It is amazing how people in Washington are so forgiving -- of each other. We have close to 15 million people unemployed and more than 8 million people under-employed because the folks managing our economy were incompetent.
In spite of the efforts of economists and policy types to portray the cause of the economic collapse as being complicated, it wasn't. It was really really simple. Prior to the downturn the economy was being driven by an $8 trillion housing bubble. This led to a boom in residential construction. (A separate bubble in commercial real estate led to a boom in non-residential construction.) The equity generated by the housing bubble also led to a surge in consumption, with the saving rate falling to almost zero at the peak of the bubble.
It was inevitable that the bubble burst. Bubbles do that. They lead to an over-supply and eventually we run out of suckers willing or able to pay bubble-inflated prices for houses. The collapse caused the economy to lose $1.2 trillion in annual demand from the private sector. Annual construction spending fell back by close to $600 billion and consumption fell by roughly the same amount as a result of the loss of housing wealth.
There is no mechanism that allows the economy to easily replace this much demand. Hence we were guaranteed a severe downturn, without massive amounts of spending by the government.
All of this is really simple. Any competent economist or policy analyst should have recognized the problems created by the housing bubble. Unfortunately, we did not have competent economists at the Federal Reserve Board; we had Alan Greenspan and Ben Bernanke.
But, the blame does not end there. Congress is charged with overseeing the Fed. It is their responsibility to ask Greenspan and Bernanke (who was at the Fed since 2002, apart from a brief stint in the Bush administration) about the housing bubble. Congress, and specifically the Republicans in the Senate, never raised such questions. They just looked the other way as Greenspan and Bernanke were driving the economy over a cliff.
The reason for singling out the Republicans in the Senate, among all the people whose incompetence contributed to the economic crisis, is that they have decided to obstruct the extension of unemployment benefits for the long-term unemployed. People should recognize the irony in this story.
The unemployed have the skills, the ability, and the desire to work: they had been working until the economy collapsed. They are unemployed because the people who were running the economy - including the Republican senators with oversight responsibilities -- were incompetent.
So now we have Republican senators who share the blame for an economic collapse, drawing healthy salaries and generous health care and pension benefits, telling the unemployed workers who were victims of their incompetence, that they can't get $300 a week in benefits. This is Washington at its best.
http://www.99erspetition.com/
If previous guidelines were in place on one would have taken the illegals loans-called steering.
When the working took out 2nd mortgages and excess debt everyone was happy as long as they were making money;.
Wow, no one ever said the 9-11 spouses were asking for too much money and should get a job at Mcdonalds.
Under Reagan and the first Bush, the ratio of public debt to GDP went from 33 per cent to 64 per cent.
Under Clinton it lowered to 57 per cent.
Under the second George Bush, it rose to 69 per cent.
The Iraq invasion, the massive tax cuts, and the unfunded Medicare changes had nothing to do with any other administration except Bush 2. Rather than paying down the existing debt while the economy was reasonably prosperous (as a Keynesian would have us do), they ignored that opportunity and created far more debt. (recall Cheney's famous "deficits don't matter).
Am I in agreement with the current administration’s economic policies? yes and no. We're in a terrible down cycle and the tools that should be available are limited by the debt levels that existed at the beginning of the down cycle.
One can defend political ideology until the cows come home, but it doesn't change facts.
Instead of becoming educated about issues that are affecting us, it seems far too many prefer adolescent name calling and ideological "who struck Johns".
And so they will continue to fool and mislead us, the gullible led by liars.
The Republicans did not want to deny unemployment but only wanted the money to come from the existing budget and not an additional spend. But that doesn't stop the liberal demonization machine from repeating the empty "they want to deny them benefits" to those who don't better and just soak it up. Baker has those "Rule for Radical" tactics down pat.
Obama keeps referring to the Bush terms as the "lost economic decade" which is when the country had record lows in unemployment. Since Obama considers this "lost" I would sugget that he go "find" it - low unemployment would be great about now.
And Baker, being a Monday morning quarterback, makes his empty message.
PS Spell check is your friend.
How about giving up your job to an unemployed person for a while. And while you're at it, you can decline unemployment, and live your ideology.
The five highest increases in the percentage of debt to GDP since WW2 are in the last 5 Republican presidential terms. Their whole purpose has been to enact tax cuts for millionaires and to then 'starve the government beast'. Now that the deficit spending is needed, they go from "Reagan proved deficits don't matter" (Dick Cheney) to deficits are the only thing that matters.
85% of our budget deficit is due to Bush wars, Bush tax cuts, Bush recessions and Bush bailouts. The phony fiscal conservative Republican budget proposal doesn't plan on balancing the budget until the year 2063!
"Despite its continuing popularity among Republican politicians, at least a few conservative intellectuals are starting to have misgivings about STB.
For some years Bill Niskanen Cato Institute has argued that STB actually increased spending and made deficits worse. His argument is that the cost of spending is ultimately the taxes that will have to be raised to pay for it. Thus fear of future tax increases was the principal brake on spending until STB came along. By eliminating tax increases as a necessary consequence of deficits, it also reduced the implicit cost of spending. Thus, ironically, STB led to higher spending rather than lower spending as the theory posits.
http://www.forbes.com/2010/05/06/tax-cuts-republicans-starve-the-beast-columnists-bruce-bartlett.html
Go to the polls in November to ensure senators are unemployed!!!!
You deserve better so take the chance to say so.
But even I cannot reconcile reality with the movement to place all of the world’s troubles at the feet of the GSEs.
Specifically, I have requested some data or evidence that DISPROVED the following facts:
-The origination of subprime loans came primarily from non bank lenders not covered by the CRA;
-The majority of the underwriting, at least for the first few years of the boom, were by these same non-bank lenders
-When the big banks began chasing subprime, it was due to the profit motive, not any mandate from the President (a Republican) or the the Congress (Republican controlled) or the GSEs they oversaw.
-Prior to 2005, nearly all of these sub-prime loans were bought by Wall Street, NOT Fannie & Freddie
-In fact, prior to 2005, the GSEs were not permitted to purchase non-conforming mortgages.
-After 2005, Fannie/Freddie changed their own rules to start buying these non-conforming mortgages — in order to maintain market share and compete with Wall Street for profits."
-Barry Ritholtz
http://www.ritholtz.com/blog/2010/05/rewriting-the-causes-of-the-credit-crisis/
Are the right-wingers resurrecting it?
And the GOP has no desire to assist the unemployed because they feel like Ben Stein.
Stein feels that ". The people who have been laid off and cannot find work are generally people with poor work habits and poor personalities." Stein said "generally" because there are exceptions like the people he knows. Speaking of past recessions, Stein states "When recessions happened, they happened to people in Ohio or Illinois or Michigan. Now, they have hit hard in California and in the law field where so many of my friends work and in Washington, D.C. (yes, even in D.C.) where I am from. "
So recession and unemployment don't occur unless they affect Stein and his personal friends.
And that is pretty much the GOP platform. If it doesn't affect me and my personal friends, who cares?
This is the problem today and as we allow those with EXTREME views and beliefs into legislative control, we will fail as a country. We are well on our way now!
Lawmakers want meeting with Obama on Korean trade deal - The ...
Jul 22, 2010 ... He added: "The American people do not support more of the same bad trade deals for good reason: they are bad for our economy and they take ...
thehill.com/.../110445-lawmakers-want-meeting-with-obama-on-korean-trade-deal
I'm not an economist and certainly cannot tell the future. I only have my local area to gauge the economy with my own eyes. It's not pretty, folks. It is getting worse.
I'm an unemployed 99er and over 50 and I was thinking that it was fantastic and wonderful that the unemployed finally had their extension passed (no thanks to the Republican Party which has lost all credibility with issues dealing with the economy). But, with my own experience of being a 99er shoved under a bus, I don't believe the economy will get better after these people have used up their 99 weeks. In addition, we'll probably continue losing more jobs than creating them in the coming future.
Once the present unemployed use up their 99 weeks of benefits (and that is occurring on a weekly basis), there will less money flowing through our economy. Will that actually be the start of real Depression similar to the one our grandparents and great grandparents went through?
Congress has to make the decision. Should they pass a law that says that unemployment benefit extensions run concurrent to the high unemployment rate or do we go through a dog and pony show every few months on extending benefits? What happens if we become a nation of 99ers? When we start having huge numbers of unemployed not receiving benefits, where will our economy go?