO nations state that all over Afghanistan there is more fear of Karzai’s forces than Taliban forces. This is the reason Karzai is trying to negotiate with “Taliban Moderates” his forces terrify Afghani villagers.
N.J.
October 2nd, 2009
12:17 pm
All the Republicans have to do is get out of Obamas way, stop being obstructionists, and let real economics work their magic.
N.J.
October 2nd, 2009
12:18 pm
Nope I pick up my economic points from non partisan economists. I pick up my international points from non involved parties and history.
Economics as well. Historically conservatives cannot point to a single time where their economics actually worked.
Pokey
October 2nd, 2009
12:19 pm
NJ,
You have no idea what you are talking about. None. Have you ever talked to someone who has been there advising Afgahns in the field? Do you ever talk to people that are there NOW advsing Afghans in the field??
Who by the way did “we” “put in charge”? How did we put them in charge???
N.J.
October 2nd, 2009
12:19 pm
Or they have to make excuses as to why their economic ideas didn’t work “this time”
But since there is always an excuse, its time to ditch the theory. There are always excuses because their ideas only sound good but do not work in the real world.
Jay
October 2nd, 2009
12:21 pm
RW, the economy isn’t great, or even good, or even OK. But I think almost every economist you can find will say that overall it’s a little bit better than it was in the late spring or early summer, and a LOT better than the worst-case scenarios would have predicted.
That’s the Fed’s conclusion. The IMF just came out with the same verdict. And as I noted, the Dow is now 3,000 points above its March low, an increase of more than 40 percent.
That’s why the headline reads as it does.
Hilliary Clinton
October 2nd, 2009
12:21 pm
The best thing about the “Cash for Clunkers” program is how it removed hundreds of Obama bumper stickers from the roadways!
N.J.
October 2nd, 2009
12:22 pm
The assertion that some how the wealthy are not as prone to the seven deadly sins of the bible, or the suggestion of Saint Paul that humans cannot even follow systems they create, any kind, ethical, economic, and so on, and will always attempt to cheat those systems is the soundest Christian explanation why “free market forces” will never and can never work. The humans that created it are sinful, always will be sinful, and any system they create will be sinful and flawed.
Kamchak
October 2nd, 2009
12:26 pm
Please spin this economic news for me without blaming Bush/Cheney.
Laying all of this at the feet of Bush/Cheney would be irrational—though the former administration did accelerate the trickle-down process. Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any other time since 1928. (kudos to Taxpayer for that link.)
Trickle-down, however, started with the Reagan administration and the savings rate has declined since 1982.
It seems that we as individuals copied our elected leaders when it came to deficit spending.
Gandalf, the Wise
October 2nd, 2009
12:32 pm
NJ! YOU COMMIE!
MM
October 2nd, 2009
12:53 pm
Back in ‘04–’06, when unemployment averaged around 5%, Jay wrote about the “jobless recovery.” He claimed that a strong stock market, low inflation, low interest rates, and impressive quarterly GDP growth were not so impressive, given the stagnation in job creation that left us with a stubborn unemployment rate. Given today’s news, most would long for a return to a “jobless recovery” like that experienced a few years ago. Thoughts, Jay?
Jay
October 2nd, 2009
1:08 pm
Well, MM, I’d say that the trends we were seeing back then were the early warning signs of the economy we have today, but for the most part were ignored. We were a consumer-based economy, but the benefits of that economy were concentrating in a relatively few hands. Long term, a consumer-based economy requires that middle-class consumers do well, and they weren’t.
In one of the pieces you cite, published in February 2004, I wrote the following:
The components of the change are all too familiar. Computers and machines are replacing human workers, allowing business to produce more goods with fewer employees. Thanks to communications technology, investment capital and technical knowledge can be shipped instantaneously across the world with a touch of a computer button, a development that has freed businesses to seek the lowest possible labor costs wherever they can find them. And unleashed by a culture of greed, corporate executives have become extremely aggressive about cutting payrolls and outsourcing jobs overseas, knowing that if they can drive up the bottom line they will be rewarded with exorbitant pay packages and stock options that will make them multimillionaires.
The result has been an economic recovery that in more than two years has produced a healthy stock market and good corporate profits, but desperately few new jobs. “The U.S. economy is mired in a jobless recovery the likes of which it has never seen, ” as Morgan Stanley analyst Stephen Roach noted recently.
For countries such as China and India, though, the change is a godsend, producing long-needed investment and jobs to areas mired in poverty. For the time being, it is also good for business. As White House economics adviser Greg Mankiw argued recently, the shipping of high-paid U.S. jobs overseas, where they can be done much more cheaply, makes U.S. companies more efficient and profitable. If an $80,000 American computer programmer is fired and replaced with a $10,000 programmer in India, the $70,000 savings goes right to the corporate bottom line.
China, however, is a nation of 1.3 billion people, India a nation of 1.1 billion. Those two countries alone create a pool of cheap labor that global businesses will be able to tap for generations to come, in the process undercutting the bargaining power of U.S. workers. In effect, technology and globalization have brought those countries into the global labor supply and have swamped the market with available workers.
In the face of such powerful trends, it is becoming harder to argue that people control and deserve whatever fate the economy hands them. An American CEO may have become five times better paid in recent years, but he has not become five times wiser, more productive or harder working. CEOs are simply the lucky and undeserving beneficiaries of larger forces at work, just as the employees they have laid off are the unlucky and undeserving victims.
But if it is true that these trends cannot be halted or reversed, the challenge becomes adjusting to them. How do we help families cope when even two-earner households seem destined to have an increasingly hard time making ends meet? How should government policy be changed if jobs become less stable, if layoffs become more lengthy, if macroeconomic trends are concentrating wealth in relatively few hands, if more and more people are losing access to health care?
The dominant political ideology of the moment calls for removing the social safety net and forcing individuals to fend for themselves. It advocates cutting benefits for those struggling hardest to make it in the new economy, while cutting taxes to benefit those already reaping the biggest benefits.
In a different economy, that might be exactly the right approach. But that is not the economy that confronts us.
Looking back, I’d say that analysis held up pretty well.
Gandalf, the Wise
October 2nd, 2009
1:27 pm
I got this excerpt is from my son’s X-BOX, I think it needs some repair.
Beatles Rock Band
My Michelle
Lennon/McCartney
“Michelle, you smell,
these are the words that go together well,
Fugly Michelle”
There is more, but it’s a little rough, any one know the cure for FUGLY?
I am so glad you all missed me so!
Kamchak
October 2nd, 2009
1:35 pm
…any one know the cure for FUGLY?
A red card for Gandalf immediately leaps to mind.
MM
October 2nd, 2009
2:17 pm
Jay,
I’d say the analysis actually shows a fundamental misunderstanding of how the economy works.
Increasing social safety nets has a cost. The cost can be paid by some combination of increased taxes and increased borrowing. Or we can inflate our way out. None of these helps the employment picture.
Pokey
October 2nd, 2009
3:44 pm
JB,
Still waiting for you to answer the questions in my original post…
N.J.
October 2nd, 2009
9:54 pm
Even more than that, it was the policies of the last eight years, which were conservative based, designed to save business owners money by eliminating high end high tech high paying jobs, and replace them with lower paying, lower tech, service jobs, with fewer benefits. The more money the average worker has to spend on basics, the more out of pocket expenses they have on health care, the less they can consume in other markets.
This is why the top down ideas of economy don’t work well. Those who run the businesses will always try to give their employees as low an income as possible and skimp on benefits, with the idea that no one else is doing it. But when his employees have to cut back on consumption of other businesses goods and services, those businesses make less money, so they have to cut back on what they pay their employees, the benefits they provide, and the entire chain of lowered consumption moves through the economy. The Europeans beat this even though they do not consume much within their own national markets. Their economies are very much based on production and export. The U.S. does neither. The workers have no real incentives to be very productive in an environment where they are basically like hamsters running on a wheel. Their real income never increases, and since they are running in place, they run nice and slow so as to not exhaust themselves for someone else’s benefit.
Conservatives can talk tax cuts all they want. The Bush tax cuts were not very popular with the working public. They didn’t get much out of them. Polls indicated that they didn’t even want them. The majority didn’t even mind the government raising taxes in order to keep paying down the national debt. The majority didnt even care much about government spending. Even today, the national debt is not at the top of the majority of American’s concerns.
In the most recent polls of national priorities, American place the economy at number 1, health reform at # 2 and both together add up to 60 percent of the public who consider these two things as the highest national priority. The national debt comes in as a distant third, with only three percent of Americans thinking it is important at all. This one poll is done monthly and the national debt and deficit spending has not only been off the radar screen since Obama was elected, it has not been on the radar screen except among Republicans in Congress who have tried to whip this up as an issue.
These stats are a true indication of how insignificant the Tea Parties were. They did not reflect the concerns of the vast majority of Americans:
CBS News/New York Times Poll. Sept. 19-23, 2009. N=1,042 adults nationwide. MoE ± 3.
.
“What do you think is the most important problem facing the country today?” Open-ended
.
Economy and jobs
41%
Health care
19%
Budget deficit/National debt
3%
Moral values/Family values
3%
War/Peace (general)
2%
Iraq
2%
The President/Barack Obama
2%
Other
24%
Unsure
4%
http://www.pollingreport.com/prioriti.htm
Bill Murray
October 3rd, 2009
2:39 pm
Our major problem is our economic system and our government’s failure to properly regulate or control it. Our economy was based on money having no real value. Just look at the condition of our banks. Most people recognize that there are a substantial number of bank failures. I believe that our banking industry’s recent operation has brought our country to the verge of a financial collapse. They, because of the lack of government control and regulation, are the responsible parties for the financial debacle we are in. What few people recognize is the fact that banks can generate, or manufacture, money. To an extent, they do lend deposited money for loans. However, they can lend up to ten times their “asset value” or the money they have on deposit, for mortgages, personal loans, automobiles, or any other item. In addition, they can generate new money up to ten times their stated asset value. It should be noted that this money growth can be exponential. In the event on a run on any bank the Central Bank is required to “bail them out”. This recently happened with a nimber of banks and the government has had to considerably increase the Central banks funding level.
In reality money has no real value unless it is associated with tangible assests whether it is a feather, gold or silver. Ever since the relationship was severed between gold and our dollar the real value of money gone down. Our nation requires a new and different monetary system, one that is more closely tied to value and or assets and not based solely on paper (debt). A gold or silver standard or something else of tangible value should be required or there may be a total financial collapse in not only our country but the world’s economic system as well. The bottom line is that all money in existance is debt and that the time has come to pay off or reduce that debt. If we don’t do it there could be a total monetary collapse. In addition, our monetary system and its policies has caused an unjust distribution of our nation’s wealth. Most of our nation’s wealth lies with the top few percent of its population. No country can survive long with that type of distribution.
In order of priority:
Restructure our economic system.
Establish controls and regulation over the banking industry.
Start rebuilding our infrastructure (roads and bridges) using the unemployed similar to the CCC camps and WPA used during the depression.
Approve a national health program.
Bill Murray
October 3rd, 2009
2:41 pm
In addition, I think that the entire Federal System is a Ponzi scheme. The whole world buys our treasury bonds, notes and bills. These debts are backed by the full ability of the Federal government to tax the income of its citizens and its corporations. As long as this money is coming in the bonds are OK. But the national debt is approximately equal to the entire gross national product for a full year and it is growing exponentially. I think there is no possibility at all that it could be repaid without a huge amount of inflation.
Tim
October 3rd, 2009
11:56 pm
In March 2004, just 10 months after the “Jobs and Growth Tax Relief Reconciliation Act of 2003″, Jay Bookman wrote that the “fairest way” to judge if it had “worked as planned” “would be to measure the administration against its own numbers.”
The predictions were made by President Obama and Senator Reid:
Obama: Stimulus will create 4.1 million jobs
http://www.msnbc.msn.com/id/28590554/
Accord reached on final stimulus bill: $789 billion for 3.5 million jobs
http://features.csmonitor.com/politics/2009/02/11/accord-reached-on-final-stimulus-bill-789-billion-for-35-million-jobs/
We’ve seen the chart:
http://michaelscomments.wordpress.com/2009/10/02/september-unemployment-the-job-loss-accelerates/
And we’ve seen Jay Bookman’s hypocrisy.
dbm
October 5th, 2009
4:34 pm
To: NJ @ 11:17 AM 10/2:
Hoover’s real mistake was propping up wages and prices. This priced people, goods, and services out of the market, worsening and prolonging the depression. If Hoover had been a “do-nothing” President like some people claim, things would not have been nearly as bad.
And are you saying tax policy has a bigger effect on bubbles and busts than the Federal Reserve?