United States Heading towards a Depression?

Dick MOrris pointed out the discrepencacy in the polls between over 60 percent approving obama, yet the majority don't really like the government spending and the economic policies. He compared it to newlyweds where the wife is willing to look past the negatives in the early stages for now. In other words as the economy continues to deterioate obama approval rating will go below 50 because many americans are not happy with his policies to begin with. For whatever reason the majority still "approve" of him overall. Althoug economy is the #1 issue for americans so it won't be long before his approval rating drops substantially.

 

Didnt I cover this? Why does the whole planet know this is Bush's fault, and yet you don't?

What can one say to that...

Ford didn't take tarp money, damn them. I'm sure we can find some other way to control how they do business. Other than that, thank you for pointing out that our government ALWAYS demonstrates patriotism by buying American, unlike conservatives who buy foreign made cars. What is wrong with those people?

That argument is something a conservative who hadn't done his research might say. What I've been trying to point out is that these companies have not been listening to the unions enough! Thats why our president, in his wisdom, just gave 39% of GM to the UAW instead of their bond holders! Now the Unions and the government DO own the company, so I'm sure everything will work out well.

now that just sounds like crack smoking. What does that have to do with anything? My argument is that we NEED to be paying these union employees more, regardless of what the market dictates. If they cant be competitive, lets just levy taxes on domestically created imports.

Why must conservatives always attack our president. Sure he screwed up by keeping our banks solvent and preventing runs on banks like those of the great depression. The point is, he made up for it by keeping the Unions afloat, regardless of the whether the companies they worked for were going under.

Are you mad? Without the auto bailout, those companies would be dissected, with the viable pieces probably being sold off to someone who will try and produce the same cars cheaper without union labor. The non-viable brands and auto lines might disappear for good!! Don't you realize how many high paying union jobs that would eliminate? No, no, this cannot be allowed to happen. The president is doing it exactly right. We need to throw however many taxpayer dollars are necessary at these union pensions so that GM can continue to exist in its current format, with the new management of the white house and the UAW.

Typical conservative. You are probably one of those who wanted to replace human workers with complete automation at these factories. Don't you realize that paying these people a reasonable pension and salary for doing something a machine could do helps our economy? God knows they probably couldn't get a job anywhere else(no insult intented). The failure of GM to run profitably is not the fault of it's management to build more fuel efficient cars in anticipation of higher gas prices. It is not the fault of the unions driving up the cost of production with strong armed wage and pension packages. It is the fault of the Bush administration in its failure to protect this inherently American business from foreign competition. Plain and simple, its Bush's fault.

Yeh yeh, and I'm sure you'll probably say next, "if the banks fail, all of America fails". Don't you understand that if the federal government doesn't give billions of taxpayer dollars to GM as a gift, right before they go into bankruptcy, America will fail as well? Thank god the president understands that.

Did you not understand that I want new tariffs on Japanese vehicles? Now is the time to hit them, they'll never see it coming. After all, they have absolutely no import tarrifs on our vehicles right now, so they are sitting ducks!

http://www.customs.go.jp/english/tariff/2009_4/data/87.htm

 

Are you saying an American car company can rely on itself without HUGE bailouts and government loans while using union labor?

Well, Ford must be doing something wrong because everyone knows unions killed all the American car companies. It's all the union's fault. So if Ford uses union labor and they don't need the government, it must be because the unions are causing problems elsewhere.

Maybe it's because conservatives are patriotic Americans by buying Japanese cars. Ever think of that?

We all know people who believe in America and are patriotic buy Japanese cars. That's why Japanese car-buyers are the most patriotic Americans.

We'll see if CEOs/executives or union labor run GM better.

I think we need to pay bank, finance, and real estate people more. They obviously weren't given enough money to keep the economy going.

Union labor is irrelevant to the American economy. They do not produce what America wants.

America wants bankers, mortgage lenders, realtors, and Mexican home builders.

No, the banks are all that matters. You see people need them to get a car, a house, and an education.

I don't care if banks lose all the money in the world. They deserve to get more, because they run the economy.

Bank employees and CEOs are woefully underpaid for the contributions they make to society. How else is everyone going to be in lifelong debt without bankers.

Banks do a wonderful job with the boom/bust cycle, inflation, and creating bubbles. So, Obama did a good job bailing them out so they can continue this critical work.

Yeah, we know the CEOs/executives of the Big 3 would never mismanage union pensions. They would never underfund them to finance lavish compensation packages for themselves or to chase short-term profits.

It is all the unions fault and union workers who saved their whole lives to have a retirement. How dare union workers expect to be compensated for lifetime savings. Only CEOs/executives get that privilege.

Of course, Washington DC was innocent in changing the laws allowing large companies to raid employee pension plans. It was all the unions fault CEOs/executives lobbied Congress to change the laws to fatten their compensation at the expense of the workers.

I disagree with you, it is all the fault of union labor.

You are trying to blame Bush and GM management while giving the unions a pass.

Bush was innocent.
Executive management and the banks are innocent.
Unions and workers are guilty.

Well, you nailed it on that one. America will fail without the banks. They produce so much paper and electronic credit, the country couldn't survive without it.

That's why the banks need trillions of dollars as a gift and GM is PROMISED billions as a loan.

I agree, it is a good thing Obama understands this.

We all know there is no such thing as an import quota in Japan.

 

Look, we can go back and forth on this for days. Its too time consuming and is getting us nowhere. Let me sumarize our beliefs and lets agree to disagree:
Your views:
A) You think the bank bailouts were a good thing because
1) They are central to our economy
2) Had we not bailed them out, we would have had many many businesses fail across the nation as the stock market tanked and investments disappeared.
B) You think union labor is bad because, all other things being equal, they make it difficult for US automakers to compete with foreign companies building cars in the US who don't use union labor

My Views:
A) I think the Auto bailouts were a good thing because if we hadnt bailed them out,
1) they would have gone bankrupt and lay off a lot of people
2) Even though they went bankrupt anyway and laid off a bunch of people, bailing them out let us pay back the unions instead of their stock holders and bond holders
B) Union labor is good because it lets our auto workers have an artificially high salary/pension ignoring rules of market economics

Things we agree on:
GMs managers robbing from their employees pension funds should be a criminal activity and they should be prosecuted accordingly

Statements made over the course of this thread that are either irrelevant or we should both be able to acknoweldge just complete BS
1) Japanese produce gas guzzlers
2) GM is keeping up with foreign auto makers (they actually lost their number one slot in 2008)
3) Japanese have quotas or import tarrifs on our vehicles
4) Japanese import tarrifs on our vehicles would make a difference, since Japanese vehicles sold in the US are built in the US
5) Bankers are underpaid
6) Unions are the root of all evil
7) Ford is failing for its use of unions (yes it does use union labor)
8) Banks are evil
9) Bush was innocent
10) Credit is either evil or unnecessary

 

@earl - What do you beleive is going to happen with commercial. I've started to see vacancies everywhere.

There were 63,900 bank repossessions in April 2009

Legislative and company moratoriums that have prevented the foreclosure process from starting on delinquent loans. Because fewer loans entered the process in the past months, there were fewer homes going into repossession. But now that those moratoriums are over, the volume of foreclosure filings is increasing.

http://money.cnn.com/2009/05/13/real_estate/April_foreclosure_stats/?postversion=2009051304

 

Let me fix that for you.

 

The current crisis is similiar in a way to the 73-75 recession in that both were triggered by an oil price shock. Eventually the stimilus applied to the economy triggered a hyper-inflation and a double dip recession of 1980 and 1981-1982. However, the difference is that we have a real estate bubble. Similiar to what had occured in 1990-1992.

It's hard to get a handle on what is happening to the economy. In the 1970s housing prices were included in the inflation numbers. During the 1980s that was switched to the equivalent rent.

 

Oops. Sorry, didnt meant to misrepresent your views. Here I thought you were trying to say banking was central to our economy as a whole, touching every business, thereby justifying your stance that the bank bailouts were OK. Now you have modified my representation of your view to be banking only effects the industries you listed above. Any sane person would have to put that into the BS category from my earlier post. If you are going to argue, you should argue with facts like I do .

 

No need to be sorry. I just needed to clarify.

Can we agree Americans want all those things I listed?

Americans want bulging equity, easy credit, luxury homes, far-flung suburbs, office & paper-pushing jobs, imported goods WITHOUT getting their hards dirty or making sacrifices.

Banks make all that possible. Banks let you have it NOW!

Americans don't want to work on a farm, a mine, a factory, or a plant. Those things don't really need banks, hedge funds, mutual funds, real estate agents, home builders, government employees, brand names, and the like.

So banks give the country exactly what it wants... an easy and luxurious lifestyle without any hard work.

Why can't we go back to that without those useless unions, factories, and domestic manufacturers?

The US had it all under Bush. We can have it again with the banks. Obama is doing his part by bailing out the banks.

That's my point.

 

The banks face nearly $2 trillion in further loses. Freddie Mac/Fannie Mae are losing billions every quarter and it's going to get worse. New York is now at the top of the list for the worst declines of 2009

Worst 25 Forecast Markets in 2009
1. New York City, NY − 32.8%
2. Las Vegas, NV − 27.1%
3. Miami , FL − 26.9%

http://www.housingpredictor.com/worstmarkets.html

 

Once things get better and people feel more confident, they will start spending. At the point and juncture, we will have too much money chasing too little goods and services.

The US deficit for 2010 will be another $1 trillion with the printing presses running day and night. This will be more fuel for the fire.

The funny thing is that he US went the stimilus route and it worked for awhile. The economy was improving and unemployment had declined to 5.8% in 1979 before collapsing into double dip recessions.

 

Thanks. I'm going to be using this info.

It sounds like people who can still produce and manufacture when those abundant dollars chase those few goods and services will be sitting pretty.

But, wait, that can't be right.

Obama and Bush told us bankers, with their paper dollars and electronic credit, were what's important.

Something is fishy here.

 

well there are many things we can do to create nw jobs and also help the environement as wel as people and get out of the recession.

just create new jobs and businesses in the feilds that will most effect us in the future like

solar power algea and hydorpnic farming these industries can create millions of jobs gloablly and help the environemnt at the same time

 

Yes. And Obama understands the Government can do this. I've been saying this all along. More people on the government payroll is great for the economy!

@pioneergold: Well at least your most recent clarification does not seem filled with misstatements. I suppose we can leave it there and agree to disagree.

Regarding the ability to produce and manufacture being key in the depression to come, I wholeheartedly agree, so long as we dont loose those dollars to foreign cars produced by domestic non-union labor. I'll repeat it again, we need to levy taxes on vehicles produced domestically by non-union labor and THEN our ability to produce and manufacture will leave us sitting pretty.

 

The stimulus after the 73-75 recession did help improve things for a couple of years. Unemployment bottomed at 5.6% in 1979. At the same time the inflation rate hit 13%.

Gerald Ford 1976 TV Ad - Economic Recovery - May 12, 1976

Gerald Ford: While I've been your President economic recovery has replaced
recession. Over three million more Americans are working now than a year ago. Total employment is the highest in our history. I have always believed that to hold down the cost-of-living, we must hold down the cost of government. That's just common sense. So I vetoed huge giveaway spending bills passed by the Congress. This action has saved taxpayers over 13 billion dollars. Runaway inflation has been brought under control. It has dropped from a rate of 12 percent to less than 6 percent. Your dollars are worth more. My goal is full recovery without inflation. Steadily, assuredly, America is working towards that goal.

http://tv.4president.us/1976/ford1976econ.htm

 

In the article Modesto and Merced area made the top 10 list for last month in foreclosure rate. Interesting enough I live right between those 2 cities in a small town. A house next door to us is selling for 89,000. It was sold brand new in 1992 for 105,000! And in 92 california housing had depreciated prices from another bubble they had back then that burst. California was the only state to have a huge housing bubble burst back in the early 90's.

I thought the inflation really took off in the early 70's due to deficits and us devaluing our currency through going off the gold standard? The inflation took off around 73 then we hit a major recession and the inflation dipped down throughout that recession, only to return with a vengeance aftewards and then hit an all time peak in the early 80's. Whats weird though is our deficits are much larger in the 90's and now yet inflation hasn't hit the 70's levels? Anyone know why it hasn't happened all these years?

 

@ bogart:

I think commercial RE is in for big problems. I didn't look in total at the video guerilla sent...but I'll get around to it.

This is partly what i responded to him:

In 1989, as a commercial re broker when the commercial RE market collapsed I had 12 sales deals in various stages of negotiation. They weren't all going to make. Every deal collapsed. Nothing sold to anyone. Buildings lost all their financing. Office leasing deals got to be incredibly hard to make w/ buildings w/out financing.

btw in the earlier part of the 1980's I rode in a car one day w/ one of the region's biggest commercial RE big shots. We were driving w/ a bunch of others from DC to Baltimore. he kept pointing to buildings and going...."I own part of that, I own part of that".

I think he suffered the biggest personal bankruptcy in the DC region at something around $750 million.

After the collapse hit in early 1989, I don't think anything sold to late 1991 or late 1992. The first sale I recall went at $0.25 on the dollar.

I don't think the DC region market really caught back up till about 8-9 years later...after the collapse. The DC region is the nation's most resiliant commercial RE market. While Manhattan is clearly the largest by a lot, the greater DC area and suburbs might be the 2nd largest. Its gonna take a whipping.

This sucker is gonna have some similar neg impacts on commercial RE in the US. Banks, insurance companies, pension funds, etc. are all gonna take big big hits.

 

Obama will bail em out!