Skip to comments.What if a Slowdown Is a Never-Ending Story?
Posted on 11/22/2008 4:01:21 PM PST by dano1
I AM endlessly charmed by chatter about when this slowdown/recession will end. (snip)
But this does not look like a typical recession. A typical recession is brought on by Federal Reserve tightening in the face of excessive demand and rising prices. The economy still functions normally, but purposeful credit tightening slows activity. When the Fed loosens up and money starts flowing, demand increases and growth returns. This, at least, is the pattern of the large recessions we have had since the Great Depression, which was a special case, as we shall see.
Smaller recessions have been brought on simply by the inventory-business cycle, but they, too, were amenable to Fed stimulus.
That was because normal credit mechanisms were working.
This time its different. Or, because that is a dangerous phrase, let me say that maybe this time its different.
The problem now, as in 1929 to 1940, is that the economy is not functioning normally. It is shot through and through with fear, even terror. Worse yet, and unlike the situation in the Depression, government miscues have been only a part of the problem. This fear is so pervasive that it has brought the credit sector to a virtual shutdown, even to borrowers with good credit. At this point, the lending sector is so panicked largely from the governments inconsistent behavior and failure to rescue Lehman Brothers that it is frozen. Not totally, but way too much for ease of lending and maybe even for the survival of a robust economy. And if a colossal worldwide deleveraging spreads to Treasury debt owned by foreigners, the situation will be deadly serious.
The unemployment rate is rising. Housing is in collapse. Manufacturing is weak. The unionized auto sector is dying before our eyes. Commodities are falling hard and fast.
(Excerpt) Read more at nytimes.com ...
That means that Obama will have to come down off his campaign rhetoric and do what’s right. Thomas Jefferson did.
That is flawed on so many levels...
what is flawed?
By Holger Elfes
Nov. 22 (Bloomberg) -- Germany's Bundesbank expects the worst recession in the country since 1949, Deutsche Presse Agentur reported late yesterday, citing unidentified people who know the content of a report to be published Dec. 5 by the central bank.
Hmmm...I don’t like this tone from Ben Stein...he is usually fairly well balanced, I think...
Obama will probably try about 100 different things, all of them wrong and out of desperation.
This is just plain stupid. Never ending. Please. Even the depression had an ending. This will be over in two to three years.
Or he could use the fear as means to implement command and control statist policies throughout the economy. Which do you think is more likely?
These things are cyclical. Always have been. Instead of lamentations of the winter of our discontent, they should thoughtfully analyze how we got into this shape and how to get out of it. Newspapers used to do journalism a long long time ago.
Every time I see Ben Stein on tv, radio or in print, he seems to be getting more and more, Morose to downright depressed.
With your employers stock price slide of 65%+ in the last year I can see why you think that.
We paid to get out of the depression with the lives of 438,000 service men.
I’d like to read this article but Bugmenot is doing nothing for me this time. Wonder what’s wrong.
I fear you are correct.
All the bailouts in the world aren't going to return the economy (neither global nor local) to what it once was, unless the anti-capitalistic regulations are removed.
You may have noticed, that not only has there been no move to undo the CRA, CAFE, nor any of the other cute acronyms, but the Dems in Congress continue to deny any responsibility for the economy's collapse.
Things COULD get better. But the future doesn't look very rosy at the moment.
You are trying to put WW II with the depression? That is a stretch if I ever saw one. History on FR is so interchangeable it is tough to keep up.
“Every time I see Ben Stein on tv, radio or in print, he seems to be getting more and more, Morose to downright depressed.”
My thought, too...I am starting to believe this is indeed a deeper problem than we know...and I think the “oh don’t be silly, we’ll snap out of it” crowd is whistling past the graveyard...Cavuto has had an awful lot of guests and has himself pretty grim...not necessarily defeatist, but grim...
And as each one fails, he will throw someone under the bus and distance himself from the failed initiative, by somehow voting “Present, but not responsible”.
With Obie, image is everything. And failure is someone else’s responsibility.
I expect a high turnover rate in his administration, and a very crowded bus undercarriage.