maybe not rewritten but updated.....i know it was written by a bunch of guys in a tavern so i understand that. or they had a sense of humor and wanted to break chops. didnt they think there would be a problem with "we the people". i think some words need to be defined more clearly.....i meant to say "the right of the people.....my bad wrong doc

Honestly, I'm expecting more of the same. While the Democrats "controlled" the Senate and the House before, they didn't have 60 candidates so the Republicans filibustered EVERYTHING the Democrats wanted to do. Nothing really got done, health care was filled with nonsense and compromise to get a couple of Republican votes, finance reform was rubbish. The tax cut debate was just a smearing campaign. Now everything the Republicans get passed through the house and senate will just get vetoed by Obama, unless he compromises as he promised.

I'm not opposed to seeing any one ideology be tested, because I don't think even the best economists can tell you truly if Keynsian economics will work any better than Smithian economics, or vice versa. We all believe one is better than the other, but belief is not proof, it is assumption.

Personally, I think Keynes is the way to go. While we can sit back and let the Economy fix itself, I'd much rather have everyone pitch in and contribute money towards infrastructure and education to not only try and fix the economy, but invest in the future as well. Of course where and how much we spend is up to debate, but I believe that at least the notion of trying is right.

Good idea!
 

As I read all the other posts, and thought about buying American, I realized that without a lot of independent research, there is no way I can determine what companies are american. How hard would it be to set a standard regarding american parts, manufacture, employment, and post them on a high-profile website?

Many would still choose the cheaper imported goods, but the ones who care would spend the extra to buy american.

Well, the way I see our industry is simple. Compare our industry as a mighty whale cruising along as it did many years ago supplying jobs and wealth. Now comes along unions, local, county, states and Federal governments as suckers and attach themselves and start draining the whale. Slowing it down and making it sick. There are just to many suckers attached anymore for the whale to get back to health and that is why our manufacturing industry is in trouble. To get back to health we need to revamp the whole system...patching as we have is like a dike with many plugs, all of them seeping through their or around their plugs. One day, well...... :(

^Our industry has seen their U.S. workers increase their productivity 2% a year every year for the last decade, while their company's share prices soared to DOW 14,000 (highest ever), revenues were up accross the Fortune 500 board and not until the markets crashed in 2008 did profits plummett. This meant that union participation fell by almost 2/3's (as did benefits and 401K matches) from the 90's, in other words these corporations had FIXED labor costs for perhaps the longest period on record. So much for the unions getting in the way. Despite these fixed, low wages for Americans they still sent jobs to Asia and India by the fistfull. How else does China go from $1 trillion to $6 trillion in a decade? It took the U.S. from the Civil War to World War I to get even half that much growth.
In the run up to these 'good times' for big business worker wages fell, job growth faded to nothing and household net worth went into the negative. Even now during the weak recovery the stock market is back to its pre-bubble normal, particularly the NASDAQ which has seen tech stocks have their best days in nearly two years, Fortune 500 profits are up again and Wall Street is planning its biggest bonus season on record after holding back for PR reasons last year.

That's a long way of saying that unions or no unions, U.S. corporations didn't skip a beat in the 20 years. It's the U.S. worker that has taken it on the chin. But Wall Street likes companies that hire Chinese workers at 1/10 the cost of $14 an hour U.S. factory worker. By the way $14 an hour doesn't even get you to the U.S. Median income.

I agree to some extent, but the high cost of doing business has underlying problem do the regulations. I remember Stanley Tools starting to outsource some and maybe all to China so it could sell it's product competitively. Now $16 bucks an hour is a minimum requirement for an worker to make if he is getting normal benefits. Now at that rate can we compete with China. ???????

^Not for low cost goods mass production.

Perhaps if like the Germans, we only concentrated on the very high end of manufacturing we might of had a shot at holding onto 5% unemployment.
But that German model requires a very different level of investment in education. They also have a mixture of public and private options when it comes to healthcare, a big advantage that allows more money to be poured into the quality of the product. German factories pay their workers well north of $14 an hour but guess what? Their employers aren't completely footing the bill for their healthacare. Now they're one of the few surpluss nations in trade. Turns out a highly skilled, highly educated and healthy workforce can deal with $2 an hour Chinese labor pretty well since they are selling to two completely different customers. You'll never beat the Chinese selling $4 ipods (that retail for $300), $5 hammers and $10 sneakers.

p.s.
I see you guys voted out Rep. Alan Grayson in Orlando. While being perhaps the biggest jerk in the House he's also BY FAR the smartest elected official in the state of Florida. A Bronx public school kid who graduated Phi Beta Kappa with three Harvard degrees, including clerking for the D.C. court of appeals no less and became a self-made millionaire 30 times over who moved for an first ever audit of the Fed. And in his place is an incoming 30 year career politician churned out by the state political machine?

Here's a great clip of Grayson calling out Bernanke on his bull****************.
http://www.youtube.com/watch?v=n0NYBTkE1yQ&feature=youtu.be

i am not ashamed to say that i will miss alan grayson. but then again, i'm a progressive.

Well, if Alan was like the Governor of New Jersey and could stand and deliver in incredible manner as he does...then he might have made it. But, we are tired of the dirt throwing politicians who are incapable of being in such a position that demands honesty and integrity. Me, I want Chris for President. :cheers:

There isn't a Libertarian Fed-hating American that won't miss that character.

p.s.
Chris Christie honest? That guy is the epitome of skewing the facts. Last week he made a speech to a GOP audience where he claimed that right before his innauguration he had been "tipped off" to a "secret wire transfer" by our hapless ex-governor to "his buddies" and had one of his aids stop it the minute he swore the oath. When I read this my head nearly exploded. First of all ANYONE with access to a newspaper knew that this money had been approved IN ADVANCE because the budget approval to NJ cities was printed in the newspaper! Also, he recently fired his education chief after Christie himself was so out of the loop on the Race To the Top funding ($400 million) that he didn't find out that the application was INCOMPLETE until his delegation had come back from D.C. !! Christie promplty tossed that education official (a well known NJ Republican) right under the bus. Schundler has since quoted the Governor as saying "the money is not worth it if it looks like I'm working with the teachers union". Although I like the idea of having a Republican Governor with a Dem state legislature, I take EVERYTHING Chris Chrisite says with a grain of salt and 10 minutes on Google.

I have NO doubt in my mind that progressives would LOVE to rewrite the Constitution without having to go to the trouble that you describe. This is why FDR tried to pack the SC so many years ago.

Intellectuals view the Constitution as an annoyance, to be dealt with as they see fit.

Some of us feel differently.

Wrong as usual PL.

Really, no kidding? :)

"managing the economy is a myth. It is, what it is.

Indeed, having three Harvard degrees means that you are smart!


When GWB was in the WH, apparently that MBA from Harvard meant nothing.

BTWW- I used to guest lecture at the Harvard School of Pubic Health. Believe me, that is NO guarantee that one is "smart."

That's a long way of saying that unions or no unions, U.S. corporations didn't skip a beat in the 20 years. It's the U.S. worker that has taken it on the chin. But Wall Street likes companies that hire Chinese workers at 1/10 the cost of $14 an hour U.S. factory worker. By the way $14 an hour doesn't even get you to the U.S. Median income.

No offence but YOU are Wall Street. Where do you think all that capital comes from?
Are YOU driving an American car? Can YOU find an American washing machine?

Folks love low prices and high value.

How puzzling is that?

You say it as if that is it. Sorry Brucelee, but Keynes didn't base his economics on BS or a conservative agenda. There is real research behind it, and to dismiss it is honestly an insult to economics as a field.

Given that I teach Economics and Finance, that would be a mistake on my part, no?

Actually, Keynes initial work has some merit as far as it went. Subsequent observations and of course, the misuse of his THEORIES, have called most of his assumptions and conclusions into dispute among reputable economists.

I think the US' recent experience with Stimulus and such will put the final nail in the coffin except for of course, the true believers.

The question isn't really whether the government can contribute to aggregate demand in the short run (it can given the method). Rather, the issue is whether this is the best way (among alternatives) for the government to act.

That I think, is very much in question.

My last comment is to the "economics as a field." In truth, economics is not a science as traditionally defined. It is much more a bunch of theories about aggregate human behavior with money as a signal.

One can prove almost nothing in economics. That is why it is so much fun to teach.
:)

We're on the same page now. I wholeheartedly agree that the spending over the recession has been wasteful. I suppose what we have to figure out is, which would be the better spend of money: tax cuts or government spending. I think at the moment it would have to be government spending, as tax cuts are not going to directly encourage anyone to spend.

I would like to know where you think Keynes' original theories stop and bad assumptions begin, and perhaps this is more of an opinion than a fact but either way I'm curious.

I favor tax cuts simply because the impact of pumping money into the consumer's pocket is faster and cheaper than having government try to spend money. Moreover, the speed of rescinding a tax cut is faster than trying to get the Feds to stop spending money.

That said, I would suggest what we need now is a bit of stability and patience. For one, I would repeal the HC law and start over.

But, that is just me.

The Great Obama smack down
 

Perhaps he should take early retirement?
 

We are giving him his retirement in 2 years. He should then move to California and straighten out there mess. :D

encouraging people to spend when they're leveraged to the hilt & their personal asset bubble (HOUSE) just popped is ludicrous. the thing i don't understand is this:

why do people assume that if money is SAVED, it is not working in the economy?

if people aren't spending, they are either:

a) placing it into some type of savings account, whereby it can then be loaned out to others. this has a multiplier effect.

b) investing it, whereby it can provide needed capital for future production

c) de-leveraging

the real problem is that right now, most people fall into category C. they are paying down debt rather than saving. encouraging spending when, in aggregate, the populace is leveraged to the hilt, is not only irresponsible, it won't work! we pulled forward too much future demand with borrowed money. that leaves a consumption gap. at some point, we will have to pay the piper. the longer we wait, the worse it will get......

I would agree with insite, in that many consumers need to simply right the ship. It seems that pols don't seem happy with that scenario but as Gov Christie says: "it is time to stop kicking the can down the road."

Now this is an assumption on my part, but maybe this is why your investors are not investing. I am 65 and I am retiring in January 2011. I lost about $75K in the bubble burst so I am not investing in any risky stocks and I want to preserve my basic capital left so I can use it during my retirement years. There are many more like me because we are the War babies and we have entered into our retirement days. Now as for the others go, I think they over extended and cannot help in the short term, but we baby Boomers invested for more than 30 years...so it my take a long time to rebuild the economy.

by not investing, though, i'm guessing you at least have your money in a bank. this allows it to be loaned out to others & it still works in the economy.

you raise a great point, though: after having been burned recently in the markets, a lot of people are very hesitant to jump back in that water. bernanke has a solution for that: quantitative easing, you will notice, has driven the returns on your savings accounts & money market accounts to virtually zero. his policies have ensured that conservative-minded investors cannot make money in low risk investments. in fact, he has ensured that you will LOSE money to inflation. he is trying to force people into risky assets because, to him, for some reason, the market = the economy.....

most of us of course know that this is BS; the market is NOT the economy, and the fact that the market is doing quite well while the economy is by most measures NOT doing well.

i,m retired and the wife still works but we have been buying condos and townhouses in our old people gated community. there are some pretty good deals now days...we are becoming suburban slumlords...beats what the savings account is paying

^ more money in bank deposits does not encourage more loan making. This has been the unwelcome surprise of the Fed, Hank Paulson under Bush and now Geithner under Obama. If the banks have excess cash, as they do now with trillions in reserve, they will simply find other ways to use it like funding foreign investment projects or lending to Wall Street trading firms. The banks will take your deposits, pay you a Turkish Lira in interest and tell you to have a nice day.

The banks can be up their necks in cash but unless credit demand remains weak the cash pegged for consumer loans -- and busines loans frankly since they exist on consumer demand-- will sit idle. The banks are sticking to pre-bubble lending standards that do not correllate with post-bubble incomes and spending. Sure you bailed us out, took the haircutt and the bounce will only be "bonused" to our guys. This spells a very very weak recovery that although it is trending in the right direction sets up the economy like a big 757 jetliner that loses two of its engines mid-flight.
We can't produce the necessary lift to climb fast enough. All this had little to do with the govt and much to do with the role of the American worker in a new economy. We outsourced and consumed ourselves out of rising wages. What did you think was going to happen when China's GDP goes from under $1 trillion to over $6 trillion on American consumptio of cheap goods? The banks have no skin in the game because even with 10% unemployment the big ones at least are turning profits. When 8 of every 10 Americans owns $1 of every $10 dollars invested on Wall Street and are making no more than they were 10 years ago you have to start wondering what the game plan has been all these years.

[QUOTE=Perfectlap. We outsourced and consumed ourselves out of rising wages. What did you think was going to happen when China's GDP goes from under $1 trillion to over $6 trillion on American consumptio of cheap goods?[/QUOTE]

At the rate that we are paid, the outsourcing only awaited China's adoption of capitalism. But then how is it that Germany has escaped our fate? Even while outsourcing some BMW production to the US.

Banks are lending. Indeed, it would be stupid not to do what earns you money.

That said, they have higher lending standards now. That is not hard to understand, as they just spent two years being beaten to a pulp with loan defaults, band failures etc.

If I were running a bank, I would do the same thing: cut the default rate.

How hard is this to figure out?

That is the supply side.

Demand is also weak. We are in a period of deleveging which is a good thing for the average schmo. Only Paul Krugman doesn't get this issue.

[QUOTE=brp987] actually they were awaiting our adoption of unfair trade. They've been ready for capitalism for quite a while. But the barriers that were in place all those decades, that allowed for rising U.S. wages, job growth comensurate with population growth, increases in household net worth, etc. ALL came down in one fell swoop. Rather than incrementally opening up the markets to allow our workforce enough time to shift towards the German economic model you reference, one of high end manufacturing, we let Pandora out of our box in a blink. We spent 40 years fighting a coldwar against communist dictatorship only to turn around and fund, on the most massive scale ever witnessed, a more freedom-hating bunch of communists who are now buying up the world's assets on the cheap and pouring millions into advanced weapons like air craft carrier-killer missiles. Glad to see we put ourselves into trillions of debt at the end of 80's to beat the Soviets only put ourselves in the wealthy pocket of China in the 2000's with our manufacturing tossed in as icing.

i think it will be chinas planet in 50 years . maybe sooner if they choose

I always love the use of the term "we."

I assume you referring to someone other than me, as no one asked my permission to do pretty much anything.

:D

Given all that, would you move to China?

I wouldn't.

i,m a fat cat money luvin capitalistic pig that like fast cars that get bad mileage...i aint eatin fish heads and rice.....besides i,m old and wont be around when china starts throwning her weight around. this country has its share of problems but its been very good to me

My son was recently in China during the summer for sponsored tour. Based on the parts he was in it was nice and the Chinese people love Americans. As far as their economic policy, I believe we did the same thing after the turn of the Century to England. What goes around comes around. I do not believe the idoit using quantitative easing as a solution...didn't the Japanese do the something with no results. Give back the 5% yields on CD's...it's us old farts who are spending and have money left. Then of course they could crash the dollar and take over the banks and give us 1/10 of our money. :ah:

The Treasury is pumping them out, but who's buying? Ben is. Only Ben is. Let's see how long this charade can last.

http://www.youtube.com/user/visionvictory?blend=2&ob=4

It's funny. As the pols lament how stupid we all are, actually, the covers are off the whole political process.

They HATE it.