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01/11/2009

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Thorstein Veblen

Here's a sharp analysis of the Fama critique of the Obama stimulus: http://firelarrysummersnow.blogspot.com/

Feel free to check it out and debate...

Thorstein Veblen

sorry for the triple post -- i was getting error messages...

Jack

Bill, I wonder. There's bound to be stresses as one sector shrivels and, hopefully, another expands.

The other day I heard that the (spunky?) ex-employees of WAMU, some 9,000 strong, decided to throw themselves a party. I wondered what might come out of that. Here (Tulsa) there's a new local bank starting up and small local/regional banks that kept to the rules have done pretty well and may benefit from the voids left by the "bigs". Could a new bank form out of the "big bang?" of WAMU?

And what of the others? In one sense they're "bankers" but zoom in and you've sales people, administrators, accountants, computer dudes, and some with clerical or not many skills at all.

IF......... a wide range of infrastructure or "new energy" jobs are created, can they and others who're laid off fit in somewhere? In keeping with the "13 careers" we keep hearing about? My guess is that most can and a few won't.

My biggest concern is that of a combo of high productivity in the US, plus outsourcing and "too many?" imports that perhaps 80% of our workforce is all that is required and THE question is what to do with the permanently un or underemployed? Interesting times?

Jack

Bill, I wonder. There are bound to be stresses as one sector shrivels and, hopefully, another expands.

The other day I heard that the (spunky?) ex-employees of WAMU, some 9,000 strong, decided to throw themselves a party. I wondered what might come out of that. Here (Tulsa) there's a new local bank starting up and small local/regional banks that kept to the rules have done pretty well and may benefit from the voids left by the "bigs". Could a new bank form out of the "big bang?" of WAMU?

And what of the others? In one sense they're "bankers" but zoom in and you've sales people, administrators, accountants, computer dudes, and some with clerical or not many skills at all.

IF......... a wide range of infrastructure or "new energy" jobs are created, can they and others who're laid off fit in somewhere? In keeping with the "13 careers" we keep hearing about? My guess is that most can and a few won't.

My biggest concern is that of a combo of high productivity in the US, plus outsourcing and "too many?" imports that perhaps 80% of our workforce is all that is required and THE question is what to do with the permanently un or underemployed? Interesting times?

Rob

I want to thank Dr. Becker for making this available in this public forum.

I am not an economist, but my instinctive reaction to the Obama stimulus was negative. It is good that Dr. Becker provides an analysis more concrete than my emotional skepticism.

I now have my own name for the Obama stimulus package: Porkonomics. Since this stimulus plan is being crafted by politicians I have extreme confidence in my own prediction: Stimulus funds will be spent to provide political benefits rather than economic benefits.

Anonymous

دردشة صوتية

Bob

From the above blog:

"What is so different about the present recession compared to that one (i.e. 1981-1982), and to other recessions since then, that would greatly raise the estimated stimulating effects of government spending on various types of goods and services?"


One obvious difference is that the 1981-1982 recession was created intentionally by monetary policy (by the Volker Federal Reserve) in order to halt the inflationary cycle.

As pointed out by Krugman today in his blog, there was plenty of room to correct that recession by a reciprocal application of monetary policy.

see:

http://krugman.blogs.nytimes.com/

Anonymous

"Time will tell whether I am right that a spending and tax package of the type analyzed by Romer and Bernstein may stimulate the economy as measured by GDP and employment, but that the stimulus will be smaller then they estimate, and its value to consumers and taxpayers could be even smaller."

Please. All economists know -- and FT's Lex actually had an article on the issue -- that "time will not tell." Economists will have the pleasure of disputing this point for the remaining time that humans have on this earth.

Dave

There are many problems with Obama's plan to stimulate, but the biggest one is that economic adjustments mandated by government work no faster than the free market. It's poppycock to talk about how government spending can increase aggregate demand without increasing the money supply, unless you have some theory for why government spending increases the velocity of money. I will grant you that it might, but there is nothing in the standard Keynesian model or even the IS-LM analysis that suggests that velocity must increase if government spends money.

I would surmise that velocity would increase only if government spends money that comes into its possession faster than the average private money holder spends money that comes into his possession. It is not at all clear to me that's the case. I fail to see why money spent by the government is different from money spent by anyone else. If we are acting on the assumption that private entities and individuals save but government does not, then that is a big assumption.

This recession has been going on since December, 2007, and we are just now talking about what a stimulus would look like, after spending more than a year in "debate." That's not very speedy. Obama's stimulus promises infrastructure spending. Infrastructure spending takes years to plan and execute. You've got to acquire land, you've got to do engineering, you've got to hire contractors, you've got to procure supplies, etc. Only when all of that is done do you hire the workers. By then, we may be two recessions down the road, or we may be in the midst of the greatest economic boom in history. And when the workers are done, and told that their services will no longer be required, we may be headed into yet another recession. In order to conclude that government action can get us out of a recession, you've got to assume that government works more efficiently than private enterprise. I see no evidence of that.

David Dzidzikashvili

The Obama stimulus plan should also envision changing regulations & economic policies to have short-term & long-term effects on unemployment, middle-class and the market stability. Strengthening the middle lass and creating more job opportunities should be the primary objective of the package, rather than handing the blank check to the Wall Street and failed financial institutions.

Jack

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Jack

Dave: Perhaps I'm missing your point, but it seems you might be overlooking the government's ability to borrow from the future to spend, if not today, in months, or as some of the estimates are this week in a year or couple of years; time frames I'd predict are relevant to the scope of The Mess.

I've more concern that we're in a structural change in which the "old" economy is likely not to provide jobs for all, until something of a lengthy transition is accomplished, than that a boom lies just around the corner. As exhibit one I'd point out the lackluster (if that) job or wage growth of a near wartime economy running half trillion deficits back to back.

Further the plan leads us into spending on infrastructure in which neither the last Congress nor the private sector was investing. Such spending should flow in over whatever else is happening in the existing economy, and given the rates of unemployment I don't think we're too concerned about "crowding out" for quite some time. And from what I'm seeing states appear to have twice the amount of "shovel ready" projects that have been shelved for the lack of funding as there is funding from the stimulus plan.

A comment on the current "pace" of private activity; we've all seen or heard of projects from the simple purchase of a car, to that of a builder trying to start even a build for which he has a customer (not a spec) to finishing out a subdivision where there is demand and the prospect of sales, finding their plans hampered by the inability to finance them at street level. This, to me, is a "no pace" effect, though one I see all are trying to free up......."soon?" or "maybe?"

Also, I've hopes that we're being led into a New Energy economy. In the short run the building of windmills, solar, the retrofitting of buildings provides economic activity in the near future while the projects will pay themselves off with dividends as we pay ourselves for the energy generated or conserved instead of sending our dollars abroad to nations that return them only by buying our productive assets which will provide even more dollar outflow in dividends or cap gains in the future.

Alaska has enough NG that been re-injected and deposits we know are there to provide 10% of US NG for half a century or more. It's been a frustration to Alaskans that the oil companies have dragged their heels on building the needed pipeline, and a further frustration that the Bush Admin pursued the frontrunning of costly LNG projects to IMPORT NG from halfway around the world, instead of providing the leadership that would make the pipeline Gov Palin mentioned a reality. This project is a $40 billion project for the US and Canada that, again, provides a ton of jobs ...."soon?" with the payback assured by our gas consumption alone, and perhaps the "Boone Pickens" bridge to the future plan, and even that of using hydrogen fuel cells that doubles or perhaps triples the energy produced per raw BTU.

But I ramble too long! In short I see a spurring short term, more sensible use of our assets mid-term and ultimately a keeping home of more of our hard-earneds to be used for even more domestic projects later. Trains to supplement and replace some of our trucking and airlines? A bio-tech boom? Who knows? but we've got to go up to bat to get a home run or even a base hit.

Anonymous

دردشة صوتية

debugger

I hope there is an amendment in the stimulus that the jobs created are for Americans and Legal Residents. If there is no amendment most of the jobs will just go to those workers with temporary working visas (H1b and L1) and Americans are still out of work. It would be a shame if citizens of India and China benefit more than Americans that funded the stimulus.

David Dzidzikashvili

Obama administration needs to realize that in several months economic crisis and soaring deficit will be solely his administration’s and his party’s problem, so for any previous or future mistakes he’ll have to take the blame. Two-three months from now nobody will remember Bush’s policies and the Democrats have to be more careful on the long-term effects of massive spending. If the new stimulus fails, just like the past one, then this will balloon into Obama’s first political problem. We have to also realize, that on the long-term we won’t be able to afford more bailouts and there has to be alternative solutions, since we are passing the trillion Dollar deficit boundary. Printing more money can be utilized as short-term tool, but on the long run it will devastate economy. Something needs to be done immediately, but more regulation & spending does not seem to be a logical answer, we need another alternative solution. Maybe we should take pure libertarian approach and let the free market decide who wins or loses? This will cause social unrest and chaos, so as a society we can not afford this option either. Maybe we’ve killed the goose that laid eggs for us?

Jack

Debugger: If we fear that stimulus spending will too quickly leak out of the nation or draw more immigrants, it would logically follow that we should be concerned about the same in overall policy. Is it time to debate "fair trade" vs "free trade".

David: I guess we're all reaching for the brass ring, but surely a "pure" Libertarian approach would REQUIRE the transparency that was lacking and led to what we see. Otherwise lassez faire would just lead to the same players raiding company after company. Some of the Mess might have been avoided had AM Best, Moody's and S&P bond raters not sold their soul and the reputations that took a century to build in the frenzy of the last few years.

I don't see a financial system working w/o a sheriff being on watch.

Patrick

Interesting video at http://money-cake.com/2009/02/heritageorg-says-obamas-spending-plan-is-wrong/ as to why Obama's spending plan will fail. The future is a scary place if things doesn't change soon! America is in serious financial trouble.

Jake

Currently I am a student at a University working part time to get by. I am entirely on my own, not listed as dependent. I recently found that I am not eligible for a stimulus check, yet illegal immigrants without social security numbers are?...What is going on?!

janrey

Tax cuts are not the answer, look at the last 8 years -- that is what got us into this mess. Doesn't anyone realize that the U.S. is in really bad shape. We need help now -- big help! Republican, Democrat, Socialist, Independent, whatever -- everyone needs to forget these ideologies and remember that they are Americans. We must work together.

Joey K

Here are my issues on Unemployment, Work Visas and Racial Differences.

If The United States of America wants to rid it’s self of Unemployment.

Then all these Corporations and other companies that have to lay off employees, the first people to be laid off should be the individuals here on WORK VISA’S.
Force the Staffing agency that placed them here to either place them somewhere else, or send them back home.
Why does the American Born Citizens have to find a Staffing Agency to find them work?

Q: Why can’t they figure this out?

A: Because it hasn’t happened to them (3) times like it has to me and other Natural Born Americans.
I met one of these individuals in 1996, and I was laid off in 2001.
Now I just began working at another Telecommunications Corporation, and this person is at this Company, He is still not an American Citizen, and is still over here on a WORK VISA.
And he was NEVER laid off.

As for local Government,
Take away the District Issued Vehicles, Credit Cards, and any other TAX paid perks and let those Administrators pay for these like everyone else. That ALONE will fix the debt.

For the United States to be the GREATEST Country in the World, the people making the decisions are the most incapable. To people like me, it’s black and white.

On November 11 on the FOX morning show, you played a video of Students speaking Spanish in a video they made for school.

I found that VERY offensive.
I always see FOX report about; African Americans, Mexican Americans, Asian Americans, Indian Americans being offended by one thing or another.

So I guess I would be called a (White or Caucasian American)
But I have NEVER seen FOX report about a White or Caucasian American being offended.

You’ve done stories about White police officers ONLY ticketing Blacks, so I called in and even e-mailed FOX and gave my, Name, Drivers License #, DOB, and PLEADED FOX to PLEASE run a check on me. And if FOX did, they would have found that ALL the tickets I have been given over the last 25+ years (10 or so) were from a Black officer. So it works BOTH ways. I didn’t see a story about that.

Here are some FACTS:

I have been wondering why Whites are called racists, and no other race is.

There are African Americans, Mexican Americans, Asian Americans, Arab Americans, and Indian Americans etc.

And then there are just Americans.

You pass me on the street and sneer in my direction.
I’ve been called 'White boy,' 'Cracker,' 'Honkey,' 'Whitey,' 'Caveman' .Peckerwood, and more, and that's OK.
But if I was to call you, Nigger, Kike, Towel head, Sand-nigger, Camel Jockey, Beaner, Gook, or Chink
You call me a racist.
You say that whites commit a lot of violence against you... so why are the ghettos the most dangerous places to live?

There’s the United Negro College Fund, Martin Luther King Day, Black History Month, Cesar Chavez Day, Yom Hashoah, Ma'uled Al-Nabi to name a few.

There’s BET (Black Entertainment Television).. If we had WET (White Entertainment Television)
You call us a racist.
If we had a White Pride Day, you would call us racists.
If we had White History Month, we'd be racists.

If we had any organization for only whites to 'advance' OUR lives we'd be racists.
Do we have Organizations FORCING Hiring Managers, CEO’s or even Pro and Colleges interviewing us because were White?

There’s a Hispanic Chamber of Commerce, a Black Chamber of Commerce,
And then we just have the plain Chamber of Commerce.
Wonder who pays for that??

A white woman could not be in the Miss Black American pageant,
But any race or color can be in the Miss America pageant.
You call us a racist.

There’s a NAACP, and United Negro College fund to name a few
If we had a college fund that only gave white students scholarships...
You know we'd be racists.
There are over 60 openly proclaimed Black Colleges in the US.
Yet if there were 'White colleges' that would be a racist college.

In the Million Man March, you believed that you were marching for your race and rights.
If we marched for our race and rights,
You call us a racist.

You are proud to be black, brown, yellow and orange, and you're not afraid to announce it.
But when we announce our white pride, you call us racists.

You rob us, carjack us, and shoot at us. But, when a white police officer shoots a black gang member or,
Beats up a black drug-dealer running from the law and posing a threat to society,
You call him a racist.

I am proud...But you call me a racist.
Why is it that only whites can be racists??
I’m sure Channel 4 will not air or even acknowledge this e-mail just like Channel 4 ONLY covered the story about
White officers are targeting Black drivers.

That's why we have lost most of OUR RIGHTS in this country.
We won't stand up for ourselves!
WHY CAN”T I BE PROUD TO BE WHITE?
It's not a crime yet, but getting real close!

Thank you,

And I am 100% sure, I will not hear back from you, because you want stimulate real economic growth, COMPLETELY Rid AMERICA of Unemployment and Unemployed people, then lets take care of our own house first.

Lay-Off the Work-Visa individuals first,

Joey K

Here are my issues on Unemployment, Work Visas and Racial Differences.

If The United States of America wants to rid it’s self of Unemployment.

Then all these Corporations and other companies that have to lay off employees, the first people to be laid off should be the individuals here on WORK VISA’S.
Force the Staffing agency that placed them here to either place them somewhere else, or send them back home.
Why does the American Born Citizens have to find a Staffing Agency to find them work?

Q: Why can’t they figure this out?

A: Because it hasn’t happened to them (3) times like it has to me and other Natural Born Americans.
I met one of these individuals in 1996, and I was laid off in 2001.
Now I just began working at another Telecommunications Corporation, and this person is at this Company, He is still not an American Citizen, and is still over here on a WORK VISA.
And he was NEVER laid off.

As for local Government,
Take away the District Issued Vehicles, Credit Cards, and any other TAX paid perks and let those Administrators pay for these like everyone else. That ALONE will fix the debt.

For the United States to be the GREATEST Country in the World, the people making the decisions are the most incapable. To people like me, it’s black and white.

On November 11 on the FOX morning show, you played a video of Students speaking Spanish in a video they made for school.

I found that VERY offensive.
I always see FOX report about; African Americans, Mexican Americans, Asian Americans, Indian Americans being offended by one thing or another.

So I guess I would be called a (White or Caucasian American)
But I have NEVER seen FOX report about a White or Caucasian American being offended.

You’ve done stories about White police officers ONLY ticketing Blacks, so I called in and even e-mailed FOX and gave my, Name, Drivers License #, DOB, and PLEADED FOX to PLEASE run a check on me. And if FOX did, they would have found that ALL the tickets I have been given over the last 25+ years (10 or so) were from a Black officer. So it works BOTH ways. I didn’t see a story about that.

Here are some FACTS:

I have been wondering why Whites are called racists, and no other race is.

There are African Americans, Mexican Americans, Asian Americans, Arab Americans, and Indian Americans etc.

And then there are just Americans.

You pass me on the street and sneer in my direction.
I’ve been called 'White boy,' 'Cracker,' 'Honkey,' 'Whitey,' 'Caveman' .Peckerwood, and more, and that's OK.
But if I was to call you, Nigger, Kike, Towel head, Sand-nigger, Camel Jockey, Beaner, Gook, or Chink
You call me a racist.
You say that whites commit a lot of violence against you... so why are the ghettos the most dangerous places to live?

There’s the United Negro College Fund, Martin Luther King Day, Black History Month, Cesar Chavez Day, Yom Hashoah, Ma'uled Al-Nabi to name a few.

There’s BET (Black Entertainment Television).. If we had WET (White Entertainment Television)
You call us a racist.
If we had a White Pride Day, you would call us racists.
If we had White History Month, we'd be racists.

If we had any organization for only whites to 'advance' OUR lives we'd be racists.
Do we have Organizations FORCING Hiring Managers, CEO’s or even Pro and Colleges interviewing us because were White?

There’s a Hispanic Chamber of Commerce, a Black Chamber of Commerce,
And then we just have the plain Chamber of Commerce.
Wonder who pays for that??

A white woman could not be in the Miss Black American pageant,
But any race or color can be in the Miss America pageant.
You call us a racist.

There’s a NAACP, and United Negro College fund to name a few
If we had a college fund that only gave white students scholarships...
You know we'd be racists.
There are over 60 openly proclaimed Black Colleges in the US.
Yet if there were 'White colleges' that would be a racist college.

In the Million Man March, you believed that you were marching for your race and rights.
If we marched for our race and rights,
You call us a racist.

You are proud to be black, brown, yellow and orange, and you're not afraid to announce it.
But when we announce our white pride, you call us racists.

You rob us, carjack us, and shoot at us. But, when a white police officer shoots a black gang member or,
Beats up a black drug-dealer running from the law and posing a threat to society,
You call him a racist.

I am proud...But you call me a racist.
Why is it that only whites can be racists??
I’m sure Channel 4 will not air or even acknowledge this e-mail just like Channel 4 ONLY covered the story about
White officers are targeting Black drivers.

That's why we have lost most of OUR RIGHTS in this country.
We won't stand up for ourselves!
WHY CAN”T I BE PROUD TO BE WHITE?
It's not a crime yet, but getting real close!

Thank you,

And I am 100% sure, I will not hear back from you, because you want stimulate real economic growth, COMPLETELY Rid AMERICA of Unemployment and Unemployed people, then lets take care of our own house first.

Lay-Off the Work-Visa individuals first,

Joel

So much for bipartisanship. Seems everyone wants to play the blame game. Can't we all just get along? (Somebody please call Rodney King!)

johannes

What i think to create jobs.
dont give employers a raise of money.
Instead give the more vacation time.
Build up 1 hour a week.52 hours a year.
It would create 1 extra job per 39 employers.
If you do that 2 years in a row 5% unemployment solved.everybody happy employers almost 3 weeks extra vacation time.
For company's people are more happy, more flexibility on the workfloor.We create also jobs in the travel industie because people have more payed vacation time.
You dont think this would work.
This is a plan that was interduced by the dutch goverment about 25 years ago worked in the netherland.
Maybe this will work better then create hate to eachother and blame people who cant do anything about it, if we want to come out of this cricis we need to work together on it and build to make this country better again.

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