Rolling US Economy Into The Shitbin Thread

http://graphics8.nytimes.com/images/2009/10/16/business/1016-biz-BONUSweb.gif

WTF

http://www.nytimes.com/2009/10/15/business/15stimulus.html?scp=1&sq=%24250%20seniors&st=cse

it's cheaper than a COLA.

there's no need for COLA this year given that inflation has been negative.

So I guess it's easier to assume that this is a crass political payoff.

Angry seniors be votin' in 2010...

Negative inflation, are you sure? I didn't think that ever happened.

Sonofabitch, it's right there in the 2nd graf. So yes, your analysis is correct.

there's no need for COLA this year given that inflation has been negative.

Uh, yeah, except wages have been frozen or gone down.

No one mentions here that this is a carrot-and-stick story — the stick being that ordinary people have been robbed of the interest they should be getting in CDs and ordinary bank savings accounts by the various bailout programs and lending guarantees

i was talking to my dad the other day, he's running the numbers for when my mom retires in a year or two. (he's already more or less retired.) and one of his working assumptions was that over the next 15-20 years they might be able to average 4 to 5 percent interest a year -- which in "normal" times would be a safe bet, but he admitted he has no idea if that'll actually bear out.

but that also gets to the extra money for seniors. you have a lot people living off their savings and social security checks who are just barely making it under the best of circumstances. (sure, the money will go to people who "don't need it" too, but there are a lot more who do need it.) and yeah there's no inflation right now, but their savings not generating any income at all means they're having to eat more into whatever principal is there, which hurts in the long run.

anyway, a lot of little things like this are what we're going to get instead of a second stimulus bill.

the porkfest haven't even begun yet!

http://www.slate.com/id/2232185/?from=rss

― Where is Stephen Gobie? (Dandy Don Weiner), Wednesday, October 14, 2009 7:44 PM (2 days ago) Bookmark

that's a pretty odd way to frame that particular article -- which as far as i can tell is pretty pro-stimulus. but there's always been a fundamental incoherence in the criticism of the stimulus bill. most of it parses as, "things are worse than they said they would be, so we should have done less about it." i've been in some arguments with republicans about this where it just became clear that they didn't even grasp the very basic concept of "stimulus spending" -- what it is, why and how it works, etc. from the gop standpoint, it seems more like, "obama say his magic heal the economy, but economy not heal yet! his magic baaaaad!"

Uh, yeah, except wages have been frozen or gone down.

Not for seniors collecting Social Security. The $250 payoff is to shore up political support for ObamaCare, where support hasn't been good.

Tipsy, your dad should sit down with a financial advisor to help him run the numbers. It will help him plan for variations in macroeconomic activity.

Yes, that article s pro-stimulus. But it dodges the point that a significant portion of the stimulus bill was flat out pork barrel spending, and to the degree that pet-projects and political buyoffs justify themselves as a net stimulus for the economy is kind of irrelevant. The concept of stimulus spending--Keynesian, say--doesn't validate the manner Congress chose to spend your money.

Meanwhile, with the economy lurching out of steep recession, and barely 20% of the money spent, I think the only assumption left is that the remaining 80% of stimulus will cause massive job growth, create long term GDP growth, and appear without much inflation. Luckily for Obama, the massive influx of funds will mostly occur before 2012.

prognosis positive!!

The concept of stimulus spending--Keynesian, say--doesn't validate the manner Congress chose to spend your money.

it's agnostic on the manner! didn't keynes say you might as well bury a million dollars and then pay people a million dollars to dig it up again?

I favor the idea of sending everyone in the USA a fair-sized dollop of food stamps. For the poor, this would result in less hunger, and for the rich this would stimulate the Maine lobster fishery.

i'm still sorta into the vouchers idea - people can save money but they'd have to spend vouchers

increased food stamp funding was part of the stimulus bill. and don, i hear this "porkbarrel pet project" blah blah a lot on the right, but it's never accompanied by any, like, examples. where are all these unworthy items? and even if they are unworthy in some sense, how is spending on one project vs. another not stimulative? spending is spending. the only actual republican proposal i've heard is that there should have been more tax cuts -- but tax cuts, depending on how they're structured, can be a problematic stimulus mechanism. (you can't guarantee the money will be spent.)

it basically seems to me that republican talking points on the stimulus bill haven't shifted since february and were never particularly moored in reality to begin with. it's now just something to beat obama up over: "hey the economy still sucks! nyah nyah!"

And did anybody really think we'd be back to late 90s bonanza by October?

F Rich states the obvious about Dim Tim, and seems as if he's clearing his throat to call President Gas a fraud:

http://www.nytimes.com/2009/10/18/opinion/18rich.html

In particular, the tone-deaf Treasury secretary, Timothy Geithner, never ceases to amaze. His daily calendars reveal that most of his contacts with the financial sector in the first seven months of 2009 were limited to the trinity of Goldman Sachs, Citigroup and JPMorgan. And last week Bloomberg News reported that his inner circle of “counselors” — key advisers who, conveniently enough, do not require Senate confirmation — are largely drawn from the same club. It’s hard to see how any public official can challenge a culture that he is marinating in, night and day.

Those Obama fans who are disappointed keep looking for explanations. Is he too impressed by the elite he met in Cambridge, too eager to split the difference between left and right, too willing to compromise? As he pursues legislation, why does he keep deferring to others — whether to his party’s Congressional leaders or the Congressional Budget Office or to this month’s acting president, Olympia Snowe? Why doesn’t he ever draw a line in the sand?

well. people who expected the first black president to be anything other than an establishmentarian were deluded. but possibly not more deluded than people who can't see past the establishmentarianism to the significance of the first black president.

An Obama report card:
http://www.nytimes.com/2009/10/18/business/economy/18view.html

My Obama report card (using the metrics from linked article):
STOPPING THE SLIDE: B
ENACTING THE STIMULUS PACKAGE: C
RESCUING THE BANKS: C
REDUCING FORECLOSURES: B+
TRYING FOR REGULATORY REFORM: F
ETC: B-

Overall, I give our Magic president a B thus far.

http://www.nytimes.com/2009/10/20/us/politics/20donate.html?partner=rss&emc=rss

Dr. Daniel E. Fass, another chairman of the event who lives surrounded by financiers in Greenwich, Conn., said: “The investment community feels very put-upon. They feel there is no reason why they shouldn’t earn $1 million to $200 million a year, and they don’t want to be held responsible for the global financial meltdown.” Dr. Fass added, “How much that will be reflected in their support for the president remains to be seen.”

The article paints a pretty dire picture re: actually regulating the financial sector to prevent the economic collapse of 2019.

There's no interest in regulating by anyone with the power to do it.

But the investment community is invested in Obama! It bought him.

Encouraging signs. The basis for the (fragile) upturn?

8. This nascent recovery is partly a bounce back from the near total financial collapse which we experienced in the Winter/Spring of 2008-09. The key components of this success are three policies.

•First, global coordinated monetary stimulus, in which the Federal Reserve has shown leadership by keeping interest rates near all time lows. Of central banks in industrialized countries, only Australia has begun to tighten. [Update: and Norway, obviously affected by rising oil prices]
•Second, global coordinated fiscal policy, including a budget deficit in the US that is projected to be 10% of GDP or above both this year and next year. In this context, the Recovery Act played an important role both in supported spending in the US economy and in encouraging other countries to loosen fiscal policy (as was affirmed at the G20 summit in London, on April 2nd, 2009).
•Third, after some U-turns, by early 2009 there was largely unconditional support for major financial institutions, particularly as demonstrated by the implementation and interpretation of the bank “stress tests” earlier this year.

It's a long blog entry, but worth reading. Simon Johnson was Chief Economist of the IMF from March 2007 -- August 2008.

Yeah but isnt half of the upturn fueled by the stimulus and free money from the fed? You cant have an upturn with 10% unemployment looking like it will be around for awhile.

The upturn has largely been fueled by a massive (nearly 2 trillion dollar) injection of liquidity by the TARP program and the Federal Reserve. This is why the banking system has not collapsed under the weight of muliple trillions of bad debt and why the stock markets have been rising.

The stimulus bill passed in March has been a very small factor compared to the Fed shoving money into the financial system. You will probably notice that the recovery, such as it is, has been confined to financial indicators. That's because the same people who defrauded us have been the biggest beneficiaries by far.

It dismays me, but doesn't surprise me that so few people have been held accountable for their financial crimes.

I really wish I bought financial stocks back when they were at their lowest. Coulda been rich.

The stimulus bill passed in March has been a very small factor compared to the Fed shoving money into the financial system.

While addressing a slightly different point, Simon Johnson disagrees (or, at least, he cautions against underestimating the significance of the federal stimulus in contributing to the recovery):

The fiscal stimulus enacted in early 2009 had a major positive impact, particularly as it was coordinated with other industrial countries – this prevented the global recession from being even deeper.

I agree the stimulus and tarp helped stave off a collapse, but Im not about to get on board with all the bullshitters on tv trying to tell me that the economy is lookin awesome because of some of these numbers coming out arent awful or 'meet expectations'.

Nice to see yesterdays rally getting snuffed out by reality today.

Wall Street stocks were down sharply in afternoon trading on Friday in the face of weak consumer data, retreating from a powerful rally the day before.

I haven't watched the TV commentators, but I can't believe they'd say the economy is "looking awesome" in, say, an objective sense. Maybe it's "looking awesome" compared to how things likely would have looked without the 2009 stimulus (and the TARP money).

The "upturn" can eat me.

My 401k from the job I got laid off from in April is still ticking up as the thieves' Dow Jones does. How do I get all my $ outta there in the most simple fashion? Will they let me roll the whole amount into an IRA?

Will they let me roll the whole amount into an IRA?

Probably. Go to whatever institution holds your IRA and talk to them about it. Getting laid off is a "qualifying event" for a rollover. I rolled over my technical writer job's 401K into my IRA at the credit union when I quit. The only possible problem I can imagine would be a time limit(?) on how recent the qualifying event must be.

almost 7 months?

I have worse problems now... NY State Labor worries that my making $200 a year freelancing is a "business"... 4-page threatening questionnaire!

oh man Dr. M don't let 'em get to you. use the telephone. you can wear these people down by being nice, but thorough. just call em up and explain your case. when they ask the next question on their list, repeat the story exactly, in the exact same friendly tone. repeat once more & they're off your back.

Well, I have to give this written response and mail it ASAP -- they've "delayed" my unemployment payments! I talked to someone there yesterday (before this letter arrived, and I knew how dire it was) and that took 20 minutes, just to get hold of a peon.

repeat once more & they're off your back

I appreciate the optimistic thoughts, but you know this is New York, right?

lol sorry ok

it is bullshit that they are denying yr payments, I am sorry to hear it

BONERIFFIC!!!!!!!!!!!!!!!!!!!!!!!!

Yay team!!!!!!!

http://michaelscomments.files.wordpress.com/2009/11/stimulus-vs-unemployment-october-dots.gif

and more fun at the source

What we need are some tax cuts. That will make everything better.

Gotta start somewhere.

hey don any guesses about where those maroon dots would be if the stimulus plan hadn't been enacted?

hey Tracer I believe everything my president tells me so yeah those maroon dots wouldn't be there. But in case you're having trouble reading a chart, it's that light blue line.

It's just so much easier to trust Obama with everything. Why bother being skeptical? Skepticism is for haters, Republicans, wingers, freepers, Bushco, Cheney, Rove, the Rand nuts, NRO online, the Wall Street Journal editorial page, Wall Street, K-street Whores, deniers, the rich, the greedy, the haves, and everyone else who is standing in the way of progress.

If I thought it was worth my time to go find similar predictive charts on the cost of healthcare reform, I would. But why bother? Ten years from now, when there are similar charts updated to reflect the Pelosi Solution in healthcare, it's not going to matter anyway. The trillions will already be spent. And it will still all be Bush's fault.

Really, I want to have Hope For Change. I really do. It's just getting harder by the second.

You've lost your mind. You're talking to the most skeptical bloc of Obama voters on the interwebs.

some of us didn't even vote for him!

lol don you cant just post charts, insult people, and pretend that counts as an argument

oh wait are we on the internet

never mind, that does count as an argument, my mistake

jesus don. i thought you were a little smarter than that, or less disingenuous. unless your argument is that the stimulus should have been bigger (like a lot of people said at the time) -- and i don't think that's your argument -- then what you seem to be saying is that things are worse than they said they would be, so we should have done less about it. that's the basic incoherence of the right-wing complaints about the stimulus pacakage.

if anyone should be saying "told ya so," it's krugman. this was him in january:

One more point: the estimate of what would happen to the economy in the absence of a stimulus plan seems kind of optimistic. The chart above has unemployment ex-stimulus peaking at 9 percent in the first quarter of 2010 and coming down through the year; the CBO estimates an average unemployment rate of 9 percent for 2010, so the Obama people are more optimistic than the CBO, and a lot more optimistic than I am.

Bottom line: even if I use the Romer-Bernstein estimates instead of my own — there really isn’t much difference — this plan looks too weak.

You've lost your mind. You're talking to the most skeptical bloc of Obama voters on the interwebs.

Dandy Dr. Morbz?