Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

What if a Slowdown Is a Never-Ending Story?
The New York Times ^ | November 21, 2008 | Ben Stein

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 it’s different. Or, because that is a dangerous phrase, let me say that maybe this time it’s 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 government’s 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 ...


TOPICS: Business/Economy
KEYWORDS: benstein; economy; recession
Navigation: use the links below to view more comments.
first 1-5051-100101-150151-190 next last

1 posted on 11/22/2008 4:01:21 PM PST by dano1
[ Post Reply | Private Reply | View Replies]

To: dano1

That means that Obama will have to come down off his campaign rhetoric and do what’s right. Thomas Jefferson did.


2 posted on 11/22/2008 4:04:06 PM PST by Perdogg (01-20-2013 Obama's last day)
[ Post Reply | Private Reply | To 1 | View Replies]

To: dano1

3 posted on 11/22/2008 4:04:38 PM PST by BenLurkin
[ Post Reply | Private Reply | To 1 | View Replies]

To: Perdogg

That is flawed on so many levels...


4 posted on 11/22/2008 4:05:36 PM PST by bill1952 (McCain and the GOP were worthless)
[ Post Reply | Private Reply | To 2 | View Replies]

To: bill1952

what is flawed?


5 posted on 11/22/2008 4:06:32 PM PST by Perdogg (01-20-2013 Obama's last day)
[ Post Reply | Private Reply | To 4 | View Replies]

To: All
Also, Bloomberg is reporting this:

German Bundesbank Expects Worst Recession Since 1949, DPA Says

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.

6 posted on 11/22/2008 4:06:44 PM PST by dano1
[ Post Reply | Private Reply | To 3 | View Replies]

To: dano1

Hmmm...I don’t like this tone from Ben Stein...he is usually fairly well balanced, I think...

Yikes...


7 posted on 11/22/2008 4:07:03 PM PST by jessduntno (Barack - Kenyan for "High Wind, Big Thunder, No Rain")
[ Post Reply | Private Reply | To 1 | View Replies]

To: Perdogg

Obama will probably try about 100 different things, all of them wrong and out of desperation.


8 posted on 11/22/2008 4:07:07 PM PST by Brett66 (Where government advances, and it advances relentlessly , freedom is imperiled -Janice Rogers Brown)
[ Post Reply | Private Reply | To 2 | View Replies]

To: dano1

This is just plain stupid. Never ending. Please. Even the depression had an ending. This will be over in two to three years.


9 posted on 11/22/2008 4:07:25 PM PST by napscoordinator
[ Post Reply | Private Reply | To 1 | View Replies]

To: Perdogg
That means that Obama will have to come down off his campaign rhetoric and do what’s right. Thomas Jefferson did.

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?

10 posted on 11/22/2008 4:07:43 PM PST by TheWasteLand
[ Post Reply | Private Reply | To 2 | View Replies]

To: dano1

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.


11 posted on 11/22/2008 4:07:48 PM PST by BipolarBob (Even the earth is bipolar.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: dano1

Every time I see Ben Stein on tv, radio or in print, he seems to be getting more and more, Morose to downright depressed.

I dunno!!


12 posted on 11/22/2008 4:08:02 PM PST by gwilhelm56 (HITLER offered Hope and Change!!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: dano1
But this does not look like a typical recession.

With your employers stock price slide of 65%+ in the last year I can see why you think that.

13 posted on 11/22/2008 4:08:55 PM PST by Balding_Eagle (If America falls, darkness will cover the face of the earth for a thousand years.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: napscoordinator

We paid to get out of the depression with the lives of 438,000 service men.


14 posted on 11/22/2008 4:08:59 PM PST by Perdogg (01-20-2013 Obama's last day)
[ Post Reply | Private Reply | To 9 | View Replies]

To: dano1

I’d like to read this article but Bugmenot is doing nothing for me this time. Wonder what’s wrong.


15 posted on 11/22/2008 4:09:30 PM PST by ottbmare
[ Post Reply | Private Reply | To 1 | View Replies]

To: TheWasteLand

I fear you are correct.


16 posted on 11/22/2008 4:09:41 PM PST by Perdogg (01-20-2013 Obama's last day)
[ Post Reply | Private Reply | To 10 | View Replies]

To: dano1
The real cause behind the financial and economic problems are the onerous, manipulative regulations enacted by (generally) Democrats in Congress. Such regulations have been piled one on top of another for several decades. They have now reached the breaking point. The straw that broke the camel's back, so to speak.

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.

17 posted on 11/22/2008 4:09:55 PM PST by ChicagahAl (So your bumper sticker says: "Don't blame me, I didn't vote!"? Duh!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Perdogg

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.


18 posted on 11/22/2008 4:11:21 PM PST by napscoordinator
[ Post Reply | Private Reply | To 14 | View Replies]

To: gwilhelm56

“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...


19 posted on 11/22/2008 4:11:35 PM PST by jessduntno (Barack - Kenyan for "High Wind, Big Thunder, No Rain")
[ Post Reply | Private Reply | To 12 | View Replies]

To: Brett66
“Obama will probably try about 100 different things...”

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.

20 posted on 11/22/2008 4:15:31 PM PST by ChicagahAl (So your bumper sticker says: "Don't blame me, I didn't vote!"? Duh!)
[ Post Reply | Private Reply | To 8 | View Replies]

To: dano1; TigerLikesRooster; rabscuttle385
"If recession should threaten serious consequences for business (as is not indicated at present) there is little doubt that the Federal Reserve System would take steps to ease the money market, and so check the movement."

~~Harvard Economic Society, October 19, 1929

"Business will turn for the better this month or next, recovering vigorously in the third quarter and end the year substantially above normal."

~~Harvard Economic Society, May 17, 1930

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

-~~Ludwig Von Mises

“Several brokerage houses tumbled; blue-sky investment companies formed during the happy bull market days went to smash, disclosing miserable tales of rascality; over a thousand banks caved in during 1930, as a result of marking down both of real estate and of securities; and in December occurred the largest bank failure in American financial history, the fall of the ill-named Bank of the United States in New York.”

~~"Only Yesterday: An Informal History of the 1920’s" by Fredrick Lewis Allen

21 posted on 11/22/2008 4:17:03 PM PST by Travis McGee (--- www.EnemiesForeignAndDomestic.com ---)
[ Post Reply | Private Reply | To 1 | View Replies]

To: dano1

Everybody has enough cars TV’s Ipods to last the decade . Not much you can do about that ;-)) Build a better car TV or Ipod ??


22 posted on 11/22/2008 4:17:12 PM PST by Deetes (God Bless the Troops)
[ Post Reply | Private Reply | To 1 | View Replies]

To: dano1

http://www.youtube.com/watch?v=2I0QN-FYkpw&eurl=http://caps.fool.com/blogs/viewpost.aspx?bpid=109293&t=01007146184382914537

Ben Stein is a tool, Peter Schiff owns him, and others in this video is from 2006/2007, notice the crap Stein spews in response, I loooove where he says Merrill Lynch is a bargain and AND ASTONISHING WELL RUN COMPANY, look at the prices the people were saying WERE BARGAINS for the financials


23 posted on 11/22/2008 4:17:44 PM PST by oioiman (The Federal Reserve has officially been listed as the USA's cause of death.....)
[ Post Reply | Private Reply | To 1 | View Replies]

To: napscoordinator
This is just plain stupid. Never ending. Please. Even the depression had an ending. This will be over in two to three years.

Sometimes depressions lead to Dark Ages. Ask any Roman. No Roman from 500AD lived to see the end of that Great Depression.

24 posted on 11/22/2008 4:18:09 PM PST by Travis McGee (--- www.EnemiesForeignAndDomestic.com ---)
[ Post Reply | Private Reply | To 9 | View Replies]

To: napscoordinator

I think he means WWII is what really pulled us out of the Depression, not the policies of the Roosevelt administration, which made it worse.


25 posted on 11/22/2008 4:19:14 PM PST by rlmorel ("A barrel of monkeys is not fun. In fact, a barrel of monkeys can be quite terrifying!")
[ Post Reply | Private Reply | To 18 | View Replies]

To: jessduntno

I believe it is much deeper - the credit sector has yet to topple and I have discussed this with some people who think this is the next thing to go. Credit is so intertwined like a spider webt that when one thing starts to go so does everything else because banks lend to banks, banks lend to companies and companies lend to companies - one in the chain defaults or goes under so do many of the others following!


26 posted on 11/22/2008 4:19:31 PM PST by Lilpug15 (I'm Moving to Alaska...You can Keep THE CHANGE!)
[ Post Reply | Private Reply | To 19 | View Replies]

To: napscoordinator; Perdogg

A whole lotta historians credit World War II as FDR’s chosen way out of the depression. No matter whether you agree or not -— it worked.


27 posted on 11/22/2008 4:20:26 PM PST by ErnBatavia (Cuba got "Change"...in 1959)
[ Post Reply | Private Reply | To 18 | View Replies]

To: dano1

I just lost all respect for Ben Stein.


28 posted on 11/22/2008 4:20:35 PM PST by Emperor Palpatine ("I love democracy. I love Free Republic")
[ Post Reply | Private Reply | To 1 | View Replies]

To: oioiman
"The crisis of the abuses of banking is arrived. The banks have pronounced their own sentence of death. Between two and three hundred millions of dollars of their promissory notes are in the hands of the people, for solid produce and property sold, and they formally declare they will not pay them. This is an act of bankruptcy, of course, and will be so pronounced by any court before which it shall be brought. But cui bono? The laws can only uncover their insolvency, by opening to its suitors their empty vaults. Thus by the dupery of our citizens, and tame acquiescence of our legislators, the nation is plundered of two or three hundred millions of dollars, treble the amount of debt contracted in the Revolutionary war, and which, instead of redeeming our liberty, has been expended on sumptuous houses, carriages, and dinners. A fearful tax! if equalized on all; but overwhelming and convulsive by its partial fall. Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper, as we were formerly by the old Continental paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burthen all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs. Prudent men must be on their guard in this game of Robin's alive, and take care that the spark does not extinguish in their hands. I am an enemy to all banks discounting bills or notes for anything but coin. But our whole country is so fascinated by this Jack-lantern wealth, that they will not stop short of its total and fatal explosion."

~~Thomas Jefferson to Dr. Thomas Cooper, 1814

29 posted on 11/22/2008 4:20:45 PM PST by Travis McGee (--- www.EnemiesForeignAndDomestic.com ---)
[ Post Reply | Private Reply | To 23 | View Replies]

To: dano1
But the Depression taught us that if there is enough fear in the economy, lenders will not lend and economic activity will continue indefinitely at a level consistent with serious recession or even depression.

This was John Maynard Keynes’s great contribution to economic understanding, and it’s a big one.

The money quote. Keynes's solution was tried by FDR. It did not work. World war did. Scary.

30 posted on 11/22/2008 4:21:08 PM PST by Jacquerie (Islam - A barbaric political system in religious drag.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: napscoordinator; Perdogg
What Perdogg said made sense to me. By various (though not all) accounts, it was World War II which ended the Great Depression.

Do you disagree with that claim, or did you not read Perdogg as making such a claim?

31 posted on 11/22/2008 4:21:30 PM PST by ThePythonicCow ( Mooo !!)
[ Post Reply | Private Reply | To 18 | View Replies]

To: napscoordinator

“Even the depression had an ending. This will be over in two to three years.”

These are the beginning days of the new dark ages.


32 posted on 11/22/2008 4:22:18 PM PST by Kirkwood
[ Post Reply | Private Reply | To 9 | View Replies]

To: napscoordinator
Even the depression had an ending...

But FDR didn't have a country that was 100 TRILLION DOLLARS IN DEBT!

Our GPD is currently about 14 TRILLION PER YEAR!

This means that for every dollar we produce, we owe seven dollars and change.

This will not end in our lifetime.

33 posted on 11/22/2008 4:26:15 PM PST by realdifferent1 ("If you saw Atlas,...what would you tell him to do?"... "To shrug.")
[ Post Reply | Private Reply | To 9 | View Replies]

To: Kirkwood

Could be. See 24. GMTA.


34 posted on 11/22/2008 4:26:34 PM PST by Travis McGee (--- www.EnemiesForeignAndDomestic.com ---)
[ Post Reply | Private Reply | To 32 | View Replies]

To: ThePythonicCow

I’ve always said it wasn’t FDR that ended the Great Depression.

It was Hideki Tojo and Isoroku Yamamoto.


35 posted on 11/22/2008 4:27:38 PM PST by Emperor Palpatine ("I love democracy. I love Free Republic")
[ Post Reply | Private Reply | To 31 | View Replies]

To: Deetes

I couldn’t agree more.

Clinton benefited greatly from the explosion in the micro-processing power and computer inter-connectivity. These gains continued, sustaining us through what could have been a really disastrous .com crash.

However, this is where your point has great relevance. We (the US and the civilized world) are to the point of technology saturation. What’s next? There doesn’t seem to be any new technology on the near-horizon that is so compelling it continues to drive demand for consumer goods.

This isn’t the only reason reason for the pickle we’re in, but it certainly is going to greatly complicate the recovery efforts.


36 posted on 11/22/2008 4:27:46 PM PST by Big_Monkey
[ Post Reply | Private Reply | To 22 | View Replies]

To: jessduntno
I don’t like this tone from Ben Stein...he is usually fairly well balanced, I think...

Ben Stein has been talking down the economy for quite awhile now. More gloom and doom than usual.

Dunno if it's personal, political, or if he really thinks there's a problem.

37 posted on 11/22/2008 4:28:52 PM PST by wbill
[ Post Reply | Private Reply | To 7 | View Replies]

To: realdifferent1

......This will not end in our lifetime. .....

It will disappear in a cloud of inflation


38 posted on 11/22/2008 4:28:53 PM PST by bert (K.E. N.P. +12 . Save America......... put out lots of waferin)
[ Post Reply | Private Reply | To 33 | View Replies]

To: dano1
So many sectors are experiencing chaos and uncertainty.. plus, no matter what, we have to institute national health insurance, that's a given. The only thing that makes sense is central planning and collaboration with the global community.

39 posted on 11/22/2008 4:29:17 PM PST by I see my hands (_8(|)
[ Post Reply | Private Reply | To 1 | View Replies]

To: napscoordinator

If prices are falling, why would anyone buy today if they could put off purchases until tomorrow?

Rare, yes. Stupid, no.


40 posted on 11/22/2008 4:29:24 PM PST by Jacquerie (Free beer tomorrow.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: ChicagahAl

YEP...what YOU said....and Obama seems to be wanting to make the regulations WORSE...ie enviro crap...taxes...etc


41 posted on 11/22/2008 4:29:37 PM PST by goodnesswins (CONSERVATIVES....saving America's A** whether you like it or not!)
[ Post Reply | Private Reply | To 17 | View Replies]

To: Jacquerie
JM Keynes's "great contribution" (sic) was the idea that we could continuously borrow from the future for pump-priming today.

When asked how this would work out in the long run, he famously answered, "In the long run, we're all dead."

Well, that gay old childless queen is dead, but we're here and alive, and we and our children will finally have to pay the price he didn't care to imagine.

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

-~~Ludwig Von Mises


42 posted on 11/22/2008 4:30:41 PM PST by Travis McGee (--- www.EnemiesForeignAndDomestic.com ---)
[ Post Reply | Private Reply | To 30 | View Replies]

To: ChicagahAl

Yeah.....speaking of “throwing someone under the bus”....I predict Hillary will be FIRST....and then...she’s outta the Senate....out of the State....and outta politics!!! maybe temporarily or maybe permanently....


43 posted on 11/22/2008 4:31:02 PM PST by goodnesswins (CONSERVATIVES....saving America's A** whether you like it or not!)
[ Post Reply | Private Reply | To 20 | View Replies]

To: napscoordinator
This is just plain stupid. Never ending. Please. Even the depression had an ending. This will be over in two to three years.

The depression ended when we got into WWII, reduced our workforce, and increased demand for the first time in a long time. Roosevelt started out with not much national debt to speak of, and delayed recovery for several years. Obama has a national debt equal to several years worth of spending and no real hope of actually expanding our economy. Two to three years is very optimistic.

44 posted on 11/22/2008 4:31:25 PM PST by Bernard (If you always tell the truth, you never have to remember exactly what you said.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: dano1
In this situation, where fear rules, we must turn to the federal government for relief.
IMHO, this is what got us into this mess.

We cannot nickel-and-dime our way out of this.
The nasty problem is that we can't dollar our way out either. Years of credit have created a black hole that will devour every bit of "wealth" the govt prints.

Saving the automakers is a step out of the darkness. Or, I might say, allowing them to die is a step toward a terrifying dusk.
I think he's got it backwards. Bailing out Detroit without savage give-backs will ensure that that darkness rivals that of the Biblical "valley of the shadow of . . ."

45 posted on 11/22/2008 4:31:29 PM PST by Oatka ("A society of sheep must in time beget a government of wolves." –Bertrand de Jouvenel)
[ Post Reply | Private Reply | To 1 | View Replies]

To: bert

What followed the last great cloud of (hyper)inflation in Weimar Germany?


46 posted on 11/22/2008 4:31:34 PM PST by Travis McGee (--- www.EnemiesForeignAndDomestic.com ---)
[ Post Reply | Private Reply | To 38 | View Replies]

To: bert

As I said, it will not end; see Zimbabwe.


47 posted on 11/22/2008 4:32:58 PM PST by realdifferent1 ("If you saw Atlas,...what would you tell him to do?"... "To shrug.")
[ Post Reply | Private Reply | To 38 | View Replies]

To: Deetes
"Everybody has enough cars TV’s Ipods to last the decade . Not much you can do about that ;-)) Build a better car TV or Ipod ??"

No need. Change formats and render the old one obsolete by denying input jacks/fuels for the old technology.

48 posted on 11/22/2008 4:34:12 PM PST by BipolarBob (Even the earth is bipolar.)
[ Post Reply | Private Reply | To 22 | View Replies]

To: Travis McGee

Your ignorance of Keynes knows no bounds.


49 posted on 11/22/2008 4:35:22 PM PST by Jacquerie
[ Post Reply | Private Reply | To 42 | View Replies]

To: Travis McGee

“Could be. See 24. GMTA.”

With Islam spreading like wildfire, the new dark ages are upon us.


50 posted on 11/22/2008 4:36:19 PM PST by Kirkwood
[ Post Reply | Private Reply | To 34 | View Replies]


Navigation: use the links below to view more comments.
first 1-5051-100101-150151-190 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson