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Forums - General - American Economy (thus world economy)

NJ5 on 10 September 2008
Jackson50 said:

 

That guy is simply calling a conspiracy where there is none. He said it does not add up, but provides nothing to showcase that.

That petroleum prices skyrocketed in the 2nd quarter is congruous with pushing down the GDP deflation rate...which is exactly what the BLS numbers showed. I am not saying this is good for the economy. Some feel uncomfortable with the idea that higher oil prices increase GDP. They may be right to be concerned, as deep down it doesn’t really make sense; but to say the government fudged the numbers is a conspiracy theorist's pipe dream and nothing more.

 

I don't care about the conspiracy angle of the story, that's really secondary. What matters more is that the GDP growth figure is irrelevant as it was calculated.

Obviously that didn't stop the whole media from reporting the number without talking about the issues behind it. Mass misinformation at its finest.

PS: It's not true that the author didn't provide anything. There's plenty of reasoning and information behind his conclusion.

 



My Mario Kart Wii friend code: 2707-1866-0957

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Jackson50 on 10 September 2008
NJ5 said:
Jackson50 said:

 

That guy is simply calling a conspiracy where there is none. He said it does not add up, but provides nothing to showcase that.

That petroleum prices skyrocketed in the 2nd quarter is congruous with pushing down the GDP deflation rate...which is exactly what the BLS numbers showed. I am not saying this is good for the economy. Some feel uncomfortable with the idea that higher oil prices increase GDP. They may be right to be concerned, as deep down it doesn’t really make sense; but to say the government fudged the numbers is a conspiracy theorist's pipe dream and nothing more.

 

I don't care about the conspiracy angle of the story, that's really secondary. What matters more is that the GDP growth figure is irrelevant as it was calculated.

Obviously that didn't stop the whole media from reporting the number without talking about the issues behind it. Mass misinformation at its finest.

PS: It's not true that the author didn't provide anything. There's plenty of reasoning and information behind his conclusion.

 

 

I said he provided nothing in regards to his statement that the numbers do not add up. Also, to say that

"In other words, to arrive at a 3.3% growth rate, the government assumed that inflation is running at a ten-year low! In contrast, the latest reading on consumer prices (CPI) in the second quarter shows year-on-year inflation running at a 5.6% rate, a seventeen-year high! How can it be that inflation is simultaneously running at a seventeen-year high and a ten-year low?"

shows he does not understand how the GDP deflator actually works. Since the US imports half of its oil, the GDP deflator will go down when there is a spike in oil prices. This is what happened in the 2nd quarter; April, May and June all saw skyrockiting oil prices. This has a weird effect by driving down the GDP deflator whilst concurrently driving up the price index. This is why it appears as if the government is using artificially low inflation numbers in its GDP calculation. There may be somewhat of an inherent bias built into the way it is calculated, but there is no grand conspiracy.



ManusJustus on 10 September 2008

I sense a lot of minimum wage hate from the free market fantasy crowd. Letting the free market decide minimum wage would be disasterous and bring down everyone in society with it. Those people who make minimum wage spend that money that ends up going to wealthy business owners, by taking money away from a large portion of society (that includes minimum wage plus wages that are effected by minimum wage, for instance a guy making 10 dollars an hour wage is based on how much he is worth over minimum wage) means less people buying goods to push the economy and less money going to businesses.

Less money for the lower and middle classes also means less chance for them to advance. In America, education is horrendous now, but imagine taking away minimum wage and watching everyone's wage drop. College would be further out of reach, which reduces the number of trained, productive workers, which hurts the economy.



Jackson50 on 10 September 2008
ManusJustus said:
I sense a lot of minimum wage hate from the free market fantasy crowd. Letting the free market decide minimum wage would be disasterous and bring down everyone in society with it. Those people who make minimum wage spend that money that ends up going to wealthy business owners, by taking money away from a large portion of society (that includes minimum wage plus wages that are effected by minimum wage, for instance a guy making 10 dollars an hour wage is based on how much he is worth over minimum wage) means less people buying goods to push the economy and less money going to businesses.

Less money for the lower and middle classes also means less chance for them to advance. In America, education is horrendous now, but imagine taking away minimum wage and watching everyone's wage drop. College would be further out of reach, which reduces the number of trained, productive workers, which hurts the economy.

I have a few problems with minimum wage laws. I dislike that it may set a price floor above the market equilibrium creating a surplus of labor. When this happens, it is usually the least well-off who gets priced out of the market. The inexperienced, least-skilled worker will not be worth the higher, government-mandated wage rates. I could list numerous faults with minimum wage legislation, but I do not want another lengthy debate.

 



Coca-Cola on 11 September 2008

It's another day and another bad news for me.
I bank at WaMu and they are in trouble.

If you bank with WaMu and have over $100,000, get money outta there.
I bank with Wamu but don't have $100,000 (FDIC insured) so I don't have to worrry,
but I might switch banks this week.
http://market-ticker.denninger.net/

It is time for all of us as Americans to raise hell and demand that Congress force all of these firms to take their marks and disclose in a fully transparent fashion the trash on their balance sheets.



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Kasz216 on 11 September 2008
akuma587 said:
blackbird3216 said:
what if freddie and fannie crashed?

Government won't let it happen because the results would be catastrophic.  It would be much worse than letting one of the major car companies in Detroit go bankrupt (which would probably be a good thing in actuality).

 

The thousands and thousands of Autoworker retirees who depend on the money they were promised to survive. (yet still get less then) disagree.



akuma587 on 11 September 2008
Kasz216 said:
akuma587 said:
blackbird3216 said:
what if freddie and fannie crashed?

Government won't let it happen because the results would be catastrophic.  It would be much worse than letting one of the major car companies in Detroit go bankrupt (which would probably be a good thing in actuality).

 

The thousands and thousands of Autoworker retirees who depend on the money they were promised to survive. (yet still get less then) disagree.

I mean where do we draw the line then?  They have obviously showed an incompetence second to none by backing themselves into a corner and nearing bankruptcy numerous times.  It is inefficient for the market to have the government baby them and strictly against a conservative economic policy.  Let the market correct itself.

 



We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

Kasz216 on 11 September 2008
akuma587 said:
Kasz216 said:
akuma587 said:
blackbird3216 said:
what if freddie and fannie crashed?

Government won't let it happen because the results would be catastrophic.  It would be much worse than letting one of the major car companies in Detroit go bankrupt (which would probably be a good thing in actuality).

 

The thousands and thousands of Autoworker retirees who depend on the money they were promised to survive. (yet still get less then) disagree.

I mean where do we draw the line then?  They have obviously showed an incompetence second to none by backing themselves into a corner and nearing bankruptcy numerous times.  It is inefficient for the market to have the government baby them and strictly against a conservative economic policy.  Let the market correct itself.

 

Do you know what kind of turmoil it would put the market to pretty much screw those retirees out of their retirement benefits?  You'd basically be wiping out a lot of middle class people in one fell swoop.

People who did nothing to help the companies make the wrong decisions.

People would go from middle class... to bottom rung poor through no fault of their own.

It would be like what would happen when banks went out of buisness before the FDIC.

If they let one of those companies fail, the government would have to pick up the retiree benefits for the company that fell.



Coca-Cola on 11 September 2008
akuma587 said:
Kasz216 said:
akuma587 said:
blackbird3216 said:
what if freddie and fannie crashed?

Government won't let it happen because the results would be catastrophic.  It would be much worse than letting one of the major car companies in Detroit go bankrupt (which would probably be a good thing in actuality).

 

The thousands and thousands of Autoworker retirees who depend on the money they were promised to survive. (yet still get less then) disagree.

I mean where do we draw the line then?  They have obviously showed an incompetence second to none by backing themselves into a corner and nearing bankruptcy numerous times.  It is inefficient for the market to have the government baby them and strictly against a conservative economic policy.  Let the market correct itself.

 

the market has not corrected itself since 1987, thus the bubble that is bursting now.

If the market corrects itself now, then we will have depression.  I don't want that.  but if not now then my kids will go through it.

Let's see if Paulson can come up with something, but thus far he has been horrible.

 



NJ5 on 13 September 2008

The dominoes keep falling:

http://biz.yahoo.com/ap/080913/lehman_brothers.html

Apparently the government is trying to avoid having to bail Lehman out. Trying to avoid nationalizing the whole financial sector I suppose... So much taxpayer money being thrown away probably doesn't help the election either.

 



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