We’re in “horrifying economic statistic of the day” territory now. From the AP:
Orders to U.S. factories for big-ticket manufactured goods plunged in October by the largest amount in two years as manufacturing was battered by the overall economic weakness.
The Commerce Department reported Wednesday that orders for durable goods dropped by 6.2 percent last month, more than double the 3 percent decline economists expected.
As the economic crisis has unfolded, there’s been a fair amount of discussion about how our economy doesn’t make stuff any more. This isn’t entirely true, of course, but it does reflect concern over manufacturing being moved to low wage countries.
One risk, I think, is that the crisis will further hollow out our remaining industrial capacity to the point where we’re left with not much more than financial services. We’ll be kind of a giant United Kingdom with better food. (I kid, UK folks. You know I love you. And I hear your food is much better these days.)
“we’re left with not much more than financial services”
You’re making a hazardous assumption that the US dollar will survive as a valuable commodity, thereby allowing a financial services industry to exist. One could just as easily assume, with some valid evidence, that the US ‘financial system’ will consist of blacksmiths trading horseshoes to farmers for corn or spuds.
Got a trade?
Got pantry?
Headlines today say the Fed is throwing another 800 BILLION toward buying up mortgage-backed securities.
You know, the mortgage-backed securities the OTHER 750 BILLION was supposed to buy up, but which has mostly been used up throwing money to banks and financial institutions who merely use the money to buy up other banks, or to give dividends to shareholders, thereby proping up not the bank, but perhaps ensuring that the stockholders keep the same board of directors in power rather than storming shareholders’ meetings like an angry mob with pitchforks and torches.
It’s like the privatisation of Soviet industry in the early 1990’s. A handfull of people ended up with all the assetts, but nobody’s quite sure how it happened, and Russia is now ruled by a wealthy oligarchy.
I felt better after the election, but now I wonder if the Republicans are going to leave anything intact as they abandon office in January. They are like a retreating army, leaving behind a scorched earth in the hope that the victorious enemy will starve in it’s newly occupied territory.
A truthy truism: All periods of currency events that birthed the explosion of hyperinflation occurred during extremely depressive to depressionary economic conditions.
It’s totally ironic that the worst inflation occurrs in tandem with deflation. Opposites attract.
How to live after the Republicans finish screwing up the economy:
1) Mac & Cheese is cheap, especially in Costco quantities.
2) Skip the combo meals at McDonald’s, Burger King, & Wendy’s. Just order something from the “value menue” and a small water instead. You can get a Whopper Jr. or a McDonald’s double cheesburger for a dollar plus tax. Skip the fries – they have as many calories as the hamburger, cost almost as much, and you don’t need the extra grease anyway.
3) Time to start preparing a mulching bin and a plot of land in your yard for a spring garden. Vegitables from it can feed your family all summer. Why pay money for gas for your mower, when that land can be producing food instead?
4) If you’ve got cash, the time to buy is between now and a year from now. Get together with some friends and see if you can’t buy a foreclosure home, and rent it back to the existing owner. They might be happy to not have to move.
This is why the staggering amounts of spending by Sound Transit now is so critical.
For every billion dollars spent on transportation infrastructure about 40,000 new jobs are created. Those are mostly union jobs – they pay great wages and benefits for the whole family.
Consumer spending is the key to economic recovery. Jobs creation (other than fast food workers) is the problem we’re having in the Puget Sound area.
ST has budgeted to spend over a billion dollars in 2009 – and that doesn’t include the ST2 money.
ST will be spending about $7 billion over the next five years on light rail phases 1 & 2 – that’s local money for many tens of thousands of great jobs around here. No need for us to wait for any trickle-down through Olympia from new fed. stimulus packages – we’ve got a job creation machine kicking into high gear.
I don’t know the original source, but I saw this today:
Congratulations, Bush & Co.!!!!! In your quest to “shrink the government to the point where it can be drowned in a bathtub”, you’ve managed to expand goverment beyond all recognition, but instead shrink the economy to the point where it is about to be drowned in a bathtub!
Transitlover @ 5: Yep, an economic downturn is exactly the time government should be investing in infrastructure improvements. Costs will be down, as the government isn’t competing with private industry for contractor resources. The government spending will cushion the full impact of the downturn. And the benefits from the infrastructure improvements will be instrumental in assisting the economic recovery, if the downturn lasts that long. It’s basic “bargain hunting” economics – buy when prices are low, sell when prices are high.
But the Republican answer is always “In tough times like this, we have to cut taxes because we can’t afford to spend any government money on anything”. Which is exactly the opposite of what they SHOULD be doing in both public and private industry.
Obama is 100% behind all these bailouts.
No tax increases for rich guys either.
It’s hysterical….business as usual.
I agree with his appointments thus far except for Eric Holder….too dirty with Rich & Terrorist pardons.
You KLOWNS just love being in charge.
Even if it means business as usual!
I think I see a pattern here! If you make a lot of cheap goods and try to sell them dear to people whose wages have been suppressed for 3 decades, you end up with a depression.
Mr. Russell, my 11th grade U.S. History teacher (who was a liberal political columnist in Phx., AZ in the 60’s), was right all along. He told me (I was a young Goldwater supporter at the time) that the Ayn Rand novels I was reading were appropriate for someone my age, but that with recognition of my inherent common sense, he had every confidence that I’d grow out of it.
Interesting thesis. We are destined to become a UK-style former great power.
I have my own theory. One day, perhaps 50 to 100 years from now, the US will break apart, much like the USSR did.
The South will become a country called New Africa.
The Southwest will become a country called Normexico.
Alaska will be annexed by Russia.
8 – We’re not in charge yet at the White House.
But yes it sure will beat the monkey gang.
Business as usual? Just another right wing lie.
re 10: Interesting thesis. Are your predictions ‘destined’ or just more of your blather?
@12
Unlike many of my comments, this isn’t blather. Something I read yesterday got me to thinking about this. A Russian analyst predicts the collapse and breakup of the USA. I think that’s entirely possible.
Rats.
McDonald’s just raised the price of the double cheeseburger to $1.19.
@14
It’s been that way for a while. Double hamburger still $1.
I felt better after the election, but now I wonder if the Republicans are going to leave anything intact as they abandon office in January. They are like a retreating army, leaving behind a scorched earth in the hope that the victorious enemy will starve in it’s newly occupied territory.
——————-
Obama doesn’t appear to have any reservations since he’s bringing on board Tim Geithner, someone who has been deeply involved in the bailouts.
————-
President-elect Barack Obama unveiled on Monday an economic team with deep experience handling economic crises. But does the man at the center of this star-studded cast, Timothy F. Geithner, the nominee for Treasury secretary, have what is needed to take the nation in a new financial direction?
“We have only two things to say about Tim Geithner, who we do not know: A.I.G. and Lehman Brothers,” said Christopher Whalen of Institutional Risk Analytics. “Throw in the Bear Stearns/Maiden Lane fiasco for good measure,” he said.
“All of these ‘rescues’ are a disaster for the taxpayer, for the financial markets and also for the Federal Reserve System as an organization. Geithner, in our view, deserves retirement, not promotion.”
————–
From “Where Was Geithner in Turmoil?”
http://www.nytimes.com/2008/11.....ref=slogin
And many of Obama’s economic advisors were closely connected to the Clinton administration. Here’s what Steven Pearlstein at the Washington Post had to say about that:
————–
As Treasury secretary, Rubin joined with Greenspan in supporting Citi’s campaign to repeal Glass-Steagall. And when he resigned from the Treasury in 1999, Rubin accepted Weill’s offer to become what amounted to vice chairman of Citi, where he has quietly worked the back channels to Washington and other international capitals while serving as strategic counselor to the chief executive and the board of directors.
Rubin has been cagey about defining his role at Citigroup — and at one point he got caught making a phone call to the Bush Treasury in a bid to help out Enron, a Citi client, during its death throes. What is indisputable is that all of the decisions that have led to Citi’s recent troubles were taken while Rubin was chairman of the executive committee, and made by executives with whom he worked closely. He defended them repeatedly and unequivocally, and as a director, he approved compensation packages that rewarded them (and himself) handsomely for judgments that proved disastrous.
————–
From: “A Bailout Steeped in Irony”
http://www.washingtonpost.com/.....00745.html
@16
Why do you think Goldy is avoiding stating his opinion on these Clintonites hirings? He’s even gone so far as to posting about dogs knocking over guns. What I know of Goldy, and I feel I know him as well as anyone, is when he doesn’t want to say anything bad about someone, he doesn’t say anything at all. In other words, Goldy is very unhappy and disappointed with the direction Obama’s hirings have taken so far. Goldy believes that if this is the change he was talking about, we might as well just elected Hillary.
Here’s Volker’s statement from earlier today:
Volcker issues dire warning on slump
Paul Volcker, the former chairman of the US Federal Reserve, has warned that the economic slump has begun to metastasise after a shocking collapse in output over the past two months, threatening to overwhelm the incoming Obama administration as it struggles to restore confidence.
By Ambrose Evans-Pritchard
Last Updated: 10:39PM GMT 17 Nov 2008
“What this crisis reveals is a broken financial system like no other in my lifetime,” he told a conference at Lombard Street Research in London.
“Normal monetary policy is not able to get money flowing. The trouble is that, even with all this [government] protection, the market is not moving again. The only other time we have seen the US economy drop as suddenly as this was when the Carter administration imposed credit controls, which was artificial.”
His comments come as the blizzard of dire data in the US continues to crush spirits. The Empire State index of manufacturing dropped to minus 24.6 in October, the lowest ever recorded. Paul Ashworth, US economist at Capital Economics, said business spending was now going into “meltdown”, compounding the collapse in consumer spending that is already under way.
Mr Volcker, an adviser to President-Elect Barack Obama and a short-list candidate for Treasury Secretary, warned that it is already too late to avoid a severe downturn even if the credit markets stabilise over coming months. “I don’t think anybody thinks we’re going to get through this recession in a hurry,” he said.
He advised Mr Obama to tread a fine line, embarking on bold action with a “compelling economic logic” rather than scattering fiscal stimulus or resorting to a wholesale bail-out of Detroit. “He can’t just throw money at the auto industry.”
Mr Volcker is a towering figure in the US, praised for taming the great inflation of the late 1970s with unpopular monetary rigour. He is no friend of Alan Greenspan, who replaced him at the Fed and presided over credit excess that pushed private debt to 300pc of GDP.
“There has been leveraging in the economy beyond imagination, and nobody was saying we need to do something,” he said. “There are cycles in human nature and it is up to regulators to moderate these excesses. Alan was not a big regulator.”
Even so, he said the arch-culprit was the bonus system that allowed bankers to draw forward “tremendous rewards” before the disastrous consequences of their actions became clear, as well as the new means of credit alchemy that let them slice and dice mortgage debt into packages that disguised risk.
Volcker = change?
I don’t see a physical breakup of the United States into seperate entities anytime in the foreseeable future (at least, not within the next half-century). Our national identity is far greater than our regional self-identity.
What we may see is a continued decline in our foreign-policy influence overseas, which matches our decline in economic influence. We might see Guam and Puerto Rico become independent, just as the British colonies became independent after WWII. Two years ago we already made the transition from an economic powerhouse to a debtor nation.
Structurally, we need to make major changes, the benefits of which we might not be able to see or measure for the better part of the next quarter-century. Priorities include:
(1) transforming our education system so our children can compete anywhere in the world;
(2) encouraging Americans to agressivly seek trade opportunities overseas (the Japanese and Chinese are kicking our buts in this area);
(3) re-establish ourselves as the primary center of high-technology manufacturing;
(4) make sure the benefits go to the working and middle-class to that their children are encouraged to invest in their own education and training in return for a lifetime of gainfull employement in industries with increasing prosperity.
Yea, I know, the devil is in the details. But I don’t have time to lay out a detailed economic recover plan for the next century in one post. Readers of this blog know I have posted my ideas on each of these issues many times.
Troll=cranium inserted in ass?
Why do you think Goldy is avoiding stating his opinion on these Clintonites hirings?
————————
The connections of many of Obama’s crop of advisers to our financial mess have been reported on far and wide. Arianna Huffington of Huffinton Post – hardly a conservative rag – wrote this several months ago:
“He (Obama) needs to start by making sure that the economic advisers he turns to extend beyond those he had on a conference call on Monday — Robert Rubin, Lawrence Summers, Laura Tyson, and Paul Volcker. It’s great to include graybeards who have been through crises before, but he needs to go beyond the two Treasury Secretaries who were complicit in the 1990s deregulation orgy that has led to so many of the problems we are now seeing.”
And Eric Dash of the NY Times had this to say in,
“Citigroup Saw No Red Flags Even as It Made Bolder Bets”:
“The bank’s downfall was years in the making and involved many in its hierarchy, particularly Mr. Prince and Robert E. Rubin, an influential director and senior adviser.
“Citigroup insiders and analysts say that Mr. Prince and Mr. Rubin played pivotal roles in the bank’s current woes, by drafting and blessing a strategy that involved taking greater trading risks to expand its business and reap higher profits. Mr. Prince and Mr. Rubin both declined to comment for this article.”
From: http://www.nytimes.com/2008/11.....038;st=cse
I may not agree with who Obama is choosing, but it’s infinity better then who McCain would have chosen. Can you imagine how badly McCain would have been handling the recession?
@11rhp mY 2 cents
I agree but think there is a silver lining.
Clinton is actually responsible (along with Bush I) for much of this mess by his failure to restructure US foreign policy post the Berlin Wall. WSe clearly never had the resources to create onw world superpower. The breakup of our world empire was inevitable.
What we did have was an opportunity to create a new world order (sorry). We still have some of the clout needed for this but obviously we are a lot weaker than if we had acted back then.
Critical elements:
1. We should support regional powers who share our world view in terms of democracy and tolerance. Obvious candidates are India. Brazil and perhaps South Africa.
2. We should make regional spheres of influence a part of put tacit policy (sorry Taiwan, Japan, Georgia) in return for collaboration with China on issues like the Indian Ocean and Pakistan.
This also means renewing the Monroe Doctrine. The Effin Russian navy should be unwelcome in our sea! BUT we have nothing to fear from a rapprochement with Cuba.
3. A flat world needs to get off of the dollar and onto some form of world currency. The terms of this currency will be more favorable to the US today than if we wait longer.
4. Two foreign policy issues MUST be solved quickly .. Israel is the obvious one. The Israeli problem is within reach thanks to GWB! With nhot threat of troops from Iraq, no Arab army can really threaten israel (thogh Iran could nuke it) WITH Palestine). The key to a solution, however, is actually globalizing the issue. We need to work to get the other nascent powers on the side of a true two state solution. The intifada will fade away if the Palestinian peoiple have jobs and self respect.
To me this suggests a new way of using the UN. The UN could bring the US, China, Europe, Russia, India and Brazil together as a sort of Committee on MidEast peace and give these folks the funds and auhtority ot make it worthwhile for Palestine to pursue peace.
Mexico is, to me, a bigger an certainlky closer problem. We need to make the American people understand why NAFTA os good for us AND work together with Mexico in the same way that Germany, England, and France have worked with Greece, Ireland and Spain t strengthen the EU.
5. We need a national academic policy aimed at keeping out elite schools’ dominance across the world. As two steps in that direction I believe we need to federalize and expand the NATIONAL MERIT AWARDs and work with peers to create exchange programs that let the brightest kids in the world compete for the best Universities.
10, etc…Troll, for once I’m in agreement with you. I also think it may all happen much faster than your prediction. I’m pushing 60 and I wouldn’t be at all surprised to find myself a citizen of the Republic of Cascadia before I draw my last breath.
2 It’s absolute scorched-earth time. The Republicans are doing all they can to leave the incoming administration with as little as possible to work with once they take over. When it comes time to move into the White House, the Obamas may find the wiring and plumbing have been ripped out of the walls and sold for scrap.
@2
“I felt better after the election, but now I wonder if the Republicans are going to leave anything intact as they abandon office in January. They are like a retreating army, leaving behind a scorched earth in the hope that the victorious enemy will starve in it’s newly occupied territory.”
Your DEMOCRAT CONGRESS IS VOTING YES ON ALL THIS SPENDING!!!!!!
Let’s not forget obama’s plan on spending. All of Bushes spending since Nov.6 has been pre-approved by your messiah.
LIVE WITH IT LOSER.
@2. Republicans. Let’s make the US, look like that entry about Detroit. And then blame it on the Democrats.
They care nothing about christian values, it’s all about greed for them.
A what if scenario. The US does split up. you end up with conservative land and Progressiveness land. I bet the conservative land would be like a third world Nicaragua or Colombia within 20 years.
The progressive-lands end up like Denmark and Sweden, boring, not superpowers, but they take care of their citizens. They have to close their borders, from all the illegals from conservative land trying to find jobs.
I predict the first group that will want to create their own nation within the boarders of the US will be African Americans. I predict they’ll want to take 5 to 10 southern states and create a new nation called New Africa. I predict this will occur by the year 3050.
@29
If so, then since we’ll have all the guns, along with a willingness to use them, we’ll just have to invade and conquer your liberal paradise.
Btw, that’s a joke for the humor impaired amoung you…
31/32 What would be likely to drive the “un-uniting” of the United states, hard though it might be for some of the more hard-over idealogues to comprehend, wouldn’t be politcial differences. In the aftermath of an economic and social collapse, geography would drive the cooperation of populations to work together to subsist on the resources that are within their reach.
I presume, Troll, that you mean 2050, not 3050. The curious aspect of the South is that it may become the dominant industrial power in post-apocalyptic North America.
Liberals are not in favor of senseless violence or pointless invasions.
We are in favor of a strong military for defense from the invading conservative hordes. (Btw, that’s a joke for the humor impaired among you also.)
Why do you figure the south would be the dominant industrial power? You don’t see other places being able to spool up, or not having access to materials? I can see either coast being manufacturing areas, because they have access to materials.
The mid west might might in trouble.
35 “Why do you figure the south would be the dominant industrial power?”
Mainly because of the newer industrial development in many Southern states, partly driven by aerospace and partly by foreign investment (i. e. Goldstar, Hyundai et al in Alabama). The result is that there are much more serviceable facilities than the aging factories of the Rust Belt, and there’s a ready pool of engineering and manufacturing talent.
In addition, Tennessee, northern Alabama and most of Georgia and the Carolinas benefit from TVA hydropower, and there’s a reasonable transportation infrastructure and some oil and lots of coal close at hand.
Unreal American & 27 said:
“Your DEMOCRATIC CONGRESS IS VOTING YES ON ALL THIS SPENDING”
Bush & Co. were like the captain of the Titanic. Full speed ahead in iceburg country, minimal watch on hand, hits the iceburgs and the ship starts sinking. Not enough lifeboats to go around. After a lot of dilly-dallying, the captain says the only plan he will approve is breaking out the buckets and asking the passengers the crew to start bailing. With no other alternative, the crew complies. The ship keep sinking, and asking how it came to this? The crew points to the captain’s errors. The captain replies: “But the crew agreed to my plan to use buckets to bail out the ship!!! They must share in the blame!!!!!”
UK was 5th in the world for industrial output in 2001, it’s now only…5th. That’s right the top 8 countries now, were the top 8 in 2001 with no change in order. Here are the 2008 (January) numbers. I referred to The Economist’s “World in Figures” for 2001 (book).
@37
You have it backwards…
No one not even Bush can make the democrats say yes. They did it cause it’s in their blood to spend others money. Didn’t you see their (Democrats) news conference on the bail out and auto?
Chuck Shumer (sp) and the rest of them couldn’t hold back their glee which turned to giggles.
Congress is where we supposed to have oversight Dems have been in control since 2007.
NO share blame buck O.
It sure is interesting that the Clinton Treasury Secretary now ShittiBank CEO Rubin just gots big mula! And you clueless idiots above don’t figger it out that the peeps Obama are putting around him in money spots are friends of Rubin?
You are such idiots. Even Current Treasury Secretary Henry Paulsen is a close protege and friend of Rubin. I already proved that some time ago. But you libtards keep up the same mantra even when facts slap you little wienies!
rhp6033: Do you remember anything?
Barney Fagg Frank said we need to raise taxes now. Screw the deficit, spend even more money. I already posted the link
yelling loser boy: You asked for proof. Well if you could remember anything… wait you’s a libtard!… 30 back in battlefield.
I wonder how many turkey executions Obama will prohibit while he’s in orifice?
#39:
I know you want to believe that the Democrats are the big spenders, and the Republicans are the fiscal conservatives. I also know that you aren’t particularly concerned with the facts, you just want to put out the Republican talking points.
But the past eight years have proven that to be a lie. The Republican Congress 2001~2006 and Bush & Co. were responsible for turning a budget surplus into a huge budget deficit, tripling the national debt in the process. They even tried to fudge the numbers by refusing to pass a budget in 2006, so that the 2006 budget would have to go into 2007 numbers (a sophomoric attempt to try to make it look like the Democrats spent more). But even that didn’t work.
As for money spent by the Congress in 2007~2008, ALL of it was insisted upon by Bush, and tied into packages which the Democrats couldn’t vote against without creating irreparable damage (such as cutting off support for troops overseas). It was a crass political move by the Bush administraiton, and you are being complicit in it.
So go try to sell those lies elsewhere, they don’t work here. We’ve been watching the process closely, not listening to Fox News regurgitating Republican propoganda. We know a set up when we see one.
42 – Yeah prove to me I accepted some bullshit challenge from you.
As for your link – I don’t click on right wing bullshit.
@44
Your original headline post @2
“rhp6033 spews:
Headlines today say the Fed is throwing another 800 BILLION toward buying up mortgage-backed securities.”
The subject is bailouts…..
I never switched subjects like you dems do consistently.
If you can’t keep on the present subject and need to switch you lost Buck O.
Dems either run congress or not?????
BTW I’m sick of the spending by Republican when they where in charge.
@4
Better to skip the fast food and just brown bag it. It’ll save you money on food and health care costs.
The main trouble with our country is we use the tax code to punish people for working and reward people for owning stuff. When wages are taxed 3 times as much as dividends and capital gains, and 1000 times as much as inheritances, why should anyone work?
Because they don’t have any inheritance?
This is by far the most riveting thing I’ve read since widespread public awareness of the magnitude of the meltdown kicked in a few weeks ago, so I thought I’d share it:
http://www.portfolio.com/news-.....reets-Boom