Recession: What are the chioces?

[Gary Childress]

OK. We've seen the choices offered so far: Bail out the rich on Wall
Street or vote Republican and get a tax cut on the $10,000 dollars you
made this year.

But what are the other choices? What would really get us out of this recession?


What do YOU think we ought to do (if anything) to combat the current
economic crisis?

 

[JerichoHill]

That's disingenous.

If You go to Recovery.Gov you can clearly see how the stimulus money has been apportioned.

As far as the one bailout that has occured, that was during Pres Bush's tenure.

As far as what to do

1) The government needs to appear like its doing something
2) The public needs to believe that the government is trying to do something
3) Obama needs to channel the speeches of FDR and RR
4) And then pray we don't get hit with another bad random occuring thing

 

[Rashiminos]

1) The government needs to appear like its doing something
2) The public needs to believe that the government is trying to do something
3) Obama needs to channel the speeches of FDR and RR
4) And then pray we don't get hit with another bad random occuring thing

1) Does it?
4) Which is good for what, exactly?

 

[carmen510]

Basically, all the government truly needs to do is appear its doing its job [with the package] and consumer confidence will go up, thereby saving the economy with much needed spending. After all, Harding overlooked the 1920-21 recession simply by tightening the government's budget, and the economy was booming within a year. Possibly add in more oversight over credit, but that's really it.

 

[Gary Childress]

As far as what to do

1) The government needs to appear like its doing something
2) The public needs to believe that the government is trying to do something
3) Obama needs to channel the speeches of FDR and RR
4) And then pray we don't get hit with another bad random occuring thing

Shhhhh. Don't let the public know it's all just play acting.

 

[JerichoHill]

Yes, pretty much its a psychological battle. But the price of inaction is *not good* when the expectations for action have already been put down. You cannot bait and switch at this point.

So go with the least harm stimulus. Which, for what its worth, the libertarians over at MarginalRevolution seem to think is pretty close to what we got.

 

[SS-18 ICBM]

I'm not really sure tax cuts can do anything when companies and consumers are losing a lot of money.

 

[innonimatu]

4) And then pray we don't get hit with another bad random occuring thing

Another bad random thing? There was nothing random about all that happened!

I'll give you the next "bad random thing": economic implosion in Eastern Europe and half the european banking system going down before the ECB can do anything about it.
Nothing which wasn't already obviously inevitable for a couple of years now.

 

[JerichoHill]

I'm not really sure tax cuts can do anything when companies and consumers are losing a lot of money.

I was discussing this over lunch with the other economist I work with. We think the idea is either to buttress savings accounts or allow consumers to pay down CC / loan debt, thereby taking down overall debt and improving balance sheets. So, we're thinking its not going to be a consumption based effect, but rather, a wallet cleansing effect?

 

[JerichoHill]

Another bad random thing? There was nothing random about all that happened!

I'll give you the next "bad random thing": economic implosion in Eastern Europe and half the european banking system going down before the ECB can do anything about it.
Nothing which wasn't already obviously inevitable for a couple of years now.

9/11 was random and has had ramifications on how the housing crisis began and played into the current fiscal crisis. I was specifically hinting that another terrorist attack would be another straw on the camel that' s very thirsty right now

 

[innonimatu]

Is there anything that cannot be blamed on 9/11?

 

[Dachs]

Is there anything that cannot be blamed on 9/11?

Yes, there is.

 

[SS-18 ICBM]

I was discussing this over lunch with the other economist I work with. We think the idea is either to buttress savings accounts or allow consumers to pay down CC / loan debt, thereby taking down overall debt and improving balance sheets. So, we're thinking its not going to be a consumption based effect, but rather, a wallet cleansing effect?

I think helping consumers pay down debt would help revitalize consumer spending in the long run. Could this go hand-in-hand with renegotiating mortgages?

 

[Gary Childress]

Yes, pretty much its a psychological battle. But the price of inaction is *not good* when the expectations for action have already been put down. You cannot bait and switch at this point.

So go with the least harm stimulus. Which, for what its worth, the libertarians over at MarginalRevolution seem to think is pretty close to what we got.

"Least harm stimulus"? So government intervention = harm?

 

[hossam]

what we need to do is invade Mexico and steal all their natural resources.

 

[Gary Childress]

Of course. Every self-respecting anarcho-capitalist knows that any compulsory deal is ineffective, be it slavery, government "protection" and social services or whatever.

What is effective, are voluntary deals. If one of the traders doesnt provide satisfactory service to the other, he is able to switch to a better alternative. No such option with a government, which eliminates any government obligation to be efficient(and no people wont make it effective through democratic elections. could you make macaroni producers effective if you had the chance to choose a macaroni producer once every 5 years and hope he will do a good job with no chance to pressurize him should things go awry?)

I don't know. "Anarcho-capitalists" seem to place all their trust in companies and business. Businesses are inherently hierarchial and totalitarian institutions. Government on the other hand can at least theoretically be more democratically administered (granted it isn't perfect but nothing in this world is going to be perfect). I don't see how there can be such a thing as "anarchist-capitalism". Maybe you should just call youself a laissez faire capitalist. "Anarchist" seems rather misleading.

 

[JerichoHill]

Oh, and FWIW, I wouldn't be investing in any Bank of America or Citigroup stock. Their TCE ratio is awful and they're very close to entering what I'd call "zombie-land." I hope they have good bankruptcy lawyers.

And FYI, Anarcho-capitalism is an unsustainable system, based on bad extrapolations off the Austrian School. Essentially, its radical libertarianism, not rational.

 

[JerichoHill]

"Least harm stimulus"? So government intervention = harm?

No. The government has the capacity to do both good and bad by intervening. When I say least harm, that is a risk mitigation term used in policy discussions.

 

[SS-18 ICBM]

One way or another, the REAL economy has to be cleaned up. Keeping cheap money available is what is holding the buttload of bad companies up, and it needs to be ended by increasing interest rates and stopping insane government spending & lending so the economy can be efficient again or else rapid inflation will follow and do the job the hard way.

Isn't cheap credit the foundation of American consumer spending?

 

[Gary Childress]

Isn't cheap credit the foundation of American consumer spending?

Buying with promise to pay tomorrow does seem to be the foundation of a LOT of consumer spending.