United States Heading towards a Depression?

Under Bush and Democrats as well the private, small business enterprises are the first in line for handouts and last in line for accountability. In using a system of paybacks that stymie the competitive nature of capitalism they insure their own existence while impeding the progress of the general welfare of the nation as a whole.
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That's not what I'm seeing. I see the middle class being pushed way down. But we have yet to see the effect the health care bill is going to have. And the upcoming emission laws which will create extra bondage for small businesses. Now that we have a real disaster that is. Very convenient how it happened so shortly after climate gate got exposed.

 

Typical GOP response. I'll repeat the essence of what I stated above. The Fortune 500 companies in the US had sales of about $9.4 trillion last year. The US GDP was $14.2 trillion. 70% of the US economy is all private. It happens to be in very large businesses. Back in 1955 the fortune 500 contributed less than 40% of GDP. BTW: In first quarter '10 the S&P 500 (virtually the same thing as the fortune 500 had its largest increase in profits E.V.E.R recorded. Man, that says capitalism is working!!!

This is an incredibly large capitalist nation. End discussion. Those 500 big companies had more revenues than the GDP of Japan, the nation with the 2nd largest GDP in the world.

The US is the simply the place where capitalism runs supreme. There isn't anything else like it.

Now all those GOP arguments about the US being communist, socialist, or Obama being controlling etc. are simply gross exaggerations without any facts behind them. The US is simply the single largest example of capitalism in the world. End of argument. Those are the facts!!!

Now after O_Nation decided he didn't want to deal with hard facts and dismissed my discussion he went on to whine about the US govt bailing out businesses or stepping into industries....more of that GOP factless attack style.

Okay, kid. Last time the US stepped into buying up private businesses and sweeping up problems before this recession (created and occurred during the years of the whiney Bush/GOP masters of BS) was back in the late 1980's and early 1990's. The feds established the Resolution Trust Company (RTC) and swallowed hundreds of billions of dollars of real estate that went through bankruptcy, crushed banks and S&L's. The feds were probably the largest biggest landlord to the private market at that time.

Guess what, whiner about communism and socialism. The Feds sold it ALL off. It all went back to private hands.

Its not communism or socialism. Its not some political hocus pocus. Its called fixing things.

Now the feds have poured money into financial institutions and the auto industry in the current world of "bailouts"

Guess what, screamer about communism and socialism? Lots of it has been paid back. Lots of it hasn't. The US is preparing to auction its ownership in Citibank stock back to the public. Current pricing suggests a big profit.

Again its called fixing things. It has nothing to do with political hocus pocus, communism, socialism, tyranny or anything else.

As to the tax idea. I see you aren't buying in. It was meant facetiously. Its clearly not going to keep O_Nation from spreading more of that hocus pocus scare tactics from the GOP that are as far from reality, as say.......uh, I got it...as far from reality as say Rush Limbaugh and Newt Gingrich, two outspoken on everything GOP'ish being great examples of say....family values. Rush just got married for the 4th time and Newt is on his third.

While the GOP is whining and scare tacticing about communism and socialism....the simple truth is that when it comes to Capitalism this nation is the one and only example of it...and its economy today, yesterday, and tomorrow will continue to exibit it.

 

Herr Oblahma is way ahead of you Herr Goebbels:

• http://www.foxnews.com/politics/201...ention-smacks-government-control-critics-say/
• http://www.nypost.com/p/news/opinio...s_by_squelching_speech_vfLuJGHbR1jzmA0lMLEAqI
• http://thehill.com/blogs/hillicon-valley/technology/100833-groups-want-fcc-to-police-hate-speech
• http://www.foxnews.com/opinion/2010/06/02/horace-cooper-elena-kagan-amendment/
• http://stossel.blogs.foxbusiness.com/2010/06/15/free-speech-watch-2/

Obama's approval rating is holding firm, even as he pushes the United States economy into a dive from which it may never recover. It looks like he (and earl) are aiming at the 1st Amendment next. Maybe that will wake Americans up. I doubt it. I think that decades of socialist indoctrination of American school children has left Americans largely incapable of independent thought.

 

Paid back? Paid back to whom? Were you referring to the bypass of a proper and legitimate bankruptcy for GM where the Obama Admin deeded a large portion of the company to the Unions that helped bring the company down? Is that what you refer to as "Fixing things"?

The comparison of this to the S&L scandal or Enron is ridiculous. Yes Citibank is going to make a huge profit. Who wouldn't with a few hundred billion dollars of free market cap thrown your way in a down market. Most of the banks took that money and bought their competition when they were weak(Consolidation). Once again, the small guys got f*cked to the benefit of big business. Who gave them the royal decree that they were worth saving(too big to fail)? I lost 95% of my net worth in 2001 when the Nasdaq crashed. Should I hold my breath waiting for the check? I would certainly like to call it "Fixing things". Speaking of "Fixing things" that created this mess, what has happened to Fannie and Freddie, who are right at the core of it?

You say that as if I should care about how many marriages they've had. Larry King is on his 7th.. so what? He could be boning a goat up the ass on a nightly basis for all I care. What he does in the bedroom or in his personal life is none of my concern for the most part. Are you concerned about it?

Cronnie capitalism where the government gives special breaks to the special interests they are in bed with is not capitalism at all. I'm not anti "Big Business" by a long shot, but the shift in GDP from small business to fortune 500 should be alarming to anyone who sees those numbers. Unfair competition is cancerous to a capitalist society.

Obama is a once in a lifetime gift to the Democratic party, and they are taking full advantage of it. I don't believe his approval rating amongst African Americans has slipped more than 3 points from its peak of 97%. With such a large segment of the American population behind him no matter what he does, he could probably set the White House on fire and have his approval rating hold firm.

 

Our economic troubles were going to happen regardless of the president and congress, be they Democrat or Republican.

The only way to fully recover is to bring manufacturing back to the US. Ironically enough, it could be a worsening US economy and desperate workforce that coaxes manufacturers back in.

However I think a prerequisite will be labor unions having a cap placed on their power over employers. I support the union concept, but it is a fact China has a lot to thank for union greed.

 

Instead, the Obama administration is working hard to take away the right of workers to have a private vote in favor of or against unionization. they are seeking to make voter intimidation a reality for millions of working Americans.

Most amusingly, they are taking away people's right to make a free choice with a bill called the "Employee Free Choice Act" -- newspeak at it's finest!

More data on this can be found at the Workforce Fairness Institute.

 

I see that the GOP right wingers here can't deal with the fundamental facts. They simply avoid it. I'll repeat it. In 2009 the Fortune 500 produced $9.4 trillion in revenues. US GDP was about $14.2 trillion. These private businesses, represented about 70% of the entire US economy.

I'll add something. Of the 2nd half of the Fortune 1,000, in other words private businesses in the US...their revenues in 2009 ranged from about $4.6 billion to a little more than $1.7 billion. I didn't do the precise math as I did with the Fortune 500, but assume the average member of the Fortune 501-1,000 averaged about $3 billion in revenues.

Hm. That adds another $1.5 trillion to private business revenues. Add that to the $9.4 trillion and you get $10.9 trillion.

In other words 1,000 large PRIVATE (non government) businesses were responsible for over 77% of US GDP.

That makes it the definition of capitalism. In fact those 1,000 businesses are more than TWICE as large in revenues than the 2nd largest GDP in the world (Japan).

Now that is the definition of capitalism. All the screaming and whining and blaming by the GOP is based on fear tactics and fantasy. The US is a capitalist nation.

By the end of first quarter 2010, that is reflective of a period in Obama's first year of office; the S&P 500 (virtually equivalent to the Fortune 500) had its greatest increase in profits E.V.E.R.

In other words during Obama's first year, Capitalism did what Capitalism is focused on. It made profits. It did it better than it ever had.

Capitalism in its efforts to create profits, is thriving under Obama.

Those are hard facts. Those are real numbers. Those are not fantasy claims by Right Wing GOP whiners. Its a fact.

BTW: O_Nation. When I referred to the Citibank situation, I was referring to the US govt funds that went to Citibank during the bailout. The funds were to a certain level in the form of equity. Citibank's stock price has risen.

The US govt is going to sell its shares. The US govt is going to make a big profit on this aspect of the bailout.

That is called "fixing things" and that is called capitalism. Those are facts. (assuming the stock price remains above its low when the bailout occurred). Its called capitalism.

 

We avoid it? You didn't address a single one of my points, and instead repeated your own. Perhaps you should call them "fundamentalist" facts.

 

O_Nation: I referred to the US bailout funds going to Citibank. Repayment to the US feds will include the feds selling their shares of stock for a profit. The US govt. will make a profit on those specific funds.

You somehow twisted that solely referencing Citibank making a profit. What is your problem? Can't deal with hard facts?

I previously referenced how the US govt in the form of the Resolution Trust Fund, (from the 1980's and 1990's) bought up privately owned properties (primarily office properties.).

The feds owned the buildings. Private owners no longer owned them. Private financial institutions didn't own them. The feds bought them up (and spent a lot of money and incurred a lot of debt) because the S&L industry crashed.

The feds held them for a bunch of years. They ultimately sold them back to private sources. In total it took quite a few years. It didn't occur immediately.

That aspect of the federal actions in the 1980's and 1990's is exactly like some of the bailout funding which occurred recently. Some of the bailout money from 2008 has been paid back. Not all of it.

As the US sells its shares in citibank it will make a profit on what it gave citibank. That will be a benefit to US taxpayers. Turns out to be a good deal for taxpayers.

There you go O_nation. unlike you I specifically responded. I still have yet to see you deal with the presentation of real numbers and capitalism versus the unsubstantiated non factual scare language you and other Right Wingers like to throw around.

 

Geez... I think he's gonna cry because the cool kids won't play with him.

It's OK, you'll always have Breeze Wood and gworld.

 

I specifically addressed your citibank comments here:

And I responded here:

You are trying to single out single positive elements of TARP while ignoring things like the transfer of ownership of GM from the original shareholders to the Unions. How can you justify that? What has that to do with the Resolution Trust Corporation created for the S&L scare/scandal?

I also noticed you are completely ignoring the "Stimulus" bill and focusing only on TARP. Let me ask you something. What do you think giving $54 million taxpayer dollars to a casino that earns more than a billion dollars a year stimulated? Its outright theft of taxpayer money. I wont respond to any of your comments on this thread until you provide us with your opinion on the story from the link above.

Don't get me wrong, I'd much rather businesses repay the TARP funds than not repay them, but if you realistically think any of that money is going to find its way back into the taxpayers wallets, you are sadly mistaken. Insult to injury, when Obama passed his budget, he used the elevated emergency spending from the financial crisis as the new baseline, and STILL managed to increase govt. spending on top of that.

 

Maybe you will be able to breath again after the midterms, per history for the party voted out of power but the likes of those who are unable to wait their turn, having not earned respect attained from reflection is the legacy that already precludes your philosophy and pitifully voids the aspirations of those that unknowingly chose again what has repeatedly failed through history to repeat itself again.....or maybe enough voters will know better than the deceitful past and find good over evil.
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Just a reminder:

1. 83 U.S. banks have failed this year
2. The Pelosi Congress has spent enough money on "bailouts" to give each and every household in America $14,000. To put it another way, that could have been used as tax breaks and forgive debt, up to $14,000 for each household.

CNN said Sunday that real unemployment is over 15%, and it's near 30% in the African-American community.

 

Mayhaps the lemur of good fortune will smile upon your fortunes in the coming year. Perhaps the faction currently enjoying the favour of the electorate will continue unabated in their efforts to Sovietize the garden. Only then will they be empowered to proceed merrily towards glorious revolution, unfettered by senseless concerns over dispiriting topics like human rights and economics. Only then will the United States be able to take it's place in the garden next to wondrous successes the likes of fabulous Cuba and spectacular North Korea. Perchance one dream day we will even be able to achieve the astounding GDP of our remarkable Communist brothers the red Chinese. Such a return to the garden is only to be dreamed of in our wildest fantasies!

 

your response was that anyone could make money. Here is what occurred. The US gave citibank bailout money. It structured it with equity. Citibank stock values increased. The US bailout funds that are equity are worth far more than the bailout. The govt and taxpayers will benefit.

That was a good deal. Not all of them are good.

Your comment above is typical mixing of issues and adding a GOP attack language, that never deals with specifics. Lets be honest. You connected the failure of GM to the unions, and now you are attacking that unions were given equity in GM for their give backs as part of the GM rescue.

First lets look at what one of your own GOP cohorts here, Corwin, reported about GM. Corwin gave a detailed description of being a vendor to auto companies, including GM and Ford. He contrasted GM with Ford. He described GM management as horrible. That has been significantly confirmed in the wide press by GM insiders, ex GM insiders and commentators with knowledge, such as Corwin.

Its no wonder the company failed. Its management on top sucked. Its been widespread.

You, OTOH, used political BS to ascribe it to unions. O_Nation: GM and Ford have very similar union agreements. The impacts of the unions on both companies is similar. GM crashed because its management s*cked. Ford survived the debacle in nationwide huge reduction in purchasing autos (which impacts every manufacturer, foreign and domestic, because it made strategic financial moves before the recession and has had hordes of cash. Ford has been better run. The union contracts are similar. Don't waste our time with baseless political attacks that don't have facts.

 

And anyone could. $300 Billion dollars is a big sum. I also never figured you for such a Bush fan, since the Citibank bailout happened under Bush. You still haven't responded to my response, so let me phrase it differently for you. Would the US taxpayers have done better giving the money to Citibank, or to this guy. The answer is obvious. It amazes me you sit here and argue about the glorious success of TARP, a Bush program, and completely ignore the fact the fundamental causes of this mess have not been addressed. Not a word about Fannie and Freddie, or "Too big to Fail" financial institutions.

Is this an admission the government shouldn't be playing the market with our money, essentially picking winners and losers in a down market?

Of course I am! The question is, why aren't you? Let me ask you a different but related question. Do you think Blago should stand trial? Why don't we just bypass the justice system and have the Obama admin determine his innocence or guilt? Conflict of interest right? That is EXACTLY what happened in the case of GM. They eventually found their way to a bankruptcy court, but only after the Obama admin had set the terms of the bankruptcy and paid out the Unions first. Why would you support subversion of our legal system? You'll get no argument from me that their management was crap ass. Obviously it was. They failed to predict the demand for fuel efficient vehicles, a demand accentuated by the spike in the oil markets. They gave the unions practically everything they wanted (sounds like the state of California). Ford may use union labor and be more successful because of better management, but lets be fair, Toyota remains the #1 car manufacturer in America even after sending many Americans to their grave in cars that accelerate all on their own. The single biggest factor you will see in their success? No union labor.

No, I just don't like wasting my time "debating" an issue when my opponent repeats the same information over and over without addressing things point by point. It ceases to be a debate, making the process pointless.

Terrific! Couldn't agree more on the Bush/Republican drug benefits legislation either. So what type of consequence should there be for giving $156 million dollars of taxpayer money meant to stimulate the economy to an Indian Casino which makes more than a billion dollars a year and pays each of its 1700 tribe members $30,000 from the proceeds? After all the $156 million is projected to create 100 temporary jobs(within the same tribe) to build a community center. What should taxpayer response be? What is your response, other than "They don't need money"?

LoL. Why are they hording cash is the question you really should be asking yourself. Every last one of these companies states they don't normally horde cash, so why doing it now? Answer: Uncertainty. People and companies horde cash when they are uncertain as to its future if they invested it (Employment). So lets ask the next question. Why so much uncertainty? Answers: 13 Trillion dollar debt. 2 Trillion dollar deficit. No end of govt. spending in sight. Waiting for the other shoe to drop in the real estate market as banks continue to offload their glut of foreclosure properties without completely crashing the market.

It must be nice to point at one market indicator and say, "All is well! The stimulus is working!". Naive, but nice.

BTW: Looking at the chart you love at the bottom of that article, the gain in aggregate net worth of household assets to $54.6 trillion is based nearly entirely on the increase in value of Corporate Equities (Dow ~7k to Dow ~10k) as well as Life Insurance/Pension fund values (once again Corporate Equities). You'll notice deposits and currency, credit market instruments, durable goods, and most importantly Real Estate did not participate in the recovery. Neither did employment. One market indicator bounces and we say, "All is well!"?

 

To date. Some of the bailout money has been paid back. Some of it has been paid back with big profits to the US govt. Its an ongoing story. More will be revealed over time.

The political hacks that use the term "bailout" as an attack on Obama simply miss so may relevant issues including:

1. It occurred during Bush's period in office.
2. Dems were likelier to support it than Pugs
3. The bailout itself saved the world economic and the US economic systems in Sept. 08, plain and simple. LIBOR had risen 3% points in days. The entire world economic system based on incredible levels of all kinds of debt, govt., private, corportate; car loans, education loans, mortgages, etc. were all subject to incredible increases in payment terms because of the massive size of LIBOR debt.
4. I bet you would like to be a hedge fund guy. Here is the stupid thing. Hedge fund managers get a rediculous tax break. They are able to take a large part of their income and get it taxed at a 15% rate versus maximum 35% rate. The top 25 hedge fund managers last year individually made over $25 billion in income. That means the top 25 guys, got to pay only 15% on most of that $25 billion verus 35% in taxes on that money. There are a lot of pretty wealthy Americans. They pay 35% on their income. I'm there. I've had years when I've been in the top tax rate and years when I haven't.

I don't average a billion in income. I don't average 10% of that. I don't average 1% of that. I don't average 0.1% of that. I pay higher tax rates than the hedge fund guys. That sweetheart tax rate should be repealed. Its horrible, especially in this economy.

Over half of world wide debt could have been subject to huge increaes in payments terms. The bailout prevented that.

Japanese and other foreign auto makers that avoid paying American union rates have a great wage benefit with regard to American built cars. From what I've read, give backs from the American unions have somewhat lessoned that cost differential. I don't know the exact difference currently between current union wages for auto workers and non union wages.

OTOH, most Japanese auto's are built in Japan. In Japan the workers get health benefits paid for by the govt. In America that is not the case. In that instance Japanese, German, Korean and other foreign auto makers have this huge advantage over American manufacturers. Auto manufacturers and their reps have been one of the elements calling for a change in the health care system in the US. That is a HUGE reason.

A number of factories that build autos in the US have been closed, including domestic and non domestic factories, union and non union. A bigger problem over the last 3 years has been that purchasing of new cars dropped from about 16 million/year to 10 million. That huge drop has killed all sorts of auto makers. It is a function of the economy.

Frankly, I neither love nor hate unions today. Unions in the US are tiny. Every year, the percentage of union membership decreases. Its a tiny fraction of US employment. Its a tinier fraction when you consider how small the percentage of manufacturing is to the US economy.

Making a big deal about unions is a simple example of Right Wing exaggeration. Its another way the PUGs advertise about a villain and an enemy that is simply not there.

Oh boy. Goody goody. I'm glad you got your ball back and you are playing in the game.

(O_Nation agrees with me again. I think this guy has some chance. What do you think? )

May need to look at this one. I support the "idea" of stimulus. I haven't followed every detail. There are probably examples that have worked appropriately and some that haven't. I'll have to look at the details. Frankly, I still wish I could make my faimily declared an Indian tribe. The first such casino I saw was minting money. That was decades before this one in Ct got money. From observation only it didn't look to me like casino's need money.

Again though, both the Dems and the Pugs have showered money on groups that don't need it.

Very specifically, I did not say all is well. I pointed out exactly what is occurring with regard to American capitalism as it relates to big businesses. As I've pointed out earlier with facts, American capitalism is thriving. In this last year, big American businesses have seen record profit growth and record growth in hoarding cash.

Big American companies define Capitalism. I'll repeat something from above. The largest 1,000 companies represent over $10.9 trillion in revenues. That is over 77% of US GDP. Those revenues represent twice the size of the 2nd largest GDP in the world.

Big American businesses define capitalism. From a purely profit and cash basis they have rebounded beautifully from the worst of the recession and are seeing the most enormous growth ever. I'd suggest, based on hard facts, Capitalism is doing great under Obama.

That is based on facts. I know it doesn't meet with the comments that you and Will make.

Sorry. I like to use facts.

I'll repeat it again. I did not say all is well. Real estate is the ugly bugaboo of this economy. It hasn't rebounded well. It has a host of problems. I professionally worked in real estate for about 2 decades. I own real estate. I've had some winners and losers. I suspect it will rebound but I suspect it will take a lot longer than the equities market. In that sense it will hurt the economy.

 

Actually, Ford and GM had significantly different union agreements.

GM's management sucked. Because their management sucked, they sucked at union negotiations and were being suffocated by their unions.

When I was there, GM's cost of labor was significantly higher than Ford's, so much so that GM would buy the same parts from vendors at the same price as Ford and still lose money because GM's cost of overhead was horrendous.

Another example: because of union contracts, if GM wanted to buy a part that was manufactured by a GM-related union, they HAD to buy that union part without a bid. No exceptions. So, GM had to buy crummy Delco batteries. Delco batteries suck - probably the worst car batteries out there. Delco had no incentive to improve their batteries because contractually they had no competition. so GM's electrical systems were designed to take into account the lousy Delco batteries, which made them lower-quality (as reported by Car and Driver, etc)

Ford was concerned about quality, and every quote they sent to me was about a real program. OTOH, GM was obsessed only with price. One out of every three quotes they sent me was a pricing exercise for a non-existent program just so they could break down our pricing structure. BTW, preparing a quote is very hard work and very group intensive. Whenever I didn't win a quote, I had to answer for it to my management. So, if I thought it was a pricing exercise, I would no-bid, which would cause GM to call my management, who would contact me & I'd tell my management it was just a pricing exercise. My management would tell GM's management to deal with me. After a few rounds of this, my management resented GM.

I'll tell you all something I'm not supposed to admit. When parts went on allocation*, I regularly made sure that Ford got their parts first. I really didn't give a rat's ass about those pricks at GM and had no problem shutting down their production lines, which cost GM ~$10K/minute. And because GM was such a pain in the ass, not only was my management unsympathetic to GM, they actually enjoyed shutting them down.

(*part on allocation = demand for a part was so high there wasn't enough to go around. I had to allocate which customer got parts & which customer had to wait).

 

Thanks, Corwin. Do you have facts on GM labor costs versus Ford labor costs? do you know where they can be accessed? (I'm lazy--I'd rather you do the research)

NM http://www.autoblog.com/2009/03/12/fords-new-deal-with-uaw-gets-wages-down-to-55-hour/ Per the article Ford is only $5/hour higher than foreign competitors. GM and Chrysler new union pacts are yet to be finalized. The Ford rate reflects what the feds demanded of GM, chrysler and unions in order to ensure the bailout funds.

Per the article, a few years ago the Ford rate was $70/hour. I wonder what the GM rate was pre bailout. (rates include hourly pay and benefits)

Here is one set of data on 2007 auto company labor rates. GM, Ford, and Chrysler totals are not dramatically different from one another. They are hugely different from labor rates from non unionized foreign auto companies making cars in US: