Some Fear Recession is Now Unstoppable

[Frodo]

Some Fear Economic Stimulus Is Already Too Late

By PETER S. GOODMAN and FLOYD NORRIS
Published: January 13, 2008

As leaders in Washington turn their attention to efforts to avert a looming downturn, many economists suggest that it may already be too late to change the course of the economy over the first half of the year, if not longer.

With a wave of negative signs gathering force, economists, policy makers and investors are debating just how much the economy could be damaged in 2008. Huge and complex, the American economy has in recent years been aided by a global web of finance so elaborate that no one seems capable of fully comprehending it. That makes it all but impossible to predict how much the economy can be expected to fall before it stabilizes.

The answer could be a defining factor in the outcome of the fiercely contested presidential election. Not long ago, the race centered on the war in Iraq.

But now, as candidates fan out across the country, visiting places as varied as the factory towns of Michigan and streets lined with unsold condominiums in Las Vegas, voters are increasingly demanding that they focus on the best way to keep the economy from slipping off the tracks.

The measures now being debated in Washington and on the campaign trail — tax rebates, added help for the unemployed and those facing sharply higher heating bills and, most immediately, a move by the Federal Reserve to further cut interest rates — could certainly moderate the severity of a downturn. Democrats and the Bush administration are considering a package of such measures that could reach $100 billion.

But the forces menacing the economy, like the unraveling of the real estate market and high oil prices, are too entrenched to be swiftly dispatched by government largesse or cheaper credit, some economists say.

“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.”

In the view of many analysts, the economy is now in a downward spiral, with each piece of negative news setting off the next. Falling housing prices have eroded the ability of homeowners to borrow against their property, threatening their ability to spend freely. Concerns about tightening consumer spending have prompted businesses to slow hiring, limiting wage increases and in turn applying the brakes anew to consumer spending.

[Verily]

Well, the economists are right; this is an economic morass that has been brewing for at least half a decade, though there have been opportunities to stop it in the past (such as banning the most extreme forms of sub-prime loans, though of course doing so would have required great prescience).

I am still of the opinion that the best solution is the hard one: weather the storm with high interest rates and tight credit. Loosening the strings will only postpone a similar, and perhaps more devastating, collapse.

[Frodo]

We could be seeing a situation (once it fully unfolds) similar to that of the late 1970s to the early '80s, though this time supply-side economics (i.e. Reaganomics) could be the main casualty once we emerge out of this recession. 

[Verily]

We could be seeing a situation (once it fully unfolds) similar to that of the late 1970s to the early '80s, though this time supply-side economics (i.e. Reaganomics) could be the main casualty once we emerge out of this recession. 

Supply-side economics has always rested on shaky logical grounds; it assumes that, if product is put out there, people will buy it, no matter how great the glut of product. This was problematic even when the United States was a self-sufficient economy (exporting more than it imported) as it encouraged short-term consumption at the expense of investment in future benefits, but it has become even more problematic today as the short-term consumption is, to a great extent, not even benefiting American producers (the very assumption supply-side economics rested upon).

[I spent the winter writing songs about getting better]

This is another reason why I'm not planning on getting a great post-college job anytime soon. Luckily Minnesota shouldn't be as hard hit as places like California and other housing bubble markets. I'm wondering if moving to California now is even possible (not that I was ever interested in doing so)

[Verily]

This is another reason why I'm not planning on getting a great post-college job anytime soon. Luckily Minnesota shouldn't be as hard hit as places like California and other housing bubble markets. I'm wondering if moving to California now is even possible (not that I was ever interested in doing so)

It's much easier to move to California now, actually. Houses are about half the price they were two years ago.

[bullmoose88]

As much as I feel like a recession is going to hit sooner rather than later, you still need two consecutive quarters of negative growth...we haven't had a negative quarter in this cycle (since the tech burst-9/11-Enron-collapse period)...sure the rate of growth (err...second derivative if my math lingo serves right) might be negative, but we're growing...


...for now.

[Speed of Sound]

Its too late....crap. Still, we must do all we can to reduce the time of barbarism recession.

[The Mikado]

Its too late....crap. Still, we must do all we can to reduce the time of barbarism recession.

So if my adopted city of DC  is Trantor (or is Trantor NYC?) what is Terminus?

[Speed of Sound]

Its too late....crap. Still, we must do all we can to reduce the time of barbarism recession.

So if my adopted city of DC  is Trantor (or is Trantor NYC?) what is Terminus?

Hmmmm....its...ummmm.........Pierre...? Expect most of Montana to break away and form kingdoms any time now.

[Lief 🗽]

Seeing as a lot of a recession is psychological, and we have news articles touting the highly regard opinions of "some", we're having a recession.

On the one hand, I hope it's not that bad, but on the other, it's happening during an election year, and the worse it is, the better the Democrat will do.

[Gabu]

Seeing as a lot of a recession is psychological, and we have news articles touting the highly regard opinions of "some", we're having a recession.

This is kinda what I was going to say.  I always find this whole thing kinda funny, because it always seems to be the case that absolutely everything is economics is a self-fulfilling prophecy: the general public thinks it will happen so it does.

[Ban my account ffs!]

I'm surprised Lou Dobbs hasn't started into his normal tirade of:

"The pundits and savants and gurus and gurus and pundits and savants, savants guru pundit guru savant guru guru savant.. kick in the face... I have horse teeth guru savant savant pundit guru wrong wrong savant guru."

[Verily]

I'm surprised Lou Dobbs hasn't started into his normal tirade of:

"The pundits and savants and gurus and gurus and pundits and savants, savants guru pundit guru savant guru guru savant.. kick in the face... I have horse teeth guru savant savant pundit guru wrong wrong savant guru."

You're forgetting "immigrants immigrants immigrants immigrants".

[bullmoose88]

I'm surprised Lou Dobbs hasn't started into his normal tirade of:

"The pundits and savants and gurus and gurus and pundits and savants, savants guru pundit guru savant guru guru savant.. kick in the face... I have horse teeth guru savant savant pundit guru wrong wrong savant guru."

You're forgetting "immigrants immigrants immigrants immigrants".

No mention of "China China China...Mexico?"

[Person Man]

Can we blame the recession on Bush?

[Ban my account ffs!]

The government is the only entity that can have a direct impact on the economy.  Bush and his status-quo, pad-the-pockets-of-the-rich, deficit spending style has certainly led to a negative outlook by the people, which could be making the economy worse than it could be.

I also blame the current congress for doing nothing and not standing up to Bush.

[Verily]

Can we blame the recession on Bush?

You could. Of course, you could also blame it on any President since and including Reagan, or all of them together.

[Person Man]

It was a joke. Sorta. We could blame Clinton as well.

[opebo]

This is another reason why I'm not planning on getting a great post-college job anytime soon. Luckily Minnesota shouldn't be as hard hit as places like California and other housing bubble markets. I'm wondering if moving to California now is even possible (not that I was ever interested in doing so)

It's much easier to move to California now, actually. Houses are about half the price they were two years ago.

Still far beyond the ability of ordinary workers to buy.

[??????????]

The Economists and Analysts need to find something else to call their professions. This recession has been in full gear (at least here) since mid-summer of '06. The very sluggish holiday sales back up that belief.

[bullmoose88]

The Economists and Analysts need to find something else to call their professions. This recession has been in full gear (at least here) since mid-summer of '06. The very sluggish holiday sales back up that belief.

Perhaps, but the economy still grew...albeit at a slower rate than before...so that's when the slowdown began...a recession both by the word and its definition deals with negative growth...which hasn't come for the whole economy...yet.

[Person Man]

The Economists and Analysts need to find something else to call their professions. This recession has been in full gear (at least here) since mid-summer of '06. The very sluggish holiday sales back up that belief.

Perhaps, but the economy still grew...albeit at a slower rate than before...so that's when the slowdown began...a recession both by the word and its definition deals with negative growth...which hasn't come for the whole economy...yet.

The slowdown has come, since July of 2007, nationally. Predict the reccession will be here by Christmas of 2008.

[??????????]

The Economists and Analysts need to find something else to call their professions. This recession has been in full gear (at least here) since mid-summer of '06. The very sluggish holiday sales back up that belief.

Perhaps, but the economy still grew...albeit at a slower rate than before...so that's when the slowdown began...a recession both by the word and its definition deals with negative growth...which hasn't come for the whole economy...yet.

The slowdown has come, since July of 2007, nationally. Predict the reccession will be here by Christmas of 2008.

It's already been here...Christmas '08 will likely be far far worse then '07.