Yesterday my friend James North said that the recession/depression/hogwart whatever you want to call it has already been good for us. He had to run; he was going to explain to me today.
Last night I saw a friend for dinner who told me to read two Lincoln speeches, from 1848 and 1854, the Mexican war speech and the Kansas-Nebraska speech. I went to bed at midnight and as I was brushing my teeth wandered out to the big bookcase in our living room. We'd moved from a bigger house to this one a year ago and, happily, tossed a lot of books. I had developed a theory that libraries are now generally circulating, due to the internet, and when I need a book I should buy it at my computer and when I'm done I should give it away. It was my general economic idea, actually, and maybe some other people's too. Since then we've battened down the hatches. Anyway, I seemed to remember that Lincoln had made the cut, on aesthetic grounds; and there was a Library of America boxed set of Lincoln that had floated into my life 15 years ago. My brother-in-law gave it to my step-grandfather, whom I lived with on the Lower East Side. My step-grandfather gave it to me. (My brother-in-law later saw that I had the books, and was annoyed.) I don't think I'd ever opened them. Snooty interior decoration.
Anyway, the point is, I grabbed the books and there were the two speeches my friend had mentioned, and then I was up till 1 a.m. with the realization, I could read this guy all winter long (in part from this recognition, that the intellectual clarity and moral leadership that I worship in Chomsky was there in a book I took for granted; and I'm going to have more to say on that head soon). As Economic Man, I am saying that the era of spending and getting and looking around for more that we thought would never end, has ended. And good things will come of it. Including rediscovering the simple riches that are already in our possession.
So finally the mad endless shopping sprees, the age of entitlement is over–slapped right in the face; too bad thrifty, responsible citizens have to pay the price too since they've been innocent all along, those stick in the muds…
I fear the Obama regime will just throw their money away at the problems; he's more like the entitled kid than his white grandmother–Joe The Plumber is a joke. But I bet Joe never got even some food stamps in his whole life.
Since then we've battened down the hatches.
;):)
They wait patiently for you on the shelf, till you are ready. They need space though.
The people who played by the rules will get soaked. How is that a change? I also bet that when the economy shrinks, the hordes of illegals will still be here. The message is that we are all poorer, and that the only rules that apply are the ones that the powerful choose to apply, which makes playing by the rules silly for the typical American. Why even know the rules when justice is arbitrary?
I've never been extravagant, or enjoyed shopping, so nothing much will change for me.
Phil,
Try the Kindle that way you'll own the book forever and it'll jusually just cost $9.95. I bought one a few months ago and I love it. Read faster too because of its great ergonomics. Disclaimer: I have no finanacial interest in anything to do with the Kindle…alas
Phil,
Try the Kindle that way you'll own the book forever and it'll jusually just cost $9.95. I bought one a few months ago and I love it. Read faster too because of its great ergonomics. Disclaimer: I have no finanacial interest in anything to do with the Kindle…alas
If the bailout monies were going to welfare programs that assured everyone a minimum income that provided for adequate food and shelter, the coming reduction of living standards from a contracting economy would not be as severe as the suffering of the poor will be. There will be many people in our society, as there already are, who have no money, with no prospects of earning any money, and they will go hungry. It may take awhile, but this failure of the economy will lead to a greater understanding for the need of the political economy to deliberately distribute wealth more equitably. Bailouts and infrastructure spending will not do enough to resolve the real problem of low wages for the median and below households, who will suffer the most from the economic contraction. Their living standards will be the ones that fall the farthest. A fiscal policy transferring the nation's future income to economic institutions, like the banks that provide little tangible goods or services, nor household incomes, to the overall economy, will not stop the economy's collapse. The economy cannot be repaired with welfare to the institutions whose fiduciary malfeasance has created this catastrophe. These institutions do not provide enough tangible goods and services to justify such a large portion of the economy's income, and, worse, they played a great role in devising the current political economic regime that has kept median and below wages stagnant while the economy grew the past twenty-five years. The sooner it is realized saving people is more important to the nation instead of saving inefficient and ineffective economic institutions, the sooner the economy will find an equilibrium of prosperity for all.
The governing USA elite think Las Vegas is the USA. Mass America can just clean the sheets and pick up in the motels and hotels. Oops, that jobs already taken over by illegal immigrants…
There are MANY that are and will suffer as a result of the recession/depression.
There is no way that the current economic situation has hit bottom. It has a significant ways to go.
I read today in the New York Times of elderly that need to get placed in independant living or assisted living facilities but can't because their homes are their primary financial assets and they can't sell their homes (at any price).
Those isolated elderly will SUFFER.
Also, the financial collapse has now begun to spread considerably to productive companies. The web of dependancies in those institutions is far more complex and less easy to contain than the fantasy of a financial bailout.
Paul Krugman proposed an innovative bailout approach about six months ago which was ignored.
That was for the federal government to fund second mortgages on all troubled mortgages, in exchange for partial equity in the homes, and a right of first refusal on the sale of any homes with those government funded second mortgages.
That, combined with regulation of mortgage offerings on residential real estate going forward, would accomplish a few CRITICAL stabilizing concerns (or would have).
1. Homeowners would not be thrown out of their homes, with the few exceptions of genuine bankruptcy.
2. Communities would not experience an artificially high rate of foreclosures in any marketplace.
3. The collapse in the value and attitude towards mortgage backed securities and insurance for them (derivative swaps) would be greatly reduced. The reason for the initial collapses in the loan and insurance markets was due more to the UNCERTAINTY of the value of the securities than the actual computable losses.
The exageration of fear replaced the exageration of hope and speculation. A downward spiral.
But we're past that now.
There is an irony for monetarists in the last few years. It proves their point that money supply increases create bubbles. The flaw in the monetarists view though is that the bubbles in equities (and equity in homes) WAS fueled by the relation of more money seeking fewer actual assets and exchanges to fill.
The tax laws favoring income from speculation and investment, over income from work and exchange contributed to the formation of the bubble in the places that it occurred.
It was not wage driven inflation, but speculation and equity driven inflation.
HOBBYHORSE#1 POSTED: "The Recession Will Be Good for Us"
ERGO: "Yummu, yummy, yummy, I got Castor Oil in my tummy…."
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My brother-in-law and two of my nephews are financial planners and my mother keeps asking why I'm want the economy to tank when it's ruining their business. I try to explain to her that Limbaugh and Hannity started referring to the current economic malaise as "the Obama recession" months before the election, and that consequently it is important that the stock market hit bottom (6000?) before January 20. My brother-in-law and my two nephews are just "collateral damage" like all of the refugee Iraqi girls that now have to prostitute themselves in Syria and Jordan to support their families.
Another horrible consequence of this recession is that it reveals status differences between generations.
My parents' generation were the beneficiaries of home appreciation, securities appreciation. They previously suffered through depression, WW2, ups and downs through the 70's. Then benefitted (not as a result of then current effort) from the 80's, 90's, and 00's appreciation (some substantiated by real economic transaction and value creation, some just phantom inflation in speculation).
Working people benefited from this as well, and mostly from the perception that American manufacturing was permanently prominent, and could confidently spin out defined benefit pensions.
In Phil's and my generation, the success became bifurcated. Some succeeded financially enormously, and now many have gotten blown over.
In younger generations, the success is more difficult. Older people block up the hall. The cost of living is much higher. The cost of entry into the economy is much higher (higher education). The obligations for social security, medicare, civilian and military, remain.
And, the whole society is dependant on the younger generation picking up the economic ball and RUNNING with it, succeeding through attention and dedication beyond any other prior.
And, as the success comes from making things, exchanging in use value for use value transaction, the long-term game is currently rigged for gross failure.
There is LIMITED capital for making and doing things, limited and hindered preparation of skillsets.
You can tell a society that will have a bright economic future by the degree of emphasis and support for higher education.
University and post-graduate education should be close to FREE on a merit basis for everyone. (The question of merit, is just the question of merit in what. A prospective skilled work-person should have free education in that as much as a prospective skilled econometric analyst.)
The recession really is affecting everyone globally. Everyone should be helping each other to make it through, specially the government. I hope the recession ends soon.
Indeed, the recession does something good if you look at the other side of it. It teaches how to adapt to change. To be more disciplined in how we spend/invest on things etc.