Obama Doldrums & a Better Future for My Kids
You can see how this has worked. In past recoveries, it comes up, as it did at first, but then keeps on getting better. The Obama recovery went up, down, flat.
The worry is that this recovery is so weak that it could just fall over. It is like riding a bike. If you go slow enough, you cannot keep your balance.
Analysts think we need at least 200,000 new jobs a month just to keep pace. American labor force participation is dropping as workers just give up. At 63.6%, the participation has never been lower in the working life of almost everybody on the job today.
As the father of three kids looking for their careers, I am worried. I started my career when the labor force was much like it is today. It was scary. But in the next couple of years, the Reagan recovery helped make me successful beyond my expectations. My kids have Obama instead and their life-chances seem not as good.
This is not good enough. We need a chance that we can believe in. (Yes a chance, not a change) Have we not waited long enough? I never had much confidence in Obama, but I really thought that by now we would be in a better position, if not because of Obama, at least in spite of his policies.
I am not sure what Romney can do. Being president is different from anything else. So we don't really know what we will get. We do, however, know what we have had. I think it has to be better.
I am not a big believer in charts, but this one is troubling. We seem to be going back into a downturn w/o ever really having a good time. We have moved from recession to decline w/o ever passing through prosperity. Obama was very promising and he made lots of promises. His was the triumph of hope ever experience. It has not worked out well. Don't Americans deserve better than just hope?
The Obama folks are touting how much government we will help. Help. What I needed and what my kids need is a chance to thrive. They only need the kind of government help Obama talks about when the economy is doing poorly. I am sure it is great to get cheaper loans from government. Wouldn't it be better for them to get good jobs so that they could pay them off?
What the Obama folks are telling us is that they will bail us out when we fail. I prefer not to fail.
Let's not get into that silly debate about how much government helps even the successful. We all benefit from an efficient and well-run government. We use the roads, schools etc provided by collective good. But there is this general help and the specific transfer. I want to avoid the actual payments. We all give and take. Good citizens contribute more than they take. I want to be a good citizen and I want my kids to be good citizens. For that we don't need free programs, we need a government that helps create the conditions where we can prosper. These are not the conditions we have today.
It is better to struggle a little and then succeed rather than just have things given to you w/o ever feeling either success or failure. We should never be the land of guarantees but we should be the land of many chances.
Posted by Christine & John at May 4, 2012 10:01 AM
“In past recoveries, it comes up, as it did at first, but then keeps on getting better.”
You mean the great Reagan recovery that saved everybody and everything and created a million jobs a month once? Note that the past three recoveries have all been long, drawn out, and not very sharp.
Not in our lifetimes have we seen a recession as long and as deep as this with a financial crisis and a wrecked housing market. How can you compare this to other recoveries and find it lacking as if it should behave as all other recoveries?
“The Obama recovery went up, down, flat.”
The spike at the end of the recession is simply Census hires. Job growth has been pretty steady for two years even despite a series of shocks in Asia and at home and a Eurozone that is completely in crisis.
We could use a lot more jobs but we haven’t come out of the problems keeping the recovery slow. You may see a downturn on the horizon just because job growth has slowed but it should pick up. Jobs lag other economic indicators and many of them are showing positive signs. Residential investment is up for instance as I mentioned in my post.
If this is the Obama Doldrums then do you call the entire time of President Bush the Bush Doldrums? Bush had a period averaging of 155,000 jobs created per month sandwiched in between two recessions. Bush had a net loss of jobs during his first term and the early 2000’s recession wasn’t even that bad.
So you content that Obama is doing about as well as Bush and I agree that it looks very similar. Wouldn’t that be great? Were you guys happy so happy with the Bush performance that you want Obama to as as good as Bush?
Bush grew government and that was a mistake. The period was not a great economic growth period. Obama promised change. He delivered more of the same at a higher cost and more debt.
We do indeed need change that we can believe in. Obama failed to deliver and there is no indication that he will do any better if we give him another four years.
PS - it would be good if it would get as good as Bush. But even by that low standard, Obama still is not up to the job.
Bush grew government in three areas: 1) Homeland Security/TSA, 2) DoD, and 3) rising health care costs, driven by the cost increases in the private sector. So spell it out. Otherwise, people will come to the wrong conclusions, and want to make changes in the wrong areas, rather than cutting the causes of growing government: TSA, DoD, and private health care.
Compare the debt incurred by the Obama administration with the debt incurred by the previous one. Under Obama, debt was incurred to provide a fiscal stimulus. Under Bush, debt was incurred to finance two wars and tax cuts for the wealthy. Big difference.
It’s important that you spell this out for conservatives, C&J. If they ever come into power again, I fear they will follow through on their threat to default on debt by not raising the debt ceiling, or opt to cut government spending by 44% instead, resulting 9% cut in GDP and an instantaneous depression. Remember, conservatives voted for Bush twice. They harmed the country badly, and they’ll do it again if you’re not careful.
If you really want to address non-farm payroll, why not address the curse of outsourcing? It killed us under the Bush adminstration, and we need to find a way to either force those companies back, or declare them foreign, tax and tariff their brains out, and underwrite local competition to replace them. Why not demand the US government define any country with more than 50% of its workforce outside the country to be foreign, regardless of where they pretend to be headquartered, and target the ones that outsourced? We owe those bastards precisely nothing.
I didn’t much care for the increase in TSA and DoD but that 9/11 thing made a strong impression on the country. You need the defense you need, not the one you might prefer.
It was great to get the “peace dividend” during the 1990s after the collapse of the Soviet threat after three generations. But this was no a choice we got to make.
I give Obama credit for killing terrorists. One of the advantages of having a Democrat in the White House is that the liberal press lays off the criticism. The disadvantage of a Romney victory would be the increase of the anti-Americanism in our American media.
Re voting for Bush - there were two elections with very different circumstances. In the pre-9/11 election, it made sense to cut taxes. Ideally, you want neither a surplus nor a deficit in “normal times”. The surplus tempts politicians to do what they love - spend money.
In 2004, we had the choice between Kerry and Bush. It was a dangerous time. I believed then and believe now that Kerry would not have done the right thing in Iraq. The surge worked. Kerry would have been on the way out by then and today we would be on defensive in the war on terror instead of talking about wrapping it up.
Re outsourcing - the U.S. is a beneficiary of in-sourcing from many foreign countries. We are net recipients of foreign direct investment.
The whole world has lost manufacturing jobs. People have been replaced by technology. The U.S. industrial base is bigger than it was in 1972 - the peak of industrial employment - but we produce more with less than 1/3 the labor force. Manufacturing is going the way of farm labor and nothing can or should be done to stop this. We need, rather, to adapt to the new economy.
Conservatives and the Obama folks can find common ground on job training and community colleges. We will part company in protection of unions.
I used to favor ‘free trade.’ NAFTA seemed to make sense. In retrospect, it has not made sense, and ‘free trade’ has been a disaster.
How much does the US benefit from in-sourcing as opposed to out? I don’t believe there are any numbers kept to measure it. In addition, what it mean if we are “net recipients of foreign direct investment”? A link would be fine, no need for a detailed explanation. When it comes to trade, I just don’t believe many of the things I was once trained and encouraged to believe.
If you Google “Foreign Direct Investment” you will find lots of it. There is a recent CRS report - http://www.fas.org/sgp/crs/misc/RS21857.pdf
The leader in foreign investment in the U.S. (per capita) is Greenville-Spartanburg, SC. You can read a little about it here. http://www.carolinaregionalcenter.com/sc/overview
Free trade is not an unalloyed value, but it does generally produce more prosperity. It gets blamed for lots of things that it really doesn’t do. Many lost industrial jobs are lost due to productivity gains. Do you really want to go back to the factory system of 1970? In the long run, only productivity increased living standards.
Re being “trained and encouraged to believe” I know people tend to use the passive voice when trying to avoid responsibly for thinking. I dislike its use.
“One of the advantages of having a Democrat in the White House is that the liberal press lays off the criticism. The disadvantage of a Romney victory would be the increase of the anti-Americanism in our American media.”
Democrat presidents are given a free pass by the liberal media and as we all know, that’s the only kind of media we have in America. That’s why we never hear anyone in the media criticize President Obama. But, criticism of Republican presidents is “anti-Americanism.”
I remember the end to the last Republican President’s tenure being marked by a total economic collapse. You know, that big red dip at the other side of the chart.
Where Obama created consistent job growth out of one of the worst recessions of modern times, Bush created a jobless recovery out of one of the shallowest.
We sure wish we could do more, and we will do more to help the economy, given the chance. You folks?
Well, given that you’re treating one of the biggest structural collapses of the economy like an old fashioned cyclical failure, you would seem to prefer to do nothing. And that’s not merely a proposed outcome on your part, it’s one you’ve been enforcing on us by a variety of means. Even before the election, your party ensured there would be no follow up to the stimulus. In fact, you tried to kill the first stimulus right out of the gate, and punished the three Republicans who helped get it passed, only one of which will being hanging around for much longer.
In fact, ironically enough, the only reason we had sixty votes for a good part of the year is that your party was foolish enough to drive Arlen Specter to our side.
What exactly are the differences between the policies Bush promoted and yours, beyond a greater incursion into the realm of immoderation? If the patient gets sicker when you feed them a medicine, does feeding them more of it cure the disease?
And no, the patient hasn’t gotten sicker under us. It’s gotten better. It’s off life-support, for one thing. And that’s with just the policies we’ve managed to get by you. We’ve returned the country to growth. You left our country in its deepest recession. I know it’s fully possible that you will use the disappointing results to justify a comeback on your side, appealing to people’s economic nostalgia, but if we simply look at the results, we can say that one party’s policies are harmful to the economy, and continue to harm it, while the other side’s have helped it recovered, and kept it from getting worse. And that’s not your side.
As the father of three kids looking for their careers, I am worried.
As you should be C&J. You have backed a conservative economic ideology that has put us in this position. You voted for GWB because the alternative was worse you claim. But it was GWB and the conservative that left us in this mess. Like most far right ideologues you use the flat economy for political gain, yet to what extent? No one can honestly say they believe a man like Romney who tells us we should be seeing 500,000 jobs a month.
I am not sure what Romney can do. Being president is different from anything else. So we don’t really know what we will get. We do, however, know what we have had. I think it has to be better.
Seriously? Romney is GWB all over again, just look back to the last time repubs/conservatives were in charge. What do you think has changed in their ideology that would allow a reasonable person to believe this time out would be any better? Obama was dealt a bad hand and has had to overcome the ignorance and deliberate obstructionism of the tea baggers caucus, conservatives and the repubs who want to starve the beast.
Perhaps the best that can happen is a reality check by those on the right. You all seem to be in denial of the failures of the conservatives/repubs during the reign of witches this country faced during the first 8 years of the new millennium. That being said why should us voters trust you guys and Romney this time around?
Romney’s promising half a million jobs a month? If he promises that and wins on such a promise, it will be his own damn fault if he loses the next election.
Since 1970, only five months have seen greater than a half million jobs in growth a month.
The only two of those months that occured subsequent to one another were under Jimmy Carter. The other three months belonged to Reagan, Clinton, and Obama.
Here is a url that goes toward the mismatch between the degree and the job.
phx8, I agree with you re free trade. For a ‘how’s it going Brownie?’ interlude I’ll gist some of two WaPo articles in yesterday’s news.
President Obama has referred to India-US trade as ‘one of the defining partnerships of the 21st century.’ But US direct investment in India is waning. India continues to delay delay on promised reforms and is reluctant to open up its markets to US companies like Wal-Mart.
A more stringent visa policy for Indians seeking to work in the US has infuriated the private sector, cooled investor enthusiasm, leading to some talk of a trade war.
India needs Iran’s oil and is unwilling to join sanctions against Iran and is reluctant to intervene in the internal affairs of other countries.
In Jan India inked a deal with France to buy 126 jet fighters, bypassing the US defense industry.
Both nations have filed WTO suits against each other. India has banned US poultry products. The US placed higher duties on carbon steel complaining that the product was being ‘dumped’ on US markets.
India is threatening WTO action over higher visa fees for professional travel. Their high tech companies employ thousands of people in the US. Also, each year tens of thousands of skilled Indian workers get H1B and L1 visas to work for US companies, often on multi-year contracts.
And, we hear how Wal-Mart bought their way into Mexico. And, we are keenly aware that the Communist Party calls the shots in China. And, the Eurozone - - - and so on.
US multinationals hording their profits offshore to beat Uncle Sam even as they conduct tax write off’s on most every expenditure and receive subsidies on top of that.
Otherwise - - -
On a positive note - - - United Technologies will pay up to $40k for an employee who has been with the Corp for a year toward a college education.
Right of center people tend to support the president in foreign affairs even when he is Democratic. Left of center people tend to support the president in foreign affairs when he is Democratic.
Imagine drone attacks done with such vigor by George Bush. How much have we heard about Guantanamo since Obama became president?
We had an economic collapse. Usually we recover faster.
I think the Romney boast is almost Democratic in its hyperbole. I don’t care for that. We did manage to produce 1 million jobs in one month during the Reagan times, but this does not happen each month.
However, if we produce jobs only at the Obama rate we will never catch up.
Re “GWB all over” we learn from the past and never actually go back. I continue to believe in market solutions.
As I wrote, thinks looked similarly bad when I started my career, but sensible policies resulted in great prosperity that made me many times better off than my exceptions. By this time in the recession of the 1980s, we had indeed produced those million jobs. This time is just too slow.
Ah, that’s all your response to me? We usually recover faster? The last few recessions were either cyclical responses to market that had been growing for a while, or the result of a combination of energy shocks and inflation.
You’re talking about almost “Democratic” hyperbole. Hmm. We never promised anything close to 500 thousand jobs a month. He would have been better advised to promise something closer to 300 thousand jobs a month. That would have been plausible, in line with the historic promise of a Reagan or Clinton.
Instead, he’s demonstrated his ignorance of the labor market in a most profound way.
I’ve been working on a chart in Excel that maps out how many months The Presidents since 1970 spent at certain levels during their months in office.
I found the pattern interesting. In the two terms that Bush was in office, he spent as much time in the negative as Obama’s been in office, total. Obama’s actually had more months in his partial first term at 200,000-300,000 than Bush ever had. Bush, though, has several months at over 300,000.
All of those, though, are in the period from 2004-2006, three, three, and then one last one in February 2006- the peak of the housing market. I remember for years hearing about the whole market being propped up by the housing market, and the jobs numbers tell that story rather well.
For one thing, Obama’s only now been in office as long as Bush’s jobs numbers spent in the negative. No, I’m not saying Obama’s months in the negative have equalede Bush’s. I’m saying that Obama’s been in office 39 months, which is the same number of months that Bush lost jobs.
To screw up as badly as Bush did, Obama would have to lose jobs for almost two years straight, and add almost another three million jobs to what actually went.
Speaking about three million jobs, that’s what Obama got hit with in the first six months he had in office, three quarters of all the jobs he’s ever lossed. After that, with the stimulus coming into effect, he’s only lost about 1.3 million jobs, and gained 4 million jobs.
He’s done that with your people on his back. Think of what he could do if folks like you would get off his back, or help him at the very least. Think of this: if the Republicans hadn’t fired six hundred thousand public employees, the economy would be that much better at this point, people with paying jobs rather than drawing unemployment.
You say our policies don’t work, and yours do. I say take a good look at the evidence. You made a shallow recession worse. We made one of the worst recessions of modern times survivable, and came out growing on the other side.
Neither I,nor you,nor anyone else knows the details of the recent collapse’s causes. We know that this recovery has been slower and more uncertain. We also don’t know why that is. This recession has violated both the theories of monetarists and Keynesian.
You mention an excel sheet. What time frames? Too often people use the time the president takes power. I know you didn’t do that for Obama. Did you do that for Bush, i.e. Did you start the Bush time in 2003 or 2001?
Re “your” and “our” policies - you don’t know what you mean by either. According to you, Dem policies have not been tried because - despite overwhelming power - you think Dems don’t have power.
I think the Romney boast is almost Democratic in its hyperbole. I don’t care for that.
C&J it is way to disengaged from truth and reality to be Democratic hyperbole. No this is misinformation half truths and outright lies, the propaganda of Faux and the conservative movement.
I don’t really think it was meant for you. It was meant for the typical Faux viewers, those who have a tough time with critical thinking.
Re “GWB all over” we learn from the past and never actually go back. I continue to believe in market solutions.
Oh come on C&J are you suggesting GWB and Romney are not two peas in a pod? What has Romney proposed that would convince one that his policies would be different than those of GWB? What in his record would convince us he would be different than GWB? We do not actually go back in to the past but conservatives do live in the past. Romney is telling us he is a strict conservative so what do you think will be different this time around?
The graph, for all the sense of visual imbalance it imparts gets its lower extremities from the depths of the second Bush recession, where we were losing 700-800 thousand jobs a month. You can go back through, download the data as I did on Bush, tally up the stuff yourself. Times when we add that many jobs are rare. Reagan only had one big month like that, and only five that made it over 400. Clinton himself only had 6.
I started both Bush and Obama on February, since most of January belongs to the previous President. For the same reason, I gave August 1974 to Ford rather than Nixon.
And no, it’s not a bad thing to use the month of inauguration, rather than count time where people have no legal authority as President. That’s all I need to say about that. You can futz around in vague psychological effects, I’ll stick to the facts.
You’re not going to get to teach the controversy here. If am to learn I am mistake, it will be because I learn new facts, it will not be because I concede an absence of them, where I know better.
Put another way, there were six months in that financial crisis where the losses exceeded half a million, which is one more than all the instances of job increases exceeding half a million in a single month for the last forty two years.
Romney is no more Bush than Obama is Clinton. Actually, it would be better if Obama were more like Clinton.
Bush’s biggest failing was his growing government. In this way, he is more like Obama than like Clinton or Romney.
Re presidential timing
You understand that fiscal years for the USG start in October, so the presidential budgets don’t even start - in the best of conditions - until sometime after that. It probably takes around 2 years for the president to start have whatever effect he will on the economy. Other things lag even more. That is why that kind of year to year analysis is too precise to be right.
I don’t know how many different ways I can explain this. It is NOT partisan to understand that it takes at least a little while for a president to pass a program. It takes a little more time for the bureaucracy to get the money out. It takes a lot more time to spend/invest that money. And an even longer time to work through the system.
You say you are a scientist. Take a simple physical reaction, much simpler than the economy. If you have a pot of water. You put enough heat under it to cause the water to boil. Does it start boiling immediately? When you remove the heat, does it instantly return to room temperature?
I don’t think that analysis by president is valid in general, but if you wanted to make it more plausible, you would need to work in 18-24 month time lag, i.e. you can credit/blame Reagan 1982-1990. Bush 1 1990-94; Clinton 1994 -2002; Bush 2 2002-2010 and Obama since 2010. I suppose that changes your data in ways you don’t like.
I understand that you don’t like me to repeat, but these are real world facts.
Re the number of jobs - the labor force participation is the lowest it has been since 1980 and the unemployment rate is still over 8%. There is no way this looks good.
One more thing you really need to think about with jobs is demography. This is something no president has any control over at all. The “decision” is made twenty years earlier.
We had great growth of jobs along with unemployment in the 1970s because the baby boom peak hit the labor market. The 1990s were a calm time because we were hitting a demographic sweet spot. The baby boomer were all absorbed into the market, while the subsequent generations were smaller. On the other hand, the great immigration that started in 1965 with changes in the law, was beginning to make a big difference.
We have a big challenge coming up now.
I am - again - not being partisan. Any analysis that does not take into account these very different demographic factors is wrong to start with. Your four year chunks may contain years when lots of people are entering the market or when fewer are. Don’t you think that might make a difference?
President Reagan couldn’t change policies in 1960, but they made a big difference to him. Obama is currently facing factors that were decided in 1949. Even the most rabid partisan will not credit or blame him for things that happened a dozen years before he was born. Yet the next presidential term (Obama or Romney) will be largely shaped by things that happened fifty years ago.
From the start of the Obama administration he has consistently cut government spending.The huge deficits were inherited. The increases in spending are primarily an automatic and appropriate government response to crisis, unemployment extensions, increased food stamps and the like. Attacking BO on the basis of being a big spender is factually incorrect. There are no huge new government programs. The ACA is primarily a consumer protection action and an attempt to control medical cost. Saves money according to the CBO. There is a small and much needed consumer protection agency to help prevent a recurrence of the big bust. What else? The meager stimulus that has largely spent itself out already? It did some good but was simply not a large enough jolt to restart the demand cycle. This is further evidence that BO is not, too his fault, a big spender.
BO has learned the tried and true lessons of Kynesian economics. His second second trip to the well to actually effect the kind of demand creating boost to the economy that it needs was blocked by the same party you support. A party that is quite willing to throw the American middle class under a bus to boost their influence peddling racket. Blame your own.
In criticizing today’s jobs report, Romney says unemployment should be 4% and we should be creating 500,000 jobs a month. The last time we came even close to that (when I was Secretary of Labor) the Clinton administration had hiked taxes, invested in education and infrastructure, and expanded the Earned Income Tax Credit for low-wage workers. That’s exactly the opposite of the Paul Ryan budget plan Romney has embraced. So what in the world is Romney talking about?
209L…Robert Reich, former labor secretary…And what in the world are you talking about?
What you don’t seem to get,or refuse to get is that this recession is not typical. You mentioned the “Reagan recovery”. Look at some graphs. That was a typical post war recession. Its was caused by the Fed raising interest rates to fight the inflation primarily cause by the oil shocks of the Nixon/Carter years. When Paul Volker decided the economy had absorbed the shocks he lowered interest rate and the economy recovered led by a housing boom. This had nothing to do with Reaganomics by the way.It had everything to do with government. Interestingly, government’s percent of the GDP under Reagan at this stage of the recovery was around 11% higher than it is now, under Obama,the big spender.
Point is this recession is different and solutions.It started when interest rates were already low. The Fed has no room to lower them. The industry that led us out of the recession under Reagan is already overbuilt.Textbook economics dictate that this particular type of recession calls for large government injection of demand stimulus into the market. That is not radical or irresponsible. Quite the opposite. What is radical and irresponsible is the reckless behavior of the GOP congress in blocking real infrastructure investments, real job creating programs, real aid to states to re-hire laid off teachers and other public servants. What is irresponsible is to continue to allow trillions in lost revenue by under-utilizing plant capacity let alone the real damage to a society with long term unemployment. BO has learned, finally. The GOP continues to hold onto its failed voodoo economic policies for crass political reasons.After getting us into this mess they are blocking proven efforts to get us out. IMO they should be treated just like an arsonist trying to block the firemen.
Maybe this recession is not typical, which only means that we don’t know why the Obama program is not working.
As I understand it, the GOP is not blocking real infrastructure improvements. They cannot agree on details with Democrats, who are also playing political games. We have the big Keystone pipeline dilemma, how to spend highway tax money etc.
President Obama learned there was no such think as shovel ready. Dems are still trying to ensure that only union wages are paid on projects etc.
I would also add that during his first two years in office, the President’s party controlled both houses of congress. They were able to get passed an unpopular health care bill and the stimulus. This is where they spent their energy. They could have passed whatever they wanted and this is what they did.
What is it with you and arguments from ignorance?
First and foremost, you rely on the budget cycle. But the Stimulus, arguably a huge deviation from the previous budget, was approved in February of 2009. How does that fit in your theory of Presidential power not being realized until a full year after the fact?
I guess one reason you might be trying this is that from March of 2001 to March of 2002, Bush didn’t grow jobs in a single month. In fact, jobs wouldn’t start growing until May of that year. Compare that to Obama, who, in a similar time frame had already broken the back of his recession and restored job growth, in that 900 thousand job hiring spurt that started in the summer of 2010. A quicker recovery from a much more intense recession. You might fault that, thinking that it’s better than things recover naturally, but time lost is money lost, deficits gained, and job destroying situations allowed to settle as the new normal.
I get the idea that you’re trying to be mysterious here because you want neither the blame for what started on your watch, nor the credit to go to Obama for what he succeeded in doing under tougher circumstances.
As for whether this is a typical recession? That there was actual deflation, a fundamental malfunction of the banks, and the severity of the job losses and the losses of personal, public, and corporate wealth should mark this as anything but typical. There’s no inflation like we should be having given the Fed’s actions. The number one reason why folks aren’t hiring is that there aren’t the paying customers to justify the expense of doing business. That’s why it’s like pulling teeth creating jobs nowadays.
And that’s why your side’s approach doesn’t work, and hasn’t worked. It’s no use giving somebody back a bunch of money on their taxes if they can be quite certain that the people they pay would not bring in new paying customers. Expansion and entrepreneurship will not occur while so many people are out of work, yet people are out of work because expansion and entrepreneurship do not occur.
Usually, I don’t agree with government lending a heavy helping hand, but in this case, with the banks as wobbly as they are, and the private sector holding out for customers, I think the government can play a catalyzing role in the situation, getting things started so that the economy’s more autonomic functions can take over later.
As for the scientist thing? I’m not, not by profession. But I have been exposed to a number of different ideas, and have formed theories off of them.
Events build under the surface, psychological pressures, institutional problems, financial stresses, and sometimes what we might consider direct or predictable is in fact nothing of the kind. Often, things will develop to the point where all you need is one weakness to make things develop quickly in one direction or another.
This isn’t magic. It takes a selection of weaknesses conspiring together to create a bigger disaster, or a collection of strengths working together to create an unexpected synergy. Often, in the case of a disaster like we saw on Wall Street, there’s no real intent to crash the market, or anything like that. But when the time comes, problems that could have remained small and by themselves hit the weakness, and something cracks, and puts further strain on something else, which gives in turn.
This wasn’t any one thing. Overpriced real estate could have corrected itself, if it weren’t for the fact that you had derivative-financed lenders continuing the bubble long past the point where they had customers able to pay. Those derivatives wouldn’t have allowed this problem to develop further, if it weren’t for the fact that derivatives are traded in such secrecy that the market couldn’t tell how overleveraged everybody was, or who owed whom how much.
We dodged a bullet on derivatives once before, during the Clinton Administration. A hedge fund called Long Term Capital Management made the wrong bet on the Ruble, and as a result almost sank Wall Street the way Lehman Brothers did. The difference is, Clinton had Wall Street unwind LTCM, while Bush let it fall flat on its face.
But even though the Clinton Administration showed better judgment in that regard, they still left the problem as it was, because they still bought into the whole “free markets police themselves” line. The results of that mistake are obvious.
The market needs information to react, and the participants know this. Concealing bad tidings and fundamentals thus becomes a temptation, and when the money’s good enough, a common practice. You need an outside policeman simply because sometimes the people involved can’t or won’t be bothered to inhibit their own behavior.
And because, as always, when you let these disastrous weaknesses build up enough, it doesn’t merely threaten the miscreant, it threatens jobs and wealth up and down the line, and often puts the taxpayers on the line for something.
Systems have a way of evolving not towards what is perfect and good, but towards what is expedient, unless something more is required of them. The law and the government can act as a selective force that reduces harmful practices, discourages pathological cultures.
This is the important difference between you and me and between liberals and conservatives.
I indeed do not believe that we have or can have sufficient information to make decisions in a centralized political/bureaucratic fashion. We need to set general goals and then let people involved figure out how to get there. This is the method I use with my own staff, which only has a few dozen people. I cannot know in detail what they are doing and so I cannot dictate in detail what they should do. How much more true for a whole economy?
“Bush didn’t grow jobs in a single month.” - Obama has not grown a single job either. Presidents do not grow jobs. At best they can create conditions that allow others to create jobs. This takes time.
I don’t really blame Obama. The reason I attack him is because HE says he does. I am really attacking his hubris, not his job creation or lack.
What SHOULD government do? It SHOULD regulate and protect the financial system. Did Obama reforms do this? It left in place many of the same things and even the same people. It SHOULD build infrastructure. How much has Obama really done. Politicians like to brag about things they cannot do and they avoid the things they can.
Re bad tidings - yes - they should reveal them. It is illegal not to.
There is a natural up and down for the economy. You rightly say that housing went too high, w/o taking up the other side that it needed to go down. Housing is only now coming back to levels that are sustainable and affordable. Government policies were specifically designed to slow this progress, to “keep people in their homes” who couldn’t afford the homes they bought.
Romney is no more Bush than Obama is Clinton. Actually, it would be better if Obama were more like Clinton.
While you may be in denial C&J the fact remains that Romney and GWB are alike in most ways. The ideology is the same which is the problem. Deny it away as you will but the fact remains the repubs are selling more of the same old misinformation half truths and outright lies to the American people.
Bush’s biggest failing was his growing government. In this way, he is more like Obama than like Clinton or Romney.
GWB’s biggest failure is his belief in the failed conservative economic ideology, the same economic ideology that Romney must toe the line to if he wants to become president.
The simple fact is this C&J, you cannot point to any reason we should as voters buy into the repub candidate. Any reason why things would be different than they were under GWB.
Exactly. I cannot see any difference between Bush and Romney either. Bush grew the government with military spending. Romney wants to increase military spending even more. Bush grew the government with TSA/Homeland Security spending. Romney will keep it the same. Bush grew the government, at least in terms of spending, by doing nothing about private sector health care insurance costs, which showed up in various federal programs. Romney wants to take the same approach.
Bush passed tax cuts. Romney wants to pass further cuts, cuts detailed in the Ryan Budget.
Does anyone know what Romney wants that is any different from Bush? They look identical to me. And more than anything else, that is what scares me about Romney…
Did Obama reduce the size of TSA/Homeland security?
Do we have a detailed budget that Obama favors? If so, I have missed it and would appreciate a post.
As part of the debt ceiling compromise, the Obama administration and Democrats agreed to participate and abide by the recommendations of a bipartisan commission. The commission, not surprisingly, failed to agree on recommendations, chiefly because the GOP refused to consider any revenue increases whatsoever. I know that sounds insane, but it’s true. The agreement included a provision to cut defense spending by $500 million if the two sides could not agree. That provision was not implemented. Would a $500 million cut for the DoD result in reducing the size of TSA/HS? Probably. But we’ll never know.
Right now, if I understand it correctly, the only budgets exist in the form of continuing resolutions. Neither side seems capable of addressing the issue. What would be the point when the House GOP is so radical and incapable of compromise? Neither the Obama administration, Democrats in the House & Senate, nor Senate Republicans can get anything done with the radical House.
By the way, the War on Women continues. In yet another example of a sustained legislative assault, Arizona will no longer fund Planned Parenthood.
Some are attacking the Ryan budget proposal. Maybe it would be more interesting if there was a Democratic alternative.
Your people are in charge, it’s their job to come up with a budget that will actually pass into law, given the circumstances. Democrats have provided alternatives, but they get shot down, or, as would be the case in the House, they never are brought up as a bill to begin with.
You tie yourself in knots trying to avoid the conclusions I make obvious with the information I do have.
Congratulations. You’re making it plain to the readers who is spitballing, and who is doing their homework.
As for taking the other side on housing costs… well, the question is whether the market has overcompensated, or whether the troubles in the financial sector have made it harder for non-supply and demand reasons to get a house.
Sometimes markets, when you hit them hard enough, don’t simply moderate to a nice average, but instead collapse towards a pathological low. The corrections of a market are not infallible themselves, nor do they always yield a sensible return to equilibrium on their own.
Did Democrats create a budget when they were in charge? No they did not.
Democrats have not provided any serious alternative since the 1990s.
Indeed the HOUSE is responsible for originating spending bills. Maybe that is why we had a balanced budget when Republicans controlled the House is the 1990s. Didn’t you think Clinton had something to do with that?