OK, now this is out of hand: debt limit raised again today.

[Hentor_the_Barbarian]

@UncleBeer

Here ya go:

http://www.federalreserve.gov/pubs/ifdp/1998/629/ifdp629.pdf
http://www.globalpolicy.org/socecon/crisis/index.htm

Please help me, UncleBeer, to understand how these are relevant to your assertion that “the prosperity of the 90’s was due to a stock bubble.”

For example, the first thing you cited concludes (on page 25)

Currency and banking crises are not a new phenomenon. Not only is the list of countries affected by these crises long, but it is also increasing. Financial crises can be very costly. For example, the International Monetary Fund has estimated that the average cumulative loss of output (relative to trend) per currency crisis oscillates between 4 and 7 percent, and for banking crisis increases to about 12 percent.35 Twin crises have even more extreme effects. Cumulative output losses increase in this case to about 15 percent.36 The fiscal costs of these crises can also be massive. Resolution costs of banking crises have in some cases reached over 40 percent of GDP (for example, in Chile and Argentina in the early 1980s).37 For currency crises, the fiscal costs are associated with the losses of reserves that central banks suffer in their basically vain attempt to defend the peg. On average, central banks lose about 8 percent of their reserves in the 6 months prior to crisis and these losses increase to 25 percent in twin crises episodes. The associated costs can be quite daunting. For example, on average, the domestic currency depreciates about 25 percent in real terms in the six months after a crisis.

One would figure that it was about currency and banking crises, making it hard to see how it proves empirically that the prosperity in the US during the 90’s was due to the stock market bubble. It’s also odd how a paper written in 1998 could have proven the cause of a still-future event.

I can’t even see anywhere in your second cite that concludes that the prosperity of the 90’s was due to a stock bubble, let alone describing any empirical analysis to support this.

Please clarify within your cites what you are seeing that supports your premise. My feeling is that it just isn’t there.

[Hentor_the_Barbarian]

@UncleBeer

The bubble burst. And the “prosperity” ended.

Or conversely, Bush was elected, and the prosperity ended.

[UncleBeer]

@Hentor the Barbarian

Please help me, UncleBeer, to understand how these are relevant to your assertion that “the prosperity of the 90’s was due to a stock bubble.”

Sorry. First link - pages 9 & 10. Particularly the footnote #13 on page ten:

The size of critical region for each indicator is common across countries while the numerical value of the threshold is country specifc to allow for the idiosyncratic behavior of the indicators in each country. For example, a 30-percent annual decline in stock prices may be business as usual in an emerging economy with a shallow stock market, but it may signal a burst of a bubble and a serious recession as well as a possible financial crisis in an industrial country.

See also the “Growth Slowdown” section of Table 2 - Leading Symptoms & Indicators on page 32.

It’s also odd how a paper written in 1998 could have proven the cause of a still-future event.

Well, we’re speaking in general terms here. I’m trying to offering evidence that all stock bubbles have a short-term positive effect on propserity. And the tech stock bubble in the U.S was pretty well under by then anyhow. It wasn’t really a “future event” in 1998. The burst, of course, was still in the future. But the birth had already occurred.

I can’t even see anywhere in your second cite that concludes that the prosperity of the 90’s was due to a stock bubble, let alone describing any empirical analysis to support this.

Yeah, that’s probably not a very good citation. I’ll retract it. I offered before only because I liked this portion:

The tech-boom of the 1990s brought a sense of euphoria to the propertied classes of the United States and Europe. . . . After Enron, WorldCom, and many other large corporations crashed in high-profile lawsuits and bankruptcies, the stock markets plunged in 2000 and the economies of the rich countries suddenly looked very shaky.

But you’re right; that appears to be opinion only. There’s no empirical data given to support the claims of their claim.

[UncleBeer]

@Hentor the Barbarian

Or conversely, Bush was elected, and the prosperity ended.

Except those events don’t coincide all that well. There was a downturn already under way during the 2000 national election. And Bush didn’t get his first federal budget until late 2001. Until that time, we were operating under the last Clinton budget.

[Hentor_the_Barbarian]

@UncleBeer

Sorry. First link - pages 9 & 10. Particularly the footnote #13 on page ten:
See also the “Growth Slowdown” section of Table 2 - Leading Symptoms & Indicators on page 32.

Thanks for the follow up.

[UncleBeer]

Please help me, UncleBeer, to understand how these are relevant to your assertion that “the prosperity of the 90’s was due to a stock bubble.”

Rats. I missed this one - didn’t C&P enough from my scratch pad.

From the bottom of page 5:

Another possibility is that currency and banking crises are caused by common factors or events. For example, McKinnon and Pill (1994) examine the role of capital flows in an economy with an unregulated banking sector with deposit insurance and moral hazard problems of the banks. Capital inflows in such an environment can lead to overlending cycles with consumption booms and exaggerated current account deficits. Most of the times these overlending cycles are also accompanied by booms in the stock and real estate markets.

The author is indicating that the currency & banking crises casued by overlending that he speaks of in the conclusion (which you quoted) are often driven by inflation of stock & real estate prices. That overlending goes hand in hand with overconsumption. Consumption is conflated with prosperity.

[Weirddave]

@bup

Hell, we’re Democrats, not communists.

You might want to make this into a sign and carry it arround so people will be able tell the difference as you march back and forth proclaiming more government is the cure for all our ills.

[askeptic]

@Weirddave

You might want to make this into a sign and carry it arround so people will be able tell the difference as you march back and forth proclaiming more government is the cure for all our ills.

Thats funny, I thought you were a registered Democrat. That being the case why would you refer to Democrats as “they”? Or is there something you are not telling us? :rolleyes:

[bup]

@Weirddave

You might want to make this into a sign and carry it arround so people will be able tell the difference as you march back and forth proclaiming more government is the cure for all our ills.

Have you read the fucking thread at all? Did you read the FUCKING OP?

Hey, Weirddave, I say the earth orbits the sun. What do you say?

[Weirddave]

@askeptic

Thats funny, I thought you were a registered Democrat. That being the case why would you refer to Democrats as “they”? Or is there something you are not telling us? :rolleyes:

Where did I refer to Democrats as “they”? As for my party status, if you haven’t figured out that I’m unhappy with the way the party is being hijacked to the left by now, you haven’t been paying attention.

[Weirddave]

@bup

Have you read the fucking thread at all? Did you read the FUCKING OP?

I’ve read the whole fucking thing, why?

[Fear_Itself]

@Weirddave

You might want to make this into a sign and carry it arround so people will be able tell the difference as you march back and forth proclaiming more government is the cure for all our ills.

Bush has fueled the growth of big government more than any other president in history:

Domestic discretionary spending rose 7.1% a year in President Bush’s first term, the highest of any modern president. Education spending is up 139% in the president’s first five years, and government energy spending has doubled. The 2002 farm bill added $8 billion a year to spending, the Medicare prescription drug bill will cost at least $33 billion a year, and ethanol subsidies are up $2.3 billion. Congressional earmarks have grown too, from almost none in the 1980s to some 13,000 last year. Some 6,373 of them, costing $24 billion, were in the recent highway bill. Some vision, some vetoes and some fiscal discipline are needed to control and then decrease annual spending growth.

I guess that makes Bush a communist in your mind, eh?

[Weirddave]

@Fear Itself

Bush has fueled the growth of big government more than any other president in history:I guess that makes Bush a communist in your mind, eh?

Pretty damn close, why?

[Fear_Itself]

@Weirddave

Pretty damn close, why?

Just so’s were clear you mean Bush & Friends pounding the pavement.

[DrDeth]

@UncleBeer

Except those events don’t coincide all that well. There was a downturn already under way during the 2000 national election. And Bush didn’t get his first federal budget until late 2001. Until that time, we were operating under the last Clinton budget.

Actually, they co-incide exactly. I remember it exactly, around the day that the election was more or less final, the Stock market took a nosedive and stayed down for years (I lost about $20000). Now, I’ll freely admit this wasn’t exactly GWB’s fault as he hadn’t even taken office yet. But the thought that he was *going to * made the stock market magically turn all those Bulls into Bears. The Market is a strange animal, and it’s doings can’t always be laid to reason, I’ll admit. But the “crash” was caused by GWB being elected- perhaps based upon what he said he was going to do. Or maybe it was sunspots. Or maybe the market just doesn’t like change. Or maybe they figured that the bubble was going to burst someday and the election of GWB would cause the burst.

[Weirddave]

@Fear Itself

Just so’s were clear you mean Bush & Friends pounding the pavement.

I’m not sure what you mean here.

[Fear_Itself]

@Weirddave

I’m not sure what you mean here.

Carrying the sign, so we know who the communists are.

[Weirddave]

@Fear Itself

Carrying the sign, so we know who the communists are.

Ahh. Fair enough. Can Bush spell “communist” do you think? Maybe Dean’s sign should read “co-HAAAAA!-munist”

[Fear_Itself]

@Weirddave

Ahh. Fair enough. Can Bush spell “communist” do you think? Maybe Dean’s sign should read “co-HAAAAA!-munist”

Maybe the same way he says “terrist-sts”

[Airman_Doors_USAF]

@DrDeth

Actually, they co-incide exactly. I remember it exactly, around the day that the election was more or less final, the Stock market took a nosedive and stayed down for years (I lost about $20000). Now, I’ll freely admit this wasn’t exactly GWB’s fault as he hadn’t even taken office yet. But the thought that he was *going to * made the stock market magically turn all those Bulls into Bears. The Market is a strange animal, and it’s doings can’t always be laid to reason, I’ll admit. But the “crash” was caused by GWB being elected- perhaps based upon what he said he was going to do. Or maybe it was sunspots. Or maybe the market just doesn’t like change. Or maybe they figured that the bubble was going to burst someday and the election of GWB would cause the burst.

They do not coincide exactly. The all-time closing high of 11,722.98 occurred on January 14, 2000. Since then it descended down to a low of 7,286 in September 2002 and is as of today back up to 11,317.42.

In other words, it’s almost back to what it was when Clinton still had a year to go. You can’t blame the downturn on Bush. I know you’d like to, but it’s not true. Clinton presided over the downturn, Bush dealt with the aftermath, indicating that the dot.com bubble burst under Clinton’s administration, along with the Enron, Rite Aid, Adelphia, and WorldCom fraud scandals. Admittedly, the downturn ended up being pretty severe, but with 9/11, the new Sarbanes-Oxley rules, and the general herd mentality of the market it was naturally going to take a long time to turn around. And it has. You can’t dispute that.