United States Heading towards a Depression?

Interesting comments, Corwin. I try not to get into the predicting business. I wouldn't venture to guess when "significant" recovery will occur as did the bankers you cite. Actually I've always "worked" markets. I try and be able to respond, subject to how the overall market is moving.

I'd suggest the two biggest problems are unemployment and the entire debt issue. When I reference debt, its not just government debt but overall debt in the govt, finance industry, personal debt and corporate debt. There is way too much debt in our economy. Over the last decade or two, the non-govt elements of debt have increased at rates dramatically faster than govt debt. Now govt debt is increasing faster. One of the reasons for the rapid increase in govt debt is that the increases in debt in the other sectors had a big impact on causing the recession. Now the govt is soaking up a lot of that debt, and spending to try and spur the economy.

As to the above reference, folks, don't scream about big govt. and blah, blah blah politically motivated bs. That is a consequence and natural result of the business cycle and the recession/crash.

Unemployment is rough. One big element of unemployment has to be construction. I just don't see the indicators for any growth in that area for over 1 year. Could be several years for different elements of that industry. We have an excess of housing. We are producing new housing at abt. 1 million less units/year than during the middle part of the past decade...and probably 4-700,000 less units/year than during the 90's. On top of an overbuilt situation we have huge numbers of homes that could go into foreclosure. There are consistant reports that foreclosures have been stalled for a year. Very sticky issue. They could be delayed, in hopes for complicated workouts, they could resume. Who knows how this thing will move forward in the aggregate. Buffett suggests 2011 for housing construction recovery. I have no feel for that market.

The most sophisticated commercial buyers in the market (Boston Properties, for one) have reported a similar phenomena for commercial real estate occurring right now with regard to sort of muddled ownership. They are suggesting that there are lots of commercial properties that have essentially changed hands from property owner/debtor to institution/lender...without actual legal changes of ownership and with the property owners/debtors acting in management--while last word on decisions is coming from the lenders. I tend to believe that as a possibility. Boston Properties works the buying market all the time. They have incredible insights.

There won't be significant commercial construction though. Too much vacancy in every market. In 2007/2008 there was a huge surge in institutional construction--universities/local govts, hospitals. Won't be seeing much of that for a good long while. All those sources are having financial problems. I don't see the construction jobs coming back for a couple of years. If one wanted to see a way to get construction workers back to work in that industry...the only way it would happen in the near term is if the Feds went on a building/or rehab spending spree. I'm not suggesting it, I'm simply saying that is a way to attack that part of the unemployment issue.

Reemployment is a slow process unless something unforeseen occurs. Time will tell, IMHO.

 

Those are just symptoms of the real problem: government that has grown too large.

 

So large, so non-transparent and so powerful that the average Joe Shmoe doesn't even have a clue on where to look for solutions.

 

Dysfunctional gov't not size is the problem - pentagon / political spending, non accountability is the problem not the size necessary for national defense. Transparency, open gov't and accountability is supposedly what Obama represented that has yet to see the light of day and fire to their feet would be more than welcome by those that voted for change.

 

The size of the government is directly proportional to its function, or in this case "dysfunction".

 

It is crazy that some don't understand that the higher the percentage of employed people that work for the government, the more the producers have to be taxed. But then again, most "work" or want to "work" for some form of government so they don't care who has to actually work to support them.

Some think this is some form of job creation. Could you imagine if the government did some real layoffs?

 

If employing people in the government actually produced something, it might make sense.
Trouble is employing people in the public sector creates nothing more than a job. A job that must be paid for by someone in the private sector.

The Federal Government needs to shrink significantly or we will never begin to reduce debt. Government itself is the single largest entitlement program and the biggest drain on our economy. It's function was to be that of upholding our Constitution, creating law where needed, enforcing it when necessary and protecting us from our enemies.

Sadly governments role has become that of a support system for those that do not want to create, provide and support themselves. Democrats feed on this. Its how they control the masses. They keep them just dependent enough on them to keep them happy.

 

I am not the only one who sees this?
Now to get the educated ignorants to understand this, but I don't know if that is even possible. Once someone thinks that 2+2=5 because all their professors told them so, it doesn't seem like anyone can be taught the simple truth.

 

Debunked, we have a president (the first one in fact) that is a product of this welfare system of dependency. That said, it's kinda hard to end it, when the people that are for it, are for it because they are already dependent on it.

Democrats and their entitlement system are no different than crack cocaine or heroin. They get people hooked, and its near impossible to get them off of it, much less convince them they have a problem.

 

And like addicts, they need more and more and more.... the addiction perpetuates.

 

Sorry, I obviously meant Glenn Beck.

This reminds me of Gov. George McGovern, who ran for President against Nixon in 1972 and lost badly on an extremely left platform.

George was criticized for being too out of touch and unrealistically liberal (even by liberal standards). Up to 1972, he had never run a business, never worked for a paycheck, never paid a phone bill. Like Mia wrote, he was a product of the government's welfare system of dependency.

I saw a TV interview with McGovern during the 1980's. He explained that he later had chosen to run a hotel in Connecticut. He was openly amazed at the contrast of the true reality of the business world verses the fantasy he had been taught in college, and made him realize how totally unrealistic and naive his platform in 1972 had been.

I am willing to grant that President Obama has good intentions, but the truth is that Idealism + NoExperience = Naivete.

 

To insinuate public employees are responsible for the national debt is ridiculous, by scale alone - not to mention the absolute wast of employing private contractors in support of wars as an example of costing taxpayers enormous amounts of money as a ploy to circumvent budgetary restraint while padding self serving philosophies.

Public and Private employment are no different than the necessity for either to exist - the 4 billion in bonuses for the failures that contributed to the Merrile Lynch insolvency is the rule of private sector hypocrisy that individuals and not society are the sustaining ingredient for functional governance.

 

It's not an insinuation kiddo, its a fact!

 

Look, the Right Wing political BS is simplistic and misses what really works on so many levels. Here are some examples. Higher education loans. The whole higher education system has never been subject to real economic conditions of demand and supply. A fancy top ranked private college cost about $3-5,000/year back in the early 1970's. The same tuition now runs about $50,000. That type of price escalation is way beyond inflation over a 40 year period. What evolved was an ever growing federal loan program. Too bad market conditions never hit that industry.

Now the GOP is arguing that it wants banks to be able to continue to make the loans. These loans are totally guaranteed by the feds. That means the private banks want to suck the money off the federal loans and taxpayer money. The GOP wants the banks to have this. The GOP is arguing that the finance industry should be able to suck up taxpayer money. Its that simple. The new rules that would eliminate the banks from sucking the guaranteed tax payer money, says okay banks...compete for servicing the loans. Earn fees for real work. The GOP is fighting that. The GOP and the Right Wing want to suck up the taxpayer money. That is one of the gross lies that the GOP and the Right Wingers continue to support. They like it when they can suck up that taxpayer money. They do it big time with all sorts of contractors.

On a different basis the GOP and the Right Wing want the PayDay Loan business to be exempt from regulation. That industry might be the biggest theft ruse in existance. Its basically an industry whose target are people with low paying jobs and people without jobs. The payday industry comes in and charges those who can least afford it interest rates in the 30% range, interest in the 100-400% range, and interest rates that go into the 1,000% range and above. What the industry and their supporters want is no regulation.

Its theft based on income levels. The Right Wing and the GOP love it. Could be one of the biggest scams in America. Its a business that takes those who can least afford it and essentially rips them off, keeps them in poverty, keeps financial pressures on them, and establishes a financially mandated lower class.

There are some regs in states to protect against this. There are regs that say a PayDay loan business can't charge a US soldier more than 36%. Get that; the GOP and the Right Wing support...and would love it if you could remove the needed regs that limit a soldier to possibly paying up to a 36% effective interest rate on a loan. Holy Sh!t. Here is what we have. The loud mouthed Right Wingers that like to verbally treat soldiers like Gods...on the sly wants to support stealing their money. Talk about a f*cked up system.

The entire banking system is one that without oversight drives itself and the rest of the nation and world into deep recessions on a now regular basis. The last big horrible bank caused recession hit the SouthWest (primarily Texas) in the mid 1980's. (that wasn't bad enough to stem the problem). It hit the whole nation in 1989. It didn't basically get cleaned up till the latter part of the 1990's. Then it took less than a decade to cause a larger recession that virtually hit a depression and wiped about 20-30% of all world wide wealth...this current recession.

The GOP and the Right Wing don't want this industry to face serious controls. They want a "free market system". Are you kidding me. That is as good as telling the entire world right now....hey we ripped you off twenty years ago; we ripped you off in the last decade, leave us alone..we will rip you off in another decade. The world of finance is the industry most removed from effective "free markets". Unregulated its a fee based industry that will lead to further world wide financial disasters.

Take all the big mouthed Right Wing defenders here who mouth off about "free markets". After reading and reading their claims, I think I have more actual "working the markets" experience than all of them combined. Work the markets...then start mouthing off about them.

Which brings me to McGovern. Corwin: He was a Senator, not a governor. Doesn't surprise me with regard to his comments about how running a real business, a hotel, was so different and harder than what he had experienced in government and the Senate. But don't limit it to him because he is a Dem. Most of the people in office have virtually no real business world, be responsible for bottom line financial results experience. That is Dems and Reps. They simply don't have it.

OTOH, in the 80's I dated a female who was a staffer in a Congressional Office. Before coming to Congress the guy owned a chain of successful small businesses. They made good money. The guy had the reputation as "the dumbest guy in Congress". I met the guy on numerous occaisions at staff functions. My impression was that the reputation thing was very accurate. I actually knew some different people in Congress. I didn't know all of them...but this guy was dumb. Okay...the guy was a Dem. . He was friggin dumb.

For about two decades I worked markets extensively in one of the nation's largest commercial real estate market. My favorite work and what I did the most was as a tenant broker. At its best, a tenant broker educates his client tenant, and sets up a system whereby the tenant has negotiating leverage and choice amongst potential places to move. That means the landlords have to compete for the tenancy. Landlords and tenants have roughly equivalent information. The market for a deal is at equilibrium. The parties work out a deal. Once a basic deal structure is agreed to a landlord presents a lease for final and legal agreements. 99% of the time its the landlord's lease. The landlord again has market advantage. If the tenant has an "out" and sufficient time the tenant still has reasonable leverage to work out reasonable and equitable terms. If not...the landlord rips the tenant up with clever legal elements. That is an example of how real markets work. There is a level of market equilibrium if both sides have equal or similar knowledge and leverage. As soon as a market twists and one side has the leverage in knowledge or the elements of demand and supply there are incredible winners and losers. The theory of markets is beautiful in its theory...but in practise it often skews badly. That is when horrendous results occur.

Markets need referees. They are a lot like sports.

 

What evolved was a teachers union that demanded more money and job security.
Market conditions never hit that industry because of union coercion.

All the GOP wants is for the banks to make loans to private industry/business that will create wealth. What they do not want is the entitlement crowd ala Freddie and Fannie compliments of the CRA to continue to give out bad loans to people that will neither pay the loan back, nor create wealth.

Boohoo.. The reality is the Payday loan places actually make money not lose it? How, cause they secure small loans at a high fixed rate and collect the money, and get paid back on top of that. Are you suggesting that these places should be regulated such that they operate like Fannie and Freddie? If you are, I'm gonna ask that you invite me over tonight, cause I want some of what you are smoking.

No, its a business that provides a very nice service and makes a profit doing it.
The biggest scam in America is Fannie and Freddie that bilked tax payers out of billions and destroyed housing values.
If you really want to talk about the financial pressures that keep low income people with a "low income", try looking at what welfare does. It keeps people just dependent enough that they have no incentive to do better for fear of losing what they already get for free.

A business can charge what the market will bear.

Step one. Eliminate CRA. Step two, do the same with Freddie and Fannie.

The moment you introduce artificial controls on a business is the moment that business ceases to be viable and profitable. It amazes me to no end how people will call for the regulation of private business all day long, but when it comes to public entitlement systems like Fannie and Freddie, and other government blunders, the thought of regulation is no where to be found.

Free Markets work. Free Markets create wealth. Free Markets pay for those entitlement programs. Do you work in the private sector or are you a college student. You really sound like the later.

A great deal of Senators and Congressmen DO have real world experience. There are several that have owned and do own businesses. Not everyone is spoon fed off the public dole and educated for free like our President.

There is no intelligence or litmus test, nor is there any educational requirement for Congress. I think you have to be 25 and a US Citizen for 7 years and a resident of your state at the time you are elected. So its entirely possible to get dumb people elected. Look at the commander in chief.

If I follow you correctly you want everyone to be level, everything to be equal and everything to be what you consider to be FAIR at the time. Does not work. Sometimes its best to leave well enough alone and let people run with the ball.

Nah, they need to be left the fuck alone. That's all we ask of our government. To be left the fuck alone so we can do our jobs and create wealth. When left alone, the American worker can create some really cool stuff.

 

I don't think they should be regulated. They should be destroyed.

You actually believe a payday loan store creates WEALTH???!?!? Wow!

These places only exist because of protection from the government and politicians. Take away that protection, and payday loans disappear.

But, you seem to love government meddling as long as it's not aimed at you.

 

The GOP is not in charge. The GOP is not chairing the committees that determine this. I could give a damn about what the GOP SAYS they want to do. The Democrats are in charge.

Look at the balancing act Obama performed as he ran for President. Only twice, he came out and said, directly, that he was against gay marriage and supported "don't ask, don't tell". Meanwhile, he had the dishonest genius to give a manufactured illusion that he supported gay marriage and gays openly serving in the military - but he never came out and said that! And despite Obama's recent pretend claim that gays should openly serve, that's just empty rhetoric because no serious progress has been made on that front.

It's exactly the same thing with the banks. The Dems pretend to paint a picture that they want things to get better and they want to regulate banks. That's a complete lie. The Democrats just had a honeymoon period where they had complete control of Congress - even the Republicans admit that the GOP was relegated to complete insignificance. The Democrats passed no significant banking regulation. It's all a farce.

What makes the above misleading is the dishonest assumption that all of the blame is due to one party.

The most dishonest point is the sentence I've bolded above. Neither party wants the banking industry to face any serious controls. NEITHER PARTY WANTS THE BANKING INDUSTRY TO FACE SERIOUS CONTROLS! We have a Congress that is owned, controlled, and managed by Wall Street. Wall Street is the puppet master. That is obvious to anyone who saw what the Democratic Congress and our Democratic President did to "bail out" Wall Street.

In my opinion, the entire bailout was criminal. And when you have Jon Stewart, 60 Minutes and numerous PBS programs like Frontline pointing fingers at ALL of Congress and painting the picture that BOTH parties are to blame (and PBS is not known for attacking Democrats) then the picture is clear.

Look, it's very simple: the best way to jump-start the economy is to do what m President Reagan did - give us a middle-class tax cut. The economics of it are so simple, it's obvious to even the uneducated: the Middle Class purchases are the basis of our economy. If you give an immediate payroll tax cut, those that are employed now have less taxes taken of of their paycheck and more money to spend. That will stimulate the economy.

Why won't the Democrats do lower middle class taxes? Because of the Three Fundamental Economic Laws of Congress:
1. Raising taxes increases a politician's political powers
2. Lowering taxes weakens a politician's political power
3. Pelosi craves power more than Hitler wanted Poland.

This is the present political reality and no amount of blaming "GOP and the Right Wing" rhetoric can change that. And no amount of blaming "GOP and the Right Wing" can change the simple fact that The Democrats Run the Government.

Opp, my bad, Mc Govern was a Senator, No wonder he was completely clueless.

But Earl, you completely missed my point - McGovern ADMITTED that he was out of touch. McGovern ADMITTED that a life of mostly politics made him too incompetent to govern a nation.

Ever met a dumb businesshuman? I have.

They are like sports only for people who root for one party the way someone roots for one sport team. In Sports, you call those people fans. In politics, I call those people "political bigots".

 

Interesting how the two hard core Republican conservative justices abandoned their own congressional testimony on president / traditional rulings that they should be honored for their own merit and on a 5/4 decision overturned a 100 year ruling obviating president / tradition simply to jockey their own personal philosophies above the interests of individual democracy one-man-one-vote principles for democracy by elitism.

Citizen's United already is targeting multiple states to influence elections on single issue legislation having nothing to do with local jurisprudence whatsoever and represents what will eventually be another conservative concocted corruption, this time our democracy than the present debacle of the economy....will they ever be held accountable for their actions before the wreck.

 

In other news, the traffic during the morning commute was heavy yesterday.

/Yawn. What, you want people to post articles about George Soros funded organizations or Labor Unions pouring millions of dollars into advertising to get their candidates elected. The news in your post could not be more mundane or inconsequential. Do you ever look in the mirror and wonder if someone has their hand up your butt to make you repeat their talking points like you are some kind of sock puppet?

 

Any business that earns a profit create wealth.

All business exists because of protection from the government and politicians. did you forget what country we are talking about?

What I support is our government defending our right to pursue our own individual happiness. If that's what you call meddling, fine.