Current doldrums are just jobless, sales-less recovery
NBER just made official what we all knew they would say: the Great Recession ended in June of 2009.
For those who are encouraged, note that they also do not indicate that there was a recession from March of 1933 to May of 1937, that the eighteen (18) months indicated is the longest since 1929-1933, and that eighteen months is—coincidentally—the average duration of the recessions between the World Wars. (The success of the Great Moderation is palpable.)
What is Plan B?
i dunno. common sense?
we appear to have here another “official” set of words that don’t describe reality.
and while the article does not address a “plan B”, I think MG is getting at “what do we do about the continuing recession?”
my humble reply would be to back away slowly from supply side thinking (tax cuts forever) and try to hire a few people to do some real work. deficits or taxes to pay for it probably doesn’t matter, but given the deficit hysteria, i’d say taxes this time.
Well, as long as the number was positive as it was becoming smaller pre-declared recession, we were not in a recession either.
That’s how I deal with things. Don’t act until I’m dead.
I’ve said it before, and I’ll say it again. My tennis group has determined beyond a shadow of a doubt that our tennis courts need re-surfacing. So there is work to do around this country.
And altho everyones house price dropped 30%, property taxes have not gone down (after going up during the boom), so we have trouble figuring out what the problem is. Must be sales tax collections?
There is no Plan B, because they don’t know how, but they won’t tell us that because it would be bad for elections and also the stock market.
I can think of several plan Bs.
The problem is that none of them are politically viable.
The starve the beast strategy is working beautifully.
That is why I have long expected a Japanese style years of stagnation.
Do you have a plan B?
Do you think the republicans or the tea party have a plan B that will lead to stronger growth?
MG, you sound like a petulant child.
oh, heck, MG
even i agree with that. except that what you mean is there is no Plan A.
Here is Peter Morici’s latest take via email. This article is being published today. You may find it under another title, ‘Political Parties Offer Little to Repair Economy’.
Peter covers many of my opinions quite well.
The Decadence of Election 2010
by Peter Morici
September 20, 2010
Americans are justifiably ticked off with both political parties but Election 2010 offers little hope. Democrats, Republicans, and yes the Tea Party offers little that is encouraging.
President Obama’s droning complaints about the failures of George Bush, notwithstanding, the current economic quagmire is a bi-partisan creation.
The Great Recession was caused by reckless Wall Street pay and fraud, a breakdown in sound lending standards by Fannie Mae, Freddie Mac and mortgage mills like Countrywide, and a huge trade deficit with China and on oil. The latter left Beijing and Middle East royals with trillions of U.S. dollars that they invested foolishly in the U.S. bond market and which financed the housing and commercial real estate bubbles.
Scrape away the finger pointing. All was set in motion by bank deregulation engineered by Clinton Administration Treasury Secretaries Robert Rubin and Lawrence Summers, and Bill Clinton’s deal to admit China into the World Trade Organization. The latter permitted China free access to U.S. markets while maintaining an undervalued currency and huge tariffs and other barriers to U.S. exports.
Democrats in Congress and the White House, when they occupied it, took every opportunity to block domestic oil and gas development and, led by the ever thoughtful and high minded Michigan congressional delegation, froze auto mileage standards.
If I like anything President Obama did, it was to finally impose higher mileage requirements. And initially, he pushed for more offshore drilling. Unfortunately, some tropisms can’t be overcome, and when BP disaster hit, the President punished the entire petroleum industry.
If President Bush is culpable for anything, it was to not see the gathering storm on Wall Street. But Treasury Secretary Snow was a railroad man and understood finance little, and Treasury Secretary Paulson, a shinning star from Goldman Sachs, honestly believed banks could borrow at 3 percent and lend at 5 and pay MBAs three years out of school five million dollar bonuses to create mortgage backed securities.
The best way to understand the Bush Treasury is to view the Eric von Stroheim 1924 masterpiece, “Greed.”
Whichever bunch of second rate incompetents you favor – the Clinton or Bush White Houses – one thing is clear, Obama ratcheting up government spending and taxes won’t fix what’s broke, and neither will the GOP prescription of tax cuts and deregulation.
President Obama’s two signature initiatives-health care reform and financial services reregulation-simply don’t work. The former fails to address the root problem-Americans pay 50 percent more for doctors, hospitals and drugs-than subscribers to national health plans in Germany, France and other decadent socialist European countries, and the banks are back to their old tricks.
Wall Street is hustling municipal governments into the kind of quick-fix budget schemes-like selling parking meters and airports fees-that made Greece the most historically elegant insolvent entity since bankruptcies were invented in the courts of ancient Athens. Now bankers are shoring up 2011 bonuses by hustling shoddy corporate bonds that lack adequate collateral and may never be repaid.
Republicans like Mitt Romney and John Boehner offer little encouraging. Cutting taxes and mindless deregulation are […]
Yup. I’d say that sums it up. And not a word about fiscal and monetary policy being inadequately goosed either. So unusual for an economist.
Hard to imagine we couldn’t concoct a Plan B out of that, but it seems to be the case.
Also, we do have sort of a trade policy in the works, sort of a Sub A- subsection of Plan A where Plan A included fiscal and monetary stimulus of China. The trade policy sub leg of policy is to allow US companies to bring case by case challenges to the WTO if they feel they are being damaged by Chinese imports. Of course we know many US companies aren’t complaining.
We’re taking a major GDP hit with existing U.S. trade policy. Morici is one of the few American economists interacting with national and international news media who raises this issue. Peter does so on a frequent basis.
My property tax has gone down two years in a row. This is a part of why municipalites are strapped.
JzB
I heard this story on NPR this morning and winced (yet again) for Obama and the Dems. The electorate hears the official story that the recession has ended, look around at all their friends and neighbors still un and under-employed and decide that the administration are liars, incompetent or both. Pitiful.
Ours still may, but our assessors move slow as molasses, and the formula they use seems to be a state secret.
MG, good question. As CR says we may have the makings of a Plan B foundation.
I am especially interested in the inexpensive “Energy” alternative for trade policy. Let’s change from importer to balanced internal use, and even if possible to exporter.
A market-based solution to health care, state level insurance plan exchanges eventually expanded to nation-wide exchanges, expand pools for risk-based recipients, expand health vouchers and expand healthcare shopping (public pricing and provider ratings) infrastrucure.
Regulate the bejeebus out of the derivatives market so that the risk is maintined or shared by the originator of an instrument.
Cut regulations for creating new business start ups. Provide loan incentives for start ups.
Cut Fed spending by 20-30%. That will put us at the near pre-recession level.
Yes, give a 1 year FICA holiday and pay for it out of the trust fund.
Do not implement any new bail outs for at least 5 years.
Cut the EPA, Dept of Educ, Agric., Interior and Dept of Energy budgets by 1/2.
I haven’t done the math, but this set of ideas will both lower the Fed borrowing (except for the SSTF), lower our prices and make them more competitive, reduce stifling regulations for startups and make their creation easier, and finally will put more money in wage earner’s pockets expanding economic growth.
As a group brain storming this is necessary and possible. You might not agree with my list, but it is a list of possible actions to formulate a Plan B.
Now I’m confused. I thought we replaced the market based solution to health care. It turned out to only be a solution for insurance company CEOs.
And no slimdown for our pigged out pork larded pentagon? Shame.
Cedric
around these parts the growth of taxes was limited by law. so the assessors figure they have not yet caught up to where they should be. on the other hand taxes never went down because there was always special assessments to keep them where they should be.
A CNN broadcaster this evening was trying to pitch the NBER announcement as solid, supportive news for the Administration and Dems. I broke out laughing. Where do the networks find these incompetent clowns?
I read the announcement. I thought the timing was lousy. If we roll into a recession at this point, the clock begins again according to NBER; they will call it a new recession.
not incompetent.
they do their job very well. which is to read the news, or even to play an expert on television.
anyone who thinks we have a real democracy needs to look out the window and see how long the country would last if “the people” made the rules.
the problem is that the folks who ARE running things aren’t doing it very well themselves.