The University of California is shutting down building projects, even if they had started. There are some jobs there that are going missing.
Here is a way to get a bi-partisan stimulus bill done - build the Great Wall of America’s Southern Border! Everyone talks about how it is too expensive - well now everyone says that we should spend money that we do not have! Think about the job creation along our Southern border!
Well, if you want to argue your hypothetical situations over the professionals’ math, then that’s fine. The whole reason that the multiplier is thought to be around 1.6 now, and not 4 or 5, is due to decades of evidence, but maybe they all forgot to carry the one or something.
But I gotta say, I find it fascinating that arguments more than half a century out of date are being recycled. And I find it even more fascinating that so many of the people who are headed straight into the wilderness are so totally oblivious that the early explorers went there and found not a damn thing. We have seriously got a few people arguing stuff that even Friedman didn’t doubt. That’s how science progresses, so I wish them the best of luck. But their profound ignorance that they’re on old roads does not bode well for their success. Most genuine pioneers happen to be aware of the trails that have already been blazed.
I have a feeling we read the same blogs. Brad DeLong was saying exactly what you’re saying a few days ago on his blog. I read Eugene Fama’s re-statement of the Treasury View, and DeLong’s deconstruction of it. I’m not making the same kind of fallacies, but you insist on trying to lump me in with that kind of thinking.
I’m making an entirely different argument, closer to the one Kevin Murphy from the University of Chicago is making. More specifically, I’m zeroing in on one aspect of his criticism, which looks like this:
from Brad DeLong’s site:
This is a very interesting equation. First note that this isn’t a measure of whether or not there will be a stimulus - it’s a measure of whether, in the long run, the spending on the stimulus will result in a net benefit to the economy or a net drain.
Now, some of the terms in the equation are debatable, and the values you assign to them will definitely come from your own political bias. For example, the ‘alpha’ term is a measure of how efficient you think government spending is. Conservative economists tend to think alpha is pretty high, liberal economists might even think it’s negative (i.e. government is more efficient than the market). So there’s room to argue over where the numbers should be, but the formula itself seems pretty solid.
What I’m most interested in here is the (f) term. This is the measure of how much of the resources in play are idle. DeLong takes Christina Romer’s view that you can treat this as 1.5 - the multiplier they expect from the stimulus. In other words, if all the money did was push around resources that are all gainfully employed, the result would be no stimulus and a direct transfer of GDP from the private sector to the public sector. They don’t believe that, so they believe that ultimately, idle resources will be consumed.
Murphy thinks that f is .5, but he doesn’t really say why, other than to talk generally about some factors that make it lower than you’d think - the already-existing value of unemployed workers, the cost of preventing them from moving into more efficient jobs by stimulating the old ones, etc.
I started thinking about f when specifically talking about infrastructure spending as stimulus. It seems to me that f is the lowest for this type of ‘stimulus’, because any time you target your money at very specific industries, and especially high technical ones, you run into issues of specialization and labor mobility and outsourcing that is going to make it very hard to draw from only idle resources.
For example, no one in their right mind would think that you could implement a 20 billion dollar health care digitization program by employing only unemployed programmers. Such a project would be extremely challenging, and take a long time, and will be ‘front loaded’ with large payments to very good, very senior analysts who are almost certainly already employed doing other things. So the general assumptions of a stimulus done at a high level such as those an economist might make are completely missing the real-world difficulties of staffing an infrastructure project.
So as a fun exercise, let’s take Brad DeLong’s numbers, but change f into something more realistic. Let’s make all the liberal assumptions he does (government is as efficient as private industry, the deadweight loss of taxation is small, etc).
So, for the stimulus to be a net benefit, it has to beat α+d, or the efficiency of government plus the deadweight loss of the taxation needed to pay for the stimulus, which DeLong believes is close to .33.
The formula for the positive side of the equation is f(1-λ). That is, the number of idle resources, multiplied by the remainder of whatever value those resources currently have. If we use DeLong’s value of .2 for lambda, the final condition we get for determining if our stimulus will work is: .8f > .33, or f > .41
Stated simply, our infrastructure stimulus will be a net drain on the economy unless at least 41% of all the resources used would have otherwise been idle.
That doesn’t mean 41% of a project has to come from idle resources, because there are multipliers - if 20% were, idle, they would generate new economic activity which in turn would generate other activity. Let’s use Romer’s multiplier of 1.5, and divide that - that would indicate that the infrastructure projects themselves would have to pull about 27% of their resources from sources that are currently idle for them to pay for the government spending and taxation used to fund them.
I don’t believe that, overall, you can come anywhere close to that number. I work on infrastructure projects all the time. In fact, I’d probably be employed on one of these projects. But I’m already employed, so I might be taken off a current project and put on one of these. You can’t count me or any of the other people on my team as adding to the ‘stimulus’, even though I might ultimately be paid with ‘stimulus’ dollars.
Bear in mind that that 27% number is derived while accepting all the other assumptions made by a very liberal economist.
Another argument that Murphy has made (and others, such as Clinton’s OMB director Alice Rivlin) is that the needs of a stimulus actually conflict with the needs of infrastructure. That is, you typically want to add to infrastructure where it is currently over-used and in need of expansion. In terms of economic benefit, that’s where you want your money to go. But in terms of a stimulus, you want to spend money in depressed areas where there may already be too much infrastructure. There’s lots of unemployment in Detroit, but the last thing Detroit needs is more highways. There’s not a lot of unemployment in Florida, but there’s a high need for better infrastructure.
The other problem with infrastructure spending is that the ‘need for speed’ for a stimulus almost certainly has to make the spending less efficient. So even if you believe that alpha is normally zero for government, that can’t be the case for rapidly-chosen infrastructure. And for alpha to be zero, (f) almost certainly has to be low. The two desires directly conflict with each other.
The “Treasury View” stuff is more ridiculous on its face, but Say’s Law or the type of recession, it’s all theoretical errors, misrepresentations of stimulus.
If the theory’s wrong, it’s wrong. But it’s one thing to get to the right conclusion, and it’s another thing again to get there for the right reason.
When I took econ 40 years ago or so, the multiplier effect was 9 to 1 for money put in banks. We have no savings in America now ,so 9 x 0 = 0.
Cutting taxes to corporations does not create jobs. It never has ,never will.
Money put into the infrastructure is not wasted. It needs to be done. There will be jobs created and work that needs to be done will be done.
Where did our jobs go? It all started in the energy sector a few years ago. The execs started brooming workers. They showed a huge profit for a while . It is logical. The execs got huge salaries and bonuses . But the infrastructure fell apart. But they really did not care. The execs had moved on to other companies and were treated like financial geniuses. So what happened is that workers wages were moved up to the execs. They were making fortunes as jobs were slashed. That money became theirs.
Offshoring was the same logic. Cut wages, eliminate environmental laws and labor protection and huge short term profits will follow. And they did. The execs got filthy rich off the backs of the jobs they eliminated and the salaries they cut.
The financial execs created wealth by taking the equities that people had in their homes. They offered cheap loans based on the increase in value in homes and the built up equities. They offered a great life style if you signed on the dotted line. That money filtered up to the top. They got filthy rich by grabbing a few thou from one house at a time. The wealth and security of America went into the pockets of the financial gurus who created incredibly complex financial instruments to obfuscate their theft.
HuffPost - Breaking News, U.S. and World News | HuffPost Yep they get it.
The US savings rate has more than doubled in the last four months. This will be a good thing eventually when those dollars have real investment opportunities to chase after, but right now those savings can only really help prop up the national debt. Buy war bonds!
And anyway, the money multiplier is based on banks lending it back out, since practically all money eventually ends up getting deposited in a bank eventually. We’re in a deflationary situation because banks don’t want to lend during a recession. But if we had a big enough stimulus, a big honking one, we could create some inflationary pressure anyway in this situation where the Fed has already exhausted its regular options.
Do corporations employ people?
Do they use money to employ people?
If they have more cash on hand, could they employ more people?
If their taxes are cut, would they have more cash on hand?
The answer to all those questions is “yes”. The issue here isn’t whether corporate tax cuts can potentially create jobs as part of a stimulus. They can. The problem is that corporate tax cuts would give us relatively little bang-for-the-buck. Cutting corporate taxes would create some jobs, just not nearly enough of them.
The question is whether corporations expect to get enough revenue to make it necessary to employ people. If not, tax cuts will just go to the bottom line, and not be productive at all. If corporations see opportunities to expand, a tax cut will be cheaper than borrowing, and then it makes sense. Not now, and not in 2001.
My company is sitting on a nice pile of cash and is still laying people off because of a reduction in revenue.
BTW, Sam’s quote said
I’ve got two questions.
Which economist is clueless enough to say that the actual resources employed is 1- unemployment rate. I’d assume that everyone who deserves the name knows the actual definition of this rate.
We’ve had deficits for the past 8 years, and an awful savings rate. Are certain economists blind to data?
That’s another way of saying exactly the same thing.
Your business is shedding jobs. Some other businesses could expand. They could employ more people. The whole reason bang-for-the-buck will be low is that it won’t be many. But “a small effect” is not the same thing as “no effect”, which is what gonzo was arguing.
Yes. Yes, they are.
Wasn’t it you asked for the cite about the Chicago economist who claimed that labor supply is our main problem right now? Labor supply the main problem, during a recession? That’s a mistake I would never have thought possible from a professional, not in a million bajillion years. A flunk-out-of-undergrad-econ mistake, and yet it happened. I think Mark Thoma summarized the problem the best:
They’ve just plain forgotten everything outside their narrow field, even the most basic stuff.
Econ takes a lot of shit from people who don’t know it, but there’s just no denying that some of it is deserved.
And this happens only to economists on the right? As opposed to say, Paul Krugman?
I’ve done a lot of listening to economists on both the left and right. I hear them talking past each other a lot, because they simply don’t share the same assumptions. Or they differ wildly in their assumptions about initial conditions in ways that are not very amenable to scientific test.
That’s what I liked about the Murphy equation - it’s not biased to the left or right - it’s just a tool for thinking about the problem. It’s similar to the Drake equation - you can’t actually use it to predict anything useful, but it helps organize your thinking and forces you to make explicit those assumptions that may not have been so explicit in your original thinking.
The equation also shows how economists can use the same basic math and come to wildly different conclusions, split fairly closely down political party lines. The values you assign for things like deadweight loss to taxes and the efficiency of government are essentially political questions because the data behind them is difficult enough to interpret that it essentially becomes a political opinion. If you think more government is a good thing, and you trust government to act rationally more so than the free market, you’ll naturally assign values that allow you to use this equation to justify a bit stimulus. But at least you’ll have to think about those values and defend them, rather than leaving them unspoken behind the model.
One thing I will say - I’m surprised by the unprofessional tone a lot of the ‘left wing’ economists adopt. Their writing can be vitriolic and condescending, even when communicating with their peers. This is a destructive attitude to have in an academic setting. And if you’re a professor with a blog, such as Brad DeLong, you also owe it to your students to set an example for proper professional behavior. You have to give your fellow colleagues the courtesy of assuming they are also professionals and not morons or somehow blind to the most basic economic facts.
I agree that Murphy’s equation is a good starting point for a discussion. However I disagree that all de Long’s assumptions are necessarily “liberal”. The assumption about the variable a is more about taking contentious issues off the table. Liberals don’t believe that a is zero ; they believe that it is negative for the programs they support which is after all why they support them. This is not because government is more efficient but government is doing things that the markets aren’t because of various market failures and because government spending disproportionately helps the poor whereas taxes come disproportionately from the wealthy. De Long’s assumption basically takes these inherently political issues off the table.
Focussing on the f variable I don’t find 27% to be high at all though it would be useful to have actual data on what it might be. Some points focussing mainly on unemployed people:
In terms of time horizon we are probably talking about 3 years. Even if the recovery starts later this year it will probably be quite sluggish to start with particularly with respect to new jobs. Therefore even if the stimulus helps only by 2011 it will still be quite useful.
There are market forces that would lead unemployed people to disproportionately fill the new jobs that are created. Unemployed people are desperately hunting for jobs right now compared to those who already have jobs. They would probably be willing to work for less than those who already have jobs. A fair amount of the stimulus spending will be on temporary projects which won’t be very attractive to the currently employed.
As the recession proceeds the variety of unemployed people is steadily increasing with more and more firms seeing layoffs. There will also be start-ups which break up, self-employed people who need jobs, graduates who don’t immediately find jobs etc. Therefore the range of skills available from the unemployed will widen.
Say the medical billing projects requires a lot of skilled programmers who are already working. What percentage would the positions with really specialized skills be? 20%? 30%? That seems high but still leaves a lot of room to hire people from among the unemployed especially if they are retrained for some time. And there are a lot of stimulus projects like school renovations which aren’t really that specialized at all.
Even if stimulus spending initially attracts an already employed person it will create a vacancy at his/her old job. Even if that vacancy isn’t immediately filled it up, sooner or later it’s likely to be. Even if it is filled up with another already employed person that will create a new vacancy. Over the course of three years there is a lot of scope for unemployed people to be hired this way. Note that this vacancy effect is not the same as the multiplier.
Overall if you include all the indirect effects and you have a reasonable time-horizon I would suspect f is greater than 1. Ultimately demand is pretty fungible and there is a strong incentive to use unemployed resources. That is de Long’s broad point. That is why focussing on the minutae of the kind of jobs created by the stimulus projects isn’t that helpful.
It’s not about whether your programs are better. Remember, this formula isn’t really abotu a stimulus - it’s a formula which tries to quantify the factors required to determine if, on balance, the economy as a whole is better off in the long run if the money is spent.
So alpha isn’t about comparing say, government health insurance against private insurance, it’s about comparing government health insurance againstl all the other ways that money might have been spent in the private market. No one disputes that if you create a government health insurance program you will wind up with more people who have health insurance - it’s about whether it’s worth the cost of having more people with health insurance. As I said, that’s an inherently political question, and that’s why economists can agree on the mechanisms and still split down partisan lines when it comes to the details that drive them.
We have had programming jobs open for months because we couldn’t find qualified applicants to take them. One of the pushes to outsource programming isn’t to save cost, but to tap into a larger pool of programmers since the right ones can be so hard to find.
When it comes to highly technical fields, or fields that require a lot of training, it’s hard to expand because it’s hard to find people to fill the jobs. Even if 10% of construction workers are unemployed, If the job pool in a given region is usually about 5000 construction workers, then you’ve only got 500 people to choose from, spread across a couple of dozen different trades. That means you have to bring in migrant workers. That raises costs dramatically and makes implementation much slower. That’s if you can find enough of those workers.
By that logic, a stimulus is useful any time. Let’s be clear - a stimulus is done with borrowed money. That’s the only way it can stimulate the economy. Borrowing money to inject consumption into your economy is a mechanism of last resort. If the economy is already recovering, the last thing you want to do is inject a stimulus into that mix.
And now you’ve introduced another problem for the formula to work out - Lambda. This is a measure of the change between the ‘idle’ state of a worker and the ‘employed’ state when provided a stimulus job. If your workers are being forced to take less than market value for these jobs, then you can’t say that you are taking them from unemployment to full employment - it’s more akin to a part-time job in terms of take-home pay. In the meantime, you may be keeping some of these workers from moving on to higher paying jobs.
So by saying that the stimulus jobs may not pay as much, you’re raising the bar for the stimulus to work.
It probably will, but that doesn’t solve the problem. The problem is that a local labor force grows to fill local labor demand. If labor was fungible, and anyone could do anyone else’s work, then you could just treat them all as a ‘labor pool’ and assume you can fill all jobs with idle resources. But labor isn’t fungible, and the velocity of change in the composition of the labor market is far too slow for a meaningful ‘stimulus’ package to take advantage of. If you decide to build infrastructure by building a new hospital, you’re going to find that there’s not a lot of current unemployment among doctors and nurses, and you’re not going to fix that problem overnight. Canada still has a shortage of doctors and nurses decades after we set all the quotas and took over managing the problem.
You’re guessing. I’m not going to throw out numbers, because I don’t know. I will say this, though - that in the early phases of the project (like, the next five years), the people doing the heavy lifting will be analysts, architects, and senior planning personnel. That’s not exactly a demographic with high unemployment. Furthermore, a lot of that kind of work of that scale is bidded on by foreign companies very aggressively. Any money that goes abroad utterly fails as a stimulus. That means ‘buy American’ to make the thing work at all, and that means a possible trade war.
There is always a cost involved in that kind of dislocation. For one thing, the person removed from that field might have been very productive in it, and less so in the new field. For another, if someone fills that job, it leaves another job wanting. Ultimately, you wind up with permanent changes in the various sizes of the job pool. We may move from building things we really want to building things we don’t want as much, but are stuck with because government subsidized it.
So, if we passed a stimulus by saying we’re going to hire ten million new doctors, and put a doctor on every street corner, that doesn’t matter? Talking about the exact kind of job is not that helpful?
Sorry, but once you get out of the classroom, the real world intrudes. Your multiplier may not get out because people aren’t cooperating, or simply can’t be pushed around like terms in an equation. This is not just hand-waving - these kinds of effects are exactly what make government action unpredictable and lead to unintended consequences, and they are why we still argue about what really happened with past stimulus programs.
What an odd thing to say, Sam, after multi-page arguments based almost entirely upon academic economic theory. We might have sold many units of drops designed to counter the Eye’s Glazed Over phenomenon so prevalent in discussions of academic economics. ("Glaze Off! Apply directly to the eyeball! Glaze Off!..)
But what about the irrationale of “economic stimulus”. As much as we might like to pretend that humans are rational actors, with definable parameters for their actions, it just ain’t so. We are monkeys, and monkeys are perfectly capable of using rational means to advance irrational agenda. (For a cite, see History of the Human Species, 30,000 B.C.E to the Present)
How important a factor are such human responses? When your brother-in-law gets a job and relieves you of the dread of his importuning phone calls, what does that mean to your consumer confidence? Quite a bit, I imagine. What happens when 10,000 people drive by a road project and think, however fleetingly, “Ah! Something is being done!”.
In a consumerist economy, consumer spending is the ball game. Providing funds for consumers to spend is crucial, of course. But co-equally crucial is providing the confidence that such money can be spent, rather than hoarded to buy ammunition when the Collapse comes.
The people must see Big Things Being Done, and they must see it soonest. Yesterday is a bit late, tomorrow is right out. Given the relentlessly grim outlook, an entirely rational consumer response would be do auction your chidren on E-Bay, and hoard the proceeds. But that’s not what we want, we want them to buy their children clothes, and shoes, and I-pods.
We need to act now, and we need to act huge. The people must…repeat, must!…see the giant wheels turning, and turning fast.
Is this a gamble? Hugh Betcha! But we were “all-in” before we even saw our hole cards, its a bit late to start calculating odds. Unless the people see, and believe in, recovery, none of this careful head-scratching and slide-rule sliding is going to matter. Unless we clap, Tinkerbelle dies.
(For a final suggestion, may we safely ignore the rational analysts amongst us who thought an Excellent Military Adventure on borrowed money was a splendid idea? I believe they have already demonstrated their, ah, “rationality”.)
I’m going to say that the first step to getting out of this massive hole is to take the shovel out of the hands of those that dug it in the first place and stop paying any attention at all to their apologists no matter how many words they spout.
If you look at the last couple of recessions you see a pattern of two years of sluggish growth even after the recession ends. During that period a macroeconomics stimulus would still be useful. This current recession is far bigger than the last two so it makes sense to plan a stimulus which will last till 2011 or even 2012.
Once you consider a three year horizon many of the points become much less persuasive. During that period it will be possible to re-train workers to learn skills. Unemployed workers, certainly those who have been unemployed for more than a year, will be willing to move to get a job. If a stimulus-created job is taken by someone who is employed the vacancy is likely to be filled perhaps by someone who is unemployed. And so on.
No one is being forced to take any job. The stimulus is creating job opportunites and it is up to workers to choose whether to take them or not. This is true for employed workers who apply for a stimulus-created job; they will only do so if it offers them a better deal than the current job. The point is that market mechanisms will ensure that stimulus jobs are disproportionately taken by unemployed workers for the reasons I mentioned before.
First of all note that the medical IT project is just 3% of the total stimulus. There is a wide range of projects and spending plans most of which don’t require lots of highly specialized staff. Secondly there are an increasing number of layoffs for researchers,systems analysts and the like as firms cut their research and IT spending. Also as mentioned before any project no matter how advanced will require a wide range of support staff. Secretaries, assistants, HR people, technical writers, low-level programmers etc. Not to mention the points about vacancies being filled up eventually.
Not necessarily. You are seeing a number of governments doing a stimulus. It’s OK if a bit of the US stimulus goes to Europe because there is a European stimulus a bit of which goes to the US. In any event if you look at the list of spending, a lot of it is likely to be local in nature.
The point is that the actual stimulus has no relationship to the assumption you are making. It is spread across a wide range of sectors requiring a wide range of skills. Energy, education, health, transportation, housing, aid to states, aid to the poor etc. Obviously the political process will ensure that the funds are widely distributed across the country. You arguments seem to assume lots of highly specialized jobs being created in a few locations which just isn’t true. Similarly the unemployed are becoming increasingly diverse in their skills and location. Firms like Microsoft and Boeing are seeing layoffs. There will be a whole bunch of skilled workers and architects being laid off in the construction sector. As the recession progresses you will see job losses across most states and occupations. So it’s quite likely that a broad stimulus package will be able to provide jobs to lots of unemployed people.
Yeah well, you need both. Physics is highly technical and academic, but the first thing you discover when you attempt to apply it is that there’s no such thing as a massless, frictionless spring. And you don’t get to say, “ignoring all other factors…” like you can when writing a technical paper illustrating a principle.
Gee, I don’t know… the most technical thing posted in this entire thread was a little simple algebra. It’s not like we’re computing the first derivative of the change in money supply or something.
Certainly the psychology of a recession is an important factor - made worse, by the way, by the Democrat’s constant refain of, “Worst downturn ever!”. One of the things Obama has to do real soon now is to stop talking the economy down.
Actually, no. The United States has a consumer-driven economy only because A) it runs a large current account deficit, B) the people have been living on borrowed money, as has the government, and C) because it can borrow money from the rest of the world at fire-sale rates due to its status of being the safe haven for capital. The difference between U.S. global borrowing and lending rates provides a lot of extra money that makes up the difference between U.S. imports and exports without causing an economic meltdown.
But ultimately, you can’t consume things unless you make them. And ultimately, you can’t make them unless you invest in production. The problem with borrowing to prop up consumption is that at some point you have to pay the money back, and when you do you will make it hard to invest in the production needed to replace the things you consumed with borrowed money. This isn’t a problem today, but it will be. Today’s stimulus is the next decade’s fiscal hangover. It’s certainly not clear to me that it’s worth a trillion dollars today to ‘stimulate’ the economy at the expense of slowing growth down later.
How do you know this? What if what the people really want to see is their debt coming down? That’s more likely, you know. All the signs point to this being a ‘balance sheet’ recession, and that money isn’t moving because people are choosing to save, having realized that they were blowing their wad on a giant party for the past decade. Maybe you want the party to keep going, but maybe they just want to take a rest and rebuild their capital.
As for seeing big things being done… They aren’t going to. Not any time soon. You’re not going to see a bit employment spike due to infrastructure projects for at least a year or more, if then.
In the meantime, it’s also possible that the mere talk of this giant stimulus is damaging the economy, because it’s injecting uncertainty into a market already reeling from incomplete information. Now on top of that ‘toxic debt’ that makes it hard to calculate risk, you have the added factor of not knowing where the government’s big feet are going to land.
For example, California just put a whole bunch of state infrastructure projects on hold. They say they did it because they have no money. But of course, that’s exactly what they’d say if they stopped them because they’re waiting for the feds to pick up the tab, or at least part of it. You can bet that right now there are state projects all over the place not being started because no one wants to commit a hundred million dollars today to a project, only to find that if they’d waited three months the feds would have paid half of it.
So the Krugman mantra goes. You need to provide hard evidence of this, and not just foot stomping with full exclamation marks.
Let’s not forget that those ‘giant wheels’ amount to about 5% of GDP, spread over 8 years. I don’t think we’re going to see giant projects around every corner.
This is just way over the top. We are nowhere near ‘all-in’. Unemployment isn’t even in double digits. So far, this recession isn’t any worse than 1991. It’ll probably get worse than that, but it’s a little crazy to say that we’re facing such imminent disaster that we have to throw all our resources at the problem in a desperate gamble to prevent doom.
Allow me to translate:
"I don’t have an argument, and can’t refute yours, so I’m going to put my fingers in my ears and go, “lalalalalalalala.”
This is the worst kind of ad-hominem tripe.
I’d think that freeing up money for loans for expansion would be more effective in the long run than a tax incentive. That would force the companies to hire as much as is needed for productivity. What is to keep a company from hiring as late as possible to get the break, and then laying off the new hires as soon as they can get away with it?
And that article was rather dreadful. I felt inclined to write to Chicago to ask for some of the tuition money I sent them for my daughter’s econ degree back.
So, where are we with this? Is this “the essentials of the economy are sound, but we’ve got to give the banks tons of money” *a la *Paulson? Are you suggesting that our problem is purely perception? And that last bit about Obama “talking down” the economy is clearly absurd. You are demanding that he cease to advocate a viewpoint he holds, and is widely held, simply because Sam Says So. How the hell does someone advocate a solution for a problem by downplaying the problem?
Huh? Its still consuming, whether or not the production occurs here or no. You buy a banana from Guatemala and eat it, you’ve consumed it, no? How we obtain the things we consume changes nothing substantial, it still a consumerist economy. People buy stuff, economy hums, people don’t buy stuff, economy falters.
Well, of course you can! You buy them from someone else, as above with bananas.
You have amply demonstrated that this is not clear to you.
Says who this is more likely? Cite?
The people who are losing their jobs are not “saving money”, they ain’t got none! Really,** Sam,** what are you on about here?
Well, then, the sooner the better, no?
Definitely, if there is no problem, people shouldn’t create one out of conjecture. Is this your thesis, or merely a sideline that you are willing to abandon at the first sign of disagreement? As well you might, unless you sincerely believe that the economic crisis is nothing more than an illusion fostered by a few melancholy liberal doom-sayers. I think that the preponderance of evidence suggests otherwise.
They’re bluffing? They’re issuing IOU’s for payment as part of a scam? Arnold is doing this? You’re kidding, right? A bit of that droll Canadian irony?
Excuse me? Where is your “hard evidence”? Its perfectly OK to offer bald statements as arguments, what isn’t quite kosher is to do it yourself and demand that I do differently. You know as well as I, if not better, that “hard evidence” is slim in a study like economics, wherein so much “evidence” is interpretive, rather than definitive.
I can probably be persuaded to increase the size, if that is your intent here.
Jimminy Crickets, Sam! First you say it isn’t that bad, then you say it could get that bad, and then you complain about efforts to keep it from getting that bad. We could prevent this, then, by doing as little as possible, and not “talking down” the economy? The magic of the Free Market will save us?
No.