Skip to comments.Let’s Be Honest: We’re in a Depression, Not a Recession, And There’s No End In Sight
Posted on 08/23/2011 6:44:28 AM PDT by SeekAndFind
If the notion that we are merely living through the aftereffects of a mere recession that ended in 2009 sounds somewhat ridiculous, thats because it is. If we were being honest with ourselves, we would call this a depression. That would certainly better convey both the severity of our problems, and the fact that those problems have no evident solutions.
The American economy currently has both a short-term problem and a long-term problem. The short-term problem is that the economy is depressed; it is growing more slowly than the population, with the result that per capita income is declining. The high rate of un- and underemployment is a factor, but is itself the product of other factors, having mainly to do with the reluctance of over-indebted consumers (over-indebted in major part because of loss of equity in their houses, the major source of household wealth) to spend, the reluctance of the impaired banking industry to make risky loans, and the reluctance of businesses to invest and to hire, which is due in part to weak consumer spending and in part to profound uncertainty about the nations economic future.
The roots of this catastrophic situations lie primarily, I think, in the incompetent economic management of the Bush administration and the Federal Reserve. The persistence of the depression, however, is due in part at least to surprising failures of the Obama administrationpoor leadership, poor management, the sponsorship of incomprehensibly complex health care and financial regulation laws that have created widespread uncertainty that has discouraged consumption and investment, and the inability to explain the nature of the economys problems to the general public. These failures caused the stimulus enacted in 2009 to be botched in both in its design and its administration, resulting in discrediting of deficit spending as a response to depression.
(Excerpt) Read more at tnr.com ...
He asks, So what can be done now? Probably nothing.
I beg to differ.
Would declining per capita incomes, high personal indebtedness, a depressed economy, high uneployment, underutilized production capacity not lead to deflation and lower prices rather than the inflationary cycle that almost all the talking heads have been predicting?
This must be what liberals means when they say the recession is over.
The white president’s Great Depression is the black president’s minor economic downturn.
Mustn’t do anything to affect O’Bozo’s self esteem.
Go read the abjectly idiotic follow-up posts to that article and weep.
I, for one, would like to see today’s unemployment rate calculated AND REPORTED in the same manner it was during the Great Depression!
With all due respect, it's not their job to solve this problem. It's their job to stay the hell out of our way so we can solve our own problems. I apologize for the snarfiness.
I get your general meaning, though. As White House Ironing Secretary, Che Carny, said the other day, The White House doesn't create jobs.
If this is a depression, I can handle it. I don’t want it getting worse as I know some who need jobs.
We will remain in this depression until Perry takes office in 2013
Depression versus Recession
Recession is the falling down part. Depression is staying down. Normally, the recuperative powers of a market-oriented economy are sufficient that the falling-down part is immediately followed by a rising-back-up part. But, that’s not happening now and that didn’t happen during the 1930s.
According to the Great Obama, it’s because of earthquakes, “speed bumps,” and other bad luck events.
It’s like Global Warming. We continue to see CO2 building-up in the atmosphere, but global temperature has flattened out. At some point, you’d think, the scientists will look for another cause of global temperature. But, those who believe in AGW desperately cling to their Hockey Stick theory.
Similarly, Keynesian economics did not rescue the economy from an under-employment equilibrium during the ‘30s, and it’s not rescuing the economy now.
So, what constitutes the normal recuperative power of a market-oriented economy? At some point, investors perceive a profit-opportunity in hiring labor and other factors of production, because of their low cost and because of the low rate of interest, in anticipation of selling their production in the future at a profit.
Why isn’t this happening? Why is money staying on the sidelines? Why is cash building up in corporate treasuries, staying or moving off-shore, or being exchanged for gold and other such hedges against inflation and political risk?
Well, duh, could it have something to do with the socialists we have in Washington who attack profits every opportunity they get? Could it have something to do with the enormous fiscal mess of the government in Washington, that puts every dollar of private income and wealth at risk?
Do they really think people in the private sector to be so stupid as to not notice that their government is insolvent and could not ever make good on all the promises it has made to its bondholders, current and retired civil servants, the aged, the poor, the sick, green industries, farmers, etc., etc., not to mention those who own government-guaranteed mortgages, defined benefits plans and bank deposits?
Do they think we are as stupid as the people who vote Democrat?
The garment industry in NYC is dead and buried. The Automobile Industry in Detroit done.
Guess who is responsible? Me?
I do not think so.
It is just government cover-up to remove people from the U3 unemployment numbers because they have been out of work too long!"
Actually it is an unwillingness on the part of Obama and the Congress based on self-preservation. If they were to honestly explain to the American public why we are in the mess we are in and the decisions that have led us to this point, there would be an instantatneous revolt adn the lives of politicians wouldn't be worth diddly-squat.
In my mind, the path to recovery is clear: Cut personal and corporate income taxes across the board and cut gov't spending. Indeed, I'd love to see a flat tax of 17%, as suggested by Friedman years ago. (BTW, Poser and Friedman worked together at Chicago years ago.) In a nutshell, we can get along quite nicely with less gov't spending. The idea that the gov't knows how to spend my money better than I do is simply a position I don't agree with.
They will be amazed at our society's intent on ignoring all the signs of what was coming. And then they will realize why they are the first generation that will not live better and at a higher standard of living than the previous. Then they will be mad at what we did to their future.
What a piece of blame and propaganda...
Of course letting the Democrats off the hook who wouldn’t do a thing to prevent all this, and in fact voted against it’s prevention...
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