Are we headed toward a depression?

[opebo]

Or just have the managers of private business increase wages. No need for government prescription at all.

Why would they do that?

[Storebought]

At some point, 'you get what you pay for.' Peanut wages attract employees just capable of tying their shoe laces, whether here in the US, or in the EU, or India.

[minionofmidas]

The average person in poverty today lives a lifestyle comparable to that of the average family in the 1970s. 

What absolute nonsense.

Well, it is comparable: "Different in almost any respect. In some respects, arguably better - not that that changes anything".

[CARLHAYDEN]

My comment had nothing to do with a critique of laissez-faire economics. Far from it.

You're arguments about the people having to endure 'a rough couple of months' ... for the sake of the greater good ... in the long term ... has been used by practically every Socialist in the 20th century. Hugo Chavez is making that argument in Venezuela as I'm typing this. I'd be damned if I see an economic rightist legitimize that specious type of argument here.

I will agree that legislative "fixing" is a deep problem (I thought Sarbanes-Oxley put an end to all of this /sarcasm). But it requires a special type of obstinance not to recognize that something within our capitalist economy is not working, and that the failure of private business to recitfy it will only mean that, eventually, the people will vote themselves an alternative that neither of us would like.

I think there's a communication gap.  I'm not talking about Americans sacrificing their financial security for the sake of the country or the wealthy.  What I want is to allow the economy, their economy, to correct itself right now so they don't have to foot the bill time and again in the future.  It's a big stretch to claim that what I'm proposing is the same as what Chavez is doing.  He's shoving the government into the economy for his own good, I want to pull it out for everyone's good.  It's not like I'm suggesting that we force anything on anyone, I'm suggesting we stop forcing things on them.

A couple of questions for you Fezzy:

1.)  Surely you're not alledging that all financial institutions are in bad shape, or are you?

2.)  Should businesses that screw up be allowed to fail?

Please, you sound like a liberal who wants inflict massive government on people "for everyone's good."

[J. J.]

A while back, I said:

I think if Obama wins, he's better turn to Michelle and quote Mdme. de Pompadour:

After us, the deluge.

I'm not entirely convinced that Cindy McCain could not say the same thing.

I don't think this will be the great depression, but we are going to have a great change in liquidity.

[opebo]

The average person in poverty today lives a lifestyle comparable to that of the average family in the 1970s. 

What absolute nonsense.

Well, it is comparable: "Different in almost any respect. In some respects, arguably better - not that that changes anything".

I think what is clear is that the condition of the working class is considerably worse nowadays than in the 1970s.

[opebo]

Owning that cheap junk described in your previous post has nothing to do with poverty or lack of poverty, fezzy.

[Sam Spade]

No.  But don't expect things to be rosy (or even pinkish) for quite a while.

All in all, it's good for this young generation (thinking under 25 or so) to experience such a thing.  They've had it quite too easy.

Even some people my age and slightly older who didn't live through the late 70s or early 80s (or remember it) never went through bad times.  It's good for them too.

The only reason why I know I'm different is because Houston in the mid 1980s to the early 1990s was in as bad of shape as the rest of the country was during the late 70s or early 80s.

[Torie]

No.  But don't expect things to be rosy (or even pinkish) for quite a while.

All in all, it's good for this young generation (thinking under 25 or so) to experience such a thing.  They've had it quite too easy.

Even some people my age and slightly older who didn't live through the late 70s or early 80s (or remember it) never went through bad times.  It's good for them too.

The only reason why I know I'm different is because Houston in the mid 1980s to the early 1990s was in as bad of shape as the rest of the country was during the late 70s or early 80s.

Actually, it is good for the young because assets will be cheaper to buy, both real estate and securities. The real expected return for equities is higher than it was 3 years ago, and certainly 8 years ago.

[minionofmidas]

Wow, that's a damn low cell phone figure. Please tell me that's way out of date. As to a tv set... yeah, I don't think you can describe em better than as Opebo has done. The things are too cheap to repair by now. (Much to the chagrin of people who know how to.) And just try living without a fridge.
No, actually, it's possible. Most Indians do. But not if you want to cook decent meals in your own home at affordable prices in a western country and don't have your own vegetable garden.

[they don't love you like i love you]

That explains a lot. Especially the homeownership numbers.

[minionofmidas]

That explains a lot. Especially the homeownership numbers.

Most rural poor in areas with stagnating population will own their homes as a matter of course.

[opebo]

All in all, it's good for this young generation (thinking under 25 or so) to experience such a thing.  They've had it quite too easy.

Oh now tha's funny.  Perhaps the upper-middle class you see on this board have had it fairly 'easy', SS, but the great majority of young people have had a very grim, tight, low-income, and debt-ridden existence.

[minionofmidas]

All in all, it's good for this young generation (thinking under 25 or so) to experience such a thing.  They've had it quite too easy.

Oh now tha's funny.  Perhaps the upper-middle class you see on this board have had it fairly 'easy', SS, but the great majority of young people have had a very grim, tight, low-income, and debt-ridden existence.

Either tight or debt-ridden, outside the inner cities. Tight in my case.

[opebo]

That explains a lot. Especially the homeownership numbers.

Most rural poor in areas with stagnating population will own their homes as a matter of course.

And the value of such homes has been declining in real terms for many years, not just during the recent economic collapse.

[opebo]

Either tight or debt-ridden, outside the inner cities. Tight in my case.

No it is certainly possible to be both, and I think it is commonplace.

[minionofmidas]

That explains a lot. Especially the homeownership numbers.

Most rural poor in areas with stagnating population will own their homes as a matter of course.

And the value of such homes has been declining in real terms for many years, not just during the recent economic collapse.

Well the value of such homes always declines in real terms, as the funds for keeping them in good shape aren't going to be available (or are going to be spent on fezzy's dishwashers and dvd's instead.)

[Sam Spade]

No.  But don't expect things to be rosy (or even pinkish) for quite a while.

All in all, it's good for this young generation (thinking under 25 or so) to experience such a thing.  They've had it quite too easy.

Even some people my age and slightly older who didn't live through the late 70s or early 80s (or remember it) never went through bad times.  It's good for them too.

The only reason why I know I'm different is because Houston in the mid 1980s to the early 1990s was in as bad of shape as the rest of the country was during the late 70s or early 80s.

Actually, it is good for the young because assets will be cheaper to buy, both real estate and securities. The real expected return for equities is higher than it was 3 years ago, and certainly 8 years ago.

That too.  I just don't like the attitude of most kids today - they feel as if they deserve everything when they can't have it all for nothing.

[Tetro Kornbluth]

No.  But don't expect things to be rosy (or even pinkish) for quite a while.

All in all, it's good for this young generation (thinking under 25 or so) to experience such a thing.  They've had it quite too easy.

Even some people my age and slightly older who didn't live through the late 70s or early 80s (or remember it) never went through bad times.  It's good for them too.

The only reason why I know I'm different is because Houston in the mid 1980s to the early 1990s was in as bad of shape as the rest of the country was during the late 70s or early 80s.

Actually, it is good for the young because assets will be cheaper to buy, both real estate and securities. The real expected return for equities is higher than it was 3 years ago, and certainly 8 years ago.

That too.  I just don't like the attitude of most kids today - they feel as if they deserve everything when they can't have it all for nothing.

For once, Me and Sam Spade are in complete agreement (even if we are, effectively, taking about two places divided by the Atlantic Ocean.)

As for whether we are heading for a depression like the 30s or not, the answer is of course not, nothing ever happens the way the TV pretends it should.

[CARLHAYDEN]

A couple of questions for you Fezzy:

1.)  Surely you're not alledging that all financial institutions are in bad shape, or are you?

2.)  Should businesses that screw up be allowed to fail?

Please, you sound like a liberal who wants inflict massive government on people "for everyone's good."

I really can't comprehend how my statements could be construed as socialist, but evidently using the words "for everyone's good" was a poor word choice.  By that I meant that it is for the better of the economy, which is in everyone's interest.

Specifically:
1. I am saying they are in bad shape as a whole because of their recent comfort embracing the spend, spend, spend habits of the federal government and American people.  They all need to take a big step backwards and resecure their assets and restore confidence in sources of liquidity.

2. If a business is headed for failure, they should not be protected from the wolves.  Let their competitors in to rip them apart and force them into either oblivion or more careful business policies.  With the government's stagnation, we are seeing a very interesting thing happen in the economy; It's taking care of itself.  Companies are buying each other, helping each other, tripping each other, everything.  The less the government says and does, the better.  Right now no one in the government or the media has anything to say and the market is going back up.  The market crashed yesterday because the government promised $700 billion in extra liquidity that never showed up.  Without that promise, it wouldn't have crashed.

My first point was that not all financial instutions are in poor shape, which you seem to have acknowledged in your response 2.

So, the idea that we can "blame society," for poor decisions by individual businesses is merely a poor way of evading responsibility.

You are absolutely correct that the government leave the situation alone.  Their intervention is like a "physician" of three hundred years ago who would "bleed" patients as part of their "treatment." 

[True Federalist (진정한 연방 주의자)]

It's definitely too late to stop there being a recession and the only definition of the difference between recession and depression that I've heard and agree with fully is Harry S. Truman's: "It's a recession when your neighbor loses his job; it's a depression when you lose yours."

That said, I don't think that a depression is inevitable.  I'm not so certain that the bailout is the correct medicine to avoid it.  What we need to do is bust up the CDOs into their component underlying securities and ban any further CDOs.  The financial industry has shown that it cannot be trusted with them.  Problem is, I can't see any constitutional way to bust up the CDOs unless they already have some provision allowing that to happen.  The closest would be to stretch eminent domain in some ways I really don't want it stretched to have the government force all of the CDO bond holders to sell them to the government (which to keep the cost to the taxpayers down, would pay them with the underlying securities themselves.)

Breakup the CDOs so that the assets within them can be priced and the current liquidity problem would be solved.

[CARLHAYDEN]

Oh, and contrary to the "chicken littles," the sky isn't falling:

U.S. stocks bounce back after Monday's plunge
Indexes positioned for steep declines in crisis-riddled month of September
By Kate Gibson, MarketWatch

Last update: 4:35 p.m. EDT Sept. 30, 2008Comments: 1694NEW YORK (MarketWatch) -- U.S. stock indexes on Tuesday blasted back from the prior session's historic rout, with the Dow Jones Industrial Average chalking up its third-biggest point gain on optimism that a rescue plan would make a comeback in coming days on Capitol Hill.
"Maybe the sky isn't falling," said Frederic Ruffy, options strategist at WhatsTrading.com.