Rolling US Economy Into The Shitbin Thread

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?

But in case you're having trouble reading a chart, it's that light blue line.

No, I don't think that's so.

The blue lines are what the Administration estimated unemployment would be with and without the recovery plan. The maroon dots are what unemployment actually is, suggesting that the unemployment problem is much worse than the Administration thought (or was willing to admit). So, absent the stimulus plan, those maroon dots would be at a much higher peak now. I think that's what the other posters above me are saying (someone please correct me if I'm mistaken).

yeah, exactly. no argument that the administration used the rosiest estimates available of how bad things were going to get. this was a conscious political decision, because if you remember at the time, people on the right were complaining that obama was being too doom-and-gloomy -- which is why they were against doing much of anything in stimulus -- so the administration i think went for the least-bad numbers they could use that were still dramatic enough to make the case for stimulus spending.

but so what? they lowballed how bad unemployment was going to get. does that mean they shouldn't have passed a stimulus bill? how exactly would anything be improved by the absence of extended unemployment benefits, state and local budget aid, tax cuts and the various other things in the package?

but i don't really expect answers to those questions, since i understand the point here is to keep dragging that chart out every month on unemployment-rate day, hoping to confuse people who don't actually understand anything about this stuff. on that level, it's probably effective, although probably moreso in forums more full of angry, uninformed people than ilx.

(and once unemployment does start falling, which it will eventually, maybe in 6 months or so, i expect to hear a lot about how that just shows we didn't need the stimulus spending because, look, the economy is getting better "on its own.")

The WSJ is already saying that the stimulus bill didn't influence the recovery.

of course. anything else would be heresy. you start admitting that government spending can help the economy, and god knows where you might end up.

the editorial page, i take it

xpost

cause i think if one of their reporters suggested that they'd be laughed out of vesey street

Yeah, editorial page (which -- no surprise to anyone -- skews right).

Actually, the WSJ's a lot like The WaPo these days: you see a complete disconnect b/w its editorial and news content.

I'm smarter than that and so are you tipsy. But let's not turn this into whose dick is bigger, okay?

I'm not advocating a bigger stimulus and yes, I'm saying that things are FAR worse than Obama said they would be w/r to employment. He trotted that chart out as evidence in January and it was wrong. People like me were highly skeptical of his claims at the time--not necessarily because we knew or know the right level (or even scope) of stimulus, but because by dumbing down the stimulus into some retarded, politically optimistic employment number was absurd to the point of being cynical.

I never advocated "doing less about it"--that's an argument you're making for me because it's convenient for you. But if you take an honest look at the stimulus package, you'll see that a huge chunk of it is a mind boggling political payoff. I think most economists agree a stimulus was in order, but there was a wide ranging debate on the tactics and how to employ it. The question here isn't maybe whether or not to pass a bill, but what the hell did the bill actually do, what actually worked and what didn't. Is it possible that the stimulus stabilized the economy but was horribly efficient in preventing rising unemployment? Is it possible to argue that the stimulus worked on some levels and failed on others?

The point I'm making is that Obama was wrong, wrong, wrong on how his stimulus would increase employment. But he--like any other pol--will simply move the goalpost and argue something that can't be proven (that without it, things would be worse, worse, worse!). Would things be worse? Which things would be worse? I guess we'll never know so why bother caring. My president--a guy I proudly voted for and like, despite his mediocrity--got what he wanted and now we have to live with it.

My fear--outside any philosophical or political reservations I have on healthcare reform--is that on the eve of committing trillions to our economic liability and obligations, we're asked by the same people to trust their economic projections. But as Bobby Knight once said...eh, why even bother to bring that up.

("horribly INefficient in preventing rising unemployment", obv)

The question here isn't maybe whether or not to pass a bill, but what the hell did the bill actually do, what actually worked and what didn't

I don't recall an alternative stimulus proposal offered by the GOP (not trying to be snide; I only recall general opposition to the notion of further gov't spending to jump-start the economy).

Obama was wrong, wrong, wrong on how his stimulus would increase employment.

Your own graph contradicts you: Obama said the stimulus package would make unemployment rise less than it would under other scenarios under consideration. Not that it would actually add net jobs. This graph doesn't speak to that at all.

The important thing here is that the worldwide economy almost collapsed last year and we should be mad that the magical Hope president can't fix everything in 10 months.

No unicorns, either. I was promised magic unicorns.

Tax cuts, people.

I mean he said "Hope" and everything is not completely back to 'normal' so that's just outright lying to us.

I think a round of GOP style tax-cuts, minus a stimulus bill, would have us facing a depression.

C'mon, you know you want to live Mexico City-style, with high thick walls around your house topped with broken bottles in cement to keep out the unsuccessful.