It’s going to get much worse…there is no escape (ECRI)

[evolusd]

[quote=briansd1][quote=evolusd]
I agree completely – there wasn’t much anyone could do to turn the ship to avoid the financial glacier we were approaching. What irks me the most is how the people and firms that caused the most harm from their greed and short-sightedness were the ones that got the most bailout funds/government assistance. The moral hazard caused by this will haunt us for years to come.

They should have allocated the bailout funds to the people and institutions that DID NOT act irresponsibly – reward the GOOD behavior of the fiscally conservative. Let us reap the benefits of acting responsible through a period when everyone was going nuts![/quote]

evolusd, you have to consider that Wall Street is such a central, systemic component of our economic system that not bailing out Wall Street was not an option.

Of course, the government could have acted differently with regard to individual executives.

Even a bailout of European governments will mean a bailout of Wall Street because of Wall Street’s exposure.
http://robertreich.org/post/11033625495

So I think that that bailing out the financial system was necessary. And overtime, it will be necessary to tax that system for the past bailouts and future bailouts.

The irony, evolusd is that good behavior does not need bailouts. What we need to do now is directly provide jobs to the people who don’t have jobs because the financial bailouts are not trickling down to jobs for the umemployed.[/quote]

I completely understand the systematic risk of the finanial system. However, I feel they should have put the worst offenders (AIG, GM, etc) through an orderly liquidation and provided cheap or government-backed financing to the RESPONSIBLE competitors that still had strong balance sheets to purchase the assets of the dogs.

Sure, it would have obviously been at discounted prices, but at least the smart companies would have then grown to be powerhouses and the idiots that led us into the hole would have been dissolved. They way they went about it made those dogs bigger than they were before!

[The-Shoveler]

[quote=flu][quote=sdrealtor]How about lanterns? Are Coleman’s made in the USA?[/quote]

no… china.

Also., American Greetings and Hallmark started making cards in china to, even though the full price of a greeting card (plain, no sound,bells, whistles) is now closer to $4….Go figure…[/quote]

Imagine the horror if they stopped accepting our dollars !!

I mean I am not going out there and making greetings cards or blue jeans, you guy’s are on your own, sorry,

The horror, the horror,.

[Anonymous]

[quote=Nor-LA-SD-GUY2]Yep the where do you get wage inflation puzzle is an interesting question[/quote]

I was actually asking if there can be sustained inflation of goods/services without wage inflation?

(Use either real or nominal inflation, just be consistent.)

In other words, do we really need to worry about a scenario where prices go up, but not our paychecks?

What could cause this, and has it ever happened?

(Looking for a sustained example, and not something caused by a disruption in supply, like war or natural disaster.)

[The-Shoveler]

The Seventies came real close to that description., there is always a delay it seems between inflation and wages so at first at least there is always some pain involved.

[briansd1]

I expected a Japan style malaise.

Globalization insures that we don’t have general wage inflation. Sure, some jobs will do better, but generally, real wages are stagnant. (in the 1970s, we didn’t have competitors who could produce goods and services to the same quality levels as today).

Our politicians misjudged America’s strengths after the breakup of the Soviet Union. The Afghanistan/Iraq wars a decade later made things much worse.

Now, the world economy must rely on China and other developing nations to be the engine of growth.

[all]

[quote=flu]Maybe this is sort of off topic, but maybe someone else has been noticing….

I’ve been seeing more and more things being made in the USA again…. Inexpensive things that you would think have low margins and outsourced….I mean, things like plastic boxes, screen meshes, screws, nuts bolts, that traditionally was be made overseas is now here… [/quote]

Generic coffee cup used at Ryan Bros Coffee – International Paper (ipfoodservice.com), made in USA.

[The-Shoveler]

If Europe and the U.S.A. go down, china will look pretty flimsily very fast.

Why do you think the china rich invest here and canada etc… (even the China gov members)

Do you think there maybe a little bit of a trust issue ?

One other Thing, even as hard as it is to find, the U.S.A. is still by way far the biggest manufacture and producer of goods.

[briansd1]

Who says that we are going down?

The USofA and Europe will still remain the largest markets. But there we won’t see sexy growth for some years.

Japan is stagnant but it’s still an important market and an incredibly wealthy, innovative society.

But for corporations and investors, the attention and focus are always on the new areas of growth.

[urbanrealtor]

What does flimsily mean?

[The-Shoveler]

This thread was, oh lets see,
“It’s going to get much worse…there is no escape (ECRI)
”
Yes that was it.

Flimsily == Weak (or something close to that)
( well in this case maybe collapses from within would have been better)

I should clarify , Well I think we will at best have stagnate growth for 5 years at least, I used to think we could recover sooner but now I am convinced we are doing our best to keep our selves down. we don’t seem to want to recover for some strange reason.
( self-inflected wound)

[briansd1]

[quote=Nor-LA-SD-GUY2]
I should clarify , Well I think we will at best have stagnate growth for 5 years at least, I used to think we could recover sooner but now I am convinced we are doing our best to keep our selves down. we don’t seem to want to recover for some strange reason.
( self-inflected wound)[/quote]

Self-inflicted wound is right.

I had dinner with my brother and some friends last night. Someone mentioned that we needed a war to jumb-start the economy.

My question then was why does it need to be war and killing people? War is the same as government spending to stimulate jobs and growth. Can’t we have some government spending other than war that would have the same impact in stimulating growth?

[Anonymous]

[quote=briansd1]My question then was why does it need to be war and killing people? War is the same as government spending to stimulate jobs and growth. Can’t we have some government spending other than war that would have the same impact in stimulating growth?[/quote]

Because only a war brings enough consensus and commitment to see the plan through to the end.

[urbanrealtor]

[quote=pri_dk][quote=briansd1]My question then was why does it need to be war and killing people? War is the same as government spending to stimulate jobs and growth. Can’t we have some government spending other than war that would have the same impact in stimulating growth?[/quote]

Because only a war brings enough consensus and commitment to see the plan through to the end.[/quote]

True Dat.

Also:
What does “jumb-start” mean?

[CA renter]

[quote=pri_dk][quote=earlyretirement]
I do think Obama could have done some things differently but he couldn’t really have changed the destiny of all the horrible things going on in the economy and the fallout from years of “sins” from Wall Street.

That’s just the plain truth.[/quote]

Funny thing is I think most people understand this, but they still put the blame on whomever is in charge at the moment.

Back to the topic:

For the economic historians out there: has there ever been a period of inflation without wage growth?

Exactly how could that happen (outside of a scenario where there is a disruption in supply of goods, such as a war)?

Who is going to pay these higher prices if they don’t have any money? What would drive prices up even higher?[/quote]

Right now.

We’ve been experiencing cost inflation without wage inflation. That’s because the traders (who now pretty much control the world) are expecting inflation, so they’ve been buying up assets in anticipation of the currency crisis/money printing. The traders (the VERY wealthy who do not have to work for a living) have plenty of money and are not affected directly by wage inflation/deflation. They are trading against each other at this point.

Eventually, they will realize that there is no organic demand (yep, used that term again) for these assets at the traders’ expected prices. The “organic” end-users/consumers ARE affected by wage inflation/deflation, so asset prices will eventually go down unless wages suddenly go up, IMHO.

Unless they tweak tax and trade policies, I have no reason to believe wages will go up. That’s why I’m a deflationist, but acknowledge the potential for inflation that results from excess monetary printing/a currency crisis — which will probably have even more catastrophic consequences than deflation, IMO.

[CA renter]

[quote=evolusd][quote=earlyretirement]I’m no Obama fan but the truth of the matter is that it wouldn’t have mattered if a Republican, Democrat or Independent was the President the past couple of years. Everything playing out now and the past few years were things set in motion already. VERY little of it could have been changed off it’s course.

I do think Obama could have done some things differently but he couldn’t really have changed the destiny of all the horrible things going on in the economy and the fallout from years of “sins” from Wall Street.

That’s just the plain truth.[/quote]

I agree completely – there wasn’t much anyone could do to turn the ship to avoid the financial glacier we were approaching. What irks me the most is how the people and firms that caused the most harm from their greed and short-sightedness were the ones that got the most bailout funds/government assistance. The moral hazard caused by this will haunt us for years to come.

They should have allocated the bailout funds to the people and institutions that DID NOT act irresponsibly – reward the GOOD behavior of the fiscally conservative. Let us reap the benefits of acting responsible through a period when everyone was going nuts![/quote]

Nailed it!!!!!!

[Author]

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