Is the economy really improving?
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JJ Husker
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84HuskerLaw
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I am sorry but so many of the discussions on this board that get into economics and politics are nonsensical really. It is downright scary sometimes to read some of the comments and statements of 'fact' offered by people. The media today spew such stupidity and unfounded crap coupled with an educational system that is filled with economic morons. This crap gets spread around and people are so fundamentally misinformed about basic economics and the markets and so on that we get Bernie Sanders and Hillary Clinton competing to win the Presidency following Obama.
It is no wonder we have an overall economy that is near comatose and has been on the equivalent of economic 'life support' by the FED and government money printers and manipulators for 7 years running. There is nothing further needed to be stated about the dire straits of the economy than to point out that the Fed Funds rates near or even below zero percent is and long term mortgage rates in the 4% range! These are without question depression level numbers. In many ways the economy is actually in worse shape that in the 1930s Great Depression era and but for adding another 11 trillion to the declared 'national debt' over t he same 7 years we would be seeing the worst poverty and starvation crisis in modern world history. We have literally 50 million people living in poverty off the public dole with virtually NO HOPE of improving their lot and another 100 million barely about the poverty line and living in fear of losing their low paying jobs, etc. Instead of Obama's promised hope and change, we've lost all hope and fear and supplanted the optimism that most (not all sadly) Americans had before Obama was elected.
You will see a clear and precipitous drop in employment, optimism, etc that coincides exactly with the rise of Obama. The deep recession that followed his nomination and the bursting of the Clinton housing bubble brought on by the lunacy of the liberal home mortgage funding mechanisms he and a handful of key Dems in the Congress and Senate. The FED has been propping up the stock market by direct investing and timing of intervention in the daily publicly traded stock markets and of course the crazy monetary policy (zero percent interest). Until we get back to more normal interest levels, etc we will never get back on a path to improved economic conditions and eventually improvement in the jobs markets. It is not how many low wage jobs have been added to the naiton's employment numbers that are meaningful. It is the big numbers of manufacturing and skilled worker jobs that have disappeared. We barely have more total employed today that we did 8 years ago and the amount of money being earned by those workers has actually fallen despite nearly 30% inflation over the same period. The economy is horrible. Period. No matter what kind of BS spin and false information the Obama people put out there.
When normal interest rates ultimately return, the nation will be paying nearly 1 trillion per year in just interest on the current debt! This is not being included in the budget right now because the government has driven rates to zero and therefore is not accounting for interest as a cost of the government. This can't last in any real economic world.
knapplc
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TGHusker
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Back to Knapp's original point and I think the heart of his post is that competition drives innovation, innovation drives positive change (change in itself doesn't necessarily involve innovation - lay offs are change but not very innovative), positive change can spur job growth, new products, stronger companies. Competition is not a bad thing. The healthy companies invite competition as it drives them to become better and more efficient (which doesn't always mean lays offs) and find new products to put in the marketplace. When all of the companies in an industry consolidate into a small group, then innovation suffers, companies grow brittle and eventually they begin to fail - they become their own worse enemy - fat and lazy as in life leads to a decline. Does Apple become Apple without Samsung, HP, IBM (earlier years), etc being around to push them with competition? No. The economy will grow and create jobs when businesses are allowed to thrive and compete. One has to look at the weight of govt regulations and taxes (which are needed in balance) and make sure those things have no undo restraint on business development. Outside of that the govt has a role in helping in the incubation process for an industry. The space initiatives of the 1960s & 70s is a great example. So much sprang from our race to the moon. Companies aren't growing organically as noted in the OP. I've worked for GE in the past and our GE company became the largest in its sector by acquisition. The same was true of a large industrial gas company I worked for. While I know we have anti-trust laws that govern if a company has too much power in one industry, perhaps that may need to be tweaked some - as noted in the health care industry, as consolidation has occurred prices have gone up. Companies have the right to pay their CEOs what they desire and to protect the share holder's equity, however, it would be nice to see positive incentives to steer corporations towards a more socially responsible actions.
Creighton Duke
Banned
JJ Husker
Donor
How's the U.S.S.R. doing these days? Or quite a few other no longer existent Eastern bloc countries/economies?
I mean that is basically what we're talking about here isn't it....heavy handed government attempting to control the economy supposedly for the social good?
Or, if you prefer something much closer to home, how about the failing economies all across Europe...austerity measures brought on by social policy making. I don't think it requires much explanation but rather just a little study of how these things have historically gone.
knapplc
Active member
You realize you're talking about a very wide range of styles of government and social policies, from state-run to extremely lax regulations, right?
If governments on the far right, middle and far left all fail economically, aren't we saying all economies are destined to fail at some point?
Could you cite an ideal economic system and set of governmental polices/regulations from history (or today)?
Landlord
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TAKODA
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I agree and disagree, with parts.
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zoogs
New member
That's not at all what we are talking about, JJ, and hyperbole is exactly what I'm trying to steer this away from.
What is austerity, for example? It's the fixation on reducing government budget deficits that tends to have taken the form of gutted government spending. It is precisely the opposite of public sector spending for the sake of stimulating the economy. What is the Soviet Union? A one-party authoritarian communist state. There's no relevance.
You said that companies have one job: to deliver profits to owners. I agree, and countries that also agree are ones such as the United States and Great Britain. So when it comes to 'social goods' -- whether that's a safety net, investment in infrastructure, or research spending -- the government has to play a role, or some things simply will not come to be.
Take the fact that the United States ranks 20th in the world in internet speeds. Greater, faster connectivity is the sort of public good that could improve access and spur economic activity for everyone. There's a social, public interest. There is *not* an economic interest for the couple of telecom giants that are already delivering enormous profits to their owners and top stakeholders.
Take research, which covers everything from microelectronics innovation that spurs growth and enables better products and competition in tech sectors, to health research which develops new medical techniques or informs public health policymakers. These are things that industry alone can't do, not because they are evil, but because they don't have nearly the same luxury for risk in their R&D as they try to push out products and outsell their competitors.
Take education, which most of us do believe is a public good. The public has an interest in an educated citizenry aware of our country's history and knowledgeable about its civic institutions. Companies just need technically proficient workers, which is hardly the same thing.
So it's a symbiotic relationship. Markets should be healthy, and for that to happen companies should of course not be crushed or universally state-owned. But likewise, all things in the public interest do not materialize magically, because as many have acknowledged in this threads, companies have to prioritize their bottom line or die away. And so there is a role there -- albeit limited -- for governments to play.
TLDR; the entire point of my original comment highlighting your post -- don't freak out at the mention of governments doing anything. We depend on it in this country, and always have.
What is austerity, for example? It's the fixation on reducing government budget deficits that tends to have taken the form of gutted government spending. It is precisely the opposite of public sector spending for the sake of stimulating the economy. What is the Soviet Union? A one-party authoritarian communist state. There's no relevance.
You said that companies have one job: to deliver profits to owners. I agree, and countries that also agree are ones such as the United States and Great Britain. So when it comes to 'social goods' -- whether that's a safety net, investment in infrastructure, or research spending -- the government has to play a role, or some things simply will not come to be.
Take the fact that the United States ranks 20th in the world in internet speeds. Greater, faster connectivity is the sort of public good that could improve access and spur economic activity for everyone. There's a social, public interest. There is *not* an economic interest for the couple of telecom giants that are already delivering enormous profits to their owners and top stakeholders.
Take research, which covers everything from microelectronics innovation that spurs growth and enables better products and competition in tech sectors, to health research which develops new medical techniques or informs public health policymakers. These are things that industry alone can't do, not because they are evil, but because they don't have nearly the same luxury for risk in their R&D as they try to push out products and outsell their competitors.
Take education, which most of us do believe is a public good. The public has an interest in an educated citizenry aware of our country's history and knowledgeable about its civic institutions. Companies just need technically proficient workers, which is hardly the same thing.
So it's a symbiotic relationship. Markets should be healthy, and for that to happen companies should of course not be crushed or universally state-owned. But likewise, all things in the public interest do not materialize magically, because as many have acknowledged in this threads, companies have to prioritize their bottom line or die away. And so there is a role there -- albeit limited -- for governments to play.
TLDR; the entire point of my original comment highlighting your post -- don't freak out at the mention of governments doing anything. We depend on it in this country, and always have.
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BigRedBuster
Active member
Can someone explain to me how a company should create jobs if the market isn't there to support those jobs?
One of the things I love about my job is hiring people. I absolutely love doing it. a) It means there is a need for more people which should imply we are doing well...and b) I love giving people jobs. I love the satisfaction of someone coming in that may not be in the job they want or maybe laid off and giving them an opportunity to be successful here.
BUT, there is absolutely no way in hell I can just go do that without a need for that person to be on the payroll.
Also, it seems like there is some type of disconnect with some people in our society. Why does a company hire you? It's because that company believes by hiring you, they can be more successful and make more money. Simple as that. It's not evil. It's not some horrible system of taking advantage of people.
But, none of that happens unless there is a market for the products. Now, yes....companies invent things all the time which creates new markets. 20 years ago Apple wasn't employing thousands of people to make Iphones. But, once a product is being produced, it needs market growth to employ more people.
One of the things I love about my job is hiring people. I absolutely love doing it. a) It means there is a need for more people which should imply we are doing well...and b) I love giving people jobs. I love the satisfaction of someone coming in that may not be in the job they want or maybe laid off and giving them an opportunity to be successful here.
BUT, there is absolutely no way in hell I can just go do that without a need for that person to be on the payroll.
Also, it seems like there is some type of disconnect with some people in our society. Why does a company hire you? It's because that company believes by hiring you, they can be more successful and make more money. Simple as that. It's not evil. It's not some horrible system of taking advantage of people.
But, none of that happens unless there is a market for the products. Now, yes....companies invent things all the time which creates new markets. 20 years ago Apple wasn't employing thousands of people to make Iphones. But, once a product is being produced, it needs market growth to employ more people.
JJ Husker
Donor
I agree with you on this for the most part. I guess where we may diverge, or the more important thing is how the government becomes involved in it all.
I don't believe I've said the government should stay completely out of it. Infrastructure spending by the government and the like are generally highly desirable things. Items and spending for the common good are not inherently bad. But also, let's not forget where those funds really come from. They are either taken out of the economy through taxation or they print more money causing inflation. So, in essence, all the government really does is shift money from one portion of the economy to another, causing undesirable consequences in the wake. Like I said, not necessarily a bad thing in all situations but sometimes it is and sometimes the detriments are not worth the benefit. Almost always somebody wins and somebody loses when the government gets involved in economic matters. As long as enough more people are winning and the downside is limited, it can be a good thing.
I guess we were both somewhat speaking in generalities. We can't/shouldn't really do that. It depends on what "social" item is being talked about and how it is specifically being funded. implemented, the benefits, the downside, etc. I guess what it boils down to is we have slightly (or more...) differing views on how well the government typically performs this function and what are acceptable detriments.
And to answer knapp and LOMS. I can't cite an ideal economic system that has absolutely no downside. They all have their own unique problems. However yes, I believe free market capitalism is probably the best I've seen. I think we can all maybe agree that it definitely has it's problems and can be improved upon in some areas but is generally better than other systems. If we could tweak it to eliminate some of the bad socialism and increase the good socialism, we might actually have something.
LOMS- Whatchu got against conservative capitalism bro? Don't make the mistake of thinking for a second that what has been going on in this country is conservative or true capitalism. Or that there is a single politician that is currently representing real conservatives. They may claim that's what it is but it isn't. For every example of income inequality etc. there equally bad examples of social policymaking gone awry. I always get a kick out of the born and bred Americans who seemingly hate our system and act like there is another, better, tried and true system out there. Certainly we can and should make things better but where is this system/economy that puts ours to shame?
BTW, I am a huge fan of Ayn Rand's Atlas Shrugged and The Fountainhead. Not necessarily the idea that society will fall apart without the creators but the moochers....she nailed the wasted air committees, counterproductive government involvement, and the non-contributing elements that want what others have without the effort required to obtain it.
/rant