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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
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To: central_va

Sigh.


81 posted on 11/22/2008 5:07:56 PM PST by fightinJAG (No choice but to boycott the Big 3 automakers, else we feed the Bailout Hole.)
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To: napscoordinator

The 70’s were not worse than this.


82 posted on 11/22/2008 5:09:03 PM PST by fightinJAG (No choice but to boycott the Big 3 automakers, else we feed the Bailout Hole.)
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To: tumblindice

Everything has an END. It may be the ultimate one.


83 posted on 11/22/2008 5:11:43 PM PST by traumer
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To: realdifferent1

“But FDR didn’t have a country that was 100 TRILLION DOLLARS IN DEBT!”

Care to explain where you came up with that figure?


84 posted on 11/22/2008 5:12:02 PM PST by cowtowney
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To: DTogo
It'll end when the 55M who "voted against Obama" (not for McCain) march on D.C. and throw all the bums out of their offices and into the street for good.

In other words, never.

85 posted on 11/22/2008 5:15:18 PM PST by bill1952 (McCain and the GOP were worthless)
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To: fightinJAG
The 70’s were not worse than this.

Yes, the 70's and early 80'S were worse (everone forgets how bad 80 - 83 were, fashions not withstanding. However, the rate of change to the worse now, misery index, interest rates + unemployment is frightening. It could get worse very soon...... Time will tell.We had Reagan then, now we have what? a mini Stalin?

86 posted on 11/22/2008 5:16:29 PM PST by central_va (Co. C, 15th Va., Patrick Henry Rifles-The boys of Hanover Co.)
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To: goodnesswins

Excellent point!


87 posted on 11/22/2008 5:16:48 PM PST by ChicagahAl (So your bumper sticker says: "Don't blame me, I didn't vote!"? Duh!)
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To: Perdogg

I wish Bush would do the same. He was late in focusing on the economy. It cost the party dearly.


88 posted on 11/22/2008 5:16:55 PM PST by Orange1998
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To: dalereed
Absolutely, FDR negotiated the attack on Pearl to get us into the war and end the depression.

Yeah, right. - Along with the smoking man on the grassy knoll who faked the lunar landing while hiding in area 51.

89 posted on 11/22/2008 5:18:45 PM PST by bill1952 (McCain and the GOP were worthless)
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To: ChicagahAl

***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.***

You are absolutely right.


90 posted on 11/22/2008 5:21:13 PM PST by kitkat (THE DAY WE LOSE OUR WILL TO FIGHT Ilast THE DAY WE LOSE OUR FREEDOM.)
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To: dano1

Just correcting my tagline.


91 posted on 11/22/2008 5:22:56 PM PST by kitkat (THE DAY WE LOSE OUR WILL TO FIGHT WILL BE THE DAY WE LOSE OUR FREEDOM.)
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To: dalereed
Absolutely, FDR negotiated the attack on Pearl to get us into the war and end the depression.

I hear tell a tin-foil hat can help your condition. Next you'll tell me you saw unmarked "Black Helos" flying over your house.

92 posted on 11/22/2008 5:24:03 PM PST by central_va (Co. C, 15th Va., Patrick Henry Rifles-The boys of Hanover Co.)
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To: napscoordinator
"History basically. We are a strong country even in rough times. I just know we will get through this."

I think you are sadly mistaken. This country isn't like the country which existed when Peril harbor was attacked.

That was a time when every American pulled part of the load, cheered for every hard won victory no matter how small, and had immense pride in the flag. That is why we won against impossible odds in the pacific.

We are fighting a different kind of war now, a war against our American cultural identity, our beliefs in freedom and capitalism, a war against our sovereignty.

And worse, we are fighting a war within our own borders, with an enemy from within.

I'm not so sure this one is going to end well.

93 posted on 11/22/2008 5:26:02 PM PST by Nathan Zachary
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To: kitkat
War is an ugly thing,
but not the ugliest of things.
The deacayed and degraded state
of moral and patratoic feelings
Which thinks nothing is worth war
is much worse.

A person who has nothing
for which he is willing to fight
Nothing more important then his own
personal saftey is a miserable creature
And has no chance of being free unless made
and kept so by the esetertions of better men
Than himself.

               -John Stewart Mill

94 posted on 11/22/2008 5:28:24 PM PST by central_va (Co. C, 15th Va., Patrick Henry Rifles-The boys of Hanover Co.)
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To: napscoordinator
“This will be over in two to three years.”
I believe that given enough time these problems will adjust buy themselves. However in the industry that I'm in(Telecommunication) we are already seeing a drastic pull back in new capital spending. Many of my colleagues as am I
are seeing upgrades and new system procurements being stop by CFO’s with no indication of when or if the the purchase will happen. If this last two or three years a lot of people will be put to the street with no hope of finding a job in their field.
95 posted on 11/22/2008 5:29:17 PM PST by devildognc (USMC 1972-1979 The Few The Proud THE MARINES)
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To: DTogo

those “55M” are going to be TOO busy trying to work to march anywhere....and fighting off the losers who have NOTHING and will be trying to beat down their doors.


96 posted on 11/22/2008 5:29:27 PM PST by goodnesswins (CONSERVATIVES....saving America's A** whether you like it or not!)
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To: dano1

One of the few Ben Stein writings I strongly disagree with.

The government is not the doctor. The American people are not the patient. The only real way out of this is getting the government out of the way and letting the American people produce things of value. That is the only way to become wealthier and not poorer. Carbon taxes, capital taxes, “wealthy” people taxes will not make things better. They will make things far worse.

And as far as saving the Big 3... I don’t think so. The unions made much of the mess they find themselves in. Until they start paying the consequences they aren’t going to change their way. Government has no right to take my hard work and transfer it to UAW for job banks, retirement, etc. If the UAW want contracts that kill their host then so be it. They can die along with it.


97 posted on 11/22/2008 5:31:11 PM PST by DB
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To: Big_Monkey

Cheap energy would be something that would turn it around.

If we really wanted to we could do it with nuclear.

Cut all the red tape and simply do it.


98 posted on 11/22/2008 5:37:24 PM PST by DB
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To: Travis McGee

I received an email today from Dr. Robert McHugh with the following market commentary: (Dr. McHugh’s technical analysis newsletter has been consistently predicting the current market crisis for many months.)

We now find ourselves in a catastrophic Bear Market, Grand Supercycle degree Wave {IV} down, which is correcting a Bull Market from 1718, before the United States even started. We show this degree labeling in the big picture chart on page 13 in this weekend’s newsletter to subscribers. How do we know this? Because the S&P 500 fell to 752 Thursday, below the closing low the market formed at the bottom of the Bear Market in 2002. It means that low in 2002 was primary degree wave (4), that prices have now fallen below that bottom, which means the rally from 2002 to 2007 is a completed primary degree wave (5), which is all that was needed to complete a series of larger degree wave fives, supercycle degree wave (V)’s top, and Cycle degree wave V’s top. This is not good. It means there is a very high probability that we are going to see new lows far below Thursday’s 752. This hurricane is not over, not by a long shot.

However, the good news is we are about to enter a period of relative calm, the second phase - a rally/sideways phase - to this three phase Bear market. This Grand Supercycle wave {IV} down is correcting centuries of rally very fast, and furiously. Time-wise, it may be relatively short compared to other Grand Supercycle waves, but damage-wise, this Bear Market is going to change the world as we know it.


99 posted on 11/22/2008 5:38:20 PM PST by RXSalesman
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To: dano1

Ben Stein - Another Hollywood Socialist moron who appears to have received his degree in Economics from a Cracker Jack box.


100 posted on 11/22/2008 5:38:47 PM PST by penowa
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