Comments on: Saturday Hot Read – WSJ’s “103,000 vs. 1.1 million”

By: J. Strupp

J. Strupp — Mon, 10 Oct 2011 04:52:17 +0000

“Meantime, Obozo mortgages the country’s future with excessive debt.”

Reagan did the same thing. The data is clear. Yet you’re trying to make the argument that consumers didn’t care in the early 80’s but they do now. You can’t have it both ways. Either the government is creating uncertainty via spending or it isn’t in both cases.

Of course, the WSJ leaves out the fact that the recession of the early 80’s was almost completely Fed. induced in order to shake out parabolic inflation expectations caused by commodities shocks/shortages during the 70’s. This one is a 30’s style debt deflation recession/depression. That’s not really debatable at this point. The WSJ doesn’t draw the obvious distinction because, to the WSJ, cutting taxes for rich people is a universal solution to high unemployment. This shouldn’t be a surprise. Look who they sell papers to.

By: dad29

dad29 — Sat, 08 Oct 2011 16:57:15 +0000

This recovery, (if it is one) will be longer than any of those in the past save, perhaps, the ’30’s.

It’s a “bank”-based (or financial) recession; they simply are more awful and painful than others.

Of course, Obozo and Bernake’s Fed haven’t helped. Aside from ObozoCare and the cascade of regulations, there is a specific problem: he’s trying to ‘help’ the banks recover by crushing their carry-trade interest earnings. How? Simple.

Bernanke has pushed the 10-year USBond rate to almost zero. (T-Bills are at virtual zero.) Banks can borrow from the Fed and invest in USBonds or bills–but the spread is now only about 2% or less. Meantime, FDIC (et al) are demanding that banks make ONLY ‘ultra-clean’ loans. Finally, when Congress caved to WallyWorld on the debit-card charges, the Banks lost another revenue-stream.

Meantime, Obozo mortgages the country’s future with excessive debt. Consumers aren’t stupid; they realize that sometime in the future, taxes are going up. That, along with their no-longer-extant home equity, tells them not to spend unless absolutely necessary–and even then, to minimize.

This goes back about 30 years, of course. The borrow-and-spend of all Gummints has effectively reduced demand NOW by prior spending. Same applies to consumers.

The snake has to digest the elephant of debt; it will take a long, long time.

By: BizzyBlog

BizzyBlog — Sat, 08 Oct 2011 13:36:31 +0000

[…] In September 2011, the economy, pending revisions, added 103,000 seasonally adjusted jobs (well, 58,000 after subtracting out Verizon workers who walked off the job in August and returned last month). In September 1983, the economy added just over a million jobs (HT No Runny Eggs). […]