Announcement

Collapse
No announcement yet.

It's the Economy Stupid!

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • It's the Economy Stupid!

    June 29, 2008
    Op-Ed Columnist
    Anxious in America

    By THOMAS L. FRIEDMAN
    Just a few months ago, the consensus view was that Barack Obama would need to choose a hard-core national-security type as his vice presidential running mate to compensate for his lack of foreign policy experience and that John McCain would need a running mate who was young and sprightly to compensate for his age. Come August, though, I predict both men will be looking for a financial wizard as their running mates to help them steer America out of what could become a serious economic tailspin.

    I do not believe nation-building in Iraq is going to be the issue come November — whether things get better there or worse. If they get better, we’ll ignore Iraq more; if they get worse, the next president will be under pressure to get out quicker. I think nation-building in America is going to be the issue.

    It’s the state of America now that is the most gripping source of anxiety for Americans, not Al Qaeda or Iraq. Anyone who thinks they are going to win this election playing the Iraq or the terrorism card — one way or another — is, in my view, seriously deluded. Things have changed.

    Up to now, the economic crisis we’ve been in has been largely a credit crisis in the capital markets, while consumer spending has kept reasonably steady, as have manufacturing and exports. But with banks still reluctant to lend even to healthy businesses, fuel and food prices soaring and home prices declining, this is starting to affect consumers, shrinking their wallets and crimping spending. Unemployment is already creeping up and manufacturing creeping down.

    The straws in the wind are hard to ignore: If you visit any car dealership in America today you will see row after row of unsold S.U.V.’s. And if you own a gas guzzler already, good luck. On Thursday, The Palm Beach Post ran an article on your S.U.V. options: “Continue to spend upward of $100 for a fill-up. Sell or trade in the vehicle for a fraction of the original cost. Or hold out and park the truck in the driveway for occasional use in hopes the market will turn around.” Just be glad you don’t own a bus. Montgomery County, Md., where I live, just announced that more children were going to have to walk to school next year to save money on bus fuel.

    On top of it all, our bank crisis is not over. Two weeks ago, Goldman Sachs analysts said that U.S. banks may need another $65 billion to cover more write-downs of bad mortgage-related instruments and potential new losses if consumer loans start to buckle. Since President Bush came to office, our national savings have gone from 6 percent of gross domestic product to 1 percent, and consumer debt has climbed from $8 trillion to $14 trillion.

    My fellow Americans: We are a country in debt and in decline — not terminal, not irreversible, but in decline. Our political system seems incapable of producing long-range answers to big problems or big opportunities. We are the ones who need a better-functioning democracy — more than the Iraqis and Afghans. We are the ones in need of nation-building. It is our political system that is not working.

    I continue to be appalled at the gap between what is clearly going to be the next great global industry — renewable energy and clean power — and the inability of Congress and the administration to put in place the bold policies we need to ensure that America leads that industry.

    “America and its political leaders, after two decades of failing to come together to solve big problems, seem to have lost faith in their ability to do so,” Wall Street Journal columnist Gerald Seib noted last week. “A political system that expects failure doesn’t try very hard to produce anything else.”

    We used to try harder and do better. After Sputnik, we came together as a nation and responded with a technology, infrastructure and education surge, notes Robert Hormats, vice chairman of Goldman Sachs International. After the 1973 oil crisis, we came together and made dramatic improvements in energy efficiency. After Social Security became imperiled in the early 1980s, we came together and fixed it for that moment. “But today,” added Hormats, “the political system seems incapable of producing a critical mass to support any kind of serious long-term reform.”

    If the old saying — that “as General Motors goes, so goes America” — is true, then folks, we’re in a lot of trouble. General Motors’s stock-market value now stands at just $6.47 billion, compared with Toyota’s $162.6 billion. On top of it, G.M. shares sank to a 34-year low last week.

    That’s us. We’re at a 34-year low. And digging out of this hole is what the next election has to be about and is going to be about — even if it is interrupted by a terrorist attack or an outbreak of war or peace in Iraq. We need nation-building at home, and we cannot wait another year to get started. Vote for the candidate who you think will do that best. Nothing else matters.
    June 9, 1973 - The day athletic perfection was defined.

    http://www.youtube.com/watch?v=k-Kva...eature=related

  • #2
    Originally posted by tallahassee blues fan View Post
    June 29, 2008
    Op-Ed Columnist
    Anxious in America

    By THOMAS L. FRIEDMAN
    Just a few months ago, the consensus view was that Barack Obama would need to choose a hard-core national-security type as his vice presidential running mate to compensate for his lack of foreign policy experience and that John McCain would need a running mate who was young and sprightly to compensate for his age. Come August, though, I predict both men will be looking for a financial wizard as their running mates to help them steer America out of what could become a serious economic tailspin.

    I do not believe nation-building in Iraq is going to be the issue come November — whether things get better there or worse. If they get better, we’ll ignore Iraq more; if they get worse, the next president will be under pressure to get out quicker. I think nation-building in America is going to be the issue.

    It’s the state of America now that is the most gripping source of anxiety for Americans, not Al Qaeda or Iraq. Anyone who thinks they are going to win this election playing the Iraq or the terrorism card — one way or another — is, in my view, seriously deluded. Things have changed.

    Up to now, the economic crisis we’ve been in has been largely a credit crisis in the capital markets, while consumer spending has kept reasonably steady, as have manufacturing and exports. But with banks still reluctant to lend even to healthy businesses, fuel and food prices soaring and home prices declining, this is starting to affect consumers, shrinking their wallets and crimping spending. Unemployment is already creeping up and manufacturing creeping down.

    The straws in the wind are hard to ignore: If you visit any car dealership in America today you will see row after row of unsold S.U.V.’s. And if you own a gas guzzler already, good luck. On Thursday, The Palm Beach Post ran an article on your S.U.V. options: “Continue to spend upward of $100 for a fill-up. Sell or trade in the vehicle for a fraction of the original cost. Or hold out and park the truck in the driveway for occasional use in hopes the market will turn around.” Just be glad you don’t own a bus. Montgomery County, Md., where I live, just announced that more children were going to have to walk to school next year to save money on bus fuel.

    On top of it all, our bank crisis is not over. Two weeks ago, Goldman Sachs analysts said that U.S. banks may need another $65 billion to cover more write-downs of bad mortgage-related instruments and potential new losses if consumer loans start to buckle. Since President Bush came to office, our national savings have gone from 6 percent of gross domestic product to 1 percent, and consumer debt has climbed from $8 trillion to $14 trillion.

    My fellow Americans: We are a country in debt and in decline — not terminal, not irreversible, but in decline. Our political system seems incapable of producing long-range answers to big problems or big opportunities. We are the ones who need a better-functioning democracy — more than the Iraqis and Afghans. We are the ones in need of nation-building. It is our political system that is not working.

    I continue to be appalled at the gap between what is clearly going to be the next great global industry — renewable energy and clean power — and the inability of Congress and the administration to put in place the bold policies we need to ensure that America leads that industry.

    “America and its political leaders, after two decades of failing to come together to solve big problems, seem to have lost faith in their ability to do so,” Wall Street Journal columnist Gerald Seib noted last week. “A political system that expects failure doesn’t try very hard to produce anything else.”

    We used to try harder and do better. After Sputnik, we came together as a nation and responded with a technology, infrastructure and education surge, notes Robert Hormats, vice chairman of Goldman Sachs International. After the 1973 oil crisis, we came together and made dramatic improvements in energy efficiency. After Social Security became imperiled in the early 1980s, we came together and fixed it for that moment. “But today,” added Hormats, “the political system seems incapable of producing a critical mass to support any kind of serious long-term reform.”

    If the old saying — that “as General Motors goes, so goes America” — is true, then folks, we’re in a lot of trouble. General Motors’s stock-market value now stands at just $6.47 billion, compared with Toyota’s $162.6 billion. On top of it, G.M. shares sank to a 34-year low last week.

    That’s us. We’re at a 34-year low. And digging out of this hole is what the next election has to be about and is going to be about — even if it is interrupted by a terrorist attack or an outbreak of war or peace in Iraq. We need nation-building at home, and we cannot wait another year to get started. Vote for the candidate who you think will do that best. Nothing else matters.
    Precisely...and that candidate is certainly not Obama. We cannot tax, spend, regulate and tariff our way to prosperity just as we have not been able to deficit spend and wildly deflate our currency to prosperity.

    But, its not just the Executive Office that has to take its head out of its ass. Its the Congress, its the Fed, its state and local governments and its Americans themselves.
    Go Cards ...12 in 13.


    Comment


    • #3
      Originally posted by TTB View Post
      But, its not just the Executive Office that has to take its head out of its ass. Its the Congress, its the Fed, its state and local governments and its Americans themselves.
      ++

      Despite that, are we not faced with two incredibly bad candidates for president? Wow.

      The contention that democracy allows the worst elements to rise to the top has played itself out in full color.

      Now, grab that bread and get back to the circus.........

      Comment


      • #4
        Originally posted by TTB View Post
        Precisely...and that candidate is certainly not Obama. We cannot tax, spend, regulate and tariff our way to prosperity just as we have not been able to deficit spend and wildly deflate our currency to prosperity.

        But, its not just the Executive Office that has to take its head out of its ass. Its the Congress, its the Fed, its state and local governments and its Americans themselves.
        No, continued bailouts of irresponsible corporations while maintaining low interest rates is the way to go. Bail out Bear Stearns, weaken the dollar so that everything is more expensive for Americans, but American assets are more affordable for the world. That's the way to do it. Any other bright comments?
        Nature always sides with the hidden flaw.

        We will have to repent in this generation not merely for the hateful words and actions of the bad people but for the appalling silence of the good people.

        Comment


        • #5
          Originally posted by raise View Post
          No, continued bailouts of irresponsible corporations while maintaining low interest rates is the way to go. Bail out Bear Stearns, weaken the dollar so that everything is more expensive for Americans, but American assets are more affordable for the world. That's the way to do it. Any other bright comments?
          You clearly don't understand my point of view and the Bear Stearns thing happened well after the dollar had deflated...something akin to just throwing another log in the fire.

          I am no supporter of Bush's fiscal polices which a thoughtful person might have picked up on before you start insulting me. Did you even read my derogatory comment on deficit spending and deflating the currency? Did I need to list everything I don't agree with? I might have to write a book if that's the case.

          I will give you the respect of not maybe understanding my POV before I start insulting you in return.
          Go Cards ...12 in 13.


          Comment


          • #6
            So what the hell will McCain do to fix the economy, TTB?

            Please provide us your very objective, very independent insight into this matter.
            “I’ve always stated, ‘I’m a Missouri Tiger,’” Anderson said March 13 after Arkansas fired John Pelphrey, adding, “I’m excited about what’s taking place here.”

            Asked then if he would talk to his players about the situation, he said, “They know me, and that’s where the trust comes in.

            Comment


            • #7
              Originally posted by TTB View Post
              You clearly don't understand my point of view and the Bear Stearns thing happened well after the dollar had deflated...something akin to just throwing another log in the fire.

              I am no supporter of Bush's fiscal polices which a thoughtful person might have picked up on before you start insulting me. Did you even read my derogatory comment on deficit spending and deflating the currency? Did I need to list everything I don't agree with? I might have to write a book if that's the case.

              I will give you the respect of not maybe understanding my POV before I start insulting you in return.
              I probably stepped across the line a bit. I did miss the link to the source of Obama's tax increases.

              You deserved a more courteous response. I am just a bit hungover.
              Nature always sides with the hidden flaw.

              We will have to repent in this generation not merely for the hateful words and actions of the bad people but for the appalling silence of the good people.

              Comment


              • #8
                Originally posted by Razzy View Post
                So what the hell will McCain do to fix the economy, TTB?

                Please provide us your very objective, very independent insight into this matter.
                I don't think he can by himself. No president can. That's ridiculous thinking.

                I don't really like McCain either....I just don't see him as bad a choice as Obama.

                But, If someone wants to vote against McCain for the reasons someone like King would. I'd have no issue with it whatsoever but to think Obama's policies are going to magically bring America back to economic prosperity is wishful thinking.

                Indepedent enough for you? I need to mow the grass soon so I don't have much more time to fritter away this morning.
                Go Cards ...12 in 13.


                Comment


                • #9
                  Well, you didnt explain why McCain isnt as bad of a choice as Obama, but no matter. Your neighbors not complaining about how long your grass is is more important...

                  And you need to make a trade with me in Yahoo.
                  “I’ve always stated, ‘I’m a Missouri Tiger,’” Anderson said March 13 after Arkansas fired John Pelphrey, adding, “I’m excited about what’s taking place here.”

                  Asked then if he would talk to his players about the situation, he said, “They know me, and that’s where the trust comes in.

                  Comment


                  • #10
                    Originally posted by raise View Post
                    I probably stepped across the line a bit. I did miss the link to the source of Obama's tax increases.

                    You deserved a more courteous response. I am just a bit hungover.
                    The FICA tax limit being lifted is very well documented. Just Google for it. If he only gets off that horse alone...I'd be less opposed to him. Also, at one point he talked about making two limits...at $102,000 you stop paying and then start again after $250,000. Better but ...he backed away from that and said that people over the limit comprise the top 6% of taxpayers. What he is proposing on the surface may seem fair to many people but its a bad policy overall if you want to create jobs and small businesses create most of them. It's just plain...a bad idea. I guess its his way of solving the SS and Medicare shortage to come soon but its the wrong way to do it. SS and Medicare need to be reformed.

                    Thanks...no harm. Sometimes I'm harsher then I need to be. We're all human. Its forgotten.
                    Go Cards ...12 in 13.


                    Comment


                    • #11
                      Originally posted by Razzy View Post
                      Well, you didnt explain why McCain isnt as bad of a choice as Obama, but no matter. Your neighbors not complaining about how long your grass is is more important...

                      And you need to make a trade with me in Yahoo.
                      That's a longer post then I have time for today...but trust me. Its coming.

                      Yeah, the neighbor kid who mows it is on vacation this week so I have to crank that sucker up. I've got a bunch of stuff to do today and need to quit screwing around.

                      The last time I traded with you...both the guys (Ortiz and Zimmerman) I got back went immediately to the DL. No thanks.
                      Go Cards ...12 in 13.


                      Comment


                      • #12
                        Originally posted by TTB View Post
                        The last time I traded with you...both the guys (Ortiz and Zimmerman) I got back went immediately to the DL. No thanks.
                        Hey, I had no way of predicting that those guys would go on the DL, you know.
                        “I’ve always stated, ‘I’m a Missouri Tiger,’” Anderson said March 13 after Arkansas fired John Pelphrey, adding, “I’m excited about what’s taking place here.”

                        Asked then if he would talk to his players about the situation, he said, “They know me, and that’s where the trust comes in.

                        Comment


                        • #13
                          Originally posted by tallahassee blues fan View Post
                          I do not believe nation-building in Iraq is going to be the issue come November — whether things get better there or worse. If they get better, we’ll ignore Iraq more; if they get worse, the next president will be under pressure to get out quicker. I think nation-building in America is going to be the issue.
                          What a novel idea!




                          Originally posted by tallahassee blues fan View Post
                          On top of it all, our bank crisis is not over. Two weeks ago, Goldman Sachs analysts said that U.S. banks may need another $65 billion to cover more write-downs of bad mortgage-related instruments and potential new losses if consumer loans start to buckle. Since President Bush came to office, our national savings have gone from 6 percent of gross domestic product to 1 percent, and consumer debt has climbed from $8 trillion to $14 trillion.
                          Private debts are a mess. Bush encouraged an evening of the playing field when it came to credit. Him and Greenspan then told Americans that Adjustable Rate Mortgages were a good bet. Then interest rates tried to go back up and snap: credit crisis; interest rates back down again, inflation up, savings suck, stock market declines, growth all but comes to a halt. But we're "safe." - at least from the evil doers.



                          I like a consumer economy as much as the next guy but you can't borrow at that rate and not pay dearly for it. In order to pay back the debts we took out at an accelerated rate we have to stop spending on consumer goods and start paying back our obligations. The alternative is to default on those debts and have access to credit taken away piece by piece.

                          We still haven't found bottom yet with credit access and now asset deflation is really picking up the pace. I thought we might find bottom in 2008 - it's looking more like 2009 now considering continued tightening credit, home price deflation, commodities inflation and the continued decline in the stock market. We will have to start fighting these beasts one at a time and I think it starts with fighting inflation. Hopefully that will lessen stock market volatility. Credit tightening will take time and then home prices can stabalize.

                          Public debt is bad too (from before the Holidays):

                          25MM jobs in 10 years / 4% GDP Growth / Insurance for everybody / Schools flush with cash don't produce results
                          Jan 2017: 4.7% U-3, 9.2% U-6, 62.7% LFPR, 5.2% Real Wages, 2.6% GDP, 19,827 DJIA, 2,271 S&P500, $2.316/gal

                          Comment


                          • #14
                            Originally posted by TTB View Post
                            I'd have no issue with it whatsoever but to think Obama's policies are going to magically bring America back to economic prosperity is wishful thinking.
                            Well, since no one actually believes that, then I think we'll be just fine.

                            Moon

                            Comment


                            • #15
                              Originally posted by marco View Post
                              We will have to start fighting these beasts one at a time and I think it starts with fighting inflation. Hopefully that will lessen stock market volatility. Credit tightening will take time and then home prices can stabalize.
                              Interest rates have to be raised, and not just for inflation. American assets are at risk because the dollar is so weak versus other currencies, allowing entities to buy up property, stock, etc. InBev can't make this play for AB if the Euro is worth $1.50 as opposed to $2.50. Keeping interest rates low to help those who spend irresponsibly at the expense of everyone else seems like overspending on credit cards in the first place.
                              Nature always sides with the hidden flaw.

                              We will have to repent in this generation not merely for the hateful words and actions of the bad people but for the appalling silence of the good people.

                              Comment

                              Working...
                              X