So, what kind of recovery do you want? Yeah, I know, a robust one. How isn't it robust when the US is still able to use far more of the world's resources than it has any right to via equal apportionment? So, yes, this recovery is robust. The fat man weighs 440 now instead of 500 pounds. He still needs a chair to get around in, but now that he is a little smaller he can get one that fits through smaller doors.
The effect of empire being understood, what you are getting at is, "why isn't there more easy money in actual circulation in the kind of economic places where ordinary people would like to see it?" Isn't that about right? Well, partly it is an effect of saving the banks, saving them in the manner that involves a serious commitment to the concept of both trickle down economics and the notion that high level investment solves everything. As a result most people can't actually borrow very much money to do anything economically beneficial unless they are in a position where they probably don't need to borrow that money anyway. It's the old saw from the 60's and 70's when people used to complain that the bank's lending policies prevented them from getting a loan. Back then interest rates might have been 7 to 10 percent, and yet people got what they could (VA, FHA, whatever), and they took their chances. Mostly their concept wasn't to flip their houses. Mostly they didn't look upon housing as an asset, but as an essential part of life. Maybe one day it, when it was paid off, it would be an asset. As the concept of housing changed so too the economy changed. As the way that financing changed so too the economy changed. Eventually, a lot of people who couldn't support onerous loans began to fail to pay back what they had borrowed. Eventually, the system worked its way round to trying to rely enough on extracting pay back from a class of people whom the loan officers of the 60's and 70's would have tossed out on the street that it buckled when a little thing like $5 a gallon gas raised its head and that class of people had to make choices between making this month's payment and whether to keep going to work.
Enter inflation and its effect on the situation. What really happened was that real wages failed to keep up. The entire system was, and still is, designed for from the top down viewing. As many dollars as come into this country every year from tribute given to the empire by foreign payment, and still we can't find a way to distribute them anywhere other than at the top. Whenever an organized force works to garner more for those at the bottom arises, like unions (even the concept of a union is enough to send a CEO shrieking) or civil rights groups, the people who absolutely must see things from the top get really upset and work definitively to help society at large both abhor such things and to legally constrain them. Further, they set up economic means to abstract not just some of the money, but all of the money out of which a portion could go to increase working person's wages. Derivatives are great in a hugely expanding economy, but the tax dodging and the speculation and the hedging taken to the extent it can get to when no one is in charge can dry up the money pool for those whose lives are lived not at the top, but at the bottom.
PeakOil is You
This is the WORST RECOVERY EVER
Re: This is the WORST RECOVERY EVER
by evilgenius » Sat 26 Jan 2013, 12:41:48
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evilgenius - Intermediate Crude
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Re: This is the WORST RECOVERY EVER
by evilgenius » Sat 26 Jan 2013, 12:42:41
Or, gasp, even at the middle.
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evilgenius - Intermediate Crude
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Re: This is the WORST RECOVERY EVER
by Plantagenet » Sat 26 Jan 2013, 15:06:54
$this->bbcode_second_pass_quote('evilgenius', 'S')o, what kind of recovery do you want? Yeah, I know, a robust one. How isn't it robust when the US is still able to use far more of the world's resources than it has any right to...
Because the strength of a recovery isn't judged on how much of the world's resources get used. A recovery is judged by how much GDP growth occurs---and on that basis the last four years are the WORST RECOVERY EVER.
Since 2009 the USA has been bringing up the rear, when it comes to economic recovery
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Re: This is the WORST RECOVERY EVER
by kublikhan » Sat 26 Jan 2013, 16:55:26
$this->bbcode_second_pass_quote('Plantagenet', 'S')ince 2009 the USA has been bringing up the rear, when it comes to economic recovery
As far as the OECD countries go, the US is doing fairly well. Forget recovery, Europe and Japan are in recession. You can't expect giant bubbles that took years to build to go down quietly. Why don't you talk about how well Spain's "recovery" is going?$this->bbcode_second_pass_quote('', 'S')afely reducing debt and clearing the way for economic growth in the aftermath of the global credit bubble will take many years and involve difficult choices.
Two years later, major economies have only just begun deleveraging. In only three of the largest mature economies—the United States, Australia, and South Korea—has the ratio of total debt relative to GDP fallen. The private sector leads in debt reduction, and government debt has continued to rise, due to recession. However, history shows that, under the right conditions, private-sector deleveraging leads to renewed economic growth and then public-sector debt reduction.
Highlights of the research include:
The deleveraging process has only just begun in most countries. Based on data up to Q2 2011, total debt has actually grown across the world’s ten largest mature economies since the 2008–09 financial crisis, due mainly to rising government debt. Only three countries in the sample—the United States, Australia, and South Korea—have seen the ratio of total debt to GDP decline.
The deleveraging processes in Sweden and Finland in the 1990s offer relevant lessons today. Both endured credit bubbles and collapses, followed by recession, debt reduction, and eventually a return to robust economic growth. Their experiences and other historical examples show two distinct phases of deleveraging. In the first phase, lasting several years, households, corporations, and financial institutions reduce debt significantly. While this happens, economic growth is negative or minimal and government debt rises. In the second phase of deleveraging, GDP growth rebounds and then government debt is gradually reduced over many years.
As of January 2012, the United States is most closely following the Nordic path towards deleveraging. Debt in the financial sector has fallen back to levels last seen in 2000, before the credit bubble, and the ratio of corporate debt relative to GDP has also fallen. US households have made more progress in debt reduction than other countries, and may have roughly two more years before returning to sustainable levels of debt. Deleveraging in the United Kingdom and Spain is proceeding more slowly, and these countries could face many years of gradual debt reduction ahead.
Overall growth in the time of deleveraging is likely to be restrained, but the pace of debt reduction varies across nations and sectors and from place to place within nations. No single country has all the conditions in place to revive growth.
The oil barrel is half-full.
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Re: This is the WORST RECOVERY EVER
by Plantagenet » Sat 26 Jan 2013, 19:59:29
$this->bbcode_second_pass_quote('kublikhan', '')$this->bbcode_second_pass_quote('Plantagenet', 'S')ince 2009 the USA has been bringing up the rear, when it comes to economic recovery
Why don't you talk about how well Spain's "recovery" is going?Because the fact that the post-2008 US economic recovery is the WORST RECOVERY EVER is a different topic then how well Spain's recovery is doing or not doing.
$this->bbcode_second_pass_quote('kublikhan', 'S')afely reducing debt and clearing the way for economic growth in the aftermath of the global credit bubble will take many years and involve difficult choices.
You can "clear away" all the debt you want and it won't help if the US recovery doesn't get stronger. Greece has been "clearing away" debt for several years now, and their economy is still shrinking so the people there are worse off then ever.
The problem in the US isn't debt....the problem is lack of US GDP growth since 2008 resulting in US workers being stuck in the WORST RECOVERY EVER.
