The Economy - Where We Are, What to Do

[Indiana Oracle]

Why write this, is there not enough being written already? A lot is being written. But there is also a lot of disinformation and misguided/disingenuous analysis floating around.

We are at a major threshold and in my view the Congressional leadership is indulging in economic adventurism that so pushes the envelope, a disastrous outcome is more likely than not. Our representatives need input from the citizenry.

This attempts to lay out the situation in plain language, and to offer a short list of the items you can use with your representatives.

Please contact them.

Content: The Problem, Where Are We, What Should be Done Macro and Micro Read the rest of this entry »

 

[RodISHI]

Most people do not care to hear what needs to be done or how to get back on tract. Fact is many sold themselves out for a buck and they do not want to give that buck up.

I mean really who the heck is really worth a hundred and eighty six million dollars a year that the business world just simply can't do without?

The people in business do not want to hear that if the working man can't pay his bills he sure can't buy any services or goods.

A kleptomaniac does not want anyone telling them they are a thief. And you can bet on it that they will do everything possible to keep up the "good work" they think they do.

 

[ItsFairmont]

I live in an average home. But my master bathroom has 14 light bulbs, which is slightly more than an entire middle-class home from the 1950s.

And that 1950s middle class home had a one-car garage (with one car in it), a phone in the livingroom (attached to the wall), and one in the kitchen (attached to the wall), one TV, three little bedrooms, each with one or two lamps, and one or two small bathrooms.

There was no microwave oven, the lawnmower had no motor, the garage had to be lifted up, and remote controls didn't exist for the three channels your TV had.

You went out to eat on your anniversary and wife's birthday, or when you got your yearly raise at work.

You didn't have a walk-in closet because you only had a few outfits for work, a couple casual outfits, and one pair of jeans you wore one day per week: Saturday.

You didn't worry too much about retirement because you worked until you were 65 and then died three years later.

Your kid might get a football for his birthday, along with a sweater and a couple small toys, and he was grateful. The only other time he got something was on Christmas or if he spent months (perhaps years) saving up.

A Bicycle cost the same in the 50s as it does now, except there are more choices now.

You didn't have a store dedicated to coffee. You just grabbed a cup of Joe from anywhere. It was all the same and it tasted just as good as the designer stuff, but more importantly it picked you up.

The meal at McDonalds, the only fast food restaurant around, was one hamburger, a french fry (which is now called small, but back then was called French Fries) and a drink (which is now called medium, but then was large). So you could actually eat at McDonald's and walk away only consuming about 600 calories.

You didn't go on vacation to other countries if you were a middle class person in the 1950s. You went to the Grand Canyon, Carlsbad Caverns, Florida, or the Great Lakes to fish.

So, was life better then or now? I say then, and they had much less than we do.


If we want a serious standard of living we need to stop talking about economic growth all the time and get back to talking about sustainability.

Growth isn't always a good thing.

 

[Zoomie1980]

I live in an average home. But my master bathroom has 14 light bulbs, which is slightly more than an entire middle-class home from the 1950s.

And that 1950s middle class home had a one-car garage (with one car in it), a phone in the livingroom (attached to the wall), and one in the kitchen (attached to the wall), one TV, three little bedrooms, each with one or two lamps, and one or two small bathrooms.

There was no microwave oven, the lawnmower had no motor, the garage had to be lifted up, and remote controls didn't exist for the three channels your TV had.

You went out to eat on your anniversary and wife's birthday, or when you got your yearly raise at work.

You didn't have a walk-in closet because you only had a few outfits for work, a couple casual outfits, and one pair of jeans you wore one day per week: Saturday.

You didn't worry too much about retirement because you worked until you were 65 and then died three years later.

Your kid might get a football for his birthday, along with a sweater and a couple small toys, and he was grateful. The only other time he got something was on Christmas or if he spent months (perhaps years) saving up.

A Bicycle cost the same in the 50s as it does now, except there are more choices now.

You didn't have a store dedicated to coffee. You just grabbed a cup of Joe from anywhere. It was all the same and it tasted just as good as the designer stuff, but more importantly it picked you up.

The meal at McDonalds, the only fast food restaurant around, was one hamburger, a french fry (which is now called small, but back then was called French Fries) and a drink (which is now called medium, but then was large). So you could actually eat at McDonald's and walk away only consuming about 600 calories.

You didn't go on vacation to other countries if you were a middle class person in the 1950s. You went to the Grand Canyon, Carlsbad Caverns, Florida, or the Great Lakes to fish.

So, was life better then or now? I say then, and they had much less than we do.


If we want a serious standard of living we need to stop talking about economic growth all the time and get back to talking about sustainability.

Growth isn't always a good thing.

We weren't as hard to please that's for sure. I graduated high school in 1976. We are right in the middle of middle class. Dad was a used car salesman and mom was a hairdresser. We had:

1400sq ft one story ranch house with four small 10x12 bedrooms, 1.5 baths, a living room, dining room, den and kitchen. One three year old chevy Impala, and a used car off the lot dad drove. A detached two car garage, but one side had dad's tool shop in it. A small yard. I had a hoop anchored on the garage roof. We had 20" color console TV, a hi-fi stereo with a radio in it, a phone in the kitchen and one in the master bedroom. No computer, microwave, cell phone, mp3 player, but we did have and 8-track in the car.....

How did we ever get by???

 

[Indiana Oracle]

My experience was similar, we just moved a great deal because my father was in the service and then a city manager. For the first 18 years of my life I was not in the same place for more than 18 months at a time. I was then in the service for 10 years - same story.

Despite all that and living a great deal of time in Germany where things were more simple still during the 50s, I look back on all of it forward to today and do not see any great change except that there are more "things" and a decided reduction in moral compass (which the ancients also remarked upon in their own way). With the exception of the internet and computer technology in general, which have been transformational, no great value added.

Also remember extolling the virtues of the Beatles to my musically inclined parents and my father looking at me as if I had lost my senses. Never really knew what he was thinking because I thought he had lost his. Mother was more indulgent but came right out with it (as was her wont), "look, these people are on drugs". Which, of course, they were. Now I hear so little music that I think is good, I have pretty much lost my desire to look for it.

So, maybe now I am my parents and look more fondly back on life than is warranted and judge what I see through that lense. If so, then so. Because by any objective measure, over the past 10 years things got waaay out of whack. One side of man's fallen nature was on full display and the culture of "me" promoted by the 60s relativists took over, unchecked. Notice how quiet that crowd is now. It happens every time social engineers tinker and fail.

So, like it seems you do, I think this reset is a healthy thing and look guardedly and cynically upon any solution or mindset representing the last 10 years of our history as the place we need to return to or restart from. But that is what I see running through this administration to include the culture of me. It will not work. We are out of bullets and should be taking a much more basic approach to things. Through that lense, recovery is achievable and we will do no harm.

 

[editec]

Macro

1. Stop funneling money into banks and buy up all delinquent mortgages. Cost: 30b/year.

Sounds like a good idea to me.

1. Do the same thing that we did in the 80s with the S&Ls: take over troubled banks, get their books in order, and then resell them to the private sector.

YES! as I said the moment I read of the AIG bailout...we more than paid for that ENTIRE company. We should own it lock stock and barrel.

1. Initiate no additional deficit spending on programs until the economy has returned to health.

Good idea, except that people will begin starving if we do that because of the rate of unemployment.

Keep interest rates where they are for the foreseeable future.

Not actually sure about this.

Introduce no measures which would inhibit free trade.

Not immediately...but in the long run we have got to change our system from what it is now, to something which does not allow other nations to impose tariffs (no matter what they're calling them..they're tariffs) on our goods IF we are not imposing tariffs on theirs.

Let any company in poor health go into bankruptcy in a normal fashion.

IF, we solved the credit problems from the banks, these companies would not be going belly up. IF the credit problems were solved, THEN letting failing companies fail certain is the right thing to do.

Do not select winners and losers in any way.

Agree.

Micro

1. Do not raise taxes in any way.

2. Agreed
3. 
   

   [see buy up delinquent mortgages, above].
   [*]Agreed
   [*]

   Take steps to ensure that no family loses the home they are living in due to job loss.[/quote]

Maybe...depends on why they're losing their home, really.

 

[Indiana Oracle]

1. Quote:
2. Initiate no additional deficit spending on programs until the economy has returned to health.

Good idea, except that people will begin starving if we do that because of the rate of unemployment.
IO. Agree. Was referring to new, permanent national programs. The main thing that upsets me about the current course of things is a lack of focus on the right now.
++
Quote:
Introduce no measures which would inhibit free trade.

Not immediately...but in the long run we have got to change our system from what it is now, to something which does not allow other nations to impose tariffs (no matter what they're calling them..they're tariffs) on our goods IF we are not imposing tariffs on theirs.
IO: Reciprocity has been missing in action in this area for far too long. Agree.
++

Quote:
Let any company in poor health go into bankruptcy in a normal fashion.


IF, we solved the credit problems from the banks, these companies would not be going belly up. IF the credit problems were solved, THEN letting failing companies fail certain is the right thing to do.
IO: This assumes we have purchased the banks and refers to companies like GM - believe there will be more.

Thanks for the reply, as always.