What the Hell is going on with the economy? I keep hearing worse and worse news about the stock market: Inflation, recession, high unemployment, the Big Three auto companies refused government help… It goes on and on.
Is there any hope for this country’s economy?
We have nothing to fear but fear itself.
Just keep that in mind…
Sorry in my opinion no, too much outsourcing, too much supply side, the country no longer makes anything of any real value. The middle class was slowly destroyed, the collapse was held off by borrowing and massive debt now the chickens have come home to roost. One thing can comfort you, Rush Limbaugh still makes $136,000 per day and telling people the middles class is earning too much. My mom has some GE stock left to her by her Dad it’s lost 75% of it’s value, my 401K has lost half. God help us.
Most Americans still work for a living. Now that economies like China and India are really modernizing, there are fewer and fewer forms of work that they can’t compete with us for. And they do that work much more cheaply. Whether U.S. companies outsource, whether we embrace free trade or protectionism, money all over the world still has the option of going to the emerging workforces of Asia or to us. And as long as they’re offering a better price, it will go to them.
I think, therefore, that Americans in general can’t expect to get much richer until China and India catch up to us. Hopefully they’ll catch up fast enough that we won’t have to fall too far.
Have no fear, Jake. The economy will rebound as soon as the US dollar completely and utterly fails, and is replaced by a new currency. Until then, you’ll only need to endure some crashing markets, hyperinflation, massive unemployment, energy shortages, and food riots. On the upside, you still have time to invest in things that will be very valuable…like razor blades and toilet paper!!
Or we import the top 1% from China and India.
“Great, now I’m scared of fear”
Ellen DeGeneres
Don’t forget spiders, snakes, WEREWOLVES, sharks, dying alone, zombies, clowns, heights, big dogs, robots with human brains, and Johnson’s wife.
You’re nuts. There’s no such thing as “heights”.
You don’t have to call me Mr Johnson
The biggest problem right now is uncertainty; because of the government bailout itself, no one can be sure just what the status quo will be six months or a year from now. When the government announces that it’s going to intervene in the market to the tune of over a trillion dollars, but doesn’t know exactly where yet, no one can make definite plans that might not be completely obsolete in another quarter or two.
Regarding manufacturing: I remember the claims that it didn’t matter that the US didn’t manufacture much anymore. That we were at the forefront of the “post-industrial” world, that manufacturing was becoming a global commodity where it was irrelevent where stuff was physically made, that the “new economy” was all about knowledge wealth, ideas and information as encoded in bits in computers. I don’t know if it’s true but I’ve heard the anecdote that supposedly the two largest industries left in the US are finance and entertainment.
Which is exactly why the financial crisis is so scary. This is what we’d bet our future on, and now it seems to be evaporating like fairy gold in the light of morning.
I hate to throw the whole can of lighter fluid on this, but I saw this by chance late last night, only because I like scanning the foreign news sources once in a while. This particular link is from the Canadian Broadcasting Corporation, but the same story is appearing worldwide. Although they generally mention that it is the American National Intelligence Council itself that has prepared this report, they generally leave out that, according to the analysis, the rest of the developed world is in just as much trouble.
Among other things, resource wars are to be expected, and continuing population growth, especially in the countries that can least afford it, as the equatorial zone becomes drier and drier. Did we not warn of overpopulation in the 1960s? But we were ignored. Nobody was politically brave enough to deal with the ramifications of this. We will now reap the harvest of this.
. . . which is the whole point. The folks that write the news make money when people watch and read the news, so they write stuff that will make more people watch and read more news. A bad economy is like the high fructose corn syrup of the news biz–it creeps into everything and makes it sell better.
You know, I think I’m quite a bit to the left of you politically, but this is very well put indeed.
Historically, Hoover was inclined by personal and political philosophy to let the banks go broke and they did in large numbers. Of course, the banking system was very fragmented in those days and a few bank failures had little over effect. Roosevelt was elected on a balanced budget platform (believe it or not), but immediately took strong action on things like social security, unemployment insurance, WPA (which consisted largely–though not exclusively–of infrastructure projects) and, in fact, also closed the banks for a few days to try to allay the panic. I have no idea what effect this actually had. He also made it illegal for Americans to own gold (exceptions were made for jewelers) effectively ending the gold standard internally. Foreigners could get gold in return for US currency. I believe that prohibition ended around 1970. In Roosevelt’s second he finally decided to try to balance the budget. The result was a second depression in 1937 (the year I was born, incidentally). Really, the depression did not end till the war came and result in enormous deficit spending, coupled with labor shortages (all those people off fighting led to “Rosie the riveter” among other things). After the war taxes were raised and the income tax soared to where the highest bracket was 91% and stayed that way till the Kennedy tax cuts in 1961 or so. During the years '46-'61 I think the US total debt was halved or nearly so. Then Reagan came in and cut taxes without cutting spending and the debt started soaring. Bush I was relatively frugal and Clinton really was roaring with budget surpluses so large that people were seriously worried what to do with all that money. The fact that the economy was supercharged didn’t hurt at all. Then Bush II with large tax cuts accompanied by two wars and large increase in spending led to the current situation in which further deficit spending is hard to face but, I think, necessary.
I don’t object so much to government bailouts as to government bailouts unaccompanied by policies forcing bailees to change. If it is necessary to wait till they go bankrupt, so be it.
In terms of sales it is:
Wholesale Trade
Manufacturing
Retail Trade
then Finance
In terms of paid employees it’s:
Health Care
Retail Trade
Manufacturing
Accomadations & Food Service
Believe it or not a lot of shit is still made here in the US.
Having lived through several market cycles since the 70s, I find all the doom and gloom hilareous. In the 90s, people thought the good times would never end. Now they think the world is ending. There is s cycle to investor psychology that closely matches the business cycle. People are currently in the “fear”, “panic” and “contempt” phases. They have lost faith in the markets and vow never to get involved again. And when the market comes back (which it inevitably does) they will also like miss out on a lot of profits.
The trick, of course, is knowing when.