May Unemployment Rises to 9.1%

[theeedude]

Another brilliant article by Krugman:
http://www.nytimes.com/2011/06/03/opinion/03krugman.html?_r=1

So, as I said, we have already repeated a version of the mistake of 1937, withdrawing fiscal support much too early and perpetuating high unemployment.

Yet worse things may soon happen.

On the fiscal side, Republicans are demanding immediate spending cuts as the price of raising the debt limit and avoiding a U.S. default. If this blackmail succeeds, it will put a further drag on an already weak economy.

 

[chucky2]

BULLSHIT, he did. have you heard of Sarbanes-Oxley? One of the biggest regulatory bills on corporations ever. it literally created a new industry.

Do not mention SOX, Ever. It is a blight upon all who must work under it, and never should be uttered except by the Devil himself when he climaxes.

That is all.

 

[Thump553]

Krugman has it exactly right this time (see post 76) but I'm almost certain he will be ignored. The GOP is hell bent on cutting spending (versus balancing the budget, which would require raising taxes) and gutting the safety net.

Any further collapse in the economy is viewed as a positive by the GOP as it will increase their chances in future elections.

Krugman was also right when he said the initial stimulus was too small to be effective.

 

[JSt0rm]

but the republicans know in their collective guts that this is the right move. They are certain so it must be true.

 

[Doc Savage Fan]

but the republicans know in their collective guts that this is the right move. They are certain so it must be true.

Just like Dems knew in their collective guts that the first stimulus package would keep unemployment below 8-8.5%?

 

[CPA]

Do not mention SOX, Ever. It is a blight upon all who must work under it, and never should be uttered except by the Devil himself when he climaxes.

That is all.

I hear ya, brother, I live with it every day.

 

[ElFenix]

Wouldn't tax cuts create demands by giving people more money to spend??

no, people are saving right now and/or paying down debt.

 

[CycloWizard]

Nonsense.

Masterful argument, but only if we ignore reality.

 

[Zebo]

Krugman has never been right in his life.

he was wrong about off shoring, see "In Praise of Cheap Labor."
he was wrong about his buddy bankster bailouts
he was wrong about stimulus and FED QE pumping and CYA with but but but we just need more.

I basically chalk his ass up there with Benny the B, academic/govt worker who's perpetually promoted for constant fail. (or is he really failing)

Also, If I hear one more comparison with the old days I'm going to stab my laptop...totally different dynamics - back then we were a low leveraged production economy and are now a MASSIVLY leveraged consumer based economy who can't even begin to service debt we already have.

 

[her209]

Wouldn't tax cuts create demands by giving people more money to spend??

More money in your pocket = more money to spend?? Simple concept.

BTW the best thing we can do now to help the economy is to suspend the SS withholding on the first $20k worth of income. That would put more money into the pockets of both business and individuals.

Dan Ariely on Tax Cuts
http://www.youtube.com/watch?v=1a75YjePEAQ#t=5m30s

 

[Doppel]

Fvcking tragic to see people still defending Obama as anything but every bit as delusional about this as the rest of them on capital hill.

 

[brencat]

Another brilliant article by Krugman:
http://www.nytimes.com/2011/06/03/opinion/03krugman.html?_r=1

Strongly disagree. The resultant distortions caused by cheap money and excess stimulus (I.e. Rampant speculation, commodity price spikes, food inflation) are simply not worth it. The only thing that will get us out of this mess is time...and deflation. That's right -- creditors are going to have to take a big haircut. Remember the old Fram oil filter commercial? 'Pay a little now or a lot later'. Well we didn't pay a little back after the Internet bubble popped. We doubled down on stupid by cutting rates and blew a huge housing bubble. Then that popped and we did it again with a credit and govt spending bubble and now that is failing. You can put off the day of reckoning for only so long but eventually you'll pay. And now I fear we're about to pay BIG.

 

[ProfJohn]

Dan Ariely on Tax Cuts
http://www.youtube.com/watch?v=1a75YjePEAQ#t=5m30s

So we should send everyone pre-paid debt cards??


The big thing about tax cuts is that it gives more money to the people to spend while tax increases takes money away from people. With our economy doing as poorly as it is today the last thing we need is to take money away from people, even the rich.

 

[the DRIZZLE]

Dan Ariely on Tax Cuts
http://www.youtube.com/watch?v=1a75YjePEAQ#t=5m30s

I like Ariely but he's a micro guy, we have a macro problem.

 

[wuliheron]

The sky is falling! Duh!

Thirty years of this crap and now that the shit has hit the fan people panic. The American public wanted those cheap loans, the American public wanted those credit cards, the American public kept voting all these yoyos into office on both sides of the isle who kept right on driving up the debt, encouraging globalization, encouraging illegal immigrants, and expanding government.

But hey, blame the drug dealers for your own addiction problem when it looks like its cold turkey time and you aren't sure if after 30 years you'll survive the withdrawals. Spout the same old nonsense about how to live clean even if they've never worked.

 

[Doppel]

The sky is falling! Duh!

Thirty years of this crap and now that the shit has hit the fan people panic. The American public wanted those cheap loans, the American public wanted those credit cards, the American public kept voting all these yoyos into office on both sides of the isle who kept right on driving up the debt, encouraging globalization, encouraging illegal immigrants, and expanding government.

But hey, blame the drug dealers for your own addiction problem when it looks like its cold turkey time and you aren't sure if after 30 years you'll survive the withdrawals. Spout the same old nonsense about how to live clean even if they've never worked.

Although you're right on one side on the other there are experts paid to guide the rabble masses in this manner, not to say the government as well. It is supposed to lead and has not led in a proper direction.

How many politicians who hold any weight at all continually parrot how bad things are specifically drawing attention to the fact that the rich get richer while 90% of the rest of us are stagnant or falling? You can hear a pin drop.

 

[fskimospy]

Fvcking tragic to see people still defending Obama as anything but every bit as delusional about this as the rest of them on capital hill.

Now if you look at that chart, you'll notice something very interesting. Obama's unemployment numbers were certainly off, but that doesn't really tell you if the stimulus worked or not. For example, by the time the stimulus was passed unemployment was already a full point or so higher than projected, and by the time it was actually implemented unemployment was about 2 points higher than expected. Ie: that chart isn't showing that the stimulus didn't work, it's showing that their baseline was screwed up.

 

[Zebo]

The sky is falling! Duh!

Thirty years of this crap and now that the shit has hit the fan people panic. The American public wanted those cheap loans, the American public wanted those credit cards, the American public kept voting all these yoyos into office on both sides of the isle who kept right on driving up the debt, encouraging globalization, encouraging illegal immigrants, and expanding government.

But hey, blame the drug dealers for your own addiction problem when it looks like its cold turkey time and you aren't sure if after 30 years you'll survive the withdrawals. Spout the same old nonsense about how to live clean even if they've never worked.

While true, it reminds me of run up to Iraq war, face time was only given to those on message...corp shill economists like krugman, the richest we look up to like corp CEOs who benefit, and establishment writers who were paid for compliance setting in motion the brain washing that exists to this day.. Guys proven right aka "giant sucking sound" Perot/Buffet etc were marginalized.

 

[wuliheron]

While true, it reminds me of run up to Iraq war, face time was only given to those on message...corp shill economists like krugman, the richest we look up to like corp CEOs who benefit, and establishment writers who were paid for compliance setting in motion the brain washing that exists to this day.. Guys proven right aka "giant sucking sound" Perot/Buffet etc were marginalized.

They were marginalized because the public didn't want to hear what they had to say any more then an addict wants to hear you say they should quit using. Besides, they just pushing drugs nobody wanted. Lower Taxes! Smaller Government! That's like telling an addict they can still afford their drugs if they just cut back on other expenses. It doesn't address the issue of their addiction and as long as they continue to deny they are addicted and blame everyone else in the world for their problems nothing can help them.

 

[wuliheron]

Although you're right on one side on the other there are experts paid to guide the rabble masses in this manner, not to say the government as well. It is supposed to lead and has not led in a proper direction.

How many politicians who hold any weight at all continually parrot how bad things are specifically drawing attention to the fact that the rich get richer while 90% of the rest of us are stagnant or falling? You can hear a pin drop.

Gimme a break. These are addicts Jonesing for their next fix and running to the nearest drug dealers they can find. You've got to be totally strung out to believe drug dealers are supposed to be leaders and will help you kick your habit.

 

[Zebo]

They were marginalized because the public didn't want to hear what they had to say any more then an addict wants to hear you say they should quit using. Besides, they just pushing drugs nobody wanted. Lower Taxes! Smaller Government! That's like telling an addict they can still afford their drugs if they just cut back on other expenses. It doesn't address the issue of their addiction and as long as they continue to deny they are addicted and blame everyone else in the world for their problems nothing can help them.

Back in Chemistry class we used to call this entropy, state or path of least resistance (lowest energy state). Science mimics life. Borowing like crazy, from same who profited from the destruction, so the population could continue to consume and live same lifestyle without really having to work very hard or make tough choices. Pretty good deal, right?

 

[PeshakJang]

Now if you look at that chart, you'll notice something very interesting. Obama's unemployment numbers were certainly off, but that doesn't really tell you if the stimulus worked or not. For example, by the time the stimulus was passed unemployment was already a full point or so higher than projected, and by the time it was actually implemented unemployment was about 2 points higher than expected. Ie: that chart isn't showing that the stimulus didn't work, it's showing that their baseline was screwed up.

That's right... when something doesn't work the way you say it will, change the prediction to fit the outcome.

"Saved or created", right? "It would have been a lot worse!", right?

Are you just high all day?

 

[Throckmorton]

That's right... when something doesn't work the way you say it will, change the prediction to fit the outcome.

"Saved or created", right? "It would have been a lot worse!", right?

Are you just high all day?

Following your logic, George Bush's wars in Afghanistan and Iraq haven't done nothing because we didn't get results as good as he expected....

His tax cuts didn't do anything either because they were supposed to stimulate the economy and we ended up with a massive recession.

Holy shit! Tax cuts have no effect. Can we raise taxes on the rich now to pay down the debt?

 

[fskimospy]

That's right... when something doesn't work the way you say it will, change the prediction to fit the outcome.

"Saved or created", right? "It would have been a lot worse!", right?

Are you just high all day?

Do you even read posts before flying into a tard rage? Damn libruls and their drugs! Maybe you should try smoking some weed, perhaps you have glaucoma which is inhibiting your ability to read.

Do you think the stimulus could have affected the economy before it was signed or implemented? If unemployment were 1-2 points higher than projected before the stimulus went into effect, isn't it reasonable to think that unemployment would be somewhere in the range of 1-2 points higher than projected afterwards?

 

[CycloWizard]

What governmental regulations forced the share of subprime mortgages issued to jump from about 4% to 11% of total mortgages in the first quarter of 2004 when it was around 3% from 2000 to the end of 2003?

source

Let's see... What housing-related legislation was signed into law right when all of the new sub-prime loans were made? The American Dream Downpayment Initiative gave down payments and closing costs to people, but only if they made significantly less than the median income for the areas into which they were moving - perfect candidates for sub-prime mortgages. The Fed also kept interest rates low, forcing banks to use larger lending volumes to stay afloat, in addition to seeking new and increasingly risky investment vehicles. Turns out that Wikipedia has an entire page detailing this timeline.

In short, government made it a priority to give housing to people who couldn't afford it. This resulted in record home ownership rates, coupled with a huge spike in subprime loans. The increased demand caused continuous price increases. After the government stopped picking up the tab, the subprime recipients couldn't afford their loans anymore. Demand plummeted, causing a corresponding drop in housing prices. Depressed housing prices spread to houses owned by those faithfully paying their mortgages, further suppressing demand since they are no longer able to get out of their current house (unless they walk away, which doesn't help the big picture at all since they now have no down payment and supply is higher still). This causes the currently-observed continuing slide in housing prices as we now have a huge supply surplus.