Recession, the definition

[editec]

Where we disagree, and have since you've been here, is that only the big boys are at fault.

I don't think that to the degree you seem to think I do, Paul.

That really depends specifically on what (AND WHO) we're talking about.

That the fiscal irresponsibility of the average consumer, according to you, is the result of the big evil investors causing them to think and act irrationally.

In the case of motgages, that is true in many cases. People with adjustable mortgages saw their motgages adjusted because the FED changed their rates.

True many people overbought, but seriously...they are NOT financial or real estate professionals, and yes I DO THINK that the professionals FAILED THEM.

We MUST hold EVERYONE to account, here.

I agree to the extent that they could KNOW they were overspending. ANYONE who took out an adjustable no income verification morgage should NOT be bailed out, for example.

You're not an idiot.

That's debatable.

You know what you NEED, and the difference between that and what you WANT. I know this because you make a lot of sense around here.

I make a lot more sense on paper than I do in my personal life, but thanks for the vote of confidence.

But why should someone else get a free pass on a bad decision, when YOU probably WOULDN'T have made that particular decision?

I haven't gotten a free pass on anything ever that I can recall.

I mean, I realize that some people are just morons. I understand that. But let's not let them slide, and blame ONLY the banks who took advantage of them, for instance. Those "morons" should still be held to account as well.

to the extent that they were venal morons, I'm right there with you. But that does NOT descibe the majority of loans in trouble, I think. Many of them, to be sure. Most of them? I think not.

Now if we were not going to bail out the banks, THEN I would be completely with you that we should also NOT bail out any homehowners.

But we have already devoted three or four times as much to bailing out banks as all the homeowners in America combined.

That is my objection to this process.

People in this country WANT WANT WANT. Too many people don't understand the fundamental difference between a want and a need. Wanting a Playstation 3, an iPod, and a $150 pair of shoes because everyone ELSE has those things, while you forsake your credit obligations, is a very serious problem. And it's RAMPANT in this country.

Yeah...well maybe. The bankrupsy statistics don't really support that contention, but yes, many people are quite stupid, I agree.

Ultimately, there's really nothing wrong with WANTING. But the problem lies in the decisions people are making, and the poor budgeting that's really hurting this economy right now. If you can afford it, and still pay your bills, then go ahead and by all means acquire your WANTS. If you're living paycheck to paycheck, for instance, then perhaps those wants may have to be put off for the NEEDS.

I've been deficit spending for the last two years just to keep afloat. Now perhaps you believe one can easily adjust ones fixed expenses, but I'm here to tell you that isn't quite so easy as you imagine it to be.

And for christ's sake, stop BORROWING to fund your wants. I believe you should borrow to fund your needs first. If you can afford to buy your wants with cash, then go ahead. If you can't, then how can you afford to buy them with interest bearing credit? It makes no sense to me.

I am probably one of the more frugal people you'll ever meet.

Still, I am going broke.

It's all very well and good when you're gainfully employed and your income is secure, and you've purchased wisely to chastize thaose not in that happy spot.

But people lose their jobs, their expenses are somewhat fixed, and what made sense when they were working makes ZERO sense today.

They cannot reduce their expenses as easily as you imagine they can.

Imagine that you suddenly had NO INCOME.

Could you, at the drop of a hat, change your expenses?

By what %?

If you were living frugally to begin with, then the answer to that is you couldn't change your expenses very much.

THAT is the predictament of many people.

They didn't buy too many DVDS, they were paying for food sheltyer and clothing.

When their incomes get sketchy, there is no economy they can take, because even when you are unemployed you STILL need food shelter and clothing.

I don't think you and I disagree about anything fundamental, EXCEPT the amount of stupidity that the American people manifest.

You think people are poor because they're stupid.

I think many of them are struggling because things keep falling apart for them and they had NO DISPOSABLE income in their economies to BEGIN WITH.

Let me remind you that the average wage in the USA is $21,000 a year.

There's not ahll of a lot of extra money being spent by those people on fancy cars and DVDs.

But if something happens to their incomes, they can be knocked over with a feather.

And soemthing IS happening to their economies...rising prices, unemployment and chronic underemployment.

there are at least 9,000,000 households counted as unemployed.

but in reality there's probably three times that many people unemployed.

Throw in those millions of American who are underemployed and I'm guessing that 50,000,000 households in America are in serious financial trouble and that is NOT because they spend too much money on wasteful stuff.

 

[Zoomie1980]

Interesting observation, Zoomie.

I'm inclined to think our system does has a random walk natural cycle which predisposes our economy to good times and bad, and that NOBODY is responsible for that.

So I am somewhat sympathetic to the complaint that many true conservatives make that our government tends to exascerbate those problems in the future by attempting to mitigate them.

Rather like we end up having really really bad forest fires by not allowing smaller nature fires to run their course.

Well all I can say is that the forest we currently live in looks like a real tinderbox and I dread to think what happens to our economy (the world's economy, too) if some real lightening storms hit it.

This is what makes global warming so threatening to our society, in my mind.

We are, like it or not, entirely dependent on reasonably predictable weather cycles.

A fairly slight shift in rain or doughts, ocean currents, hurricanes and what have you, might have truly serious consequences on our economic system and all in real time that makes dealing with it VERY difficult.

Not a clue how to mitigate that if it turns our to be the case.

Katrina was a drop in the ocean compared to how monumentally bad mother nature can serve us tidal shifts in how our ecology works, I think.

Remember the Mionoeans.

One volcanic disaster and the world's most advanced society and economy was wiped out.

And it was wiped out not just on their island, but most of the city states of that society all over the mediteranian, too.

Shit like that does happen, ya know.

The benefits of a global warm up FAR OUTWEIGH the down side. Mainly by bringing millions of more acres under production of food for a dangerously low food supply. We gain millions of grain acres and citrus acreage expands as well. Vast areas of Russia, China and Canada become able to grow Corn and Wheat that were previously too cold.

Global cooling is what is to be feared as it would be catastrophic to human habitation by greatly SHRINKING arable acreage.

 

[Zoomie1980]

I don't think that to the degree you seem to think I do, Paul.

That really depends specifically on what (AND WHO) we're talking about.



In the case of motgages, that is true in many cases. People with adjustable mortgages saw their motgages adjusted because the FED changed their rates.

True many people overbought, but seriously...they are NOT financial or real estate professionals, and yes I DO THINK that the professionals FAILED THEM.



I agree to the extent that they could KNOW they were overspending. ANYONE who took out an adjustable no income verification morgage should NOT be bailed out, for example.



That's debatable.



I make a lot more sense on paper than I do in my personal life, but thanks for the vote of confidence.



I haven't gotten a free pass on anything ever that I can recall.



to the extent that they were venal morons, I'm right there with you. But that does NOT descibe the majority of loans in trouble, I think. Many of them, to be sure. Most of them? I think not.

Now if we were not going to bail out the banks, THEN I would be completely with you that we should also NOT bail out any homehowners.

But we have already devoted three or four times as much to bailing out banks as all the homeowners in America combined.

That is my objection to this process.



Yeah...well maybe. The bankrupsy statistics don't really support that contention, but yes, many people are quite stupid, I agree.



I've been deficit spending for the last two years just to keep afloat. Now perhaps you believe one can easily adjust ones fixed expenses, but I'm here to tell you that isn't quite so easy as you imagine it to be.



I am probably one of the more frugal people you'll ever meet.

Still, I am going broke.

It's all very well and good when you're gainfully employed and your income is secure, and you've purchased wisely to chastize thaose not in that happy spot.

But people lose their jobs, their expenses are somewhat fixed, and what made sense when they were working makes ZERO sense today.

They cannot reduce their expenses as easily as you imagine they can.

Imagine that you suddenly had NO INCOME.

Could you, at the drop of a hat, change your expenses?

By what %?

If you were living frugally to begin with, then the answer to that is you couldn't change your expenses very much.

THAT is the predictament of many people.

They didn't buy too many DVDS, they were paying for food sheltyer and clothing.

When their incomes get sketchy, there is no economy they can take, because even when you are unemployed you STILL need food shelter and clothing.

I don't think you and I disagree about anything fundamental, EXCEPT the amount of stupidity that the American people manifest.

You think people are poor because they're stupid.

I think many of them are struggling because things keep falling apart for them and they had NO DISPOSABLE income in their economies to BEGIN WITH.

Let me remind you that the average wage in the USA is $21,000 a year.

There's not ahll of a lot of extra money being spent by those people on fancy cars and DVDs.

But if something happens to their incomes, they can be knocked over with a feather.

And soemthing IS happening to their economies...rising prices, unemployment and chronic underemployment.

there are at least 9,000,000 households counted as unemployed.

but in reality there's probably three times that many people unemployed.

Throw in those millions of American who are underemployed and I'm guessing that 50,000,000 households in America are in serious financial trouble and that is NOT because they spend too much money on wasteful stuff.

What exactly "falls apart"? If millions and millions of people can do what you do for a living your wage will be low. That's about all there is to it. Want a higher wage, gain a skill. It's how the world works.