Economy shrinks for first time in 3 1/2 years[W: 395]

a351 · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

Conservative said:
People don't spend net worth, they spend personal income.

Net worth goes up and down and the problem is the net worth hasn't recovered because of very poor leadership and economic policies.

That's correct, but a steep decline in net worth undeniably alters the spending and savings patterns of the average consumer. Think big picture here.

Leadership by it's lonesome can't resurrect structural and sectoral devastation. Housing and Financial markets have clawed back (the latter at a much quicker pace), yet still have some ground to cover before losses are fully recouped. No overnight fixes were or are available.

Donc · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

OpportunityCost said:
You ignoring his supporters in the financial district is borne of what? Partisan blindness?

Lawyers, academia, unions, the press, financial sectors, all had heavy support for Obama.

The average donation to BO's campaign was $54.94.Hardly Koch like pockets.

Conservative · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

OpportunityCost said:
And in this one, people are having assets forclosed or repossessed. Your view of things is myopic. This recession is pretty bad. Comparing it to 81-82 doesnt do anything useful or constructive, unless we learn something from it.

Obviously nothing is going to change your mind or anyone else's but the reality is leadership is what brought us out of the 81-82 recession and lack of leadership prolonged this one. It is the responsibility of a leader to work with both parties to solve the nations problems, Obama has zero leadership skills and showed thus the worst recovery on record. Reagan was a leader and the recovery speaks for itself.

Conservative · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

a351 said:
That's correct, but a steep decline in net worth undeniably alters the spending and savings patterns of the average consumer. Think big picture here.

Leadership by it's lonesome can't resurrect structural and sectoral devastation. Housing and Financial markets have clawed back (the latter at a much quicker pace), yet still have some ground to cover before losses are fully recouped. No overnight fixes were or are available.

People experience paper losses every day and net worth loss is a paper loss. Wall Street recovered quite well, main street not so well. Think big picture here, over 22 million unemployed/under employed/discouraged workers, low economic growth, almost 6 trillion added to the debt in less than 5 years, growth of the entitlement society is the big picture and is being promoted by a leftwing ideologue and all his minions.

Jetboogieman · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

Conservative said:
Think big picture here, over 22 million unemployed/under employed/discouraged workers

But it's their own fault they're unemployed.

Conservative said:
Hey, invest your own money, buy a business and you can hire all the two year unemployed deadbeats you want. Why aren't you doing that since you are such an expert on private business?

Conservative said:
If you came to me as an able body and told me you couldn't find a job in 2 years I wouldn't hire you because obviously you had no problem taking a taxpayer check vs. doing any job. I prefer hard working people than someone who can work but chooses to collect an unemployment check

Conservative said:
As for unemployment, if it takes you two years or even a year to get another job you aren't worth much at all.

Conservative · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

Jetboogieman said:
But it's their own fault they're unemployed.

2 plus years of unemployment insurance isn't incentive for anyone to find a job. Obama is creating the dependent class funded by those of us that actually pay Federal Income Taxes

Kushinator · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

Bronson said:
FDR's policies prolonged The Great Depression. So in a way, you are correct, though only to your detriment. You undermine your own argument by trying to use it as an example.

Par for the course

FDR's policies prolonged Depression by 7 years, UCLA economists calculate / UCLA Newsroom

It is not a good idea for you to post links to website explaining the results of a research paper you are incapable of both understanding and defending. Case in point, here is the actual paper:

http://www.minneapolisfed.org/research/events/2000_10-20/Cole_EquilibriumAnalysis.pdf

The main assumption from this paper will be in bold:

Our results show that New Deal policies are important for understanding the persistence
of the Great Depression. The key depressing element behind New Deal policies was not
monopoly per se, but rather linking the ability of firms to collude with paying high wages.
Our model indicates that these policies reduced consumption, and investment about 14 percent
relative to their competitive balanced growth path levels. Thus, the model accounts for
about half of the continuation of the Great Depression between 1934 and 1939.

But in reality, the assumption that these actions were contractionary results from ignoring the frictions that persisted at the time, e.g. nominal interest rates near the zero bound along with nominal wage rigitities.

As Gauti B. Eggertsson states in his 2006 follow up paper, "Was the New Deal Contractionary?",

Eggertsson said:
In this paper the social planner’s optimality condition that holds under regular circumstances fails due to a combination of sticky prices, shocks that make the natural rate of interest negative, and the zero bound on the short term interest rate (that prevents the government from accommodating the shocks by interest rate cuts). This combination changes the optimality conditions of the social planner so that, somewhat surprisingly, it becomes optimal to facilitate the monopoly pricing of firms and workers alike. This result provides a new and surprising policy prescription that has been frowned upon by economists for the past several hundred years, dating at least back to Adam Smith who famously claimed that the collusion of monopolies to prop up prices was a conspiracy against the public."

Hence the paper has been invalidated due to these authors desires to exclude important economic variables (and their data sets), namely the conditions of low nominal interest rate frictions (short term interest rates near zero) and nominal wage rigitities (sticky prices in the form of wages)....

You fail, and fail miserably.

phattonez · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

For the person who thinks that Austrians have no theory of the firm.

The Economic Theory of the Firm - Per Bylund - Mises Daily

It's really not hard to find. I don't know why you bring up these specious arguments.

Why do I bring this up? Because you always bring up this false argument when I get into a debate with you.

upsideguy · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

Conservative said:
Right just like right now when nothing is as it appears because people like you ignore reality and actual results. Wall Street is doing quite well but Main Street is suffering unless you believe high unemployment, high debt, and low economic growth is a true liberal success story and the new normal.

You are right... we still haven't dug out from the mess left by Bush.

Kushinator · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

phattonez said:
For the person who thinks that Austrians have no theory of the firm.

The Economic Theory of the Firm - Per Bylund - Mises Daily

It's really not hard to find. I don't know why you bring up these specious arguments.

Why do I bring this up? Because you always bring up this false argument when I get into a debate with you.

Did you read the article in its entirety?

The Coasean theory of the firm is without a doubt the dominant cornerstone; this is simply a matter of fact that can be supported by using a multi-school approach e.g. instutionalism, New-Keynesianism, Neo-Classical Economics, etc....

From your own source which you undoubtedly did not read close enough:

But what about the Austrian School? The answer is that we sadly do not have a theory of the firm. Mises did not theorize much on firm organizing, and Rothbard finds it sufficient to briefly discuss the natural limit to firm size due to the calculation problem in Man, Economy, and State (1962). More recently, we have seen several attempts to draft an Austrian theory of the firm, but they generally remain drafts rather than developed theories. Frederic Sautet has attempted to formulate a theory of the firm based on Kirzner's entrepreneur in An Entrepreneurial Theory of the Firm (2000), but does not make a thoroughly convincing case, and Peter Lewin has developed a Lachmann-inspired capital-based view of the firm. Similarly, Peter G. Klein has made some progress in integrating the transaction-cost approach with Austrian capital theory and Misesian entrepreneurship (see his The Capitalist and the Entrepreneur [2010] and the forthcoming Organizing Entrepreneurial Judgment: A New Approach to the Firm [2011]).

While these approaches are predominantly Austrian in both flavor and substance, they all tend to disregard the traditional, "older" view of the firm as a different type of division of labor; instead, they focus more narrowly on several distinctly Austrian insights. Furthermore, the firm tends to be analytically separated from the overall market process due to the emphasis put on its internal organization and boundaries. But should the firm be analyzed as a creature distinct from the market — or is it an integral part of the market's process and its evolution toward more extensive or intense division of labor and greatly increased prosperity?

This article makes an argument as to why the Austrian school does not need a theory of the firm, just in the same respects as it does not need to incorporate empirical methods to understand economic result. At least the author is honest in regards to the Austrian shortcomings.

Conservative · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

upsideguy said:
You are right... we still haven't dug out from the mess left by Bush.

How long do you blame your predecessor for your own failures? You liberals really need to get together and decide, did Bush or Congress under Democrat control create the mess Obama inherited or now is it the House totally responsible for the mess we have today even though Obama had two full years of Democrat control. Which is it, Congress, the President, or simply the House?

Boo Radley · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

Conservative said:
How long do you blame your predecessor for your own failures? You liberals really need to get together and decide, did Bush or Congress under Democrat control create the mess Obama inherited or now is it the House totally responsible for the mess we have today even though Obama had two full years of Democrat control. Which is it, Congress, the President, or simply the House?

Not sure what happens before one one is elected is the new person's failures.

Fenton · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

Texmex said:
Texas is alright, especially if you are in the corporate world. If you are a worker, not so much.

BTW, the main thing wrong with Texas is too many conservatives. But don't worry, after new immigration laws are passed, we will be mostly Mexican, so good bye GOP!

Lol....I've lived here my entire life and if anything with the last 10 years of massive illegal immigration of Mexicans into this State we've become more Conservative. Our State House is more Conservative than it's ever been before so so much for your simple theory. Here's a word for you....."Gerrymandering"

If your a worker in Texas and it's not "all-right" then you have only your self to blame. It's not the Conservatives fault your limited. It's not the Conservatives fault you made foolish choices in your life that have left you envious of those who earn more. It's not our fault you were not raised correctly, or feel as if your entitled to things you have not earned.

How cowardly of a position, how deprived of merit and character is it if your only option is to wash a State with law breakers with a different nationality and give them the right to vote ?

Ignorant voters is what got us into this mess.

Fenton · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

upsideguy said:
You are right... we still haven't dug out from the mess left by Bush.

Hahaha....no you guys have dug a hole more massive than ever before. It's not a character attribute to follow a bankrupt ideology to it's end if it's end is failure.

Blaming Bush really comes across as desperate and pathetic.

Kushinator · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

Conservative said:
People don't spend net worth, they spend personal income.

On the contrary, peoples consumption patterns are heavily dependent on their personal wealth.

Source

OpportunityCost · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

Whipsnade said:
The average donation to BO's campaign was $54.94.Hardly Koch like pockets.

That doesnt mean he didnt have wealthy donors.

Cite source materials please.

upsideguy · Feb 2, 2013

Re: Economy shrinks for first time in 3 1/2 years

Conservative said:
How long do you blame your predecessor for your own failures? You liberals really need to get together and decide, did Bush or Congress under Democrat control create the mess Obama inherited or now is it the House totally responsible for the mess we have today even though Obama had two full years of Democrat control. Which is it, Congress, the President, or simply the House?

There is no ambiguity at all. The policies of the Bush administration took essentially a balanced budget and turned it into substantial deficits via tax cuts, two unfunded wars (never in US history have we simultaneously started a war, much less two, and cut taxes) and significantly expanded an entitlement (Medicare Part D), again with no funding plan. This created very large deficits of the $500-700B level, which then became huge deficits when the economy cratered in 2008, taking another $400B of tax revenue and requiring a $100B in increased unemployment benefits (thus taking the $500-700B running deficit and adding $500B).

These were policies of the Bush administration set into place from 2001 to 2004 and passed by that congress. This was when good ship USA hit the iceberg and began taking in water. When the congress of 2006 was sworn in, we already had substantial water flooding the hull. When te seas got rougher in 2008 from a bad economy (the seeds of which were planted during the 10 years prior), we began to list. Sorry that the current guy hasn't fixed the problem, but he was not the guy that steered the ship into the iceberg. He has merely been trying to fix it. If it takes 50 years to fix the ship; then Bush, rightfully, gets blamed for 50 years.

I am not now, nor have I ever been, ambiguous about where the blame lies.

Donc · Feb 3, 2013

Re: Economy shrinks for first time in 3 1/2 years

OpportunityCost said:
That doesnt mean he didnt have wealthy donors.

Cite source materials please.

If you consider pacs wealthy donors; sure he had pacs but nothing that equals roves American crossroads, are the Koch brothers Americans for Prosperity, who outspent BO, s pac by an 8-to-1 margin the month before the election. The key is, it was a waste of money, might as well thru in a sewer with the candidate that the republicans fielded. Look at the candidates you had to choose from, the only one that had half a chance of winning was Jon Huntsman, he got drummed out by the clown show in January. It went downhill from there.eace

OpportunityCost · Feb 3, 2013

Re: Economy shrinks for first time in 3 1/2 years

Whipsnade said:
If you consider pacs wealthy donors; sure he had pacs but nothing that equals roves American crossroads, are the Koch brothers Americans for Prosperity, who outspent BO, s pac by an 8-to-1 margin the month before the election. The key is, it was a waste of money, might as well thru in a sewer with the candidate that the republicans fielded. Look at the candidates you had to choose from, the only one that had half a chance of winning was Jon Huntsman, he got drummed out by the clown show in January. It went downhill from there.eace

Right. Youve got rhetoric. Nothing to back it up with. Hows the kool aid?

a351 · Feb 3, 2013

Re: Economy shrinks for first time in 3 1/2 years

Conservative said:
People experience paper losses every day and net worth loss is a paper loss. Wall Street recovered quite well, main street not so well.

Certainly not of similar magnitude. Also, this paper loss you speak of so casually quite obviously affects the every day habits of your average Joe. The easiest example would be the decimation of retirement designated funds that pushed many back into the labor force long past an optimal age, or invariably towards higher risk investments during a period customarily predestined for low to no risk, nest egg maintaining investments.

Napoleon · Feb 3, 2013

Re: Economy shrinks for first time in 3 1/2 years

Conservative said:
How long do you blame your predecessor for your own failures? You liberals really need to get together and decide, did Bush or Congress under Democrat control create the mess Obama inherited or now is it the House totally responsible for the mess we have today even though Obama had two full years of Democrat control. Which is it, Congress, the President, or simply the House?

Why do Republicans insist that the so-called "free market" requires government intervention to fail?

Danbury · Feb 3, 2013

Re: Economy shrinks for first time in 3 1/2 years

Conservative said:
How long do you blame your predecessor for your own failures? You liberals really need to get together and decide, did Bush or Congress under Democrat control create the mess Obama inherited or now is it the House totally responsible for the mess we have today even though Obama had two full years of Democrat control. Which is it, Congress, the President, or simply the House?

Wait a second. On the one hand, you lash out at "liberals" for blaming a predecessor too long, but then you go on to blame the preceding government balance, ie: two years of Democratic control. Now remember, when it is noted that the economy collapsed before Obama became president, the conservative reply is always that "Democrats had taken control of congress in 2007." So not only do conservatives try to blame Democrats by mere existence (unable to say WHAT they did in less than a year to CAUSE a near second Depression), but when it is also noted that the DOW hit a record 14,000 in 2007, credit is NOT given to the new majority. (Btw, the DOW hit 14,000 the other day, same day it was reported that the economy shrank by .1%, so your trickle-down economics are alive and well, so why complain?). Seems to me you're caught up in a "blame game" yourself rather than considering the POLICIES that cause negative or positive effects.

Economy shrinks for first time in 3 1/2 years[W: 395]

a351

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Economy shrinks for first time in 3 1/2 years[W: 395]

#NeverTrump

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I'm not-low all the time

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I'm not-low all the time

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Pragmatic Idealist

#NeverTrump

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