CEOs less willing to hire, sales a worry

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CEOs less willing to hire, sales a worry

 (Reuters) - U.S. chief executive officers' view of the economy darkened in the third quarter, with top executives saying they were less willing to hire new workers as they fear sales growth will slow.

www.reuters.com/article/idUSTRE68R2Y620100928

AKA Aggregate Demand is falling and efforts should be made to boost it.

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You think a President and the Government shouldn't keep an optimistic outlook? Do you have any idea how much further confidence would go down the drain and worse off we'd all be if we had the President, Fed Chairman, etc. telling people that the economy was going down the drain?

They're doing their job.. incorrect or not.

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CEOs less willing to hire, sales a worry

 (Reuters) - U.S. chief executive officers' view of the economy darkened in the third quarter, with top executives saying they were less willing to hire new workers as they fear sales growth will slow.

www.reuters.com/article/idUSTRE68R2Y620100928

AKA Aggregate Demand is falling and efforts should be made to boost it.

What is your suggestion?

Right now?

The recession we're experiencing is the result of a demand for safe and high-quality assets. Have the government buy up risky assets, like the Fed is currently engaged in to an extent, so that people have more safe assets to park their cash in. Essentially an all out expansionary policy that has the effect of 1) Reducing the demand for such high quality assets and 2) Increases the supply of high quality assets for investors safely park cash in. The Fed must also be careful, however, to make the original investors and financiers who parked their cash in the not-actually-safe "safe" assets do not profit from the government underwriting their bad investments (otherwise the next downturn will be spectacularly worse than the first)

Economics is reduced from "science" (the quotes are to appease skeptics of this status) to art in the current downturn.

The other problem is how carefully governments have to tread when engaged in this policy to make sure confidence in the governments backing of these assets doesn't waver. If investor confidence in the governments ability to meet its obligations (essentially if the ratings agencies unleashed hell on the US and downgraded us threefold) then the government guarantees of these assets will be useless and actually worse the problem. We've seen this broad collapse of confidence before in Greece.

So in essence; spend and spend freely, but at a penalty rate so that speculators don't profit from parking their money in non-safe assets (You can see where the Fed has failed at this strategy).

Its not a pretty situation nor an orthodox Keynesian, Monetarist, or "Classical" recession. Its both a supply and demand side problem at the same time.

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Sorry, but I think that the President and other parts of the government, including the Fed Chairman should tell us the truth, rather than feeding us optimistic nonsense.

C'mon CARL, all Fed Chairmen are cautious with their words and error on the side of optimism......one gloom and doom sentence from a Fed Chairman and markets worldwide could plunge.

And Presidents?  LMFAO........every one of them feed us optimistic nonsense.

Look, happy talk just doesn't work.

Ford tried it, Carter tried it, Bush I tried it, and it all failed.

While you may prefer "optimistic nonsense," I would prefer the truth.

One word of truth from the Chairman of the Fed and Markets would, indeed, plunge. You would prefer the truth I'm sure, but your not Wall Street who really can't hear the truth (that our situation is awful and we could be facing a Lost Decade).

It may not be ethical but its necessary to keep peoples rather shakey faith in the Market intact. If Bernanke was to suddenly say "We're in a liquidity trap, there's nothing we can do with monetary policy, good luck!" the results would be horrific.

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Guys, its very simple.

When government officials make overly optimistic projections on the economy, they end up losing credibility.

Theirs a big difference between losing credibility and actively telling people they're doomed/good luck with it. Governments can lose credibility but the second they tell the truth to Wall Street things only get worse.

There is, also, a difference between admitting theirs a serious economic problem and actively encouraging the economic downturn with the full blunt of the bad news.

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You continue to misrepresent my point.

I am not urging government officials to tell people "they're doomed/good  luck with it," as you suggest, but rather they admit there is a serious economic problem, and propose reasonable measures to deal with it.

Some reasonable measures have been proposed (and enacted) since the stimulus. What would you propose?

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Fair enough. 

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Not really, he said the situation and outlook were quite poor not "we're screwed good luck with it".

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Not really, he said the situation and outlook were quite poor not "we're screwed good luck with it".

I was referring to the last part of that sentence of CARL's -  but rather they admit there is a serious economic problem, and propose reasonable measures to deal with it.

My mistake. You bolded the whole thing so I didn't know for sure..

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I should know better than to engage here, but....

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Since he started he's proposed a stimulus, increased availability of small business loans (via the SBA), an infrastructure spending bank, and continued tax breaks (albeit only for the middle and working class). Now to me he should have done a lot more when he had a chance, but he's proposed a few "reasonable measures" at the least.

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Without harping on the meme, what would a genuine stimulus package have looked like to you?

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Your right that's not fair. He should mix taking responsibility for his own actions and failures with demonizing Alan Greenspan.