Market Down, Again

[Doppel]

The House needs to start working on third round of fiscal stimulus for Obama to sign.

It will. And it will help for a while and then we'll end up back to where we are now, except with even more debt. The fact that the last QEs have stopped the bleeding (temporarily; they have not grown a fvcking thing) leads you to conclude incorrectly that more of them are a good idea, failing to appreciate that the debt is going to become ever more difficult to pay, as it has in Greece, for example.

 

[cubby1223]

The House needs to start working on third round of fiscal stimulus for Obama to sign.

Where is the money going to come from?

Are you printing the money you want to hand out? Or are you trying to convince new buyers of the debt you are capable of repaying it?

Or are we going to do what we seem to love doing - loan money to banks at near zero interest so they can give the money right back the government in interest-collecting bonds. Basically it's free handouts to the richest of banks.

 

[RbSX]

America! Fvck yeah!

 

[theeedude]

It will. And it will help for a while and then we'll end up back to where we are now, except with even more debt. The fact that the last QEs have stopped the bleeding (temporarily; they have not grown a fvcking thing) leads you to conclude incorrectly that more of them are a good idea, failing to appreciate that the debt is going to become ever more difficult to pay, as it has in Greece, for example.

Here we go with this ignorant bovine excrement again. We aren't Greece. We borrow money in our OWN currency. We can ALWAYS pay it back. The only question is how much inflation we are willing to accept, and with 9+% unemployment, that's a non-issue, inflation is a better outcome than a deflationary spiral. If anything, the dollar HAS to devalue in order to make US more competitive. We need a massive stimulus targeted at DIRECT job creation. Not tax breaks, not handouts, actual government infrastructure JOBS. We need money for the unemployed to go to school and improve their future productivity instead of sitting at home eating nachos and getting dumber. Instead we are cutting education spending, that is just retarded teabagger thinking, and it will hinder the US.

 

[theeedude]

Where is the money going to come from?

Are you printing the money you want to hand out? Or are you trying to convince new buyers of the debt you are capable of repaying it?

Or are we going to do what we seem to love doing - loan money to banks at near zero interest so they can give the money right back the government in interest-collecting bonds. Basically it's free handouts to the richest of banks.

There is no shortage of money. Fed is practically begging the government to take it. There is shortage of willingness of the House to take it and start hiring. If the government doesn't take it, the only way the Fed can pump it into the economy is to give it to the richest banks for free and hope they will do something with it. So your choice, do you want your elected representatives to decide how to spend it, or do you want the richest banks to do it?

 

[matt0611]

High inflation and high unemployment are not mutually exclusive.
There was both of them in the 70s and the government was spending a lot on warfare and welfare by money printing. Didn't seem to work too great.

 

[Infohawk]

We need money for the unemployed to go to school and improve their future productivity instead of sitting at home eating nachos and getting dumber.

Do you think 300 million phds is going to make for a good economy? Parking people in education doesn't make any sense. If we want a strong economy we need working class and middle class jobs that don't require increasingly bogus degrees. Your status quo Democratic plan won't bring those back. (Neither will the Republican plan, but still)

 

[kranky]

I'd like to see some companies with the means to do so, decide to hire more people even if they don't absolutely have to. It would be a great PR move. Not because of a tax break, and in spite of the many unknowns ahead regarding health care and taxes.

And if they just have no way to use more people, hire them anyway and figure out a way for them to support non-profits, do community work, etc.

 

[theeedude]

Do you think 300 million phds is going to make for a good economy? Parking people in education doesn't make any sense. If we want a strong economy we need working class and middle class jobs that don't require increasingly bogus degrees. Your status quo Democratic plan won't bring those back. (Neither will the Republican plan, but still)

Sure it's going to make for a better economy than people sitting at home and letting their skills deteriorate. Not all degrees are bogus, with possible exception of the for profit universities that Republicans love so much. You can't have a middle class without education anymore, middle class jobs require degrees and skills. If an unemployed person is not getting education, that is a complete waste. There is no need to reinvent the bicycle, we had the GI Bill after the war, we had enormous infrastructure spending, we know what we need to do to be a great country, we just need to tell the reactionary rightwingers to STFU and actually do it.

 

[ultimatebob]

I wonder how much worse the economy needs to get before we get a legitimate third party contenders for national office.

Face it... neither side really gives a rats ass about lowering the deficit or improving the economy. The Republicans just want to keep high defense spending and tax breaks for their reelection campaign donors, and the Democrats want to keep their entitlement programs and fat government pensions for the campaign donors on their side.

 

[theeedude]

High inflation and high unemployment are not mutually exclusive.
There was both of them in the 70s and the government was spending a lot on warfare and welfare by money printing. Didn't seem to work too great.

We don't need welfare, we need direct spending on jobs so that people are:
-Improving the country's productive potential with better infrastructure
-Getting paid a paycheck for it

 

[wuliheron]

Do you think 300 million phds is going to make for a good economy? Parking people in education doesn't make any sense. If we want a strong economy we need working class and middle class jobs that don't require increasingly bogus degrees. Your status quo Democratic plan won't bring those back. (Neither will the Republican plan, but still)

No, but few thousand electricians rewiring the grid would be a good place to start. How about a few engineers designing new bridges to replace the aging ones. What we don't need is anymore financial experts and lawyers sucking us dry.

 

[Infohawk]

You can't have a middle class without education anymore, middle class jobs require degrees and skills.

Skills sure (but they can be trained), degrees no. The reason you can't get a middle-class job anymore without a degree is because there aren't that many jobs and you need to separate yourself from the pack. In other words its a sign of a poor job market and not a sign of an undereducated workforce. Educating people is not going to create jobs. Spending $120K funding a college degree for someone who "works" as an intern or at Starbucks is not a good return on investment.

 

[Bitek]

@Infohawk: I don't think there is a Democratic plan.


_______
There are economists who happen to be liberals who have plans. Economists who have had an excellent track record of being right over the last 2-3 yrs (so says David Frum.) IDK WTF Obama is doing.

The Obama plan seems to be do a half-assed stimulus, then spend two years BSing the recovery, hoping fairies sprout from the "green shoots" and pretend you never really were for all those things you did, and don't need to do them again. Mr. Mushy-Middle, Mr Calm, everything will be fine so long as we believe it is.

The GOP plan seems to be the Hoover plan or the European Plan ala the ECB. Do austerity, contract the money supply in face of borderline deflation, high debt loads, and high unemployment. F it all. Throw gas on the roof and light it and blame something else.

Gov't debt "crowding out" the private sector? How is that? How do they explain the 10 yr note falling to a 2.4% four days after the largest debt ceiling increase in history? Looks like there are plenty of buyers of bonds, safe bonds, who dare not take any investment risks as the world wants to blow up.

That's where the money for stimulus comes from, and its barely coming with interest. Deal of a lifetime. We can make solid investments in the country at barely any borrowing costs. Get people working, fix all the busted bridges, build better networks and power grids, etc. Set the stage for a solid econ later.

Borrowing $1T isn't much if you can have a $22T economy in 10 yrs. Too bad we came into this thing w/ so much debt and structural problems anyway, but we are where we are. Cut fat, but grow the meat.
Just sitting on our hands won't fix the problem and will not make deficits & debt go away no matter how deep we cut.

 

[Infohawk]

No, but few thousand electricians rewiring the grid would be a good place to start. How about a few engineers designing new bridges to replace the aging ones. What we don't need is anymore financial experts and lawyers sucking us dry.

You're agreeing with me then. I'm fine with infrastructure spending. Those electricians don't need college degrees degrees though. And we have those engineers already. Civil engineers have a hard enough time finding jobs from what I hear. Putting civil engineers or electricians through law school is a waste of time and money.

 

[theeedude]

Skills sure (but they can be trained), degrees no. The reason you can't get a middle-class job anymore without a degree is because there aren't that many jobs and you need to separate yourself from the pack. In other words its a sign of a poor job market and not a sign of an undereducated workforce. Educating people is not going to create jobs. Spending $120K funding a college degree for someone who "works" as an intern or at Starbucks is not a good return on investment.

You are assuming economy will never recover. I am not, and when it does recover, it's going to be better if the people who are currently unemployed have new skills and better education, than if they simply sat at home, collected unemployment and let their skills deteriorate. You are never going to get people paid middle class wages unless their education allows them to be productive enough to make more money for their employer than those wages and benefits cost. Even if there was not much we can do about unemployment now, in 2 years, you could have an employee with masters degree in engineering, or you can have one with 2 years of unemployment on their resume.
As far as education vs skills, if you want people to have skills, these skills are learned through work, not through sitting at home getting unemployment checks. So we need government jobs program to address near term unemployment, and education programs to let people get an education for the long term.

 

[Infohawk]

You are assuming economy will never recover. I am not, and when it does recover, it's going to be better if the people who are currently unemployed have new skills and better education, than if they simply sat at home, collected unemployment and let their skills deteriorate. You are never going to get people paid middle class wages unless their education allows them to be productive enough to make more money for their employer than those wages and benefits cost. Even if there was not much we can do about unemployment now, in 2 years, you could have an employee with masters degree in engineering, or you can have one with 2 years of unemployment on their resume.
As far as education vs skills, if you want people to have skills, these skills are learned through work, not through sitting at home getting unemployment checks. So we need government jobs program to address near term unemployment, and education programs to let people get an education for the long term.

You're overstating the importance of education in a middle-class job. Is an engineering degree going to help you be a better office manager? Maybe a little, it's certainly not going to be worth the cost. If anything it will just reduce wages for engineers since there will be a glut of engineering degrees. Again, we don't need a country full of phds or engineers. We need a diversified workforce. Heck, in a good economy, companies pay their employees to get further education if they need it.

There's not much reason to think the economy will get better with any of the current Democratic or Republican plans. You act like a spending spree would lead to a 1950s economy. The difference is that in the 1950s there weren't free trade agreements with countries full of cheap labor.

 

[Jhhnn]

The world stock markets are down again. Anyone want to bet on what the US jobs report has to say tomorrow? Didn't think so.

I hope the President made tons of campaign money on his birthday. He will need it. I hope he is still skimming off 5% for his personal account as is the nature of Chicago politicians. He'll need it in his retirement.

It's all Obama's fault! Everything!

As the junior Senator from Illinois, he engineered both the Ownership Society bubble and the European credit bubble, too. He deregulated the financial sector single-handedly, over the strenuous objections of Republicans, right?

He cut taxes at the top over a period of 30 years, starving the govt of revenue, borrowed more to fight the evil empire, the Terrarists! and the Evil Saddam.

He absolutely insisted on holding taxes low at the tippytop for the Job Creators! so that they'd do that, but, uhh, they haven't.

He's offered us a vision of "expansionary austerity", where cutting spending will magically create jobs & demand, and where cutting govt services & projects will do exactly the same thing! He proposed that the IRS could bring in more money if we just cut their budget, and that the SEC will do a better job under the same circumstances.

Heck, he even claims that welfare is cheaper than free birth control, and that's gotta be good, because anything free for poor people is Bad, very Bad!

Blame Obama! He let the banksters run wild, crashed the economy, mired us in two wars, nearly forced govt default, and then shoved a debt deflation spiral right down our throats! It's all his fault, everything!

 

[theeedude]

You're overstating the importance of education in a middle-class job. Is an engineering degree going to help you be a better office manager? Maybe a little, it's certainly not going to be worth the cost. If anything it will just reduce wages for engineers since there will be a glut of engineering degrees. Again, we don't need a country full of phds or engineers. We need a diversified workforce. Heck, in a good economy, companies pay their employees to get further education if they need it.

There's not much reason to think the economy will get better with any of the current Democratic or Republican plans. You act like a spending spree would lead to a 1950s economy. The difference is that in the 1950s there weren't free trade agreements with countries full of cheap labor.

Are you really that dense? Not everyone is going to go into engineering, some are going to management, medicine, whatever it is. And not everyone is going to get a PhD, even if someone with HS diploma gets an AA degree, that's a whole lot better than them sitting at home on unemployment, doing nothing, and LOSING their skills. As far as free trade, Silicon valley is hiring right now. High paying jobs ($100K++) for engineers. With the free trade and all. With outsourcing and everything, they'll still hire people who have skills and education that the company needs. But they aren't hiring people who have been sitting on unemployment for 2 years. Those resumes go in the trash. Resumes of people getting advanced degrees go on top.

 

[Infohawk]

Are you really that dense? Not everyone is going to go into engineering, some are going to management, medicine, whatever it is. And not everyone is going to get a PhD, even if someone with HS diploma gets an AA degree, that's a whole lot better than them sitting at home on unemployment, doing nothing, and LOSING their skills. As far as free trade, Silicon valley is hiring right now. High paying jobs ($100K++) for engineers. With the free trade and all. With outsourcing and everything, they'll still hire people who have skills and education that the company needs. But they aren't hiring people who have been sitting on unemployment for 2 years. Those resumes go in the trash. Resumes of people getting advanced degrees go on top.

Getting frustrated huh? Of course people will get educated in different things. The point is that educating those people doesn't create jobs. Silicon valley is still hiring. So are a lot of other upper-middle-class professions. Outsourcing doesn't start with CEOs. It starts at the bottom with laborers and steelworkers and progressively works its way up the ladder. If you think you're safe in an engineering or software job, good luck with your head in the sand. And it doesn't change the fact that there's only so much demand for software engineers or the fact that the requirement of an engineering degree is a sign of a poor job market and not a sign that it's actually needed. (If you hadn't noticed a lot of the tech innovators were people who eschewed formal education. It wasn't necessary for them to do the work.) There's absolutely zero reason to think that someone in China can't do the same software job that someone in silicon valley can do except for much less.

 

[the DRIZZLE]

Getting frustrated huh? Of course people will get educated in different things. The point is that educating those people doesn't create jobs. Silicon valley is still hiring. So are a lot of other upper-middle-class professions. Outsourcing doesn't start with CEOs. It starts at the bottom with laborers and steelworkers and progressively works its way up the ladder. If you think you're safe in an engineering or software job, good luck with your head in the sand. And it doesn't change the fact that there's only so much demand for software engineers or the fact that the requirement of an engineering degree is a sign of a poor job market and not a sign that it's actually needed. (If you hadn't noticed a lot of the tech innovators were people who eschewed formal education. It wasn't necessary for them to do the work.) There's absolutely zero reason to think that someone in China can't do the same software job that someone in silicon valley can do except for much less.

It really comes down to this. Some people have argued similar to sensamp that there is a mismatch of the skills of the workforce and the skills needed by employers. IMO the data doesn't support this hypothesis. The vacancy rate is still very low, indicating that there just aren't enough jobs to go around.

 

[Bitek]

Job training and education are all well and fine, but we are not seeing a skills mismatch in the economy right now. Unemployment is high across all sectors. Retraining will mostly result in somebody being unemployed in something else.

Understand the point on keeping skills sharp while they are out of work, but really we need to get people back to doing what they know how to do.

 

[theeedude]

Getting frustrated huh? Of course people will get educated in different things. The point is that educating those people doesn't create jobs. Silicon valley is still hiring. So are a lot of other upper-middle-class professions. Outsourcing doesn't start with CEOs. It starts at the bottom with laborers and steelworkers and progressively works its way up the ladder. If you think you're safe in an engineering or software job, good luck with your head in the sand. And it doesn't change the fact that there's only so much demand for software engineers or the fact that the requirement of an engineering degree is a sign of a poor job market and not a sign that it's actually needed. (If you hadn't noticed a lot of the tech innovators were people who eschewed formal education. It wasn't necessary for them to do the work.) There's absolutely zero reason to think that someone in China can't do the same software job that someone in silicon valley can do except for much less.

You really can't see the forest for the trees. These companies don't decide to just create a job, they decide to create a job to bring in SPECIFIC SKILLS that they need. If they can't find those skills, then that job is not created. The job is created only when demand for skills meets supply of that skill, in the form of an educated, skilled employee who can earn his own keep and then some. Even if we don't do anything about demand now, we should do something about supply of educated workers, so down the road we don't have a situation where companies want to hire, but can't find the skills they need.

 

[Jhhnn]

You really can't see the forest for the trees. These companies don't decide to just create a job, they decide to create a job to bring in SPECIFIC SKILLS that they need. If they can't find those skills, then that job is not created. The job is created only when demand for skills meets supply of that skill, in the form of an educated, skilled employee who can earn his own keep and then some. Even if we don't do anything about demand now, we should do something about supply of educated workers, so down the road we don't have a situation where companies want to hire, but can't find the skills they need.

Sounds great, except there is no shortage of skills, just shortage of work. The Job Creators! aren't creating jobs, and anybody with a lick of sense needs to realize that the whole concept is a joke in a debt/deflation scenario. Obama's mistake is that he's bought into it at all.

I'll quote Bitek's linked article from the increasingly heretical David Frum-

Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right?

 

[theeedude]

Sounds great, except there is no shortage of skills, just shortage of work. The Job Creators! aren't creating jobs, and anybody with a lick of sense needs to realize that the whole concept is a joke in a debt/deflation scenario. Obama's mistake is that he's bought into it at all.

I'll quote Bitek's linked article from the increasingly heretical David Frum-

I already said we need stimulus to create government infrastructure jobs for right now. But we also need to make sure that those for whom we can't create jobs right now have opportunity to improve their skills so they have a better chance of getting a good job in the future.