Like you, I read the articles and try to find little glimmers of hope, little signs that the recession is abating. Right now we know that unemployment is expected to rise into double digits from the present 8.9% to 9% rate. And we also know that those figures are probably lower than reality. The government needs to look good or at least as good as it can...
Rising unemployment does not bode well because as we know that will lead to more foreclosures. That leads to housing devaluation and a diminishing of the value of our assets, etc etc. The housing market plays a prominent part in our economy and its health affects the economy's health dramatically.
So, I am pleased to see that Krugman is talking in a reserved and positive manner about the state of the world economy. I am very surprised to see that he is willing to predict flat to positive growth in the US GDP for the end of 2009. Recall that Krugman only a short time ago was flabbergasted at the Obama administration's plans to reignite the economy, expressing nothing less than catastrophe times 10 for the economy.
Reuters: World economy stabilizing: Krugman
"I would not be surprised to see flat to positive GDP growth in the United States, and maybe even in Europe, in the second half of the year."
"We have averted utter catastrophe..."
5 comments:
It's all relative isn't it? You know the saying a RECESSION is when your buddy loses his job and a DEPRESSION is when you lose yours." For millions it's already a calamity. For Krugman and the rest of the elite it was nothing more then an event that's happening to "OTHERS" anyway. So to see some glimmer of even a leveling off allows them to change the channel. Look, one can only watch a train wreck for so long. The mind needs a break. That's all we're seeing here. It's the collective minds weariness of other people disasters. We all do it.
Although I am a pessimist about the recession lifting soon, I am optimistic that employment will eventually rebound. The thing about Krugman's remarks is that it will encourage the markets. If the markets can at least maintain their numbers, we might get some stability then growth, then job hiring. Once the corporate sector starts expanding and rehiring, the rest of the community fills out with housing, services, etc etc.
Under normal circumstances, I would agree. However, these are anything but normal circumstances, therefore, please tell me where 1. these Corps. will get $$ to hire and expand, as the banks are in the process of de-leveraging a fancy term for trying to get rid of bad debt. 2. Where are the Industries that will produce these mythical jobs? Even most of the so called green jobs are being offshore d.
The sad truth is we've painted our own people into a corner. The top 10% own most of the World's wealth and raw material and land and can hire any population , anywhere they like. Look out how Lord Gates and Lord Buffet go overseas and give awards to their employees everywhere put here. They're citizens of the world and most of us are citizens of the shire. We are antz and they are ant keepers. Welcome to the new feudalism my friend.
In truth I can't articulately and step by step answer but that won't stop me from flinging -
It depends on the corporation. I don't think there is a formula for all sectors in terms of growth and how they will begin to re-employ people. Shipping for example, will gradually improve as China (I know China) starts selling more and more junk again and imports raw materials to make the stuff, and it will. Energy sectors are going to grow, oil will not stay at $60 per barrel. It may seem that corporations are all overseas and that we are being left with junk but there are tons of corporations in America and there is still a modest amount of wealth in the middle classes. The middle classes are on hold with their spending because their assets have shrunk. The 1 mill is now 500K, the 500K is now 250K etc etc. People are on hold. The market is crucial in all this of course and the market can't go anywhere unless there really is something to build on. We read the reports and you see little signs here and there. Sears reports profit, this is a surprise. Apple doesn't do quite so bad. Not all banks got involved with the bad mortgage stuff. A bank like USB which is out west is doing fair, weathered the recession about as well as any and might fair better than some. I don't think this is going to go boom town or anything like that anytime soon, but gradually it will clear.
I am intrigued by the question and I will try to gather a better answer, there may not be one. I could be talking crap.
The present GREAT RECESSION will not be cured by more of the same policies of the last 30 yrs. All that will do is move the speculative bubble around and we will continue with a boom-bust cycle like were settling into. The swindlers and gamblers love this kind of market,because they make fortunes in them. For everyone else though they create the kind of mess were now in.
AYN RAND'S WORLD
Another problem with a boom-bust Randian economy is it moves toward wealth concentration at the top and as I said a kind of Industrial feudalism and fascism. Read some of Kevin Phillip's excellent books on this topic. Phillips was an early founder of the present GOP and has basically repudiated the whole trickle down voodoo economics theory. He now realizes that without some mechanism ( very progressive taxation) to redistribute wealth in a capitalist society you end up with an aristocracy again in a very short amount of time. If our goal is a "middle class" society then the present set up has taken us in the opposite direction.
GOP against Middle Class Society
I believe that the GOP in fact doesn't want a "middle class" society. I don't know about the Dems. however? They make good speeches, but seem to back up the same old GOP economics these days when push comes to shove. Dem. policies coupled with GOP have built a middle class in India and China and destroyed ours.
NO REAL DEMOCRATIC CHOICE
Why we continue to elect these people is because we no longer have a REAL democracy. The $$ owns both so called parties and they seem to only differ on the amount of crumbs they toss off the table. The meat goes to the top as always, no matter who runs DC or any State house, anymore.
ABORTION, GUNS, GAYS & GOD
The Big difference is on social policy. Social policy is @ most a distraction, it does little to feed people and provide employment. But, it allows the two Corp. wings to say their different.
The 1% Rule
In reality the only difference is that of style not substance. The GOP wants a Christianized Fascism and the DEMS. want a more Protestant non-denominational and "liberal" variety of Fascism. They both want TBTF Fascism though. They both have supported policies that create more poverty here and more billionaires @ the same time. The Dems. have their billionaires like Buffet and Soros and the GOP has the rest. It's a Gov't by the top 1% now. All we need are a return of titles.
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