Will Europe’s problems become our problems?

Yikes.

In recent months, I’ve begun to feel just a wee bit more optimistic about the economy, and the weekend shopping figures seem to justify that sentiment. Hiring seems to be picking up a bit as well. The biggest remaining obstacle to continued recovery would seem to be the ongoing economic problems in the Eurozone. If that challenge could be managed, we might be alright heading into 2012.

Unfortunately, numbers released last week revealed that new manufacturing orders in Europe had fallen by 6.4 percent, a decline comparable to the collapse of 2008. And what does this mean for those of us on this side of the Atlantic? How much protection does thousands of miles of ocean provide?

Tim Duy at Fed Watch compares how U.S. output has historically tracked that of Europe and concludes that Europe’s decline could have a serious impact here, and none of it good:

6a00d83451b33869e2015393b77059970b-pi

Of course, since this is all Barney Frank’s fault and has nothing to do with an international debt crisis driven by an historic spree of irresponsible lending and borrowing, it’s all going to get better now that Frank has announced his retirement.

So we’ve got that going for us. Which is nice.

– Jay Bookman


(H/t Kevin Drum)

246 comments Add your comment

Keep Up the Good Fight!

November 29th, 2011
8:22 am

But but there is still evillllllll Nancy and that Kenyan….

Jm

November 29th, 2011
8:24 am

Correlations does not imply causation

Europe’s problems will be ours because we’re racking up debt just like they did

It’s a bad idea and when will liberals wake up to the threat of debt

Bye Barney! :D

Lord Help Us

November 29th, 2011
8:25 am

Sorry Jay, the ‘Barney Frank/Fannie/Freddie/CRA’ narrative has already reached self-perpetuating status. It is ‘fact’ that is beyond beyond reproach.

Adam

November 29th, 2011
8:25 am

I love the final snark.

Seriously though I am a little worried. Especially if the payroll tax cut doesn’t get extended. Emotional reaction to such changes can cause harm to the economy too.

Keep Up the Good Fight!

November 29th, 2011
8:26 am

It really is a shame that the Republicans wasted billions and billions on a war that was not needed and the Bush tax cuts (and the secret Bush $7.7 trillion bailout of the banks). Instead of fights over the stupidity of “no new taxes”, the government would have some ability to really help this economy.

Midori

November 29th, 2011
8:29 am

RB from Gwinnett

November 29th, 2011
8:29 am

“and has nothing to do with an international debt crisis driven by an historic spree of irresponsible lending and borrowing”

You mean it wasn’t Bush’s bad economic policy, Jay? Are you calling Obama a liar?

Lord Help Us

November 29th, 2011
8:29 am

I wish Reagan hadn’t ‘taught us that deficits don’t matter…’

Granny Godzilla

November 29th, 2011
8:29 am

Only if we allow our own conservatives to force the sames kinds of cuts and austerity programs that Europe has put on place.

As Europe continues its slide, the effects are sure to be felt in the United States, where the threat of a recession in 2012 is now greater than 50 percent. “It is not something that we would be insulated from,” Federal Reserve Chairman Ben Bernanke said last week. “I don’t think we would be able to escape the consequences of a blow-up in Europe.”

But even with evidence that austerity is wreaking havoc on European economies, American policymakers remain intent on following that lead. But chasing Europe down the austerity hole is only ensuring that the U.S. will experience another “great recession,” according to economists surveyed by Politico:

“To engage in austerity right now would be a great mistake,” insisted Desmond Lachman, an economist with the conservative American Enterprise Institute. “It would push the economy into a great recession.” [...]

“We need to learn from the European recessions,” said David Walker, former comptroller general of the United States, “and structure our own program” accordingly. He, too, said he considers large, near-term budget cuts potentially disastrous. Walker and other experts said significant budget cuts are certainly necessary — eventually. But not now. [...]

“Austerity brings a cyclical contraction,” said Thomas Kleine-Brockhoff, a German who is senior director for strategy at the German Marshall Fund in Washington. “You can’t just slash. You also have to invest and reform.” In his view, U.S. politicians don’t seem to appreciate this because they hold “a dangerous philosophy of American exceptionalism, as if they were exempt from the rules of finance.”

Jm

November 29th, 2011
8:30 am

Typos above. Oh well…

Europe’s economy is indeed tied to ours. The banking system probably has the worst exposure. But America’s economy is not shackled to Europe’s.

Jm

November 29th, 2011
8:34 am

Granny. You should read what you cite.

The last guy is implicitly saying cutting IS necessary. But that you also have to make appropriate investments.

Let me translate for you: stop sending out government checks to people who don’t need them and invest in education and infrastructure

That means cutting entitlements. Something liberals are against.

Keep Up the Good Fight!

November 29th, 2011
8:35 am

Thanks Midori…. I forgot the 3d…… oops. ;)

stands for decibels

November 29th, 2011
8:35 am

Only if we allow our own conservatives to force the sames kinds of cuts and austerity programs that Europe has put on place.

Pretty much my take as well.

(Ok, I’d change “force” to “continue with” and fix that “sames” typo.)

Brosephus

November 29th, 2011
8:36 am

Only if we allow our own conservatives to force the sames kinds of cuts and austerity programs that Europe has put on place.

:shock: :shock: :shock: :shock: :shock:

So, while conservatives are actually proposing we be like Europeans, they’re accusing Obama of trying to turn America into something like Europe??? Wow, so the Obama trying to make us into a European socialist country is nothing more than guilty conscience talk….

Stevie Ray

November 29th, 2011
8:37 am

Jay,

You have been quite the prolific poster the past day and some change..are you trying to get out on vacation or can you simply not resist all the great material served up all over the globe? :-)

Great question for sure. Bush’s wars, Obama’s collossal spending sprees without any objective measureable return (no W-2’s but lot’s of conjecture about saved jobs). Assigning fault to any one individual seems nonsensical to me. I’ve concluded that Franks main fault is not different from any other in DC which is being part of the PERMANENT POLITICAL CLASS.

I do think at some point the Euro disaster will definitely affect us….that whole single currency thing kept them from the option of bet hedging…

kayaker 71

November 29th, 2011
8:38 am

This whole thing is Bush’s fault, no doubt…. cause Midori says so. The auricle has spoken, the fog has lifted and now all of us see the light. What a bunch of crap!!!

JKL2

November 29th, 2011
8:38 am

I thought we were supposed to try and become a good country like our european brethren? Why the sudden need to split?

I’m sure obama has a stimulus program for them. Free money for everyone!

Stevie Ray

November 29th, 2011
8:39 am

GRANNY,

In all seriousness, just how much more can we spend? We are running out of tax payers wouldn’t you agree? The fact that we are borrowing a larger % of annual spend each year speaks volumes…

Jimmy62

November 29th, 2011
8:40 am

Yeah, the US has borrowed too much for too long, we must cut spending! Glad you finally agree, Bookman!

However, if you think the US has solved its problems, you are nuts. All we’ve done is shovel dirt over the problems and prop things up. The administration is just praying their temporary fixes last long enough to get them reelected, then we’ll see the beginning of the real fall. We chose to bail out and cover up rather than deal with the problems. Those chickens will come home to roost.

JohnnyReb

November 29th, 2011
8:41 am

Europe’s problems are of course bad news for us, however, there is a more important story. The Euro was/is an attempt to prove the “collective” is better than the individual. Coupling countries via one currency and trying to manage all to a single outcome, the value of the Euro, is a veiled socialist experiment. Not surprising for Europe as with the exception of Germany and perhaps one or two other countries, the majority want more than they put in.

More troubling is the drive from the Left to make America like Europe. All encompassing, all caring, all nanny state. How many more examples will be needed before the Left realizes their idiology does not work? If the failed Euro drags the US into another recession or a depression, will that be enough? I doubt it.

Granny Godzilla

November 29th, 2011
8:43 am

Jm

I read what I posted Mr. Silly Pants!

You may have also, but the point flew way over your head.

Mick

November 29th, 2011
8:43 am

yaker

They said this real estate collapse had very long tentacles, it’s a shame that so few profitted at the expence of the world economy. Like I said before, this is going to take years to fix, no matter who is president. Right now, austerity is exactly the wrong medicine…

Paul

November 29th, 2011
8:44 am

Jay

“since this is all Barney Frank’s fault and has nothing to do with an international debt crisis driven by an historic spree of irresponsible lending and borrowing, it’s all going to get better now that Frank has announced his retirement.”

I like your blog so much better now that the analyses are of a caliber worthy of submission to The Journal of Foreign Affairs.

Brosephus

Our cons are really cost-cutting socialists.

RB from Gwinnett

“You mean it wasn’t Bush’s bad economic policy, Jay? ”

Think “Wall Street during the Bush Administration.”

http://www.cnbc.com/id/28977890/

jconservative

November 29th, 2011
8:44 am

In a bi-partisan move the Republican President, the Democratic controlled House and the Republican controlled Senate decided that we could cut government revenue, increase government spending and the deficits would go down and the national debt would disappear. The year? 1981.

Thirty years, and a $15 trillion national debt later, both Democrats and Republicans are pretending it did not happen.

Until both parties admit the historical fact, nothing will be done to resolve the problem.

Granny Godzilla

November 29th, 2011
8:44 am

Stevie Ray

“In all seriousness, just how much more can we spend?”

Back at ya’

“in all seriousness, just how much more can we cut?”

Stevie Ray

November 29th, 2011
8:45 am

The EUROZONE reminds me of any major league team…say the Braves or the proportion of taxes contributors and sponges. Sometimes you are the bug (Derek Lowe) and sometimes you are the windshield (Martin Prado).

The UK are looking quite brilliant.

Paul

November 29th, 2011
8:45 am

Lousy rotten liberals – yeah, kill all entitlements, like Social Security, Medicare, VA benefits, etc. Rid us of all socialist organizations – police, fire, schools, highway departments and the military. By all means, let’s get the same belt tightening going that Europe has – a couple months of vacation a year and huge pensions and such. And who needs a balanced approach to the debt crisis, anyway? When I was laid off we couldn’t increase our revenue either, so we just cut costs like food and housing.

Joe Hussein Mama

November 29th, 2011
8:46 am

RB — “and has nothing to do with an international debt crisis driven by an historic spree of irresponsible lending and borrowing”

“You mean it wasn’t Bush’s bad economic policy, Jay?”

Bush’s bad economic policy = an international debt crisis driven by an historic spree of irresponsible lending and borrowing

Remember, the war in Iraq was run off-budget. That was paid for on the national credit card. Shame we can’t take it back to the store for a refund or exchange.

Joe The Plumber too.

November 29th, 2011
8:46 am

poor jay, mourning the loss of one of his bedwetting heroes, but I’ll miss slobbering barney too. His soundbites from time time were downright funny, not screeching nancy funny but funny nonetheless. Why his getting upset and stomping his feet about this or that is just a notch below urkle with his little boy muscles flexing on that Florida beach talking about kicking somebodys butt….priceless. Oh well, cheer up jay, I’m sure the libs have the next clown waiting in the wings to fill barneys rather large shoes.

Joe Hussein Mama

November 29th, 2011
8:47 am

Jimmy62 — “Yeah, the US has borrowed too much for too long, we must cut spending! Glad you finally agree, Bookman!”

Liberals have been agreeing with this for a long time. The sticking point is revenue increases, which GOP lawmakers have largely refused to even consider.

Stevie Ray

November 29th, 2011
8:47 am

GRANNY,

What have we cut to date? We can increase revenue which seems like the right thing to do but it doesn’t seem to matter as we can’t raise enough revenue to offset deficit spending…we need economic recovery that no government can provide…..cyclical stuff so get used to this for the next few years…

Paul

November 29th, 2011
8:48 am

Stevie Ray

“Obama’s collossal spending sprees without any objective measureable return ”

http://blogs.ajc.com/jay-bookman-blog/2011/11/23/cbo-reports-stimulus-package-was-a-major-economic-success/

and, as has been noted, spending under Pres Obama has been pretty flat – right in line with Pres Bush’s spending.

http://blogs.ajc.com/jay-bookman-blog/2011/11/09/lets-examine-the-big-spending-obama-meme-a-little-closer/

stands for decibels

November 29th, 2011
8:49 am

So, while conservatives are actually proposing we be like Europeans, they’re accusing Obama of trying to turn America into something like Europe?

New here, are you?

Seriously, those of us who have been reading the econ geeks (Atrios, Krugthulu, et al) — it’s old hat by now.

Paul

November 29th, 2011
8:49 am

Paul 8:45

Same request from the previous thread this morning.

Please change your name.

Thanks,

Paul

Mick

November 29th, 2011
8:50 am

**I’m sure the libs have the next clown waiting in the wings to fill barneys rather large shoes.**

Yeah, maybe they should draft some republican presidential candidates, that’s the most elite clown parade around, a regular seven ring circus..

carlosgvv

November 29th, 2011
8:50 am

Global capitalism has now connected all of us by powerful strands of the same marketplace. The result is a free-running economic system that is reordering the world. In this new world order, what happens over there will most definitely affect what happens over here. There are no signs that this will go away anytime soon so, get used to it.

Redneck Convert (R--and proud of it)

November 29th, 2011
8:51 am

Well, seems to me Europe is in trouble because it keeps shoveling money to Those People. Cut out all the welfare and get back to dog-eat-dog and they’ll be OK. We need to do the same. Whack SS big-time, get rid of paying people not to work, stop this Medicaid and food stamps, and give the defense budget about a 50% increase and we’ll get back on our feet. You can look it up, every country that wastes money paying Those People to have babys and lay around is in big trouble.

What we need is a big dose of Trickle Down. So let’s cut the taxes for the Job Creators, drill a oil well in everybody’s back yard and on all the beaches, burn coal till you can’t hardly see your hand in front of your face, and tax the heck out of people that don’t make alot of money. That’ll make ‘em go out and take two or three jobs just to keep from getting taxed to death. And if people don’t have money or a job it’s their own fault. We need the Flat Tax or the Fair Tax or any tax system that’ll push the tax burden down on the people that don’t pay much now.

See, I told you I’d get my Talking Points from Fox News. I’m loaded for bear. Have a good Tuesday everybody.

Joe The Plumber too.

November 29th, 2011
8:51 am

gee mickey, didn’t see that coming………..yawn

Granny Godzilla

November 29th, 2011
8:51 am

Stevie Ray

“What have we cut to date?”

How about 600,000 government workers?

kayaker 71

November 29th, 2011
8:52 am

So where do we get the money that Granny wants to spend? We are broke. Our debt equals or excels our GDP. Our GDP cannot increase until we put people back to work. More Chinese money? Yeah, that outta do it. What’s a few trillion here and there.
No one, yes no one, has ever spent themselves into prosperity. We cannot borrow ourselves into prosperity by spending borrowed money. Elementary economic stuff.

Joe Hussein Mama

November 29th, 2011
8:54 am

Redneck Convert — “get rid of paying people not to work”

So you’re saying we need a capital gains tax INCREASE, then.

Steve - USA

November 29th, 2011
8:55 am

Paul,

It might be easier to just change your name instead of always asking the other Paul to change his.

Richard

November 29th, 2011
8:55 am

What is the left’s plan for reducing the deficit? I really don’t understand. Tax increases and defense cuts? That won’t make up the difference. What do they think will happen when we are unable to continue paying our bills?

Mick

November 29th, 2011
8:55 am

Just saying good morning…bigger yawn

JF McNamara

November 29th, 2011
8:56 am

Jm,

“Correlations does not imply causation” – Yes, but sometimes the correlation and causation are linked. We live in a global economy, and we both import and export heavily to Europe. If they decline, we will too.

Lord Help Us

November 29th, 2011
8:57 am

‘What is the left’s plan for reducing the deficit?’

Mine is Simpson-Bowles…what is yours?

larry

November 29th, 2011
8:57 am

Its hilarious that people think they dont have a right to get back what they paid into. SS, Medicare , Medicaid, VA benefits , GI bill etc. etc. are benefits that people have paid into all of their working lives.

They are entitled to them. Raise taxes on millionares like they want. They even went to Capitol Hill to say so.

Paul

November 29th, 2011
8:58 am

Steve USA

There’s enough name-changing on this blog, already.

Paul

November 29th, 2011
8:58 am

good one, LHU

Stevie Ray

November 29th, 2011
9:00 am

GRANNY,

I truly didn’t know that…where were these cuts made?

PAUL,

Not sure which Paul referenced Jays 11/23 relative to Spending Spree success but did you consider the silly ranges offered by category? In context each was like saying the Falcons will win between 2 and 16 games this year. The standard deviation renders the argument dead on arrival. What the CBO is saying is that they don’t have any objective evidence so they offer a range. Actuarially speaking, if I went to my clients and suggested they book a convervative ..04 percent or 2.6% whatever they liked, I doubt my invoices would get paid…How funny is that?

Paul

November 29th, 2011
9:02 am

larry

Military do not pay any $$$ contribution for VA benefits during their military time, nor do they (I think) pay anything toward the post 9/11 GI Bill.

Stevie Ray

November 29th, 2011
9:04 am

KAYAKER,

Well said…

LORD,

I’m with you on the Simpson Bowles…too bad it didn’t serve the special interests of both parties which is the only way anything gets passed. I read in Washington Post yesterday that K STREET is expecting huge windfall from failure of POOPER COMMITTEE…Do you know they actually have lobbyist engaged specifically to prevent defense base closures?

USMC

November 29th, 2011
9:04 am

“Right now, austerity is exactly the wrong medicine…”–Mick

Unbelievable the lack of intelligence!
Let’s keep spending MORE money that we DON’T have, that sounds like a logical fix to our economic problems. LOL!

Must have had a late night at the Union Hall with his drinking buddies. LOL! :-)

Jm

November 29th, 2011
9:05 am

Steve USA bingo. Paul. Add a letter or something. Or get original and creative. :)

JF M. I don’t entirely disagree. Our economies are linked. The question is whether it is a weak or strong link. I personally think European decline does not dictate that America must decline as well.

Paul

November 29th, 2011
9:06 am

Stevie Ray

That was me – the original.

Standard deviation doesn’t render it doa – the ranges just show the level of uncertainty. If anything, it makes the data more credible as it shows the variation. It’s like a stock broker saying ‘based on historical average, you’ll get a return of 8.5%” vs “you can realistically expect to get losses some years and 12% other years.”

"Banned" so you must not be reading this :P

November 29th, 2011
9:06 am

Enter your comments here

Granny Godzilla

November 29th, 2011
9:06 am

barking frog

November 29th, 2011
9:06 am

All their other problems have always been our problems, why should
their economic problems be any different? They should switch from the
Euro to the Dollar.

Jm

November 29th, 2011
9:07 am

JFM

I also think it is highly likely that they are more linked to us than we are to them. Excluding the banking system. It’s a question also of who might be towing whom on a net basis.

Paul

November 29th, 2011
9:09 am

Will Europe’s problems affect us?

Sure. Just like our immoral bundling of bogus ‘good’ securities helped them crash.

Other question is, how much are we going to contribute to Europe to weather this?

Manchurian-Kenyan Candidate

November 29th, 2011
9:10 am

Still quite busy these days making gobs of money…..don’t get on this blog as often as I used to. Funny how all the sheeples are crying about how bad the economy is, can’t put food on the table, make ends meet, blah, blah, blah……and we’ve had the best Black Friday and Cyber Monday in years…..ha ha ha

I guess they figure Uncle Obama is gonna pay for it anyways…..so more flat screen TV’s with my welfare checks!!!

Normal

November 29th, 2011
9:10 am

Good morning all y’all.

It seems to me that since all of Europe is Socialist/Communist, that to solve this problem, all of the countries should just nationalize their financial systems, execute all all of the CEO’s, reset the balance back to zero and then carry on with no more financial problems. Socialist/Kenyan Obama could then follow suit and the world would live in financial bliss forever….cue ” We Are The World”. :)

barking frog

November 29th, 2011
9:11 am

Just because there has never been a Secretary General
of the United Nations from North America is not a reason to
refuse to appoint Bill Clinton to the position. The World
economy would then come back.

Doggone/GA

November 29th, 2011
9:11 am

The other “Paul” – name jacking is one way to get banned from Jay’s blog. You are using the same name as a long-time poster here. That is name jacking. I suggest you take his advice and change your name before Jay catches up with you.

Jm

November 29th, 2011
9:13 am

Stevie

Granny is making that up, at least at the federal level. At the federal level, no job cuts

Stevie Ray

November 29th, 2011
9:13 am

GRANNY,

Can you find the actual numbers of jobs lost or added at Federal Government level since 2007? All I could find is that most of those jobs lost (see attached) were state and local governments..perhaps I’m missing something. My source is Harry Reid who I suppose you support?

http://blog.heritage.org/2011/10/19/forget-the-facts-reid-says-private-sector-employment-is-just-fine/

Mick

November 29th, 2011
9:14 am

usmc

Hey gomer, keep singing that lousy tune of yours. I raarely drink, and never on a monday nite. sometimes you have to spend money to make money, you know what I mean?

Mary Elizabeth

November 29th, 2011
9:14 am

For an analysis of why financial solvency is failing in Europe and it why it may go wrong in America, I recommend this article by Paul Krugman, posted 11/21/11 in the NY Times (Those who have bias against Krugman should, especially, read this article, entitled, “Boring, Cruel Euro Romantics.”):

http://www.nytimes.com/2011/11/21/opinion/boring-cruel-euro-romantics.html?_r=1&partner=rssnyt&emc=rss

Excerpts from Krugman’s article:

“Let me single out in particular the European Central Bank (E.C.B.), which is supposed to be the ultimate technocratic institution, and which has been especially notable for taking refuge in fantasy as things go wrong. Last year, for example, the bank affirmed its belief in the confidence fairy — that is, the claim that budget cuts in a depressed economy will actually promote expansion, by raising business and consumer confidence. Strange to say, that hasn’t happened anywhere.

“So am I against technocrats? Not at all. I like technocrats — technocrats are friends of mine. And we need technical expertise to deal with our economic woes.

“But our discourse is being badly distorted by ideologues and wishful thinkers — boring, cruel romantics — pretending to be technocrats. And it’s time to puncture their pretensions.”

Paul

November 29th, 2011
9:16 am

Mary Elizabeth

USinUK’s been giving us first-hand accounts of the real, not theoretical, results of austerity in England for some time now.

Theory vs reality. Again.

Midori

November 29th, 2011
9:20 am

I see much like jm, Kayaker is begging for attention.

Stevie Ray

November 29th, 2011
9:21 am

GRANNY,

Helpful link. I’m only concerned with Federal jobs which your article suggests were 13% of total (78,000 by my math)..I’m wondering if the increases in wages at Federal level has more than offset this reduction in headcount??

Midori

November 29th, 2011
9:21 am

Hi Paul (the cool one, that is) :)

Recon 0311 2533

November 29th, 2011
9:22 am

Europe’s problem is a result of debt same as ours. Fitch just downgraded us because the debt commission failed should we fail to do something significant over the next year the other credit rating agencies will downgrade our credit rating and we’ll be in serious trouble. With a do nothing president whose more concerned about campaigning against congress as his re-election strategy the likelyhood of anything significant being accomplished is very slim.

Jm

November 29th, 2011
9:22 am

Midori
U don’t see much.

Paul

November 29th, 2011
9:22 am

Good Morning, Midori!!!

Said g’night last night, but you’d already gone off to slumberland.

Stevie Ray

November 29th, 2011
9:25 am

MARYLIZ,

I have found economist’s come in all flavors none of which I find credible in the long term as they have zero accountability and an no less partisan that most on this blog.

Check out my definition of ECONOMY: “Purchasing a barrel of whiskey that you do not need for the price of the cow you can’t afford”.

Midori

November 29th, 2011
9:25 am

I see you picking your nose again

Paul – saw that this morning but the thread had already died, so I thought I’d catch up with you on the new thread :)

Mary Elizabeth

November 29th, 2011
9:26 am

Paul @ 9:16

We have lots of work to do in busting the pretensions of that “romantic” ideology right here in the U.S.A. – that tax cuts and austerity are always “good” for the economy before we drive ourselves over the brink into a Depression.

Just as USinUK shared with me over the past weekend, “We got trouble – right here in River City” and we need to state what that trouble is over and over and over again until some of the Romantic Purists, like Grover Norquist and his flock, catch on. In other words, as Krugman says, “It’s time to puncture their (ideological) pretensions.” WAY past time!

Granny Godzilla

November 29th, 2011
9:27 am

Stevie Ray

Yes, I probably could if I felt like doing the legwork for you.

Oh and Stevie

Jm says, “Granny is making that up, at least at the federal level. At the federal level, no job cuts”

Which is in direct opposition to what the Fact Check I linked to states.

Your pick – vitriolic partisan blog spammer or fact check?

Soothsayer

November 29th, 2011
9:27 am

What many people don’t realize is that Europe’s problems are very much like ours. A lot of mortgages were made that probably shouldn’t have which led to a speculative housing bubble.

Just like us, millions of people have defaulted on their mortgages leaving the banks (or holders of MBSs) holding the bag.

The real difference between the U.S. and the Europe is that we “printed” $7,700,000,000,000.00 and gave it to our insolvent banks, while the Eurozone cannot, at present, do that.

What they’re doing right now, as we speak, is trying to figure out a way for the ECB (European Central Bank) to print Euros, while at the same time giving Brussels the authority to control the economies of the so-called PIIGS countries.

While this may solve the liquidity problem, it does not bode well for the Eurozone long term as terrible inflation will likely result.

Mick

November 29th, 2011
9:29 am

recon

Don’t forget to mention the do nothing congress we have, especially the house which is controlled by ? God only knows…

Stevie Ray

November 29th, 2011
9:34 am

GRANNY,

On a federal level your data is weak…78,000 jobs but likely offset by compensation trends….I don’t really care about state and local reductions which are generally driven by many state laws to balance budgets…what a concept.

Recon 0311 2533

November 29th, 2011
9:36 am

Spending our way back to economic stability is an ideological myth. Paul Krugman is the lefts darling make believe economist but he offers nothing but left wing ideology with very little substance.

RB from Gwinnett

November 29th, 2011
9:38 am

“Bush’s bad economic policy = an international debt crisis driven by an historic spree of irresponsible lending and borrowing”

Joe, the borrowing and lending referenced in the story is between banks and people, not between the federal government and China. That borrowing problem is a result of a SPENDING problem, not a lending problem.

Might be a good idea to figure out the difference before you post any more opinions.

Brosephus

November 29th, 2011
9:38 am

dB @ 8:49

I was being just a wee bit tongue-in-cheek. :)

Not sure if those that I read qualify as Econ geeks, but I’ve been reading on that for a while myself. Seems that it would almost be common sense though.

Paul @ 8:44

:lol:

jcon @ 8:44

Good luck on having much mutual agreement on that one. Some will deny it like Peter even after the rooster crows his head off.

USMC

November 29th, 2011
9:40 am

“Hey gomer, keep singing that lousy tune of yours. I raarely drink, and never on a monday nite. sometimes you have to spend money to make money, you know what I mean?”–Mick

Hey Mick,

So spending money that we DON’T have on welfare and other entitlements is going to MAKE us money??? Interesting concept. We’ll take your word for it.

Welcome to the Occupation

November 29th, 2011
9:43 am

Richard: “What is the left’s plan for reducing the deficit? ”

The plan? Massive forgiveness of debts. Mortgages, student loans, you name it. Get the people out from under water.

Temporary bankrupting and nationalization of the banks.

THAT will renew our financial and economic systems — the ’social contract’ if you will — and in turn allow for growth to return.

Mary Elizabeth

November 29th, 2011
9:47 am

Krugman had enough substance to win the Nobel Prize for Economics, and while some may even mock that achievement, it stands.

Problems aren’t sovled until the deepest element of the problem is looked, square on, and our current economic problems have been building for decades – based on valuing greed. That greed became reflected in our economy, as demonstrated when the greed inherent in the housing market bubble finally burst.

More Krugman:

“And the things they demand on behalf of their romantic visions are often cruel, involving huge sacrifices from ordinary workers and families. But the fact remains that those visions are driven by dreams about the way things should be rather than by a cool assessment of the way things really are.

“And to save the world economy we must topple these dangerous romantics from their pedestals.

“Let’s start with the creation of the euro. If you think that this was a project driven by careful calculation of costs and benefits, you have been misinformed.”

Joe Hussein Mama

November 29th, 2011
9:48 am

RB — ““Bush’s bad economic policy = an international debt crisis driven by an historic spree of irresponsible lending and borrowing”

“Joe, the borrowing and lending referenced in the story is between banks and people, not between the federal government and China.”

Shrug. Your question seemed to answer itself in the matter that you posted.

“That borrowing problem is a result of a SPENDING problem, not a lending problem.”

If financial institutions make bad lending decisions, then such a borrowing problem is most assuredly a lending problem, regardless of whether the borrowers are individuals, businesses or nations.

“Might be a good idea to figure out the difference before you post any more opinions.”

Might be a good idea to check your posts before you answer your own questions in the future.

USMC

November 29th, 2011
9:48 am

“Don’t forget to mention the do nothing congress we have, especially the house which is controlled by ? God only knows…”–Mick

It looks like the “DO NOTHING” Democrats are finally getting out of the way…

Frank 17th House Democrat to announce retirement
http://thehill.com/blogs/ballot-box/house-races/195629-frank-17th-house-democrat-to-announce-retirement

Mick

November 29th, 2011
9:50 am

usmc

They don’t call you guys jarheads for nothing! I was referring to infrastructure. Welfare? It’s a mess, so I’d rather be spending the money having people doing some work for a paycheck, you know bring back the wpa or ccc anything for people to get up, work, and get a check…

getalife

November 29th, 2011
9:50 am

Bailout after bailout and the people are hitting the streets.

All hell will break loose and I feel fine.

barking frog

November 29th, 2011
9:50 am

The Oil Nations have Trillions of dollars chasing a safe haven
with a fair return…can affect the world economy good or bad..

Stevie Ray

November 29th, 2011
9:50 am

MARY ELIZ

Yes, Krugman won NOBEL prize but the award for economics has been bestowed upon those who are from both sides of liberal/conservative policy.

Also, since GORE and OBAMA got NOBELS as well (first for what will prove to be hoax and latter for …..well getting elected i guess) I think the Nobels should go back to dynamite manufacturing..

barking frog

November 29th, 2011
9:52 am

Stevie Ray 9:50 Din-O-Miiite!!!!!!

St Simons - we're on Island time

November 29th, 2011
9:53 am

Not so much now, but by 2016 when we, as always, come dragging
up the rear in joining IFRS, we & our banking/accounting/Financial
reporting systems become more uniform and intertwined, we will be
linked to whatever goes on in the world.

The difference is, these are planned/managed economies, managed
in the long term interests of their people, not “here-we-go-yeehaw
boom-or-bust supply side jaysus free for all” like here in ‘Merka.
We all had baby booms, we all have baby boomers retiring,
and more responsible countries planned for this, understanding they
would run deficits for this period. But not this breed of “Merkan
cowboy cons, no sir. We had to have tax cuts for the rich and
Little Nero’s Unfunded Adventures for Fun & Oil. Really, the most
irresponsible 8 years – well, ever. Nero wasn’t as irresponsible as
Little Nero with a Cowboy Hat and the Neocons.

Welcome to the Occupation

November 29th, 2011
9:55 am

Stevie Ray: “Yes, Krugman won NOBEL prize but the award for economics has been bestowed upon those who are from both sides of liberal/conservative policy”

I love how people throw these accusations of “conservative” and “liberal” around.

Would you gripe about the Nobel if I pointed out past winners who tended towards the neoliberal (that’s ‘conservative’ for you) camp such as Friedrich Hayek and Milton Friedman (the latter of which is patently just a flat out con artist)?

TaxPayer

November 29th, 2011
9:56 am

When did Harry Reid go to work for Heritage.

Tommy Maddox

November 29th, 2011
9:58 am

Jay – to answer your question – yes.

Mary Elizabeth

November 29th, 2011
9:59 am

Stevie Ray @ 9:50

Evidently, the Nobel Prize Award Committee saw something in President Obama that eludes your awareness. I agree with their decision awarding him the Nobel Peace Prize, and I agree with the timing of that decision.