Talk Elections

http://money.cnn.com/2012/02/24/news/economy/double_dip_recession/index.htm?iid=HP_LN (http://money.cnn.com/2012/02/24/news/economy/double_dip_recession/index.htm?iid=HP_LN)

---

those who know my history on this forum know I've been a follower of this firm for well over 10 years...it's going to be very interesting to me to see if ECRI retains their unmatched record for calling turns of the business cycle.

In September 2011, they predicted a new US Recession, starting sometime between 2011Q4 and 2012Q2...

their director made the TV rounds today, you can follow some of their arguments using the following video links:

Velocity of money dropping
http://www.businesscycle.com/news_events/news_details/5051

US Growth slowing, not picking up
http://www.businesscycle.com/news_events/news_details/5049

US Growth at 21 month low
http://www.businesscycle.com/news_events/news_details/5047

Velocity of Money...

help me find some charts showing velocity of money

http://www.crystalbull.com/stock-market-timing/Velocity-Of-Money-chart/M1/ (http://www.crystalbull.com/stock-market-timing/Velocity-Of-Money-chart/M1/)

couple of more charts showing velocity of money:

M1 velocity
http://ycharts.com/indicators/velocity_of_m1_money_stock

M2 velocity
http://ycharts.com/indicators/velocity_of_m2_money_stock

This chart is hardly a homerun for the case that M1 velocity is a leading indicator of recessions.

you missed their point:  velocity has fallen off a cliff, and the only thing holding the house of cards up is massive money pumping by the Fed.

Is there any reason to think the Fed can't continue to pump?  Or perhaps even increase the rate of pumping?

It's funny how Politico Wonkish and other conservatives are arguing how QE was going to cause the velocity of money to explode and lead to hyperinflation. The Fed hasn't done that much pumping since June 2011. A $100 billion increase in the monetary base since then, which is very small for the size of the economy, almost all of which happened in the latest week.

I hadn't realized how far it sagged last year.

()

And it also shows in the MZM velocity (without time deposits but with all money market funds.

()

I'll believe a recession is around the corner (or quarter, if you will) when the S&P 500 starts a downward trajectory. Obviously there is going to be a shakeup once the proverbial **** hits the fan in Europe, but who really knows what it is going to happen? Regardless of whether or not a recession happens this year, it is hard to see the price of gas coming down at any point this year given the messy situation in Iran (unless, of course, the EU meltdown causes a September 2008-style panic). In any case, I would prefer to be involved with Romney's campaign than Obama's campaign. Given the state of America, both socially and especially economically, I am 90% sure that Romney is going to be the 45th President of the United States of America.

Keep in mind that the velocity of money is just a quotient (money stock measure / high powered money = velocity measure). If you increase the divisor (as the Fed did) then naturally the quotient will fall, otherwise you would see the money stock explode. Overall M2 is still rising rapidly:

()

As you may recall, I predicted a double dip recession.

Inasmuch as the response to the first dip was like  that of a drunk who tries to 'cure' a hano-over with another bout of boozing, the result of the next dip will be even worse.

So you expect the GOP controlled House to help supply the booze?  Because no matter what happens to the economy between now and November, I will be extremely surprised if the GOP loses control of the House in November.  The GOP will probably gain the Senate, and hopefully the White House.  If we're extremely lucky, the Senate will ditch the filibuster and we can finally have a responsible government again. (Responsible in the sense they will be unable to say, we could have done better, but the other party was able to block us, so the responsibility for what happens will entirely theirs.)

Thank you for correcting this. The most I ever implied could happen would be a return of double-digit inflation similar to what we saw in the late 1970s. This could still happen down the road, obviously, but I would not bet on it anytime soon.

First, the House Republican leader has consistently surrendered to the Democrats, and been able to drag along enough Republican votes to keep up the massive spending.  So unlike a bartender obey the dram shop laws, the House Republican leaders (and his supporters) keep pouring the booze for the drunks.  Really unsuprising.

Second, yes, I realize YOU are opposed to minority rights and want a runaway goverment, and therefor oppose the filibuster.  

You're worried that with a Republican House, Senate, and White House that we'll get a runaway government unless the Democrats can filibuster?  And I thought I was cynical.

Try looking at what has actually happened.

http://geekpolitics.com/obama-on-raising-the-debt-ceiling/

Yes, both parties play shameless politics with the debt-ceiling when out of power because they count on the other side being sane.

The filibuster is another tool that an be used to let parties have their cake and eat it too.  They can promote policies that anyone who takes a serious look at them knows would be awful if implemented, but which nonetheless are popular.  The filibuster lets them gain the credit for doing the people's will while not ending up being blamed for the disaster that would have resulted if implemented.

Get rid of the filibuster and politicians would actually have to govern instead of merely pander for votes because if they promote a bad policy, it would get passed, and they would get blamed for the results.  Might be painful in the short term until the politicians learn that, but a little pain to get some adults in government instead of the immature brats we have now would be a good thing.

Wrong again!!!

To you, the only "sane" position is to keep increasing federal government spending!  

Yep, you want big government to rule over us with an iron hand, untrammeled by rules and procedures.

You might consider watching the original verison of A Man for All Seasons.  There is a scene in there where Thomas More's son in law advocates throwing out legal procedures.  More explains the problem with such an approach to him.  But then, you probably wouldn't understand...

However, here's the exchange:

William Roper: So, now you give the Devil the benefit of law!
Sir Thomas More: Yes! What would you do? Cut a great road through the law to get after the Devil?
William Roper: Yes, I'd cut down every law in England to do that!
Sir Thomas More: Oh? And when the last law was down, and the Devil turned 'round on you, where would you hide, Roper, the laws all being flat? This country is planted thick with laws, from coast to coast, Man's laws, not God's! And if you cut them down, and you're just the man to do it, do you really think you could stand upright in the winds that would blow then? Yes, I'd give the Devil benefit of law, for my own safety's sake!

http://www.imdb.com/title/tt0060665/quotes

Finally, you really shouldn't talk about "immature brats," considering your fit throwing.

I won't bother to list again the specific areas where I favor large cuts in major government programs, because it is clear you either don't believe me, or cannot remember them.

The minutia of rules and procedures more often serve the purposes of big government than the reverse.

Except I'm not advocating removing all the laws.  Just the antidemocratic ones such as the filibuster.

As long we're tossing quotes, let give you this one from Tolkien:
So go ahead and place your faith in gates. I'll place my faith in men.  No rules will defend liberty if the voters do not act to defend it.

Thanks, I needed the laugh.

Well, lets get down to specifics.

First, I do NOT believe you favor "large cuts in major government programs" in the aggregate.  Yes, I know you hate national defense and agriculture, but have opposed cuts in the aggregate, and especially in left-wing programs.

Second, you never stop making false and irrational assertions like "The minutia of rules and procedures more often serve the purposes of big government than the reverse."  Are you next going to assert the world is flat?

Third, I realize that this may be news to you, but, Sir Thomas More was a real person, and the play and movie is factually based, unlike you Imrail.  Now I realize YOU believe in fiction rather than facts.

Fourth, we are in total disagreement in your desire to remove "antidemocratic" laws.  The Constitution of the United States is replete with what you would call "antidemocratic" laws, like the requirement of a supermajority of the States to amend the Constitution.

Specifics please?

I've called for increases in the age of eligibility for both Social Security and Medicare to age 70, as well as changing the inflation index that is used to calculate the COLA to one that historically has given a lower figure.


If you think the quotes in that play are direct quotes and not words put into the character's mouths by a scriptwriter ...

As for Imrahil? (I presume that is who you meant by Imrail.)  You seem to have confused me with someone who gets upset by being called by another name.


For someone who claims to revere the Constitution, you seem to have a low regard for the Constitutional requirement that a simple majority is sufficient to conduct ordinary business in the Senate.

Well, lets see.

First, you vaguely state that you support "...increases in the age of eligibility for both Social Security and Medicare to age 70, as well as changing the inflation index that is used to calculate the COLA to one that historically has given a lower figure...." but do NOT deny that you favor increases in federal spending in the aggregate!

Second, the quotes in the play do reflect a number of statements made by Sir Thomas More.  You do not deny that they reflect the statements of More!

Third, I note that you do NOT deny the point I made about the amendment process to the Constitution of the United States.  Could it be that you were unable to comprehend it?  If so, I will spell it out: a simple majority in Congress cannot change the Constitution, and statutes passed in violation of the Constitution are null and void!

Even though it would impossible without massive increases elsewhere in the budget to overwhelm the cuts I have favored, since you are determined to pick a fight, I'll address your childish assertion directly.  I do not favor increases in aggregate federal spending on a constant dollar per capita basis over the long-term.  Indeed, I favor decreases, since that is the only way we can get the budget under control without increasing taxes to economically damaging levels, which I don't favor either.

And before you pounce on the above to launch a new diatribe by claiming "economically damaging levels" are weasel words, I do favor a modest increase in tax revenues by eliminating loopholes, and if enough loopholes can be cut, pairing that with a reduction in nominal rates.  Any new taxes, such as a carbon tax needs to be paired with offsetting cuts in other taxes, with capital gains being my preferred tax to reduce or even eliminate

Capital gains taxes have a multi-year recordkeeping burden I find objectionable which is my primary reason for opposing them.  That's why I'd prefer that if capital gains taxes are merely cut instead of eliminated, that instead of a simple reduction in the tax rate for all capital gains, that capital gains be eliminated for very long term capital gains.  For example, reduce the rate to 10% for capital gains on assets held five years, 5% for those held ten years, and 0% for those held twenty years, but leave the taxes as they are for assets held less than five years.  Of course, if capital gains taxes are to be eliminated, we'll need to raise other taxes to offset the lost revenue.


They reflect to some degree his recorded opinion, but since I've never studied his life I can't be certain of the degree to which they do.  In any case, he's a dead 16th century Englishman, who lived in a time when the political concerns of the day were much different than our own.  There is no particular reason to hold that his opinion is the final word in political discourse and every reason to hold that were he alive today he would likely form completely different opinions for the different situation he found himself in.


I comprehended it fine.  But it doesn't require passing a Constitutional amendment to change the tax code or pass a budget, nor should it.  The supermajority provisions you are fond of do not apply to the business of passing ordinary legislation, and with good reason.

There are no supermajority requirement  in the Constitution for legislation relating to the public fisc.  The Senate filibuster in not in the Constitution, but is a Senate rule that has outlived its usefulness because of overuse and abuse.

Well, let's go through you assertions one at a time.

First, of course, to you, any disagreement from a consecative is ipso facto "childish."

Second, lets examine your disingenous statement about aggregate spending "over the long term."  John Maynard Keynes, when it was pointed out that the polcies he advocated would destroy the economy "over the long term," responded that 'over the long term, we're all dead.'  So, just how long is the "long term" you talk about?  Decades?  Centuries? 

Third, yes I know that you are enamored with more and higher taxes.  For you a day with out more taxes is "economically damaging" since you believe in more and more taxes as a goal in and of themselves.

Fourth, thank you for adding the "carbon tax" as another example of you desire for more and higher taxes.

Fifth, I am not surprised that you have not studied the works of Sir Thomas More.

While I do find most of your arguments to be childish, I consider you to be not a typical conservative, but a romantic reactionary who wishes to return us to a past that never was.


I should have know better than to preempt your fault-finding, since you consistently act to find fault with anyone who doesn't accept your narrow view of the world.

By "long-term"  I meant "on average without being so bound to dogma that for example, when the economy goes bad and previously agreed to counter-cyclical spending kicks in, there's no requirement to cut spending elsewhere to fund what the unemployment insurance fund was established to take care of in the first place.  (Note that I am not referring to the extensions in unemployment insurance that were put in place after the fact.  Those should have been offset elsewhere in the budget, not simply added to the Federal debt.)


Yawn.  Your repeated screeching of this untruth is not worth rebutting yet again.


Only someone either deficient in reading ability or with no regard for the truth could possibly twist "Any new taxes, such as a carbon tax, need to be paired with offsetting cuts in other taxes," into a desire for higher taxes.  That statement expressed a desire for shifting the basis of taxation to a different source, not a desire for increasing the total tax burden.

Well, lets see,

First, of course YOU consider any argument for freedom to be "childish" s you are merely a proponent of more and more government.  You would have others believe that a "typical consercative" want a bigger government (and less freedom), and only a "reactionary" would want less government.

Second, despite a lengthy and pointless diatribe, you did NOT answer my point on your definition of "the long term."

Third, I seem to recall that YOU extracted points when someone else used the term "screeching."  so, do such points apply to you?  Hmm.

Fourth, aside from reinstating taxes which previously existed on your leftists buddies in the film industries, you are in general favor of more and higher taxes.

 

CARL, why do you keep advocating increasing the deficit?  Do you consider the situation that Greece has found itself to be in to be what the United States to aspire to?

Even if tax levels remain where they are now let alone go down, we need to cut spending, and you have consistently refused to spell out spending cuts that would come even close to doing that.  Granted, few politicians are willing to contradict the myth that many voters believe, that there is a painless way to cut spending. Paul Ryan is a prominent exception though he oversells what he is offering and downplays the impact his proposed cuts would have.  But that is to be expected from politicians. At least he is offering something specific, which is more than you do.

(Incidentally, in at least one aspect, I think Ryan is not being aggressive enough in cutting spending.  His proposal has the Social Security retirement age continue its current slow rate of increase of one month every two years til it reaches age 70 instead of the current age 67 it is heading to.  I favor having that rate of increase be one month every year.)

BTW, since you insist on a arbitrary specific time frame for "long term", how about somewhere in the range of two gross to five gross fortnights?  A gross fortnight sounds about right for "medium term" while trying to project economic trends beyond five gross fortnights is very much a fool's errand.

“Two gross to five gross fortnights”

Hmm.

A fortnight is two weeks.

While I have seen the term “gross” used in other measurements, I have never seen it used in time measurements.  Can you translate it into standard (generally accepted) time measurements?

A gross is a dozen dozen and as far as I know has no other numerical meaning.  I won't do the math for you as you might want the practice if you ever want to work out a plan to deal with the deficit.

On second thought, no reason to make you practice for something I doubt you'll ever do.

A gross fortnight is 2016 days or approximately 5½ years.