Home › Forums › Financial Markets/Economics › Roubini: “We Are in ‘Worse Situation Than in 2008”
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September 5, 2011 at 12:33 PM #728408September 5, 2011 at 1:01 PM #728409
Allan from Fallbrook
Participant[quote=Arraya]
Alan, correct me if I am wrong. Are you saying government spending coupled with working together for the greater good is what we need?Isn’t war government spending? That would fall under Keynesian-like stimulus. Hmmm
However, FERs polices did get some people working again and built things of value, when the country was mired in unrest and starvation. Sure, at the time, the prevailing ethos was laissez faire(which ironically was a planned doctrine), so it made his policies very divisive. You can’t use a logic of IF his polices did not fully pull the country out of depression THEN doing X(nothing?) would have been better. It’s just not an argument you can make.
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Arraya: I wasn’t arguing that FDR’s policies had NO effect during the Great Depression, rather, I argued that WWII had a GREATER effect than did FDR’s policies.
As I pointed out in one of my responses to SK: There is no magic solution. The problems are deep-seated and structural and both parties are mired in moribund thinking and failed policies. However, this is the US and I’m more hopeful about America pulling out of this, than I am about China, Japan or the Eurozone.
America is an exceptional country, but not because of God and His blessings, but rather due to demography, geography and abundant natural resources (and our big-ass military). Push comes to shove, the US is better prepared to ride this out, than, say Greece or France or even England. China is in a great deal more peril, especially over the long haul than we are (as their demography chickens come home to roost), as is Japan. The European Socialist model is running rapidly out of road and demography is becoming an ever-larger issue there, too, in terms of replacement rate and aging.
This isn’t meant to sound nationalistic or jingoistic, just the facts on the ground. It also isn’t meant to sound triumphalist, either, especially since we’ve done such a good job over the last three generations of really fucking things off (Right, Left and Center combined).
September 5, 2011 at 1:12 PM #728410SK in CV
Participant[quote=Arraya]Hello rock, meet hard place[/quote]
Great comment. The quoted part is, I think, a precise description of the current economic situation and the body politic. Even if there was a fix, the climate prohibits it from happening.
And this part:
[quote=Arraya]Now, we are at another inflection point – where they are stuck in a crisis of creativity focusing mainly on trying to reinflate the bubble with a banking system that is faking it and a populace that is both commodity and debt saturated as well as there being no true engine for job growth.[/quote]For too many years we have relied on growth (construction spending) being the engine. I’m living in Phoenix now, a city that for the last 30 years has survived on growth. There has been virtually no other significant industry. Without growth, much like my wrinkly neighbors to the NW in Sun City, it will wither and die.
What the country needs is something like a new iphone. Or better yet, a cross between a new blackberry and a new iphone. (I’m a blackberry fanboy, and I know it doesn’t really fit, eh. But there is good reason for including it.) Something that is affordable for the masses. Something that is a necessity for business as well. It belongs in a kitchen as well as an office. Something that is developed and constructed here. (Before the Israelis invent it, and ship it off to China for construction.) Something that i can plug into my business analytics models and prove to business managers that putting one in the hands of every employee will improve bottom line without costing jobs. It will save on power consumption and make Korean made 3D glasses obsolete. Students from K-graduate school will carry it to class every day.
And a jobs tax credit to encourage it to happen. Despite the fact that I have no idea what it is, problem solved.
September 5, 2011 at 1:20 PM #728411briansd1
GuestPeople working together for the greater good. That’s well said Arraya.
Let’s take health care reform for example. We all knew that we needed to reform health care and implement some kind of universal health system. So Obama adopted a Republican plan and he’s labeled a communist Hitler by the right.
On the debt ceiling, the Republicans play brinkmanship to the detriment of the country.
As Allan accurately pointed out, the Republican are uncompromising and dug in. Obama completely underestimated the hard ideological line that the GOP would take and HOLD. The GOP has NOT budged and this is where Obama’s inexperience has wrong-footed him, again and again .
Obama’s strategy of appeasement of the Republicans and “working together for the greater good” is not paying off. Even Allan sees that, and along with liberals is advocating “going big” on the Republicans.
Is it really inexperience on the part of Obama, or a genuine desire do to the right thing?
The evidence points to intransigence on the right that is ruining the country.
September 5, 2011 at 1:36 PM #728412Participant[quote=briansd1]People working together for the greater good. That’s well said Arraya.
Let’s take health care reform for example. We all knew that we needed to reform health care and implement some kind of universal health system. So Obama adopted a Republican plan and he’s labeled a communist Hitler by the right.
On the debt ceiling, the Republicans play brinkmanship to the detriment of the country.
As Allan accurately pointed out, the Republican are uncompromising and dug in. Obama completely underestimated the hard ideological line that the GOP would take and HOLD. The GOP has NOT budged and this is where Obama’s inexperience has wrong-footed him, again and again .
Obama’s strategy of appeasement of the Republicans and “working together for the greater good” is not paying off. Even Allan sees that, and along with liberals is advocating “going big” on the Republicans.
Is it really inexperience on the part of Obama, or a genuine desire do to the right thing?
The evidence points to intransigence on the right that is ruining the country.[/quote]
Brian: I love you, man! Even when trying to make a valid point, you turn it into Left versus Right and thus make my point that this kind of warped, partisan thinking is why we’re here now.
Forgetting the execrable strawmen that litter your argument (communist Hitler? That’s not even possible!), you cannot use the word “evidence” unless there is ACTUALLY evidence to support your argument.
As to doing the right thing, have you been paying attention lately? How about Obama’s position on the whole EPA – smog thingie? I’m conservative and even I recognized that this flew in the face of Obama’s base constituency.
ACA/Obamacare? That’s a hot mess and largely because Obama failed to make it his own, meaning don’t give shit to Congress to do because they’ll fuck it up. Same thing with the stimulus. Right idea, really bad execution.
Sorry, Brian, but pointing at the Republicans and simply stating “it’s all THEIR fault” is both puerile and completely wrong. Obama is NOT leading, pure and simple, nor is he being true to the core principles of the Democratic Party. You seem content to blindly accept everything Obama says as being right and good, whilst painting the Republicans as know-nothing rubes. As with everything in life, there is an element of truth there, but you’re trying to spin straw into gold and that just ain’t gonna work.
September 5, 2011 at 1:38 PM #728414Anonymous
Guest[quote=SK in CV]What the country needs is something like a new iphone.[/quote]
Nah, we just need someone to invent Soma.
September 5, 2011 at 1:40 PM #728413Guest[quote=Allan from Fallbrook][quote=Arraya]
Alan, correct me if I am wrong. Are you saying government spending coupled with working together for the greater good is what we need?Isn’t war government spending? That would fall under Keynesian-like stimulus. Hmmm[/quote]
Arraya: I wasn’t arguing that FDR’s policies had NO effect during the Great Depression, rather, I argued that WWII had a GREATER effect than did FDR’s policies.[/quote]
You are both right. From an macro-economic perspective, there’s not much difference between stimulus spending and war. But almost nobody understands that. That’s why we always hear the argument that “the New Deal didn’t fix the economy, but WWII did.” And few who make the argument can correctly explain why WWII was such an economic savior. The standard answer was that “we destroyed the competition” – which is not true. Industrial competition with Europe and Japan was not an issue at all during the Great Depression.
[quote]America is an exceptional country, but not because of God and His blessings, but rather due to demography, geography and abundant natural resources (and our big-ass military).[/quote]
All these things help, but the key to our exceptionalism is the one value that makes America unique: Respect for the rule of law, especially over other factors like wealth, birthright, caste, religion, political ideology (e.g. socialism), etc. It’s our entrenched cultural respect for a common set of rules that creates the foundation for innovation and capitalism.
We didn’t always have a big-ass military. That’s only been the case for the last third of our history. Also, let’s not forget that a big-ass military has been the cause of downfall for many empires.
[quote]Push comes to shove, the US is better prepared to ride this out, than, say Greece or France or even England. China is in a great deal more peril, especially over the long haul than we are (as their demography chickens come home to roost), as is Japan. The European Socialist model is running rapidly out of road and demography is becoming an ever-larger issue there, too, in terms of replacement rate and aging.[/quote]
Agreed, mostly at least. Europe is a mixed-bag of situations. Germany is doing better than us in some ways, other economies are spiraling down the toilet. Personally, I think you may be over-weighting the differences and importance of demography.
BTW, have you heard the phrase “Tea Party Keynesian?” I think the term perfectly captures some of the arguments we are hearing now and will hear even more as the election grows near. Too bad most folks won’t understand what it all means.
September 5, 2011 at 1:44 PM #728415Guest[quote=SK in CV]
For too many years we have relied on growth (construction spending) being the engine. I’m living in Phoenix now, a city that for the last 30 years has survived on growth. There has been virtually no other significant industry. Without growth, much like my wrinkly neighbors to the NW in Sun City, it will wither and die.
[/quote]I said before, if you’re the best and brightest you will be fine. America is still the shining city on the hill.
But if you’re an average high-school educated middle class American — the mainstay of middle America, you do worrry.
That’s fueling some worrisome right-wing politics that’s been gaining traction in Europe and may become more prevalent in America.
DON PECK: … as to the state and future of the economy.
You know, wages in Manhattan and Silicon Valley have been growing remarkably rapidly. In the places where the meritocratic elite, the most highly educated, highest skilled people have increasingly congregated over the past 20 years, the recession was lighter, housing fell less, recovery has begun.
In many of the former middle-class meccas, though, places like Tampa and Phoenix and Las Vegas, where people with moderate education, limited savings tended to go over the last 20 years to try to get in on a middle-class lifestyle, we see tremendous pain.
http://www.pbs.org/newshour/bb/business/july-dec11/middleclass_09-01.html
September 5, 2011 at 1:46 PM #728416Arraya
ParticipantAlan – I agree, I was just pointing out it was still FDRs policies and Keynesian stimulus – and poking a fun, a little;)
Ironically, it was probably the depression that set the conditions for the war.
September 5, 2011 at 1:58 PM #728417Participant[quote=Arraya]Alan – I agree, I was just pointing out it was still FDRs policies and Keynesian stimulus – and poking a fun, a little;)
Ironically, it was probably the depression that set the conditions for the war.[/quote]
Arraya: Regarding the Great Depression setting the conditions for WWII: There is much to that. I read a quote somewhere regarding the 1930s that said, “America chose the future, Italy chose the past and Germany chose oblivion”.
September 5, 2011 at 2:03 PM #728419Participant[quote=Allan from Fallbrook]
Arraya: Regarding the Great Depression setting the conditions for WWII: There is much to that. I read a quote somewhere regarding the 1930s that said, “America chose the future, Italy chose the past and Germany chose oblivion”.[/quote]
Try “The Great Transformation” by economic historian Karl Polyani. The book was written in 1944. It’s actually quite a famous book in social sciences circles. He actually cites both world wars as a consequence of economic collapses.
September 5, 2011 at 2:05 PM #728420Aecetia
ParticipantGermany chose Götterdämmerung.
September 5, 2011 at 2:05 PM #728421ParticipantPri: My comment regarding our big-ass military was largely snarky and driven by a comment from a friend regarding China having to collect on their US debt (“Let ’em come and get it!”).
I would point out that, in spite of our not always having a big-ass military, we haven’t hesitated to use force to advance our fortunes and this goes all the way back to policies such as Gunboat Diplomacy and Manifest Destiny. We’ve been a going concern from the jump (the original iteration of “Life, Liberty and the Pursuit of Happiness” was “Life, Liberty and the Pursuit of Property”) and we’ve always liked that particular mix of policy and bayonets.
I definitely agree regarding the rule of law and its an excellent point that I overlooked.
I’m sure I did over-simplify the problems confronting the Eurozone, China and Japan, but I threw those out there largely to make a larger point.
Regarding “Tea Party Keynesian”, nope, that’s a new one on me. I’m partial to “Tea-vangelical” as it sums certain aspects of the movement perfectly, while also feeding into my Jesuitical arrogance.
September 5, 2011 at 3:21 PM #728425Participant[quote=Allan from Fallbrook]I would point out that, in spite of our not always having a big-ass military, we haven’t hesitated to use force to advance our fortunes and this goes all the way back to policies such as Gunboat Diplomacy and Manifest Destiny. We’ve been a going concern from the jump (the original iteration of “Life, Liberty and the Pursuit of Happiness” was “Life, Liberty and the Pursuit of Property”) and we’ve always liked that particular mix of policy and bayonets.
[/quote]
I found that bolded part fascinating. I’d never heard that before. It made me laugh. And head straight for google. Where I found this.
The phrase has meant different things to different people. To Europeans it has suggested the core claim—or delusion—of American exceptionalism. To cross-racial or gay couples bringing lawsuits in court, it has meant, or included, the right to marry. And sadly, for many Americans, Jefferson might just as well have left “property” in place. To them the pursuit of happiness means no more than the pursuit of wealth and status as embodied in a McMansion, a Lexus, and membership in a country club. Even more sadly, Jefferson’s own “property” included about two hundred human beings whom he did not permit to pursue their own happiness.
Lots more good stuff in the article.
http://hnn.us/articles/46460.htmlCuriosity can keep us entertained for an entire holiday weekend.
September 5, 2011 at 6:26 PM #728432Participant[quote=SK in CV][quote=Allan from Fallbrook]I would point out that, in spite of our not always having a big-ass military, we haven’t hesitated to use force to advance our fortunes and this goes all the way back to policies such as Gunboat Diplomacy and Manifest Destiny. We’ve been a going concern from the jump (the original iteration of “Life, Liberty and the Pursuit of Happiness” was “Life, Liberty and the Pursuit of Property”) and we’ve always liked that particular mix of policy and bayonets.
[/quote]
I found that bolded part fascinating. I’d never heard that before. It made me laugh. And head straight for google. Where I found this.
[/quote]SK: If you want to have some real fun, Google Smedley Butler (USMC). In terms of American colonialism and exploiting resources for American use, this guy was like Zelig during the period 1910 – 1930s. Later in life, he essentially recanted and detailed how he ran a “government racket” for years.
Personally, I always wondered why there isn’t a single mechanic, or farrier, or shopkeeper who signed the Declaration of Independence; rather, they’re all members of the landed gentry.
We’ve always been about the jingle.
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