Ask yourself the following: is momentum a good thing or a bad thing?
One of the more persistent trends in the United States' postwar economic history is that the volatility in the performance of the economy has decreased over time. For example, from 1948 through 1969, the median change in the real GDP growth rate from one quarter to the next was 4.0 percent. Since 1987, however, it has been just 1.8 percent. A similar, although slightly less dramatic trend can be observed in the behavior of the unemployment rate. The economy, over time, has become increasingly sticky, stubborn, robust, stable, or whatever synonym you prefer. It has more inertial momentum than it once did.
Median Quarter-to-Quarter Fluctuations
Period GDP Unemployment
Martin Era 1948-1969 4.00% 0.23%
Volcker Era 1970-1986 2.91% 0.18%
Greenspan Era 1987-2009 1.81% 0.15%Decreased volatility -- momentum -- is generally thought of as a Good Thing. And it is a Good Thing -- if the economy is expanding.Right now, however, the economy is not expanding -- it is contracting. And when the economy is contracting, reduced volatility may be an altogether different thing. It may mean that contractions are longer as well. Take a look, for instance, at Justin Fox's graph at Time.com about the behavior of the unemployment rate over the past six recessions:
Lost jobs appear to be taking longer and longer to recover with each subsequent recession. In fact, if we look at all recessions since World War II, the three most recent recessions (prior to this one) are associated with the three longest time frames for employment to return to its pre-recession peaks. The 1991 and 2001 recessions in particular were associated with so-called jobless recoveries.
Months Required for Employment Rate to Return to Prior Peak
September 1948 20
July 1953 23
August 1957 20
April 1960 20
March 1970 18
July 1974 19
March 1980 10
July 1981 26
June 1990 31
February 2001 47
December 2007 ??You don't particularly see this trend, by the way, if you look at other measures of economic performance, such as GDP growth. However, as we transition into a post-industrial economy, there is less relationship between employment and GDP than there used to be. (The intuition, I suppose, is that labor is relatively less important as a factor of production than it once was).Now, this next part is going to be a bit more speculative. Suppose that we want to project the unemployment rate into the future (albeit rather crudely) based solely on previous unemployment rate data. This can be accomplished by running a regression analysis and using the unemployment rate at various past periods as the independent variables. For example, we can predict the unemployment rate in month M by looking at the unemployment rate in months M-1, M-2, M-3, M-6 and M-12. If we do this based on the entire post-World War II dataset of unemployment rates, we get the following:
This has the unemployment rate peaking over the summer at 8.1 percent before starting to decline; most economists would consider that to be a pretty decent result. (By the way, even though this is an extremely unsophisticated model, it is not necessarily out to lunch in thinking that the equilibrium unemployment rate will be in the high 5's rather than numbers like 4.0 that we are used to. The unemployment rate has never fallen below 5.0 in three of the last five economic expansions, and the average unemployment rate achieved during expansionary periods is generally quite a bit worse than the best (lowest) unemployment rate.
Now suppose instead that we perform the same process based solely on data from the Greenspan Era -- from August 1987 onward. This gives us a rather different result:
Here, the unemployment rate gets all the way up to 9.6 percent, and doesn't peak until May 2010 -- more than a year from now. If this projection is accurate, the economy might exit the recession somewhat sooner than that -- employment tends to be a lagging indicator -- but it won't be without a lot of suffering in the intervening months. The Greenspan Era data also seems to posit some periodicity in employment rates -- that is, the presence of business cycles -- but with superlong periods lasting for perhaps as long as 10 years. Perhaps the business cycle hasn't been eliminated so much as it has been extended. Momentum is a Good Thing if you're driving down the highway -- but a Bad Thing if you're driving off a cliff.
Now, there are much, much more sophisticated ways to do economic forecasting than this. My point is simply that some of the same things that might have been working in the economy's favor before could be working against it now. We have developed good tools for preventing recessions -- but this makes the fact that those tools are not working all that much more troublesome.
74 comments
I'm curious--what do these curves look like during the Hoover / FDR years?
Nate,
You know what might be interesting? If we look at the historical recessions/depressions predating the GD and compared them to the post GD era, focusing on the amount of corrective market regulation in each and its relative effects.
I hear laissez-faire extremists even now screaming that regulation does not work, and this is after the economic downturn created largely by a lack of regulation. If we were to illustrate which recessions were handled by what types of regulations, we can see if tax cuts really do anything, or if that's just an illusion. We can also see where real market regulation worked-or didn't.
Interesting. Check this out.
February 2001 47
If that is the case, Bush II only had a net growth of jobs from the peak of Jan. '01 from Jan. 2005 to Dec. 2007, or 35 months of additional job growth.
I'd be curious to show the periods of growth past the previous job peak prior to when the recession started. In other words, the period when job growth breaks the break even point and continues to grow to the next ocuring recession.
I wonder if a pattern would be detected. If in fact you could detect a pattern to detect when unemployment gets too low it could be an indicator a certain market is ballooning and it's time to take preemptive action, target the market specifically, and lessen the economic impact.
Lastly, one thing I'd like to point out.
None of these recessions was addressed with Keynesian macro economics theory no?
This will be an excellent experiment here to gauge which technique is more efficient, purely tax cuts or a mix of targeted stimulus along with tax cuts.
For anyone who hasn't seen this yet, here is an interesting news clip from CNBC
These two guys aren't too impressed with who's running our financial systems and suggest the only way to avoid creating these ridiculous bubbles that cause massive instability to our markets that have been occurring is to do an overhaul of the financial systems and they aren't convinced anyone in place now is capable of this.
As TMP pointed out in an article, those jokers on CNBC are trying to get investment tips from these two ignoring everything they are saying.
OK. Last link then I gotta work.
It appears something is seriously wrong with our financial industry if it is indeed this unstable.
As one of those for which this is a depression rather than a recession (a recession is when your neighbor loses his job, a depression is when you lose yours), all I can say is OUCH.
im in a depression too. Another family member is about to lose the 25 year old business.
i keep getting this feeling we are being lied to. a debate about a recession isnt helping.
Warning: This comment is Way Off Topic
the phrase "inertial momentum" is really bugging me.
It is seems redundant to the point of distracting.
Anyone care to give a mini physics lesson in the context of discussing the validity of this phrase?
This is really interesting, Nate. But could you show these charts with some kind of confidence interval around the curves?
Nate: What I think you ignore here is the possibility of a discontinuous event. Statistical models are one of the culprits in this mess with financial models built on "Value at Risk" (VAR) calculations that assumed normal distributions.
If we have a "fat tail" event here -- or what Nassim Taleb calls a "Black Swan" event, then we have to throw traditional statistics out the window and look more to Chaos Theory, and fractal math to "guide" us.
DIscontinuity is a fearsome thought.
Nate-
Nice post, and this model is as good as any at this point as we are so far outside the norms of the more sophisticated models as it makes them almost worthless - until we see the strngth and timing of the turn-around.
Holding my breath until we see stabilization in jobs/GDP/money flows. Will this stimulus and the TARP II help, sure. What should we do though? Let the CITI's and B of A's fail and do it like we know works. After Bush I brought us the S and L crisis we did the old fashioned way and took over the banks and spun themback out - this is what works, lets do it. We will have to in the end in any case.
One sticking point:
There is one circle of economic thought that the technological advantages we have now are lowering the barrier of reentry to the workforce. With online sites like monster.com and rapid retraining through online universities, full employment has been artificially lowered.
When you add data from pre 2000 to post 2000 data, you artificially raise your post-recession equilibrium. The problem is that without that earlier data you are working off of one recession data point that was "solved" with limited spending and trickle down tax cuts. By definition that will take longer to work through the system.
One analysis I'd like Nate to look at is the length of recession vs. what policies were enacted to end it. It might be a powerful proof of keynsian econ to show that governments that tried tax cuts ended up taking longer to repeir their economies than ones that tried spending (albiet to a smaller degree than we are now).
Geithner is on NOW.
The Time chart is pointless unless you take into account workforce population growth.
High workforce population growth leads to faster recovery. The two lowest population growth eras in the post war era are centered around 1975 and 1985. These should correspond roughly to workforce population in 1991 and 2001, I think.
I don't think you can draw any useful conclusions from that chart as it stands now.
you are awesome, nate! keep it up!!
@[ tyler curtain ]: To my knowledge, there is no data before approximately 1940. Nobody was tracking it.
@mhz: The phrase "inertial momentum" is, in fact, redundant. Inertia is the mass of an object; momentum relates the inertia of an object with its direction and speed. So, for two objects with the same speed (and direction), the object with larger inertia will have larger momentum.
The analogy, then, works out in the following way: The economy is larger now than it used to be, so it takes longer for changes (in direction) to occur.
ldf
Who the hell is this guy on CNN live stream right now? If Krugman is listening to this guy he is probably pulling his beard out.
Luckily Bush has left the country with a large number of things that can quite easily be corrected that also bring about a fair amount of economic benefit, such as:
(okay, not all of these are because of Bush)
1) Drawing down from then leaving Iraq, saving a few billion a month
2) Starting up relations with Cuba again - apparently there's quite a bit to be made from air traffic that has to go through Canada and I've read that removing the travel ban alone would result in $200 million a year for these companies
3) Resolving the situation with Iran as well - trade between Iran and the US has been increasing ever so slightly in spite of the sanctions and finding a way to come to a bilateral solution to remove these will help (of course it will help Iran much more than the US so this isn't as helpful as Cuba)
4) Cutting the defense budget by a bit, say 10-20%, but not in areas that directly affect employment. Just weird high-tech projects that don't look all that realistic and are bleeding taxpayer funds.
Don't forget that Canada has also approved a stimulus package of its own and the better cooperation there is between the two countries on their respective packages the better things will work out. Canada's investment is some $30 billion a year or so for the next two or three years, tiny in comparison to the US but still big enough that you'll want as much coordination as possible.
So in short: friendly up with Cuba, leave Iraq, work closely with the Canadians and things will go a wee bit better than they would otherwise.
I don't believe inertia and mass are the same.
Inertia just refers to a body's tendency to resist changes in its state of motion. "Bodies at rest tend to remain at rest"
So perhaps, an alternative phrasing could be "The economy, over time....has more inertia"
That is, it has become more difficult to change it's state of motion.
There is no claim in Nate's comments (or by use of the chosen physics terms) that this increasing difficulty is solely attributed to size.
We're currently twenty or thirty years into a period characterized by the following misguided trends, which can be guaranteed to produce failure -
1) Regressive taxation, leading to inadequate revenues and heavy burden on the vast majority of consumers.
2) Excess funneling of public resources into the military. Although military spending is partially a transfer payment/welfare program, and research funding program, it is ultimately almost a pure waste, and the most inefficient possible way to achieve the same beneficial objectives, when it exceeds the amount actually needed for defense.
These two policies have a proven track record of causing problems, whether in agricultural, pre-industrial mercantile, industrial, or post-industrial economies.
We also have been in a period of -
3) Enmity toward beneficial programs - hence inadequate environmental programs, universal health care only for the elderly and disabled (and thus most expensive to provide it for), excessively expensive education, etc.
This factor certainly leads to relatively worse performance in a modern economy, especially when quality of life outcomes are considered.
"Bubbles" may be undesirable, but they are just zero sum games. Every overpriced house or internet stock that was purchased also had a SELLER who gained what the buyer lost. I would suggest that bubbles will occur even in the best managed economy. The gradual deterioration of the US economy is probably due to the factors above.
Obama is a product of his times, and thus will address "1" and "3" weakly, while, at least in the near term, ignoring "2".
He is thus massively better than any realistic available alternative but also a physician who prescribes a beneficial but rather weak medicine.
Hence, I suspect that Nate's regression analysis accurately reflects true underlying trends.
I can only imagine what would happen if five or ten percent of military spending were redirected to beneficial civilian programs...
I think it's possible we're entering another period of relative volatility. Part of the moderation in the business cycle might have had to due with the reliance of the economy on finance and consumer credit, both of which are encountering difficulties they haven't faced before.
You guys are a bunch of socialists. If you would just admit it, the American people would throw you out.
Now we find out that there is a nationalized health care provision in the Spendulous bill. When the seniors find out that the government will ration their healthcare and decide which operation they get, there will be a revolt like you have never seen before. You will see every house and senate seat go to the opponent of this type of provision.
The revolt has already begun.
As a physicist, I will try and explain this inertia vs. momentum question, and determine whether the phrase "inertial momentum" is redundant.
Inertia as quoted from the always correct Wikipedia is: "the resistance of an object to a change in its state of motion". The mathematical description of this idea is mass, as correctly pointed out by Adam.
Momentum is the product of an object's mass and velocity. From Newton's second law, the rate of change of momentum is equal to the external forces acting on said object. Therefore, for two objects with equal velocity the one with higher inertia (mass) will have higher momentum, and thus will require greater external forces to change the velocity.
Since momentum is defined in such a way, it is clearly redundant to use the phrase "inertial momentum". Doing so is the same as describing someone's weight as "massive weight".
Nate -
I certainly don't think it is invalid to point out that the time-to-recovery in unemployment has been longer in more recent recessions.
But, one might look at your first chart and pick out another trend altogether. It appears to me that time-to-recovery mirrors, more or less, the initial decline in jobs. In other words, recessions that shed jobs the fastest are the fastest to earn them back.
That said, it could be argued that the relatively fast increase in unemployment we are seeing now suggests a relatively fast recovery when things finally do turn around. If that is the case, pre-Greenspan era data, counterintuitively, could be more useful in forming predictions than more recent data, because the current recession is more like a pre-Greenspan recession when there was greater volatility.
Of course, there is absolutely no way to determine the "right" way to look at this.
@MrZebra: Yes, that's what less inertia results in: faster initial job loss, but faster recovery.
What we do not appear to be experiencing is a relatively fast loss of jobs. The slope has been increasing, but for at least the first ten months so far, this has been one of the most gradual job losses plotted.
The fact that it is accelerating, and hasn't begun to level off is far more worrying. The job loss for January, for example, was seasonally adjusted. A total of 3.5 million jobs were lost, some of which were seasonal, but with lower hiring for this past holiday season, it's highly likely that the initial estimate will be adjusted upward.
Jack-be-nimble -
"You guys are a bunch of socialists. If you would just admit it, the American people would throw you out."
Mindless use of the word 'socialist' as a replacement for rational argument has made the word meaningless.
"Now we find out that there is a nationalized health care provision in the Spendulous bill."
WTF are you talking about? Can you please express yourself clearly and specifically? (That was a rhetorical question.)
Of course, it would be terrible if we had a sane health care system, like every other developed country, wouldn't it?
"When the seniors find out that the government will ration their healthcare and decide which operation they get, there will be a revolt like you have never seen before. You will see every house and senate seat go to the opponent of this type of provision."
I believe the only response to this is "bwahahahahaha". Don't you ever bother to check what Rush Limbaugh tells you before parroting it?
"The revolt has already begun."
You mean that polls show Republican approval ratings going up, or something like that? Really? Really? Are the approval ratings for Republicans doing well?
Going to make yourself look stupid by using past data to make predictions here. We're coming into paradigm shift territory - there's a reason all of the existing economic models have been shown to be demonstrably rubbish at prediction. I'm afraid some reading of George, Ricardo, Fisher (his post-depression works) and others is in order.
The vote just passed in the Senate, similar to yesterday.
I really feel bad for Jack-be-nimble and the rest of the far-right. Those guys are on the wrong side of history and don't even realize it.
Rush Limbaugh, Hannity, Glenn Beck and the rest of conservative radio (including the Republican party) are going bananas over a country that no longer trusts them. Instead of having ideas and a message that will actually connect w/ voters, they use the "s" word as the new "n" word and think that they are actually more informed than the rest of the nation.
These guys are living in a bubble and talking rhetoric instead of offering "solution" to problems that are happening right now.
What's really sad for the neo-cons and the talk radio dittoheads is that everything that Barry Goldwater and Ronald Reagan stood for have been pissed away by W and conservative media. If the stimulus works, if Barry O turns around the economy, if we actually capture Osama bin Hidin', then these guys are discredited to not just the nation... but the world...
And if Michael Steele is the best thing that the Republican party can do, then it truly is a bad time to be a Republican or a Libertarian... not saying that I underestimate Michael Steele, but I'm not underestimating Barack Hussein Obama. This guy is a poker player and he's holding his cards close to his chest.
This is going to be a very interesting 4 years, maybe 8...
@Dave and Way Off Topic-
So an object's velocity does not contribute to it's inertia or its resistance to change?
In other words if I rephrase part of your statement to create a different situation in which
two objects have equal MASS, yet one has a greater speed (the direction component of the objects' velocities are the same)
That leads me to a question about this situation:
will the one with the greater speed, require greater external forces to change either the speed or the direction of the object or does all resistance to change come from the mass of the object?
(velocity is speed x direction right?)
Here is you poll dkweeds courtesy of Ras:
"With the Senate poised to vote Tuesday on an $827-billion version of the economic recovery plan, 62% of U.S. voters want the plan to include more tax cuts and less government spending.
Just 14% would like to move in the opposite direction with more government spending and fewer tax cuts, according to a new Rasmussen Reports national telephone survey. Twenty percent (20%) would be happy to pass it pretty much as is, and five percent (5%) are not sure.
Republicans and unaffiliated voters overwhelmingly want to see more tax cuts and less government spending. Democrats are more evenly divided: 42% agree with the Republicans, 32% want to pass the plan as is, and 22% would like to see more government spending and fewer tax cuts.
Most conservative and moderate voters want to see more tax cuts. A plurality of liberals say the plan should be passed pretty much as it is."
It sure looks like you really have the American people on your side.....
@Harold- Thanks I started to respond about the valueless use of the word "Socialist" by jbn (or jBS if you like)but I thought- WHY BOTHER?
That said-I did find your respond helpful in letting go of the "bad taste" that reading his post had left in my brain.
If he posts like that again I think I will invoke the DNFTT rule rather than the "Why Bother" sentiment.
You are either a capitalist or a socialist. It is only a disparaging name if you disagree with the policies and outcomes. A socialist isn't someone who wants to nationalize companies. That is a red herring argument. A modern socialist wants to move the government more and more into its control taking a larger and larger of the GDP. This would include nationalized health care. If you are for single payer healthcare, you are by definition a socialist. This is not name calling, it is descriptive definition.
Hey Jack bn- thanks for the (Rassmusen?) poll results- can you send a link that includes the questions asked verbatim etc? It would be helpful in interpreting the numbers.
Y'know, cherry-picking polls on a site that's primarily devoted to dissecting polls is really unlikely to convince anyone.
But whatever floats your boat...
JBN-
I believe you are mistaken. It is communism that is just a red herring.
I think you're looking at things wrong. Only the last 3 recessions have been all that much longer than the previous ones. What is similar between these recessions is not that they have come latest, but rather that they happened during republican "government do nothing" administrations.
Jbn- I am sure you are familiar with the following phrases
1) False dichotomies
2) Framing a discussion
3) Conceptual continuum
4) Differing perspectives
5) Differing world views
I would have a very hard time engaging in a constructive discussion in which I would have to agree to the statement:
"You are either a capitalist or a socialist"
Even reproductive sexual state, one of the most recurrent and often binary (male or female) phenomena in the living world, is not simply dichotomous. I would be happy to provide examples different sexual systems that are not dichotomous or examples of continua within seemingly dichotomous systems if you would like.
As far as I can tell many (if not most) phenomena, particularly complex socio-economic phenomena, are not binary. BWDIK
I suppose it was too much to hope for that the crowd shouting "It's impossible to predict anything! Shut up!" would only respond to election predictions...
Yes, it's entirely possible that this event is unlike any other since we've been tracking economic statistics, in which case the predictions will turn out to be wrong. That's the way prediction works, and if so, Sean will take his lumps. But just saying that doesn't make it so, and declaring someone to be "stupid" for making a prediction when you have nothing to say but "that's impossible" isn't particularly courageous.
Time to drop some science on your ass via a link. There is a difference between inertia and momentum: http://www.sciforums.com/momentum-vs-inertia-t-17983.html
Tyler -- Yeah, I think that's a distinct possibility. One of the economists an NPR show had on a couple of weeks ago (Tyler Cowen, I think) said that this is arguably the first true experimental test case for whether Keynesian stimulus actually works.
Could you explain some more about how you did the regression analysis?
The American people will never knowingly adopt socialism, but under the name of lib-eralism they will adopt every fragment of the socialist program until one day America will be a socialist nation without ever knowing how it happened.
-Nathan Thomas, American Socialist Party Presidential Candidate
Nathan Thomas was right. We now have an officially socialist nation with a hardcore Marxist President, and socialist Congress to support him. After 232 years this once great country has collapsed economically, morally, and in all other ways. History teaches us that all democratic governments fail after about 200 years. Did you think we were some-how different? We’ve been failed badly since the 1960s when liberalism started taking over. 71% of the brain dead American public thinks the economy will improve this year! Totally clueless. They’re waiting for Messiah Obama to lead them to the Promised Land. He’s going to lead them straight to Hell and try and drag us along with them. He promised to, “bring the troops home.” What is he actually doing? Revving up the war in Afghanistan, and planning to attack poor Pakistan. Iran is still a very, very good possi-bility, but the American people are tired of paying for phony wars when they can’t pay their rent and feed themselves. He’ll bring back the military draft and take your son and daughter. Why discriminate? The housing crash has a long way to go, and the commerc-ial real estate crash will be even worse this year. More and more empty store, empty strip malls, and then entire empty shopping malls. General Growth Properties is the largest mall owner in the world with 200 malls. They are bankrupt! The median home price is down to $175,400 and may easily fall to $125,000 or even lower.
This year is going to be a total disaster. Think massive hyperinflation. The money sup-ply has increased over 70% in a year! People will be out of work. We’ll lose a million jobs a month. Yes, that will make twelve million lost jobs this year. 30% real unemploy-ment here we come. The true figure is already 18% and rising. The dollar will fall. Real estate will keep collapsing. Residential will keep collapsing for three more years instead of two as this bailout insanity continues. Commerical real estate is going to be much worse. You can’t rent an empty store or office! Strip malls will be vacant, and then major malls will simply shut down. Countless businesses will declare bankruptcy. Banks will continue to fail despite insane bailouts. Raging inflation will rob people of their life savings. Every dollar printed robs every American behind their back. Will Rogers said,
Invest in inflation; it’s the only thing going up.” 2010 will be even worse. Auto loans will fail, and people will be forced to give their cars back. Credit cards will fail, and people won’t have credit cards anymore. They won’t have any cash either. Retirement and pen-sion funds are all broke. Social Insecurity was broke decades ago. Messiah Obama also lied about taxes. People will be taxed to death to finance a Marxist economy. That’s how it works. Just pay careful attention to everything you hear and see, and you will be able to see tomorrow. The Obama Honeymoon will soon be over and his Marxist bailout pro-grams will just make the problems larger. Paul O’Neill said the bailouts are “…crazy with awful consequences.”
There is a very interesting man named Lindsey Williams who has some fascinating things to say. He has no website, but if you simply Google “Lindsey Williams” you will find loads of information about him. His basic thesis is that the international bankers run the show behind the scenes. You can call them the Council on Foreign Relations, the One Worlders, Globalists, Elitists, or whatever, but it is the same group that owns the “Federal” Reserve (which isn’t federal and has no reserves.) The U.S. Government has purposely not drilled the ANWR (Alaska) and Bakken (Montana and the Dakotas) domestic oil fields. They have purposely refused to allow SASOL plants to produce $2 a gallon clear fuel from coal. We have 200 years of oil, 200 years of natural gas, and 1,000 years of coal in our own country. This dependency gives them control. There is no energy crisis! (Russia is not going along with any of this to their credit) This is in ad-dition to uranium for nuclear power. Big Oil would, of course, love to develop these fields and make America 100% energy independent, but are stopped by the government. Big Oil is not the Bad Guy folks. The current $40 oil price he says is manipulated to bankrupt the OPEC countries, especially Iran. It does not matter who is president, be-cause he is merely a puppet for the real world powers. Obama will make the energy crisis much worse with government programs. Low gasoline prices are now bankrupting states due to less tax revenues. California is already bankrupt and has ended all welfare pro-grams. This will result in deadly riots that can only be controlled by military intervention. China, Japan, and the Arab countries are all refusing to finance our debt by buying vari-ous Treasury instrument. The dollar is in free-fall. Gold and silver will go to the moon due to hyperinflation. The whole point here is to destroy America, so the New World Order will finally succeed. America was the last barrier to this. Massive hyperinflation will be the big problem in 2009. Look for a merger of Canada, Mexico and the U.S. as the North American Union with the Amero currency. Google “Amero” if you don’t be-lieve that. This may sound very extreme, but just look at what is happening TODAY, and you can see tomorrow. The last depression was 80 years ago. 5,000 years of history prove it is cyclical and events repeat themselves. We are very overdue for a depression after 80 years. This will make 1929 look like a walk in the park.
Government whore Warren Buffet just confirmed his belief in Marxism over capitalism and free markets. He said of Obama Hussein, “You couldn’t have anybody any better in charge.” That’s a quote about a hardline Marxist president. His Berkshire Hathaway (BRK.A) is hopeless, and he is up to his ears in the very derivatives he warms about.
Senile in Omaha is telling Americans to go buy all the stocks they can. We have real 18% unemployment now, not the ridiculous 7% the government claims. This 18% figure in-cludes people out of work, those who simply gave up, ones who never registered for unemployment benefits, people who can only get part time work, and those who were not eligible. Go to www.shadowstats.com if you want proof of this. You’ll also see proof of 16% real inflation. Unemployment was “only” 25% in the last depression but should go to 30% in the next two years during the Much Greater Depression. Right now you can still get a job in a car wash, or a fast food restaurant for minimum wage (and a free lunch). That will end soon, and there won’t be any jobs. Unemployment will go up even more dramatically this year.
The banks are all broke even with the massive bailouts. This is much worse than 1929 and getting worse all the time. J.P. Morgan (JPM) down 65%, Goldman Sachs (GS) down 70%, Bank of America (BAC) down 80%, Wells Fargo (WFC) down 65%, Barclays (BCS) down 90%, Deutsche Bank (DB) down 80%, and CitiBank (C) down 90%. Empty your savings account. Keep a minimum checking account, keep nothing of value in your safe deposit box. There will be a “bank holiday” and the doors will be closed.
In 1787 at the University of Edinburgh professor Alexander Tyler said - A democracy is always temporary in nature. It simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover they can vote them- selves generous gifts from the public treasury. From that moment on, the majority always vote for the candidate who promises them the most benefits from the public trea-ury, with the result that every democracy will eventually collapse due to loose fiscal policy, which is always followed by a dictatorship. The average age of the world’s greatest civilizations from the beginning of history has always been about 200 years
The U.S. is 232 years old. Our country is finished, through, over, done with. It will not recover. Twenty or thirty years from now we’ll be just another socialiast, welfare police state with a very low standard of living. Look at the history of England to understand this.
Folks, the universe gives us “signs” all the time if we just open our eyes. On January 20 the stock market fell over 330 points during the Inauguration. For the first time in history the swearing in of the president was flubbed, and Obama had to be resworn privately in his office. For the first time in 232 years no Bible was used to swear him in. These are clear signs that this four year presidency is going to be an unmitigated disaster like never before. This is going to make the Great Depression look like a picnic. These three inci-dents are anything but meaningless accidents; there are no accidents in our universe.
2009 is going to be the worst year since the Great Depression. Prepare for it. Invest in silver. Educate yourself and be prepared.
Invest in silver.... Nate Silver!
Mad Hatter's latest comment stolen straight from this nut's site: http://www.emergencyprepwire.com/2009/02/roger-mason-feb-2009-economic-rant/
Stay classy there, MH!
Well, here goes a bit of EuroCrap (TM):
Why do you Americans loathe and despise us so deeply? Why does even the mention of socialism or welfare cause you to shiver? Is it so difficult to respect _our_ choices?
Note that I'm no socialist - I consider myself a liberal (with the European meaning of the word), but for example universal health care is a must for me: every time that we Europeans are remembered (by a movie, series, w/e) that a person with a broken leg might not have it fixed due to economic concerns, or that fathers can go bankrupt in order to pay for their childrens' meds, well _that_ sends a shiver through our spines.
I won't go as far as blaming you for everything we're going through, but we Europeans are _also_ suffering the consequences of your lack of sensible regulation and full laissez-faire! So please get your act together and fix your big fat economy ASAP, since even our welfare shields are starting to get depleted over your decisions.
BTW: Hatter, I think BHO was sworn in using Lincoln's Bible (strange tradition in the country of church-state separation, but, well, "in the FSM you trust"...). Besides, at least other two inaugurations had a "bad" oath which had to be repeated . This is a sign of your absurd literalism, enshrined into your legal system and that enables judicial lawmaking to modify rights without actual legislation being passed - this can be both good (California before Prop8) and bad (McCarthyism).
wv - staic: what stoics were before running out of money
Mad Hatter, get a brain and stop living in the cold war.
Your response is only worth the [insert Monty Python Marx and Mao game show skit here].
(here, I was feeling guilty for the occasional Media Matters cut'n'paste. Thppppt!)
No original thinking in the wingnut dittohead universe as usual, bankrupt of ideas, out of options except for screaming and fear mongering like the shit-diapered babies you are.
"Here is you poll dkweeds courtesy of Ras:
With the Senate poised to vote Tuesday on an $827-billion version of the economic recovery plan, 62% of U.S. voters want the plan to include more tax cuts and less government spending."
Sorry, that's not what I asked for. Then again, I guess you were talking to 'dkweeds'.
Let's see a poll that addresses what I actually asked - level of approval for the Republican party - here's one, just to the left - www.pollingreport.com. Oops. Looks bad.
"You are either a capitalist or a socialist."
Well, then I guess I can't be a socialist, because I'm an active entrepreneur.
"It is only a disparaging name if you disagree with the policies and outcomes."
Who said the word socialist was "disparaging"? I just said that you've rendered it meaningless - as you go on to prove.
"A socialist isn't someone who wants to nationalize companies. That is a red herring argument."
No, I believe that would be an accepted definition of "socialist".
"A modern socialist wants to move the government more and more into its control taking a larger and larger of the GDP."
I am not able to follow this sentence. The government more and more into "its" control - what's "it"? What are you saying about GDP? Can you explain clearly and quantitatively?
"This would include nationalized health care. If you are for single payer healthcare, you are by definition a socialist."
Wait, you just told me I can't be a "socialist" and a "capitalist" at the same time. But the US has a the largest single payer health care system in the world, Medicare, covering all of our elderly and disabled, and I support it. I also support extending single payer to every American. But so do thousands of other entrepreneurs, corporate executives, mainstream economists, scientists, etc. Does that make us all "socialist"?
"This is not name calling, it is descriptive definition."
No, it's a very silly name calling game. You've arbitrarily defined rational policies that are supported by the majority of Americans as "socialist", because you can't mount a serious argument.
fear mongering like the shit-diapered babies you are
Funny, I could say the same for the shit-for-brains President, as all he's been doing the last week is fear-mongering trying to scare everyone shitless by saying the same thing trying to win enough support to pass this massive, worthless "stimulus" package.
You moonbats are completely devoid of ideas and especially reason. You all have the same, worn-out, tired ass excuses and are only good at playing the "victim" or "race" cards. What freaking hypocrites.
How about you shut your bitch ass up unless you have something constructive to say?! Huh?! How 'bout it, moron?! 'Cause I haven't seen you say anything intelligent since I've been on here, except mostly tell lies.
harold,
You are a socialist. Stop living in denial. And shut the hell up while you're at it.
The majority of Americans now ARE socialist. This country is over with. Through. Done. Kaput. The only way out now is for a secession or breaking up of the union. Let the socialists have their welfare, mediocrity, slavery to the state, and government control and interference, while those of us who stand for capitalism, freedom, honor, and integrity have a nation unto ourselves.
Translation: This stimulus bill wont work so we must soft land this debacle and point out this recession will go on forever. Yeah the clones will eat it up. That's the ticket.
I propose this. Let there be another secession and the formation of a New Confederacy! The South and the Plains states...and maybe some of the Rocky Mountain areas. This will be the one true nation for economic and personal liberty. Then, let the Left Coast and Northleast and MediocreWest have their socialist state and be the United Socialist States of America.
The Confederacy would have only 1/2 the population but would have twice the economy, twice the military might, 10 times the will to defend itself, and 100 times the personal liberties.
The Confederacy should then declare war on the USSA and slaughter the evil socialists by the millions. I don't mean pansy little pogroms here folks, I'm talking out-and-out genocide of socialism. Then the Confederacy can reclaim the USSA's lands as part of the new, unified, and true democracy.
-Nate
I have a bone to pick with this analysis.
You break down the "Median Quarter-to-Quarter Fluctuations" by _____ Era where ______ is the head of the Fed. I like this table and I think it speaks volumes. However, its worth noting that stated aims of each of these era's was different. For instance I know that Greenspan put alot of effort into controlling inflation.
If, in fact, it is the monetary "paradigm" of the Fed that matters then I think we have to wait to see what happens. As far as I can tell the Fed threw out the book with this latest recession so we can no longer assume that the behavior of the economy will remain consistent with that of the last 20 years.
That being said i love this site . Keep up the good work!
@mad Hatter,
Dude, lighten up. Seriously. Life's too short. You're starting to sound like Hitler did in the 1920's.
You're starting to sound like Hitler did in the 1920's.
Thanks for providing further proof of Godwin's law, champ!
Now, come up with something original or shut your mouth!
harold,
When they come for your business by taking 80% of your profits, will then you revolt or will you just operate under the table and not pay taxes. I am guessing that you do that already.
Regarding healthcare, single payer is dispised everywhere it is being practiced. It is a two class system in England. Those who are rich can seek better private healthcare. Those that can only rely on the state get rationed care. With the rationed care, you can get a checkup anytime you want. To get some surgeries, you must wait months. How would you like it if you needed bypass, but the government didn't think it needed to happen for 4 months. Believe me, this issue is going to blow up in Obama's face bigtime.
Dave said...
As a physicist, I will try and explain this inertia vs. momentum question
Good explanation from a physicist's viewpoint, but the term is NOT used in a physics context.
Since momentum is defined in such a way, it is clearly redundant to use the phrase "inertial momentum". Doing so is the same as describing someone's weight as "massive weight".
So boxing having 'feather weight', 'bantam weight', 'light heavy weight', 'heavy weight', etc., classifications is redundant? Throw them all together and let them fight it out, no matter the weight classification?
Same for a word such as 'mission'. In a religious context, it means one thing. In the vernacular, or military sense, or diplomatic sense, etc., it can mean something else entirely. For instance, "Hitler was on a mission to destroy" has no meaning in the religious sense of the word 'mission', but it DOES mean something in the vernacular.
Zero has proposed a "stimuless" bill that will do nothing to jump start the economy.
Obama not only mischaracterized the opposition to this bill but history as well when he lied at his presser about Japan's lost decade which came about as a result of massive frenetic stimulative infrastructure spending and not because of a lack thereof.
In truth Obama wants to do to us just what the Japanese government did back in the 90s and you really have to wonder what is motivating him.
His toady, Tim Geithner, has laid another goose egg, a big Zero today in front of Congress with his Tarp 2.0.
It really seems these people either don't know what they are doing or have malevolent intent.
Obama continues to terrify the people with his visions of economic calamity and the need to resort to food banks and the like. His rhetoric is so over the top as to be reckless. What business will spend or expand, what household will buy cars, boats or vacations when Hooverville looms in their future?
I honestly think he wants the consumer economy to tank so he can have a further excuse to take over more and more of our economic lives and use it as means of reshaping society in accord with his Socialist vision.
Dumbasses who go along with this crap w/o any critical understanding of what is going on will be the ones responsible for the destruction of our society. The intelligent among you who support this nonsense are complicit and Marxist sympathizers who want to see capitalism destroyed most likely out of envy – for being such failures.
Recall that it was Marx who said that Democracy inevitably decays into Socialism. Perhaps we are beginning to see today the beginning of this degradation.
UH OH!!!!!!!
The revolt has begun and the libs are in it over their head: (Courtesy of Ras)
"Are Republicans winning the public relations battle over spending in the $800-billion-plus economic stimulus package? Democrats and Republicans are nearly even in this week's edition of the Generic Congressional Ballot.
The latest Rasmussen Reports national telephone surveys found that the Democrats’ lead is down to just one percentage point. Forty percent (40%) of voters said they would vote for their district’s Democratic candidate while 39% said they would choose the Republican (see crosstabs).
This marks the lowest level of support for the Democrats in tracking history and is the closest the two parties have been on the generic ballot."
Mike in MD: Dave used "massive" in the physics sense, meaning that the object in question has mass. It doesn't necessarily mean that the object in question has a large mass. That connotation is added by popular discourse. Thus, the boxing classifications are not at all redundant.
Adam,
The term as used by Nate was not used in a physics context. Therefore total discussion of the term in a physics context, and only in a physics context, is ridiculous.
The same as the boxing weight classes was not used in a physics context, does that mean we need to discuss the boxing weight classes ONLY in a physics context?
By the way, if NASA can use the term 'Micro-inertial momentum sphere stabilizers' (notice the words 'inertial momentum' in close association to each other, regardless of the modifier word 'micro'?), does that mean that NASA has no use for physics, or that the proposal is a quack because it uses 'redundant' terminology?
http://sbir.nasa.gov/SBIR/abstracts/94/sbir/phase1/SBIR-94-1-09.04-2567.html
"When the seniors find out that the government will ration their healthcare and decide which operation they get, there will be a revolt like you have never seen before."
Thanks, Jack, yes, they'll use their canes and walkers and shout at the damn kids on their lawns to stop giving them healthcare, for God's sake. "In my day no matter what you had they'd give you one aspirin, and it cost a day's pay, and it was the size of your fist!"
While these are interesting thought experiments, the fact is that every recession is swayed by a completely unique set of historical circumstances, which makes longitudinal extrapolation VERY difficult. (So as a social scientist, this is about where things start to get really inconvenient for me. =) ) However, I will concede that these are some clever models, and they also have the virtue of getting news junkies arguing about Newtonian physics... not something you see every day.
wv: 'waxing'. With any luck, what I'll be able to afford again in a few months, NOT what the economy will continue to do.
Jack -
Regarding healthcare, single payer is dispised everywhere it is being practiced.
This is simply not true. It isn't despised in Canada, Australia, most of Europe, or Japan. Medicare isn't despised in the US.
It is a two class system in England. Those who are rich can seek better private healthcare. Those that can only rely on the state get rationed care. With the rationed care, you can get a checkup anytime you want. To get some surgeries, you must wait months. How would you like it if you needed bypass, but the government didn't think it needed to happen for 4 months.
England isn't "everywhere". I don't want a UK-style system.
Still, although they are usually regarded as having the second worst health care system in the developed world, after the US, they achieve better results than us, far more cheaply. If they were really routinely denying needed surgery, they'd have worse public health statistics, and that isn't the case.
Mad Hatter -
"Shut the hell up"?
Sorry, coward, this is a free country, and this is a blog that's moderated by someone other than you.
If you can't handle having your delusions challenged, that's your problem.
You chose a damn good name for yourself.
I have to admit that the right wingnuts on here (not to name names, but MH, JBN and our dear buddy PK) are bouncing between amusing me and scaring me. Amusing me since they are so painfully misinformed and out of touch with reality that it just *has* to be some kind of entertainment. Scaring me because they actually seem to believe in the drivel they spew forth like someone with a serious case of the runs.
So lets line out some simple, very obvious facts:
1. The economy is in deep shit right now.
2. There is little agreement on how to fix it.
3. Nobody knows how long it will last.
4. The right has nothing to lose by stonewalling measures to fix it.
5. Regardless of what you put forth, SOMEONE will disagree with it.
6. As part of #5, anyone can twist/manufacture polls and numbers to say anything they want.
Now for the opinions (all mine, and all original):
1. The right lost their ass in the last election. I smell sour grapes.
2. Those advocating secession: Read a history book. Secession caused the civil war. The same civil war that was one of the bloodiest, most illogical events in American history. I am a very proud American, and I have absolutely zero desire to watch thousands of my fellow citizens be slaughtered by our own just because of ideological differences. Might was well trample on the Constitution, set it on fire, and piss on it to put the fire out.
3. Obama may not be popular with you, but he is your president. He is my president. He is the president of all 300-something million Americans in the world. Deal with it. You can work with him and show him some respect, and possibly get some of what you want (politics = compromise), or you can fight him on every term and blatantly disrespect him... and have your opinions left out of every single measure put forth by his administration.
wv: figen - What the figen are these people thinking?
The three liberal republicans just went on record backing out of the Spendulous bill.
We'll see what they want. Apparently, they all want to have intimate relations (whatever that means) with the new president. Spector knocked down the other two to get to the front of the line.
Jack-be-nimble said...
The three liberal republicans just went on record backing out of the Spendulous bill.
Linkie please, little jackie?
Was it on Faux News, little jackie? Remember, Rupert Murdoch admitted last week that Faux News was "never been a company that tolerates facts." Thus if you provide a linkie to a Faux News source, we'll just have to consider that you are spewing out more GOOPer propaganda and male bovine droppings.
The thing those recent recessions have in common, is that in both cases the "solution" the government used was massive tax cuts. Hopefully this time the stimulus package will make a difference.
@MadHatter:
You would have helped your cause if you had gotten socialist Norman Thomas' name right, just for starters.
Also, your assertion that lower gas prices causes lower gas tax receipts is just plain wrong-headed. Gas taxes are charged, for good or ill, as so many cents on the gallon, not as a percentage of the gas price. So, if driving diminishes (which it did during the period of high gas prices) then gas tax receipts go down, since fewer gallons are actually burnt.
Try dealing with reality sometime rather than your apocalyptic fantasy world.
Using strictly payroll data will give you false 'information' because it specifically includes all firms with < 50 workers.
Small business has been the engine for job growth for a while now. It's not the 1950s-1970s anymore where everyone worked for a large company, and lots more people were unionized.
So those graphs are essentially trash.
Mad Hatter:
"We now have an officially socialist nation with a hardcore Marxist President, and socialist Congress to support him."
Reality check from a lifelong Canadian citizen: Canada could hold an election tomorrow and put Jack Fucking Layton in power, and we would still not be remotely close to being an "officially socialist nation with a hardcore Marxist President". So to apply that label to the US is beyond insane.
Looks to me like you picked the right name, all right. Maybe you should double-check your mercury dosage?
wv: cycho. Too perfect for this post.
natesilveristoopidassfuck.
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