The site has turned into the equivalent of a bunch of rabid fans at a sports match. There is no room for discussion amidst all the screaming and rooting for the home team.
One of the consequences of this narrow focus and obvious partisanship is that the site is no longer of any influence. People don't quote the essays and the popular bloggers aren't asked for their thoughts elsewhere.
One can have a loyal following but no influence. Just look at the tabloid press - millions of readers, but no editorial clout.
It's too bad, it could have been a force for change. A site like Talking Points Memo now attracts all the thoughtful political analysts and current authors. Huffington Post is trying to do something similar as well as adding entertainment figures to make the site more like a regular newspaper.
Markos' political naiveté is the cause of this lost opportunity. Policies not Politics ---- Daily Landscape
Or if you think that, given the housing market situation, people will stop having negative savings rate and will start tightening their belts a bit to build back the cushion no longer provided by their houses.
You don't mean that they might actually cut back on consumption.....?
That's not going to do a whole lot for shareholder value....
Consumer borrowing rose in March at the fastest pace in four months, more than double the increase of the previous month, in what was seen as a sign of rising economic stress. The Federal Reserve reported Wednesday that consumers increased their borrowing at an annual rate of 7.2 percent, compared with a 3.1 percent rate of increase in February. The gain was much larger than economists had been expecting and reflected strong borrowing on credit cards and also in the category that includes auto loans. The increase in consumer debt totaled $15.3 billion at an annual rate in March, much bigger than the $6 billion increase that economists had been expecting.
Consumer borrowing rose in March at the fastest pace in four months, more than double the increase of the previous month, in what was seen as a sign of rising economic stress.
The Federal Reserve reported Wednesday that consumers increased their borrowing at an annual rate of 7.2 percent, compared with a 3.1 percent rate of increase in February.
The gain was much larger than economists had been expecting and reflected strong borrowing on credit cards and also in the category that includes auto loans. The increase in consumer debt totaled $15.3 billion at an annual rate in March, much bigger than the $6 billion increase that economists had been expecting.
The gain was much larger than economists had been expecting and reflected strong borrowing on credit cards and also in the category that includes auto loans.
I suspect a lot of that consumer borrowing won't have been spent on consumer items.
Robert Mundell:
The United States suffer from a surplus of real estate,
so the economy will all be o.k. if the US cedes California and Texas to Mexico? Life should consist in at least fifty percent pure waste of time, and the rest doing what you please.
Hell if I know. WHEEEEEEEEEEEEEEEEEEEEE!
Although, granted, that was a haze, too, so perhaps we're both wrong. WHEEEEEEEEEEEEEEEEEEEEE!
http://www.snopes.com/history/american/texas.asp
As for the economy, I wonder if all the folks who knew that WMDs were not going to be found in Iraq (which includes a lot of us) are the same as those who know that things are going to get a whole lot worse for a long while, no matter how many paid-for Pollyannas break wind out of their mouths.
Karen in Austin Thence comes our true nobility by grace, It was not willed us with our rank and place. Chaucer
For example, i understood that lawmaking was done at the bar of the Driscoll Hotel, then later transferred to the "legislative" process.
"That's right, you're not from Texas Texas loves you anyway."
Mr. L. Lovett Skennah Kowa
I'd love to be a year-round fly on the wall at that place; lots of scoops to be had.
A large sinkhole that has swallowed up oil field equipment and vehicles in southeastern Texas is still growing but there have been no reports of injuries or damage to homes. Television news footage showed a tractor, oil field equipment and telephone poles falling into the sinkhole as it grew near Daisetta, northeast of Houston.
Television news footage showed a tractor, oil field equipment and telephone poles falling into the sinkhole as it grew near Daisetta, northeast of Houston.
Or, perhaps, it's being outsourced. A doo run-run-run, a doo run-run
Where does he think the credit=money will actually come from for this recovery?
Or rather - won't come from.
This guy has not the slightest idea how the economy works, has he?
No.
(This has been another edition of Simple Answers to Simple Questions.) WHEEEEEEEEEEEEEEEEEEEEE!
The recent government report that US gross domestic product increased 0.6 per cent in the first quarter was very misleading. It implied that economic activity was rising in January, February and March. But the increase actually refers to the rise from the average level in the fourth quarter of 2007 to the average level in the first quarter. Monthly data since January indicate that economic activity and GDP have been declining since the start of this year.Private sector payroll employment peaked last November and has fallen five months in a row, shedding more than 300,000 jobs. Industrial production was lower in March than in December and January. Real personal income net of taxes and transfers is also lower than in January. Real retail sales have fallen since the start of the year. Private housing starts are down 13 per cent in just the two months since January and 36 per cent from a year ago.
The recent government report that US gross domestic product increased 0.6 per cent in the first quarter was very misleading. It implied that economic activity was rising in January, February and March. But the increase actually refers to the rise from the average level in the fourth quarter of 2007 to the average level in the first quarter. Monthly data since January indicate that economic activity and GDP have been declining since the start of this year.
Private sector payroll employment peaked last November and has fallen five months in a row, shedding more than 300,000 jobs. Industrial production was lower in March than in December and January. Real personal income net of taxes and transfers is also lower than in January. Real retail sales have fallen since the start of the year. Private housing starts are down 13 per cent in just the two months since January and 36 per cent from a year ago.
Hard numbers: The economy is worse than you know - St. Petersburg Times
Ever since the 1960s, Washington has gulled its citizens and creditors by debasing official statistics, the vital instruments with which the vigor and muscle of the American economy are measured. The effect has been to create a false sense of economic achievement and rectitude, allowing us to maintain artificially low interest rates, massive government borrowing, and a dangerous reliance on mortgage and financial debt even as real economic growth has been slower than claimed.
Ever since the 1960s, Washington has gulled its citizens and creditors by debasing official statistics, the vital instruments with which the vigor and muscle of the American economy are measured.
The effect has been to create a false sense of economic achievement and rectitude, allowing us to maintain artificially low interest rates, massive government borrowing, and a dangerous reliance on mortgage and financial debt even as real economic growth has been slower than claimed.
Under John Kennedy, out-of-work Americans who had stopped looking for jobs -- even if this was because none could be found -- were labeled "discouraged workers" and then excluded from the ranks of the unemployed. Lyndon Johnson orchestrated a "unified budget" that combined Social Security with the rest of the federal outlays. This innovation allowed the surplus receipts in Social Security to mask the emerging federal deficit. Richard Nixon created a division between "core" inflation and headline inflation. If the Consumer Price Index was calculated by tracking a bundle of prices, so-called core inflation would simply exclude, because of "volatility," categories that happened to be troublesome (and thus in the "headlines"). At that time, it was food and energy (as it is now). Under Ronald Reagan, the Bureau of Labor Statistics decided that housing was overstating the Consumer Price Index and substituted an entirely different "Owner Equivalent Rent" measurement, based on what a homeowner might get for renting his house. This methodology, controversial at the time but still used, sidestepped what was happening in the real world of homeowner costs. Some say that led to the mortgage crisis today. Under the first President Bush, officials moved to reorient U.S. economic statistical measure away from old industrial-era methodologies toward the emerging services economy and the expanding retail and financial sectors. Skeptics said the underlying goal was to reduce the inflation rate in order to reduce federal payments -- from interest on the national debt to cost-of-living outlays for government employees, retirees and Social Security recipients. Under President Clinton, the convoluted CPI changes proposed under Bush were implemented. And the Clintonites tinkered with the unemployment number, in part, by changing its housing economic sampling, disproportionately eliminating inner city households. That is believed to have reduced black unemployment estimates and eased worsening poverty figures.
Lyndon Johnson orchestrated a "unified budget" that combined Social Security with the rest of the federal outlays. This innovation allowed the surplus receipts in Social Security to mask the emerging federal deficit.
Richard Nixon created a division between "core" inflation and headline inflation. If the Consumer Price Index was calculated by tracking a bundle of prices, so-called core inflation would simply exclude, because of "volatility," categories that happened to be troublesome (and thus in the "headlines"). At that time, it was food and energy (as it is now).
Under Ronald Reagan, the Bureau of Labor Statistics decided that housing was overstating the Consumer Price Index and substituted an entirely different "Owner Equivalent Rent" measurement, based on what a homeowner might get for renting his house. This methodology, controversial at the time but still used, sidestepped what was happening in the real world of homeowner costs. Some say that led to the mortgage crisis today.
Under the first President Bush, officials moved to reorient U.S. economic statistical measure away from old industrial-era methodologies toward the emerging services economy and the expanding retail and financial sectors. Skeptics said the underlying goal was to reduce the inflation rate in order to reduce federal payments -- from interest on the national debt to cost-of-living outlays for government employees, retirees and Social Security recipients.
Under President Clinton, the convoluted CPI changes proposed under Bush were implemented. And the Clintonites tinkered with the unemployment number, in part, by changing its housing economic sampling, disproportionately eliminating inner city households. That is believed to have reduced black unemployment estimates and eased worsening poverty figures.
Yet anothe article on creative government statistics:
Kevin Phillips: Washington's Great "No Inflation" Hoax - Business on The Huffington Post
I can't find any details right now, but I seem to remember that with normal incarceration levels, unemployment figures would be about 2% higher than they currently are, while employment figures would drop a bit (I think by less than 1%). Does anybody have reliable data for either of these figures?
Well, it looks like, for the moment, instead of starting to save, US consumers have switched to credit card borrowing...
Bloomberg.com - U.S. Consumer Debt Rises More Than Forecast in March
Consumers are turning to credit cards after banks tightened standards for home-equity loans and other borrowing. The March figures brought U.S. consumer borrowing in the first quarter to $34 billion, the most since the first three months of 2001, when the economy entered its last official recession. ``Consumers are strapped as incomes are not keeping up with inflation and this is leading them to rely increasingly on credit to see them through the worst housing downturn since the Great Depression,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York. ``The days of extracting cash from one's home to spend on goods and services are long gone.''
``Consumers are strapped as incomes are not keeping up with inflation and this is leading them to rely increasingly on credit to see them through the worst housing downturn since the Great Depression,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York. ``The days of extracting cash from one's home to spend on goods and services are long gone.''
Bloomberg.com: Citigroup Leads Wall Street Drive to Hurt Taxpayers (May 9 2008)
Taxpayers from Massachusetts to California are paying Wall Street banks to end derivative contracts gone bad as they exit the collapsing auction-rate bond market, with penalties in some cases topping $10 million and compounding the pain of rising borrowing costs. Sacramento County, California, paid Morgan Stanley $5 million to cancel an interest-rate swap agreement when it refinanced $79.5 million in auction-rate securities last month. The fee added to the cost of the bonds after the rate on the securities more than doubled to 9.8 percent in March as dealers stopped supporting the market. ... States, cities, hospitals and colleges face penalties exceeding $10 million to terminate swaps that failed to protect them against higher rates, according to interviews with borrowers and advisers. That's on top of the $1 billion in fees they're paying to dealers to help sell bonds that would replace auction- rate securities they sold, based on industry averages.
Sacramento County, California, paid Morgan Stanley $5 million to cancel an interest-rate swap agreement when it refinanced $79.5 million in auction-rate securities last month. The fee added to the cost of the bonds after the rate on the securities more than doubled to 9.8 percent in March as dealers stopped supporting the market.
...
States, cities, hospitals and colleges face penalties exceeding $10 million to terminate swaps that failed to protect them against higher rates, according to interviews with borrowers and advisers. That's on top of the $1 billion in fees they're paying to dealers to help sell bonds that would replace auction- rate securities they sold, based on industry averages.
Reuters: "I love you Mom but can't afford to send flowers" (May 6, 2008)
Love for Mom is a given, but buying flowers on her big day may not be. A slump in flower sales since late last year will likely continue through Mother's Day, another example of Americans cutting back on spending due to recession fears and escalating food and gasoline prices. "If you look at what's happened on Valentine's Day and Christmas, the market for flowers has cooled," said Eric Beder, an analyst at Brean Murray. "Growth has slowed in the past two quarters. Mother's Day will probably be a slow quarter, too."
A slump in flower sales since late last year will likely continue through Mother's Day, another example of Americans cutting back on spending due to recession fears and escalating food and gasoline prices.
"If you look at what's happened on Valentine's Day and Christmas, the market for flowers has cooled," said Eric Beder, an analyst at Brean Murray. "Growth has slowed in the past two quarters. Mother's Day will probably be a slow quarter, too."
Another example of an economic commentator getting cause and effect backwards. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
Sure, Joe Blow is so keen on borrowing to buy his house because he has inflationary expectations.
But Joe doesn't have them in relation to what he consumes 'cos he's interested in the past, not the future.
He wants a pay rise not because he thinks prices are going to go up, but because they have gone up and he can't buy what he used to.
Only economists could assume anything else, but then they don't live in the real world.
People have inflation expectations, but Joe's only thinking, "Man, meat and cereal are costing me a lot more these days." He thinks that will continue to be the case, watching the news. But he's only going to adjust his budget gradually as he needs to.
The problem economists run into when they talk about consumers and firms is that they see all of these adjustments and assume people and businesses will handle them immediately. That would be silly. He/it might plan a bit ahead of the game, but he/it has no idea what, exactly, is going to happen. Most of the adjustment is gradual. Economists -- and, again, this really applies to economists of a certain persuasion -- take this fuzzy term, "expectations," and build automatic clearing of markets into things. Granted, it's more a convenient assumption they make in cases where they're likely focusing on some other issues, but still: It's silly.
Welcome to the fight over sticky prices and wages. WHEEEEEEEEEEEEEEEEEEEEE!
Joe Blow doesn't really think about inflation when he's borrowing for a house.
Of course he does. He thinks house prices are going to go up. They always go up, don't they? If he didn't, then he wouldn't buy.
Drew J Jones:
People have inflation expectations, but Joe's only thinking, "Man, meat and cereal are costing me a lot more these days." He thinks that will continue to be the case, watching the news.
But IMHO he asks for his wages to go up to restore the status quo ante. Not to pre-empt inflation.
I doubt whether inflationary expectations play much, if any, sort of role in Joe's thinking - unless he's an economist....
Okay, yes, that's true. I was thinking more along the lines of how it impacted his real interest rate at a given price. But you're right. He'll be thinking about the price of the asset, too. Really, though, I don't think that's going to impact him much unless prices are moving strongly in one direction or another (like they are now).
I completely agree that's his initial move. He's falling behind, so he asks for a higher wage. But I suspect that, if the inflation is sustained, he'll think of the future to some degree. I don't think it's an either/or kind of thing. WHEEEEEEEEEEEEEEEEEEEEE!
I don't think it's an either/or kind of thing.
Indeed.
I don't think many things are "either/or". Unfortunately we are up against people who think they are......
It's funny. The pundits will occasionally bring up Harry Truman's statement that "All my economic advisors say, 'One the one hand _, and on the other hand _.' Someone give me a one-handed economist." And I always think, "Yeah, and we have a word for one-handed economists: Frauds." WHEEEEEEEEEEEEEEEEEEEEE!
He's a weird one in the history books. One of the most hated presidents in history during his time, yet he's now looked upon as a true maverick and one of the all-time greats. WHEEEEEEEEEEEEEEEEEEEEE!
I would REALLY love to see a discussion of it here among people who actually have some economics background. The insights are pretty fascinating, but the book def. has an agenda (hey, that I agree with) so I'm really interested to know what others think of it. Come, my friends, 'Tis not too late to seek a newer world.
I'm planning to go back to the reviews in the FT and the Economist I saw a while back and do a compare. In the long run, we're all dead. John Maynard Keynes
