Worst U.S. President Ever

Post Reply New Topic

Well, to assume your theory must be correct is also a sign of your lacking analytical comprehension. Even if trends reflect an outcome your theory suggests, this does not mean that other explanations do not exist. In any case, some major trends that are usually assigned responsibility for some of these matters are the increase in firm size caused by globalization, the increase in international competition, and the use of technology in firms. Usually, among economists, these sources of change are cited as opposed to regulatory issues, particularly given that the government has not typically done much to promote middle class jobs, and the extent of unionization in the US has typically never been very high. The rise of management benefits, however, also is sometimes put in perspective of more causes than firm size, these causes are usually considered institutional factors emerging, or the increased competition for leadership due to a change in practices in hiring management, as it used to be that promotions were mostly internal, however, now more recruitment of management from outside firms is occurring.

The simple fact is that if the workers who are also the consumers do not have the cash to buy what they produce the economy flops. The concept that giving subsidies to management will increase investment in production and produce jobs has resulted in management moving overseas to take advantage of the cheap labor, thereby depriving local labor of the purchasing power to purchase the goods produced. Although the lower price of imported goods offsets this to a degree, you cannot get money where money is not given and, in the long run, as is obvious in the decline of consumer spending, if consuming workers are not given incomes commensurate with their standard of living then the whole system collapses. As it surely is doing.

And this works in both directions: if the workers are so overpaid that labor costs drive up the price of products, then the higher wages will be meaningless.


I don't think the system is collapsing. I know a couple people who are out of work, and they might have some relatively tough times ahead of them, but it's not the end of the world. The economy will recover in a few years at most and people will forget about all these complaints until the next recession strikes.

Well, no, more like that they are open for large levels of corruption, and create an unnatural monopoly of labor that excludes other laborers from working, despite the efficiency of allowing such trades to occur.


Wal-mart doesn't pay minimum wage for most of it's workers, most companies don't pay minimum wage, even for the gruntiest of jobs, and for the most part, minimum wages are not a *great* way to promote public welfare, with most economists siding with the EITC because that lacks the problems with screwing up labor markets, and still gets the job done.

Sand, there is no necessary relation given the fact that a lot of the purchasing in the US is due to social ideas rather than necessity, thus credit purchases would be more likely to have to do with lending practices, and credit markets. In any case, the basic functioning of the economy works as this:

Y=C+I+G+NX

If consumption(C) decreased, there seems no reason why investment(I), or net exports(NX) couldn't easily start picking up the slack. Thus, it really seems as if the problem you put forward of credit issues would not have to do with the distribution of wealth, but rather in risk management, a different topic.

Ok, and these trends, amongst knowledgeable economists, are usually ascribed to increased use of technology, increased globalization, and increased size of firm along with perhaps some supporting factors. There seems little reason to blame Reagan, as in any case unions have never been the majority of workers, and never even close, so to claim that they are *that* powerful is questionable, as there is no logical reason for a union group to support welfare of those outside of it, and there are valid reasons to think that unions hurt the welfare of those outside of them.

Not really, we can export goods, or we can start creating a different mix of goods such that these goods will be sold.

Tax cuts don't seem likely to profoundly impact the labor market, unless specially directed to do so, and this is because of the difficult clash of income effects vs substitution effects, with both pushing opposite directions.

In a global economy, the location of production does not really matter. All that happens is a readjustment, and there seems no necessary relationship between distribution of income and macroeconomic stability, so long as the socio-political apparatus is stable.

Sand, the problem with the current situation has little to do with consumption, and a lot more to do with credit markets, particularly involving risk management, and readjustments to such issues, if I recall correctly, the drop in consumer spending was *after* the housing issues started arising, and there is no reason to suppose that these housing issues were due to poverty anyway, given the large amount of speculation going on in these markets, heck, the major source of housing problems was in adjustable rate mortgages, which are not used by normal people so much as speculators. As for the cause of the speculation, well... that's more uncertain from what I've heard.

The raw fact is that people are being kicked out of their houses because they were conned into unsustainable mortgages. The unemployment rate is now higher than it's been in decades and credit cards are generally no longer a source of money for people who cannot pay the rates. The balance of payments clearly indicates that imports over exports is in a highly negative state and the loss of well paying manufacturing jobs is generally replaced by low paying service jobs. And there is no end in sight. Obama is promising all sorts of special stimulants, new military spending, and China is rapidly losing its appetite for lending the US money so the only source is printing the stuff which pushes the economy over the cliff. The coming hard times are not a short term affair.

Let's see, the fact that people are getting kicked out of their houses is always there. The major issue we've been seeing though, is not a rise in homelessness, but rather problems within our financial system, this implies risk-management issues given the housing matter.

By balance of payments, you mean balance of trade, right? The balance of trade is really significantly impacted by the budget deficit. Remember, the equation I showed earlier?

Y = C+I+G+NX Well, C(consumption) and/or G(government spending) are increased(depending on whether we have a tax cut or government spending increase), but in a reasonably stable macroeconomic state, Y is relatively constant(even in a more unstable state, Keynesian stimulus would be imperfect at just increasing Y without changing the balance that makes up Y), this means that either I(investment) or NX(net exports) have to suffer. Well, in a global economy, it is often net exports that suffer, which is because in order to buy deficit, our money is necessary, therefore it is not exchanged for goods, but rather for deficit. Investment may shift, but this is dependent upon the relationship between our financial markets and global financial markets, the less global impact we have, the less our levels of investment decrease, as the less our actions impact the global interest rates.

In any case, people promise doom so freaking often, it makes me want to puke. Maybe we will have Great Depression 2, maybe we won't, in either case, nobody is smart enough to know better, nor is anybody powerful enough to do anything, and pretending that either is the case is arrogance or stupidity.

The collapse of the housing bubble is definitely not "people are always getting kicked out". The value of housing is dropping precipitously and the housing market is in dire trouble. As a repository of individual wealth this is a sign of very bad trouble indeed. The US auto industry also has had a horrible year and unemployment is skyrocketing. These are not things to be lightly dismissed. As the value of the dollar drops there is pressure to drop the dollar as the currency of record and there is a correlated problem of the increase of the cost of importing oil which, at the moment, is still the lifeblood of industrial power. Oil prices recently dropped because oil became too expensive to use in the easy way it was used before but if the value of the dollar drops in response to Obama's determination to throw lots of money at the current problems then oil prices have to rise again. These are not problems easily solved and there is no automatic recovery on the way.

Right, and the value of housing dropping significantly is a case of overvaluation, which is one of those little phenomena that we don't know about perfectly, much less how to predict and control it. It also cannot have a lot done about it, as we don't know the true price of the housing market given that the value of houses was getting very high before this all had happened, which led to a lot of speculation, as can be seen from the number of home renovation shows there were. The loss in value in houses isn't a terrible problem though, unless it impacts investment more deeply than a simple price change in a single market seems likely to.

US auto has had a terrible year, but US auto is actually a big national f*** up anyway, it is a concern but not a terrible concern, particularly since we seem to be bailing them out like we always do anyway.

Unemployment is increasing to a level above the point where the US is healthy, but... I wouldn't say that unemployment is as bad as it has sometimes been historically during a recessionary period. I mean, the latest data, the December data put unemployment at 7.2%, however, in the early 90s it had gotten up to 7.6%, in the early 80s, it got up to 10.8%, in the mid 70s it got up to 9%, and in the early 60s it has gotten up to 7.1%. So, taking that into account, unemployment has to get a lot worse to be significantly different than past recessions.

Fiscal stimulus typically causes the dollar to rise in value, it would only drop in response if confidence in the US economy tanks, but I don't see tanking necessarily occurring.

Everyone says that the given set of problems isn't easy to solve, and frankly, I'd side with automatic recovery before I would think policy makers to be effective. Particularly given that there seems no reason for the economy *not* to recover, a major issue would end up being duration, but in this situation, I don't think that the economy will suddenly collapse, sounds too "doom prophet"-ish.

I admire your optimism but the lack of confidence in the financial sector is not being reversed by the multiple billions being currently thrown at it which, in general, are not being used to encourage lending . Investment occurs when an industry indicates a market for the goods to be produced and the investment has to be local to spur industry and create jobs. The current talk is that US infrastructure has been neglected so long that there is a severe need for projects to bring the status of bridges, roads, and general transport facilities up to snuff but local governments are suffering severe drops in tax collecting and have not the funds to finance the work and are restricted to balance their budgets, a restriction not imposed on the federal sector. Estimates I have heard indicate the federal government is making only weak efforts to solve the lack of local funding even under Obama's proposals. There is much too much money being drained away by the useless nonsense in Iraq and Afghanistan and all the unnecessary military bases throughout the world which produce nothing and demand goods that are totally unproductive in the central economy.

The severe problems in health and education due to the unnecessary milking of funds by overpriced drugs and health insurance companies that spend more on preventing proper care of their clients than actually paying for what is needed. Beyond that there are on to 50 million citizens who have no health insurance at all and this is bound, in the long run, to undermine the general health of the entire nation. And, of course, education is an ongoing ineffective mess.

I don't have much faith in Keynesian stimulus anyway. The efficacy of it is under question, and such a large package is certainly less known than smaller ones.

As for everything else. Problems exist. Got it. World still ain't ending. The healthcare system is certainly flawed, it probably won't undermine national health as just be a pain in the rear, the US's life expectancy is good once you adjust for health losses that are outside the power of the healthcare system, and strangely enough, there are some statistical studies that muddy the waters on the relationship of healthcare to life expectancy, which is really confusing some people.

Instead of waiting for some dumb bastard to foment a war to spur outrageous spending of the type that stimulated the US economy out of depression as in WWII why not get going on projects that require huge input like terraforming the Earth and eliminating the Sahara and other non-productive areas of the Earth without massacring millions of people in the process. All sorts of crazy ideas such as creating space mirrors to concentrate the Sun's energy for power or cut down global warming or control the weather in specified spots could do the trick. Conventional business which profits by destroying ecology such as the frightful destruction in Appalachia by chopping off mountain tops and dumping them in valleys and the vandalism of the Everglades to support an unneeded sugar industry and housing nobody wants doesn't help. There are very big Earthwide possibilities for humans to finally take proper control of their planet and kick out the greedy thugs that are murdering people and destroying it. The false hope of going back to the old BS economy of consumption of senseless meaningless destructive goods may be finally petering out. It's a hope anyway.

Because Keynesian stimulus is costly, and in order to enact it properly, we must both use it quickly, but also we would have to monitor it's uses somewhat carefully, otherwise the tax break would make more sense due to the waste of the project. Even the war stimulus is notable for it's wastefulness, I mean, a war effort is like devoting an economy to dumping goods in a pit.

Your hope seems the more empty one, who would agree with your notions? If few people, then who'd implement them? In any case, your proposals don't seem to address humans taking control so much as a particular value scheme, given how many people like consumption, and wouldn't care about the loss of the Everglades, and the lack of perceived US need to terraform the Sahara.

Hitler pulled the German economy out of a hell of a deep pit and created a war machine that almost defeated all of Europe and whatever finance he needed he got. The US could do the same thing for creative, not destructive purposes. And it surely would help the whole world and probably make quite a few ingenious people rich. But maybe people have to stew a bit in total misery before they come to their senses.

Hitler practically turned his country into a war economy before the war, and his policies included the use of powerful methods such as wage controls and the like, methods that would be questionable during a peacetime economy, and that would, if applied for a long duration, lead to the destruction of our country, just as they would in the long-run lead to the destruction of Germany. Germany just never lasted that long.

In any case, one person's creative purpose is another person's fool's errand, and it seems questionable to declare objectively and infallibly how a given set of projects would be judged by the rest of humanity.

You're right on the first part but Hitlers Germany did not improve economic possibilities in the world but manufactured goods that were made to be destroyed and to destroy other economies. The Tennessee Valley project is a better comparison.