Whatever the relative merits or drawbacks there are to forking over giant sums of taxpayer money to failing corporations, it’s hard to see how that is going to reverse the larger trend of deflation.
Consumer prices plunged 1 percent last month, more than forecast and the most since records began in 1947, after being unchanged the prior month, the Labor Department said in Washington. Excluding food and energy, so-called core prices unexpectedly fell for the first time since 1982.
Seriously, after we bail out the automakers, then what? We bail out retailers? Restaurant chains? With job losses mounting this sure looks like a severe deflationary spiral.
We needed a stimulus package yesterday, but that’s not going to happen until at least late January or early February, apparently. Yikes.
You just don’t get it Jon…. We are headed for a depression/recession/balanced budget/surplus/Ramadan so the only possible response is more tax cuts for the rich!
You liberal types sure make economics more complicated than it needs to be.
Now watch me hit this ball….
. . . which is why the Prop. 1 stimulus package is so important locally. The grassroots push for green, family-wage jobs that carried the day on Nov. 4 will pay dividends many times over. For every billion dollars ST spends – and the 2009 budget calls for spending over that amount next year alone – 37,000 jobs will be created. Those dollars will be spent here, priming the local economic pump.
The Repugs running the show in the Rust Belt screwed the environment and screwed working families unfortunate enough to live there. Their narrow corporate mindset and selfish, short-sighted policies have so poisoned the well that voters there never will go for the kind of stimulus package for a green future we’ve got in place.
If the giant corporate give-aways actually did force an inflationary spiral, it would just make things even worse for the ordinary schmucks who are losing their jobs anyway.
Isn’t the fact that we do have deflation in spite of this supposed to be the specific indication that we’re no longer dealing with a recession, but a depression? Or are all the economic textbooks being frantically rewritten so nobody has to admit it?
@3: It will be a giant (maybe not great) depression and the falling gas prices (and other prices are predicting it). It will take years to get out of this hole that Bush has dug.
@2 I wouldn’t have a problem with the extravagantly expensive and grossly inflexible transportation system that local voters foolishly approved on Nov. 4 if they paid for it by printing money instead of dipping into the pockets of senior citizens on fixed incomes who won’t even live long enough to ride on the thing. I have reported the King County electorate to the state Department of Financial Institutions for investigation of financial exploitation of the elderly.
As a retiree on a fixed income, I like deflation better than inflation. It’s about time someone did something for us old farts who are too sick and feeble to work anymore!
@4 “It will take years to get out of this hole that Bush has dug.”
Yeah, probably, but I’ll manage to live with it if it doesn’t take down my pension system and brings carrots back down to 1932 prices. YUMMY!!! I LOOOVE CARROTS!!!!
@3
We need some major pump priming. There is a heck of a lot of infrastructure spending that can be done across the country.
What happened to Goldy’s plane crash post? It was there, then it vanished! Anyway, Goldy wondered if it was divine intervention when 1 guy walked away from the crash when the other 7 on board were all killed. I asked the Great Mother Rabbit Spirit about this and She said, “He’s a Democrat.” That’s about what I figured, too.
Aw shucks, now the trolls are gonna come on here and say, “That Roger Rabbit is mean-spirited!” Well, isn’t that just like Republicans! When they don’t like the message, they diss the messenger! Hey, don’t blame me! I’m only a reporter! If the message sucks, change your storyline!
These Republicans go around all the time saying God is on their side. The German soldiers in WW2 thought that, too. Look how it turned out for them. The moral of that story is that wishing for something doesn’t make it true.
Actually, deflation isn’t necessarily bad, unless you owe money on a deflating assett.
Then when the loan gets “underwater”, you are stuck – you can’t sell or refinance it, you can only keep it and keep paying off the loan, or give it back to the bank in foreclosure.
Some of the deflation is simply a reflection that the market was overheated, and this is a “correction”. The Bush administration’s home loan practices (failure to oversee, regulate, and enforce) was a proximate cause of a speculative bubble. When average wage-earners were taking out no-interest APR loans to flip houses before closing in order to cash in on rapidly rising prices in the 30 to 60 day interval, you know the market’s heading for a collapse. But what’s REALLY pushing deflation now is the combination of lots of foreclosures on the market caused by “underwater” loans and rapidly rising APRs, and the shortage of credit generally which makes it difficult for most people to take advantage of the low-cost opportunities.
Stimulous I support. Bailouts I do not support anymore. The line has to be drawn somewhere. What did we get out of the first bailout? Oh, and by the way, Christler was bailed out back in 1979 already. Why bail them out again?
I REALLY want an answer on this one: My logical (?) brain tells me that with the treasury printing out yet more billions of dollars for bailouts, we should be hit with rampant inflation (yet more unbacked bucks out there). But since nobody is buying, prices are currently falling, particularly gas. If/when the banks start actually using the bailout bucks, will inflation follow? I’m too old to take a course in economics so hope someone can dumb it down for me.