Armed Polite Society
Main Forums => Politics => Topic started by: Angel Eyes on August 25, 2010, 04:26:14 PM
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http://www.cnbc.com/id/38831550
Synopsis: Gluskin Sheff economist David Rosenberg says the U.S. economy is caught in a 1930s style depression, not a recession as commonly believed. He cites parallels with the stock market gains in 1930, which turned out to be a false indicator that the worst had passed.
I'm afraid he's right.
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I saw this article yesterday, and ended up discussing it with some coworkers over lunch.
Our general conclusion is that we probably are in a depression, though not for the reasons Rosenberg cites. Rosenberg's prime reason seems to be stock market performance similar to the '30s, whereas we think stock prices can't define a depression. GDP action might, though it depends on how you define a depression as to just how much lost GDP you need before it's official.
It brought up an interesting question: how do you define a depression? There doesn't seem to be a definitive formal academic definition.
We came up with the following general characteristics for a depression:
- Shrinking credit, defaults, bank failures
- Falling prices in some (not all) major asset classes
- Deleveraging, frugality
- Prolonged business slowdown, businesses unwilling to invest or expand
- High unemployment
- Populist government policies that cater to the masses but actually make matters worse
A recession is a temporary disruption in the normal flow of resources within the economy, we all mostly agreed on that. We didn't agreement on whether a depression was just a deeper, more pronounced recession, or something else entirely. I fall int he "something else entirely" camp
Anyway, it was a great discussion. We didn't get much done that afternoon.
I'm curious what the peanut gallery here thinks. How would you define a depression, and do you think our current situation fits your definition?
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I would answer, but I am still awaiting my Peanut Gallery credentials.
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Wisecrack remarks are sufficient credentials here.
:P
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I think that you might have all of the elements of a depression listed, plus one that is not an indicator but a result.
- Populist government policies that cater to the masses but actually make matters worse
This does not come about until after the actual economic collapse. Admittedly it makes matters even worse, and delays any recovery. But I am just not convinced, reviewing all the depressions that the world has suffered through, that this is necessary in order for the situation to be a depression. (In other words, if by some miracle the gooberment did not take a populous bend that catered to the masses - 2 distinct possibilities of what might not happen, although very low probability of avoiding either one - there could still be a depression.)
I posit this based on some of the European depressions when they still had monarchs running things. Those folks avoided populist policies like the plague, until they got run out on a rail or lost their heads.
Comment? Rebuttal?
stay safe.
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I am reminded of the old saying: when your neighbor loses his job, it is a recession; when you lose your job, it is a depression.
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Recession: When your neighbor loses his job.
Depression: When you lose your job.
Recovery: When Obama loses his.
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Occam's razor.
Either the people that are pushing the policies that are driving this country in to ruin really are just that stupid.
Or
The people that are pushing the policies that are driving this country into ruin have an agenda that is best served with a country in financial ruin.
I really don't know which way to come down on this anymore. =(
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Well, I'm only 26, so I'm not sure I can say with any real accuracy without a lot of studying.
But we can agree that you can have a recession without a depression, but you can't have a depression without a recession, right?
At first glance, I'd say it feels like a depression for a great many people in the US and many more outside the US influenced by our decisions. But I've got to say, this doesn't feel like a depression. You can still find work if you can do something to set yourself apart from the pack.
Also, we've been hovering over a severe worsening of the economy for awhile. We could go up or down, it seems. My guess is, if Obama sees reelection, we'll go into a depression. If we keep him out of the White House, we can keep hovering long enough to take off again.
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Semantics!
A recession is just the new word for depression. Until the 30's, every thing we called an economic "recession" is what our fore bearers call a "depression". Politicians changed the word after the "Great Depression" so that every hiccup in the economy wouldn't harken back to 'that' time.
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RoadKingLarry, I (and many others) been saying for over a year that it certainly seems like the administration is doing everything possible to drive the economy further into the ground.
They're following the FDR playbook, spending gobs of (borrowed) money on do-nothing projects, raising taxes, scaring businesses, increasing deficits, and piling on regulations. Everything the Roosevelt administration did wrong, Obama is doing again.
Either they can't read history books, or they can read them so well that they think they can replicate the 1930's.
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I'm as mad as hell... (http://www.youtube.com/watch?v=WINDtlPXmmE)
=(
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Monkeyleg, someone much smarter than me said: "Never attribute malice what can be explained by stupidity"
Another applicable aphorism: "The only reason this has never worked before (socialism) is that there's never been anyone quite as smart as me in charge".
If our economy really does crash and burn, and makes people really think (I know, a dubious proposition), then the phoenix that rises may not at all resemble the bird the architects of the crash wished for. I don't for a minute believe that the chattering classes really understand the inherent "leave me alone" mindset of the majority of Americans. They see people lining up for "the dole" (however you define that) and believe that .gov owns them, just because .gov buys them. Let .gov really try some social engineering here in my neck of the woods. Tarred and feathered, if they're lucky. Disappeared, if they're not.
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Hasn't the Great Depression only really become a Depression when FDR started trying his tricks?
I remember that Australia and some other countries which have not responded with social engineering have not experienced it as badly.
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Hasn't the Great Depression only really become a Depression when FDR started trying his tricks?
I remember that Australia and some other countries which have not responded with social engineering have not experienced it as badly.
No, it was a depression already.
Other countries don't talk abou the Great Depression because theirs didn't go on for 12 years.
FDR didn't cause the depression. He did transform it into the Great Depression, though.
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I am reminded of the old saying: when your neighbor loses his job, it is a recession; when you lose your job, it is a depression.
By that measure, it's definitely a depression. At least it is/was for me.
:P
=|
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Monkeyleg, someone much smarter than me said: "Never attribute malice what can be explained by stupidity"
It takes an awful lot of stupid to make the kinds of "mistakes" they're making now. They don't seem that dumb, they seem smart enough to know better.
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If they have no disingenuous intent they should be smart enough to listen to the people who actually create wealth. The fact that they don't and won't says all we need to know.
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If they have no disingenuous intent they should be smart enough to listen to the people who actually create wealth. The fact that they don't and won't says all we need to know.
There's a problem with that line of thinking.
Liberals don't believe people "create wealth". They believe rich people get that way off the work of other people.
They believe the economy works like magic. Growth and innovation just happen: the people who "discover" or "create" some new process or technology were just lucky. Without them, someone else would have done it.
So, who cares what some guy that won "life's lottery" thinks? He's only wealthy because he got lucky.
They want REAL thinkers in charge.
That's the mentality we have to deal with. It's not that they are trying to destroy the country, but that will be the result.
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I am aware of what liberals believe; I know a few. What I have learned is that almost all I talk to, regardless of their level of education, seem unable to reason and are largely bereft of facts. They get their information from only a few dubious sources. This is not about real thinking at all, just wishful thinking. But I was talking about the people with glittering resumes who work deep inside this administration, not friends who watch MSNBC and read the NY Times. If you are Geithner or Summers or Reich you OUGHT to have learned what works and what doesn't in terms of the criteria of the debate. This isn't an administration, it's a cabal.
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If you are Geithner or Summers or Reich you OUGHT to have learned what works and what doesn't in terms of the criteria of the debate.
Quite right, and why I really do wonder if this could all be intentional.
Even Hizzoner Mayor Bloomberg warned the city council that raising taxes on the top earners would reduce tax revenues big-time.
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I don't think its a depression until we see more Hoovervilles.
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I am aware of what liberals believe; I know a few. What I have learned is that almost all I talk to, regardless of their level of education, seem unable to reason and are largely bereft of facts. They get their information from only a few dubious sources. This is not about real thinking at all, just wishful thinking. But I was talking about the people with glittering resumes who work deep inside this administration, not friends who watch MSNBC and read the NY Times. If you are Geithner or Summers or Reich you OUGHT to have learned what works and what doesn't in terms of the criteria of the debate. This isn't an administration, it's a cabal.
I have heard the exact same thing said, but substituting 'conservative' for 'liberal' and inserting various Republican names in place of the Democratic ones.
I guess it all depends on whose ox is being gored, eh? I have been around long enough to know that such sweeping generalizations, regardless of which end of the political spectrum you fall, are rarely valid. But they make great sound bites.
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I don't think its a depression until we see more Hoovervilles.
What would a Hooverville look like these days? What would life in one look like?
With unemployment, food stamps, free medical care, free housing (go ahead, skip your mortgage payments - Obama will help you stay in your house and the bank can't keep up with the volume of foreclosures), there's no need for the indigent to congregate in shantytowns.
Your neighbor could be a modern Hoverville-ian and you'd never know unless you catch him swiping his EBT card or the bank finally gets around to booting him out.
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I don't think its a depression until we see more Hoovervilles.
It is definitely a problem of what a modern Hooverville looks like.
We have more renter- and home-owner friendly eviction and foreclosure rules, so now tenants and landlords are both hurting. We have also substantially criminalized homelessness, have heavily regulated construction standards for dwelling-places, and have experienced the middle-class-ifying of America. It's not out of avarice that homeless people own cellphones and laptops, it's out of a sense of survival and the desire to improve one's situation.
A Hooverville would be a viable living option for many people in Lansing if it was legal, and I'm not entirely sure if I'm one of them yet (one runs up against the whole "if things were different, they'd be different" phenomenon), but I'm close.
The shelters locally are all full, and have been for a couple years. Every night. There are people keeping cars running instead of buying food, just so they can keep moving and not get ticketed for parking in the wrong spot. Rack up enough tickets and your next shelter is jail, which is also full. Lots of people--including me--living in fear of getting a traffic ticket because that puts one a couple weeks out from bench warrant or license suspension territory, and if you can't drive, you are stuck competing for far fewer jobs against many more applicants, and the jobs don't pay a livable wage.
Let us not forget too, that CPS has determined it's not legal to have children in a dwelling without hot and cold running water, finished flooring, separate bedrooms for adults and children of different sexes, or a functional heating system. If one is unable to independently provide these things, one is required to seek public assistance and/or risk losing custody of their children to the state. We've criminalized poverty, but we've REALLY criminalized being an impoverished parent.
Yes, it's a depression. If it was legal, there would be Hoovervilles.
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Now that its mentioned, unemployment and living with mom and dad is the norm for my graduating class.
Lets not forget tho, sleeping under a bridge is illegal for the rich man and poor man alike.
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Now that its mentioned, unemployment and living with mom and dad is the norm for my graduating class.
Hey, I just applied for a doc review job in South Carolina. Guess I better start google-mapping some bridges to sleep under.
Lets not forget tho, sleeping under a bridge is illegal for the rich man and poor man alike.
Seeking shelter in state park or national forest campgrounds is not. That's only illegal for people who need the shelter.
Know why? Of course you do, but I'll spell it out anyway:
Park campgrounds are the only such scenario where the rich man is as likely to seek the shelter. Laws against sleeping under bridges are not illegal because it is injurious to any particular person to have someone sleep under a bridge. It's illegal because homeless people sleep under bridges, homeless people are perceived as a criminal element, and people don' want a perceived criminal element to exist, especially not where they can see it.
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Now that its mentioned, unemployment and living with mom and dad is the norm for my graduating class.
Higher Education Bubble (http://pajamasmedia.com/instapundit/104782/)
Glenn Reynolds has been posting a lot about it lately.
I've been in complete agreement. Having taught college students, more than half of them don't belong in college.
We should be encouraging skills based education as well as knowledge in schools.
We don't and we're going to suffer for that.
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I've been in complete agreement. Having taught college students, more than half of them don't belong in college.
I'm always tempted to post my LSAT and IQ scores on my resume, along with the statement "This document and any documents accompanying it have been authored and edited solely by me".
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Incidentally, the college degree is fast losing value like the high school degree did. (Edit: as is evidenced by BW's post above.)
Employers started requiring college degrees when graduating from high school started meaning you are able to show up at a building at least some of the time until people finally pushed you out.
A college degree has been devalued as well: those graduating haven't become much more productive than when they entered, they just now have a signal that they are slightly brighter than those that couldn't make it through college.
It's a shame, too. When our society decided everyone should graduate high school we dumbed down school.
We should have examined our beliefs and realized maybe not everyone should graduate high school. Not everyone should go to college.
Everyone should have an option to increase their value, whether it be through education or skill development.
Why have we devalued skilled labor? In this matter, I love what Mike Rowe (http://www.ted.com/talks/mike_rowe_celebrates_dirty_jobs.html) is doing.
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have heard the exact same thing said, but substituting 'conservative' for 'liberal' and inserting various Republican names in place of the Democratic ones.
I guess it all depends on whose ox is being gored, eh? I have been around long enough to know that such sweeping generalizations, regardless of which end of the political spectrum you fall, are rarely valid. But they make great sound bites.
That wasn't a "sweeping generalization," it was an inference based on specific people I know and colloquy with, that's all.
As for people like Geithner, Summers, and Reich, among others, they claim expertise, and they should be able to demonstrate it. So far, nada. I am still trying to figure out how Geithner managed to get the head job at the NY Fed with his resume, by the way.
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Now that its mentioned, unemployment and living with mom and dad is the norm for my graduating class.
Kid #3 just moved back in. Out of school for 1.5 years, with a BS in math and physics. Currently ecking out a living of sorts doing inventory.
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Why have we devalued skilled labor? In this matter, I love what Mike Rowe is doing.
It's called progress. The value of a Westerner's labor increased to the point we're more valuable as barristas and translators then we are as miners. A century from now, the same will no doubt expand to more and more countries - unless someone touches off a world socialist revolution or something.
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Why have we devalued skilled labor?
In part because there are too many people that are incapable of "skilled labor" and think that brain work is all that really matters. Since they can't do it they think they must be better than those that can and do.
City dwellers like to look down there noses at the "sanitation engineers" but how long would their cities be habitable with out the trash collector?
Like you flush toilets and hot and cold running water? Thank a plumber.
Enjoy living in a cozy dry house? It wasn't built by a corporate lawyer.
Kind of nice to be in the comfort of air conditioning when the temps hit 100+. I'd bet you don't call an English lit professor when the AC breaks down in July.
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It's called progress. The value of a Westerner's labor increased to the point we're more valuable as barristas and translators then we are as miners. A century from now, the same will no doubt expand to more and more countries - unless someone touches off a world socialist revolution or something.
As an economist, I must disagree.
Wage for skilled electrician: $13.73 to $20.93
Wage for barista: $7.24 to $9.04
Wage for plumber: $14.43 to $21.92
Wage for translator: $13.24 - $26.23
We're obviously not more valuable as baristas and only sometimes more valuable as translators.
Yet, we generally don't encourage people into trade skills. It's curious.
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This is why, at least in part, I want a cert in a skilled trade that won't go away.
Anyone, anywhere can hack out python code. But, can a guy in India fix your air conditioner over the phone? =)
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I know that in the chemical industry down here, good instrument and electrical technicians are valuable. The problem for young people is that they normally have to pay their dues and work hard for contractors in order to get the experience needed to get the better paying jobs as company employees at plants. The pay can eventually be very good if they can develop expertise at PLC controllers, analyzers, or high voltage gear. I have also heard the same said about good welders being hard to find.
I know one instrumentation supervisor I used to work with always said there weren't very many good technicians younger than him. Most of the younger guys who were smart went into computers, or control programming, or just college in general.
That said, degrees in the primary engineering fields (electrical, chemical, mechanical) from good schools are still in decent demand as far as I know. I know my company is one that has required degrees for certain jobs over the last 15 or 20 years, but mostly it is engineering degrees.
I have wonder if an associates degree in a technician job plus 2 years experience will get you a job faster and maybe at better pay than a C average in a general studies type degree from an average university. The biggest difference with college degrees is usually in what you are doing 30 years later.
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I don't think its a depression until we see more Hoovervilles. Obamavilles.
Fixed it for you!! ;)
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City dwellers like to look down there noses at the "sanitation engineers" but how long would their cities be habitable with out the trash collector?
Like you flush toilets and hot and cold running water? Thank a plumber.
Enjoy living in a cozy dry house? It wasn't built by a corporate lawyer.
Kind of nice to be in the comfort of air conditioning when the temps hit 100+. I'd bet you don't call an English lit professor when the AC breaks down in July.
Very true!
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The education system is geared against training skilled laborers. It's about empire-building and bureaucracy. School systems are top-heavy with administrators who, experientially and philosophically, are not comfortable with "blue collar" career tech education. Parents also have been sold on the idea that their kids need white-collar educations and degrees to advance financially, even if many of those kids would be far better off learning a "trade." Then there's the "third rail" of race and ethnicity: the ed powers that be do not wish to be accused of creating a caste of minority blue-collar workers. And did I mention the unions that want to strictly control the amount of people on their rosters? As has been well noted, skilled labor, right now, isn't considered "cool" in a society that wants 15 minutes of fame on YouTube, and, yeah, it's often hard work that takes a toll.
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It also isn't just a financial matter. A lot of people are genuinely happier if they can work with their hands and build something they can see, touch, and feel. Not everyone is happy being a desk jockey.
I guess the other side of things is that with more people earning college degrees, the competition is that much harder. You better try to get in the better school, try for the more difficult degree, and get better grades. Otherwise, you find yourself at the bottom of the resume pile.
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I am still trying to figure out how Geithner managed to get the head job at the NY Fed with his resume, by the way.
going by his facial expressions i'm starting to think THE obama likes his "monicas" :angel:
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City dwellers like to look down there noses at the "sanitation engineers" but how long would their cities be habitable with out the trash collector?
Like you flush toilets and hot and cold running water? Thank a plumber.
Enjoy living in a cozy dry house? It wasn't built by a corporate lawyer.
Kind of nice to be in the comfort of air conditioning when the temps hit 100+. I'd bet you don't call an English lit professor when the AC breaks down in July.
I like razzing the city slickers as much as the next hayseed, but there are a whole lot more plumbers and AC repair guys in cities than in the countryside. Because that's where most of the work is. And of course, there are lawyers and other desk jockeys in the country, too.
Now, maybe country folk are nicer or more respectful to the handyman, but country folk tend to be more polite, of course. :)
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Now, maybe country folk are nicer or more respectful to the handyman, but country folk tend to be more polite, of course.
You say somethin', city boy?
(https://armedpolitesociety.com/proxy.php?request=http%3A%2F%2Fcareersecretsauce.files.wordpress.com%2F2009%2F04%2Feasy-rider-redneck.jpg&hash=81d62d0f731e87152f1cf8ea4bb51dc592f4157c)
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You say somethin', city boy?
(https://armedpolitesociety.com/proxy.php?request=http%3A%2F%2Fcareersecretsauce.files.wordpress.com%2F2009%2F04%2Feasy-rider-redneck.jpg&hash=81d62d0f731e87152f1cf8ea4bb51dc592f4157c)
DUDE, he's got a serious problem with his thyroid.