The Economy

[melon]

The election aside...

Our economy is in quite a dire predicament. The Federal Reserve has cut interest rates again another half a percent--down to 1.25%. This is very close to the 1.1% price deflator used in the third-quarter GDP report, meaning we could have a situation where interest rates go below the inflationary rate. The worst case scenario is still looming: interest rates cut down to the bone, with the economy still not moving. This situation is what happened to Japan with its prolonged recession.

I really don't think many people are really understanding the severity of this statement. There is this assumption that the economy will just correct itself out of the blue, and there is no sign that this is going to happen. The traditional Republican avenues--tax cuts and rate cuts--are not working. It is my fear that, indeed, we have no choice but to head where Japan was economically in the 1990s with the current state of federal leadership.

Melon

 

[nbcrusader]

In all seriousness, what do you think will work here?

 

[deep]

The administration?s plan for reviving the economy is spending their way out of this recession.

The concept of fiscal conservative is a myth to this administration. Hold on to your wallet. And get ready to downsize your life style.

 

[deep]

In all seriousness, what do you think will work here?

Restoring credibility to our stock market by appointing a SEC chair who will go after wrong doers and evil doers instead of running interference for them. - for a start

 

[martha]

1.25%.

Holy crap!!!!!

My money will do better if I take it out of the credit union and put it under my mattress.


Almost.

 

[Dreadsox]

If you have money.....buy real estate....In this economy it is pretty sound.

 

[melon]

In all seriousness, what do you think will work here?

In my opinion, there is little that can be done.

The primary drive for the economy is consumer spending. Tax cuts are ineffective, because the particular tax cuts that Bush signed, with all rhetoric and political horn-blowing aside, really do mostly benefit the top 1%. However, it is the working class--most of America--that has to spend, in order to drive the current state of the economy. At the same time, though, all the tax cuts in the world aren't going to help if people aren't paid sufficiently from the start.

This is where I go back to Karl Marx's original theory that capitalism would destroy itself, if left alone. What he never anticipated was the regulatory environment of the Progressive Era, which, I think, was the only thing that has kept American capitalism alive. If we had left it in the monopolistic, deregulatory state like in the 1880s and 1890s, I tend to believe that we would, indeed, be socialist now. With regulation in place from 1900-1970s, we, for better or for worse, had a system in place that was relatively successful in distributing wealth amongst all social strata. However, with the heavily deregulatory climate of the 1980s and 1990s--and now the consequences of those two decades--I think we're heading back down the same path as the 19th century. Give it a few more decades, and I'm sure it will happen.

What *could* happen is some drastic reregulation, but right-wing propaganda has been successful in demonizing that strategy. We are going to have to find some way to actually have industry raise their salaries and benefits for everyone--but with the sick state of American business, it is unlikely. But, otherwise, we are doomed.

Melon

 

[melon]

Originally posted by deep 200
Restoring credibility to our stock market by appointing a SEC chair who will go after wrong doers and evil doers instead of running interference for them. - for a start

To invest in the stock market, one actually has to have *money.* Most people lost their ass in the stock market in 2001, and now their notions of retirement are postponed another decade or so. Retirement funds were really the only thing propping up the false 1990s economy. We were always building on a non-existent foundation, and any smart stock analyst should have seen this coming from a mile away.

Melon

 

[melon]

On another thought, if one can make a parallel to the 1990s and the 1920s, in terms of prosperity, one can perhaps make a parallel to the 2000s and the 1930s. Perhaps it is time to crack out the New Deal again.

Melon

 

[diamond]

I would rather live in a secure enviorment and world than be concerned on how fat my wallet was.
Once the world is a safer place I think everyone will wanna spend their money again
Peace
DB9

 

[Screaming Flower]

any smart stock analyst should have seen this coming from a mile away.

not necessarily. in fact, not true at all.

 

[pax]

If you have money.....buy real estate....In this economy it is pretty sound.

I've read that somewhere else, too...I think Jane Bryant Quinn wrote something about it recently.

 

[melon]

I would rather live in a secure enviorment and world than be concerned on how fat my wallet was.
Once the world is a safer place I think everyone will wanna spend their money again

Right.

This "war on terror" could easily last 50 years. Remember the Cold War? And, plus, it is apparent with this mid-term election that it is to Bush's advantage to keep this "war" going on indefinitely.

And I challenge you to say that first sentence if you were a member of the unemployed in America.

Melon

 

[melon]

not necessarily. in fact, not true at all.

Blue-chip stocks have plenty of standards of measurement to indicate the health of a company. Internet stocks never held a profit, nor did they have any standards to measure their actual worth.

Yes...they should have seen this coming a mile away.

Melon

 

[melon]

If you have money.....buy real estate....In this economy it is pretty sound.

Invest in Boston real estate. Where else can you buy a crappy house in Roxbury for $700,000?

Melon

 

[STING2]

In my opinion, I'd put some serious brakes on this gloom and doom senerio. There is no way you can compare the 1930s to 2000s. In addition, the amount of money that an average person in this country makes today far exceeds what people made back in the 1920s after adjusting for inflation. Just look the number of gadgets and equipment that the average person buys today, but did not back in the 1920s. Today we have only 5.7% unemployment compared to 25% unemployment in the early 1930s. In fact, unemployment right now is lower than it was in 1995! In addition, the natural rate of unemployment according to most economist is supposed to be 6%. Of course that was the theory before the late 90s boom in the economy. Unemployment rising from 4% to 5.7% in 2 years is nothing to get excited about.

The USA is #6 in standard of living according to the United Nations human development report. Thats out of 183 nations. In addition GDP continues to grow and there was only one quarter of negative GDP growth. For it to be officially a recession, you have to have two consecutive quarters of negative GDP growth. GDP growth for 2002 is already projected to be 3%. While not as healthy as the 5% and 6% figures of the late 90s, it is healthy. Unemployment increases for up to 1 year after a recession or economic down turn has ended.

The economy is starting to grow slowly again and by 2004 could be in good shape. If not, it will continue to muddle through. Aside from the 5 countries that are ahead of the USA in the Human Development report, no one in the history of the planet has ever had it as good as we do in terms of overall standard of living. This just shows that Capitalism, (regulated to prevent monopoly which destroys competition and pushes things towards Soviet Communism), is a shining success and the model to continue to follow.

The Consumers are out there and they have plenty of money to spend. Elevation Tour by U2 was this countries 2nd highest grossing tour in history. Consumers in the USA continue to buy over 1 Trillion dollars of goods and services every year from overseas helping strengthen the economy of many countries overseas, which in turn helps US exports to those countries.

I remember in 1988-1992 where it was forcast that Japan would overtake the USA and we would be poor and suffering by the year 2000. This was based on far worse economic data for the USA back then than we have today.

Democracy and Capitalism will continue to spread through out the planet in the 21st century with the engine for this spread being technology and international trade.

 

[The Wanderer]

if the economy doesnt turn around in the next 2 years, will it be the republican's fault? or is it the fake prosperity of the Clinton era that's to blame?

maybe we need good ole fashioned war bonds to jumpstart the economy

 

[Dreadsox]

Invest in Boston real estate. Where else can you buy a crappy house in Roxbury for $700,000?

Melon

Melon, you seem down ........

I did not say in MA.

However, I do know of people who have bought homes here recently and they have found that their property value went up 40-50,000 in less than four months.

Myself....I am looking Maine and Vermont......



Peace (To ALL)

 

[hiphop]

If you have money.....buy real estate....In this economy it is pretty sound.

If you can, buy real estate in Rio de Janeiro. Still very lowdown prices, will go up a lot in the next years, you can get an apartment at Copacabana very cheap at the moment.

 

[melon]

I did not say in MA.

I was joking about the Boston real estate.

But you're right. When the stock market is crap, real estate is where you're supposed to invest.

Melon

 

[melon]

There is no way you can compare the 1930s to 2000s.

Yes. We have more credit cards now.

Melon

 

[Screaming Flower]

Blue-chip stocks have plenty of standards of measurement to indicate the health of a company. Internet stocks never held a profit, nor did they have any standards to measure their actual worth.

Yes...they should have seen this coming a mile away.

Melon

melon despite the fact that i agree with you 90% of the time, sometimes your arrogance is nothing short of mind-boggling.

 

[diamond]

Right.

This "war on terror" could easily last 50 years. And I challenge you to say that first sentence if you were a member of the unemployed in America.

Melon

Buckle up, its going to be a long ride.

Furturmore, if I were broke/unemployed and not working I would rather live in a safe world..
Whats the point in having money if your world is not safe and secure?

Listen to Screaming F., your arrogance is a little much today Melon..

Peace
diamond

 

[melon]

I apologize if I have been arrogant. Please accept my sincerest apology.

Melon

 

[DrTeeth]

I don't think Melon was arrogant and haven't really seen the world get any safer since the start of this 'War on Terrorism'.

 

[STING2]

Dr. Teeth,

So you think we were safer prior to 9/11 then we are today?

 

[deep]

Melon,

You have a right to your opinions. I don't find them arrogant.

Maybe others should apologize to you for name calling/ or labeling.




That said, here are some of my thoughts, make of them what you will.

Before 9-11 the US was perceived as safe. Perception is reality.

I think much of the US policy is contributing to making it less safe.

Taking Iraqi oil. Using drone planes to blow up supposed Talaban terrorists can lead to what we call acts of terror.

 

[Dreadsox]

Melon,

You have a right to your opinions. I don't find them arrogant.

Maybe others should apologize to you for name calling/ or labeling.

I agree Melon....when are we hooking up for a pint!!!!!
We may be on opposite sides, but I appreciate how much you make me think.


Peace (to ALL)

 

[us3]

Melon is...

sardonic?
yes!

sarcastic?
sometimes!


thought provoking?
always!

arrogant?
no!

 

[LarryMullen's POPAngel]

Buckle up, its going to be a long ride.

Furturmore, if I were broke/unemployed and not working I would rather live in a safe world..
Whats the point in having money if your world is not safe and secure?

Listen to Screaming F., your arrogance is a little much today Melon..

Peace
diamond

I'm one of those unemployed, one of many that I know. While I'm not married with children, or with any children at all, and living at home with a kickass mother who's helping me out, it has been very tight and shitty this year having no work.

I can only imagine those who have it much worse off than I, and while I'm sure that living in a safe world is a priority for them as well as it is for me, living on the street probably sounds a lot scarier to them at the moment than some terrorist incident that "may" occur at so and so date. Also, unless we're talking about the Stone Ages, when has this world EVER been safe?

Just my thoughts.