tag:blogger.com,1999:blog-36212542.post6510819892748203728..comments2024-03-09T03:20:20.004-05:00Comments on Tenured Radical: As Wall Street Tumbles, Herbert Hoover -- er, John McCain -- Claims That "The Fundamentals Of The Economy Are Still Strong."Tenured Radicalhttp://www.blogger.com/profile/05703980598547163290noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-36212542.post-34748478236703130522008-09-18T20:03:00.000-05:002008-09-18T20:03:00.000-05:00Anonymous,The top 1% are already paying more than ...Anonymous,<BR/>The top 1% are already paying more than the bottom 95% and are paying a greater share of income taxes than before the Bush tax cuts. See<BR/><BR/>http://www.taxfoundation.org/news/show/22652.html<BR/><BR/>for this information. More than 40% of the households in the US already pay no federal income tax. It gets awfully dangerous when we are in a situation where almost half are paying nothing (or even collecting via EITC) and taking so much from the wealthy.davidjhemmerhttps://www.blogger.com/profile/15557657307865513144noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-57911901192734961682008-09-18T16:37:00.000-05:002008-09-18T16:37:00.000-05:00Yes, because if we raised taxes on the top 1% and ...Yes, because if we raised taxes on the top 1% and increased capital gains taxes, we wouldn't be in the current situation.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-36212542.post-54832666590106313502008-09-17T19:18:00.000-05:002008-09-17T19:18:00.000-05:00Right wing sniping?McCain said the fundamentals of...Right wing sniping?<BR/><BR/>McCain said the fundamentals of our economy are strong. TR ridiculed this and said we are in a Great Depression. I politely asked her what economic measures she uses to measure the "fundamentals" and she can't even answer. I wouldn't call that sniping, I'd call it calling out TR for baseless attacks. The reality is that any reasonable objective measures of the economy she chooses will show that the current situation is nothing remotely comparable to the Great Depression, which is why she hasn't provided any.davidjhemmerhttps://www.blogger.com/profile/15557657307865513144noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-64863309807029756652008-09-17T16:39:00.000-05:002008-09-17T16:39:00.000-05:00TR,In a departure from the right-wing sniping that...TR,<BR/><BR/>In a departure from the right-wing sniping that's dominated the comments section of this post, let me say that I too have been wondering how all of this is going to affect my TIAA-CREF account. I met with my rep the other day, and she still thinks I should stay the course with my moderately aggressive package. Nervous sigh. I'm following her advice for now.<BR/><BR/>And I'm glad you referenced the Brooks article. I too appreciated it.<BR/><BR/>All the best,<BR/><BR/>TLTim Lacyhttps://www.blogger.com/profile/02896230254720822005noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-91148357989555622202008-09-17T15:22:00.000-05:002008-09-17T15:22:00.000-05:00I'd only add that McCain is quite like Hoover, - b...I'd only add that McCain is quite like Hoover, - both had a pretty unbridled faith that government programs could solve economic problems. McCain is no defender of laissez-faire. And then take a good look at what Hoover actually did in office and then please tell me with a straight face he was a defender of deregulation and laissez-faire and "do nothing".... so says an economic historian of the Great Depression.Steven Horwitzhttps://www.blogger.com/profile/00470758334242360804noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-72791589795676767072008-09-17T14:56:00.000-05:002008-09-17T14:56:00.000-05:00Let's see, who were the biggest recipients of Fann...Let's see, who were the biggest recipients of Fanny Mae and Freddy Mac political contributions? Could it have been -- yes, the results are in, ladies and gentlemen-- John Kerry, Barack Obama, and Chris Dodd? For confirmation, see<BR/>http://www.foxnews.com/story/0,2933,423701,00.html<BR/><BR/>Yes, I know, it's Fox News, but they cite their source. A quote from their story:<BR/><BR/>"Fannie and Freddie have been creations of the congressional Democrats and the Clinton White House, designed to make mortgages available to more people and, as it turns out, some people who couldn't afford them.<BR/><BR/>Fannie and Freddie have also been places for big Washington Democrats to go to work in the semi-private sector and pocket millions. The Clinton administration's White House Budget Director Franklin Raines ran Fannie and collected $50 million. Jamie Gorelick — Clinton Justice Department official — worked for Fannie and took home $26 million. Big Democrat Jim Johnson, recently on Obama's VP search committee, has hauled in millions from his Fannie Mae CEO job."<BR/><BR/>And let's not get started on Chuck Schumer. Here's an exerpt from his Wikipedia entry:<BR/><BR/>"Following the meltdown of the subprime mortgage industry in March 2007, Schumer proposed a federal government bailout of subprime borrowers in order to save homeowners from losing their residences.[33] Others are quick to point out that such a "bailout" would primarily benefit lenders and Wall Street bankers, who make large campaign contributions to congressmen;[34] Schumer's top nine campaign contributors are all financial institutions who have contributed over $2.5 million to the senator.[35]"<BR/><BR/>Now, remember folks, according to TR we need to vote Democratic to stave off the next Great Depression. Indeed!JackDanielsBlackhttps://www.blogger.com/profile/17285871354441074406noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-38081614067358485482008-09-17T11:11:00.000-05:002008-09-17T11:11:00.000-05:00Jarrod, when unemployment has been hovering around...Jarrod, when unemployment has been hovering around the 20% level for several years, as it did during the Roosevelt administration, then come back and tell me that the Depression is upon us. Until then, no sale.<BR/><BR/>As for the economic difficulties we are experiencing, have you forgotten that the Democrats have been running the legislative branch of government for the last two years? What laws have they proposed to remedy the situation?<BR/><BR/>A good part of our current problems originated in a Clinton-era push to stop "redlining" -- that is, turning down home loans to folks who lived in poor districts. Laws and regulations encouraged banks to loosen their lending criteria, and they did so with a vengeance. Now we are reaping what was sown. We could go on and talk about the "Qants" and the hedge funds and the funny securities packages of bad loans put together by the investment banks and the superior ratings given these packages by the rating agencies, but suffice it to say there is plenty of blame to go around. And I suspect a lot of the folks responsible for this situation vote Democratic. If you think that Obama/Biden represent reform, feel free to vote for them -- but prepare yourself for disappointment if they get elected!JackDanielsBlackhttps://www.blogger.com/profile/17285871354441074406noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-26251807637742191222008-09-17T05:06:00.000-05:002008-09-17T05:06:00.000-05:00Wow. This is quite a pile on. A couple of points...Wow. This is quite a pile on. A couple of points. First, using the Great Depression as an illustrative analogy is a useful for making the point that in fact there are serious economic problems in the United States that need to be addressed aggressively (see NYTimes article: http://www.nytimes.com/2008/09/17/business/17leonhardt.html?hp). The United States just nationalized ANOTHER major corporation, AIG. Come on folks, the United States overthrew Mossadegh for lesser actions. The United States has managed to *technically* stay out of recession thanks in large part to increased exports arising from a weak dollar. Take those away, and you have a recession. It is also no secret that over the span of the Bush Administration a dramatic wealth redistribution has taken place as fewer and fewer 'middle class' jobs were created and more and more entry level retail and service jobs took their place. Real wages have been falling while wealth inequality, measured by GINI, has been rising. Yet consumers continued to spend? How? As TR points out, they leveraged their future through their home mortgages and credit cards. We are *only* seeing the result of the mortgage bust, and that has yet to run its course. Should consumers start defaulting on their other lines of credit...well, let us just say that the Great Depression will look like the 'good old days.' Do the Federal and State governments have the fiscal flexibility to deal with such an event? In short, no. The fiscal irresponsibility of the Bush Administration has left the Federal government without significant options short of printing more money, a bad move given already high inflation rates. <BR/><BR/>Second, this idea that U.S. economic fundamental are 'sound' as measured by the willingness of Americans to work hard is ridiculous. Once again, the Great Depression analogy TR uses is helpful in exposing the banality of this claim. Americans were more than willing to work hard during the Great Depression, but that did not stop it from occurring. The economic system then was built on a house of cards. Ben Bernanke, for example, attributes the Great Depression to...DEBT! Consumers and businesses overextended themselves and defaulted, driving the national economic system into he ground. Here again, TR's analogy is highly illuminating. There are obviously contending views of the causes of the Great Depression, but its use as an analogy to highlight the current risks and the possible impact of poor decisions regarding the future leadership of this country (i.e. McCain's open admission that economics is not his thing) is a legitimate one that right-wing prof and Jack should acknowledge.<BR/><BR/>And now, back to my dissertation...Jarrod Hayeshttps://www.blogger.com/profile/15527345022223699608noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-30927453796437905302008-09-16T12:52:00.000-05:002008-09-16T12:52:00.000-05:00Some interesting statistics:October 1933: Unemploy...Some interesting statistics:<BR/><BR/>October 1933: <BR/>Unemployment 22.9%, Dow 93<BR/><BR/>January 1938:<BR/>Unemployment 17.4% Dow 121<BR/><BR/>from "The Forgotten Man" by Amity Shlaes<BR/><BR/>Two observations: <BR/>1) Several years of the Roosevelt adminstration don't appear to have made much difference in these key figures, despite all the alphabet-soup agencies and social programs;<BR/>2) Looks like things were a lot worse then than they are now!JackDanielsBlackhttps://www.blogger.com/profile/17285871354441074406noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-66386928313268832292008-09-16T12:44:00.000-05:002008-09-16T12:44:00.000-05:00If you can't answer those questions I suggest you ...If you can't answer those questions I suggest you not volunteer yourself to go on TV as an expert to explain why we are in the 2nd Great Depressions.<BR/><BR/>Besides TR you and I should both be happy at what is going on. We have complete job security. I'm 30 years from retirement. I'm thrilled to see the stock market drop now, it means my TIAA-CREF contributions are buying more each month, I'm buying stocks on sale. The stock market in 30 years is going to be where it is going to be, better for me that it stays low for now. Also the Fannie/Freddie situation plus yesterday's stock market debacle (and the ensuing bond market rally) have driven 30 year interest rates down so low that now I can refinance my house and save $150/month. Sweet sweet depression!<BR/><BR/>Even if you won't answer my challenge, at least answer my first comment. You disagree with McCain on the fundamentals of the economy. How do you measure these fundamentals?davidjhemmerhttps://www.blogger.com/profile/15557657307865513144noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-60785155642336130702008-09-16T12:09:00.000-05:002008-09-16T12:09:00.000-05:00Dear rwp,Sweet of you, but I can't accept the chal...Dear rwp,<BR/><BR/>Sweet of you, but I can't accept the challenge. I'm too busy preparing for class, doing searches, writing books. Maybe another time. And I can't think of a single reason why I would prove my intellectual worth to a complete stranger anyway. Work on your own blog and prove me a fool there if you wish. You wouldn't be the first.<BR/><BR/>TRTenured Radicalhttps://www.blogger.com/profile/05703980598547163290noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-2373011401131426682008-09-16T12:06:00.000-05:002008-09-16T12:06:00.000-05:00Here is a comment from Amity Schlaes, author of "T...Here is a comment from Amity Schlaes, author of "The Forgotten Man: a New History of the Great Depression":<BR/><BR/>A few people have asked whether the current period is like the Great Depression. The answer is 'no.' This period is to the Great Depression as a drizzle is to Katrina."<BR/><BR/>Don't know whether or not you are familiar with this book, TR, but if not you might want to check it out.JackDanielsBlackhttps://www.blogger.com/profile/17285871354441074406noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-6467457410855371602008-09-16T11:22:00.000-05:002008-09-16T11:22:00.000-05:00I am issuing a challenge to TR. I claim, based on...I am issuing a challenge to TR. I claim, based on somewhat slim evidence of her post, that she has no real understanding of what is going on on wall street. That she does not understand why Lehman Brothers is going bankrupt but Merril got bought out at a premium to its stock price. That she doesn't understand why mortgage rates on teh 30 year mortgage rates tumbled yesterday. That she cannot justify calling this the "2nd Gret Depression" when it is really just a 20% decline in the stock market, something that has happened over a dozen times since the "First Great Depression". That she doesn't understand why Bear Stearns was bailed out but not Lehman. etc.. etc...davidjhemmerhttps://www.blogger.com/profile/15557657307865513144noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-9019711504532403872008-09-16T09:24:00.000-05:002008-09-16T09:24:00.000-05:00TR, I'm not sure Roosevelt would be much help. As ...TR, I'm not sure Roosevelt would be much help. As a "historian of the Great Depression" I am sure you know that the unemployment and stock market figures from the late '30s weren't much better than when he took office -- sure, he created make-work programs for the masses (and for eggheads) that resulted in some pretty nice murals, parks, and post offices, but it took World War II to get us out of the Depression. Even with every liberal economist in the country backing him up, he couldn't make the Depression go away. But you must know this.JackDanielsBlackhttps://www.blogger.com/profile/17285871354441074406noreply@blogger.comtag:blogger.com,1999:blog-36212542.post-44110430239163855852008-09-16T09:01:00.000-05:002008-09-16T09:01:00.000-05:00TR,Maybe you can tell us which data do you use to ...TR,<BR/>Maybe you can tell us which data do you use to measure the "fundamentals" of the economy. (unemployment? GDP? avg weekly hours worked? interest rates? inflation? bank failures? etc..) And then once you've told us these, maybe you can:<BR/><BR/>1. Compare these data right now between the US, the EU and Japan and explain why the US is doing so much better.<BR/><BR/>2. Compare the data between the US now and the Great Depression.<BR/><BR/>Maybe it would give some perspective.davidjhemmerhttps://www.blogger.com/profile/15557657307865513144noreply@blogger.com