To go along with the article above. Income down cost for essentials up.

 

Consumers in U.S. Relying on Credit as Inflation Erodes Incomes

 

"The dollar volume of purchases charged grew 10.7 percent in June from a year ago, while the number of transactions rose 6.8 percent, according to First Data Corp.’s SpendTrend report issued this month."

 

"After-tax income adjusted for inflation fell 0.1 percent from January through May, according to figures from the Commerce Department. The drop came as Labor Department data showed energy prices rose 8.2 percent and food climbed 2 percent during the same period."

http://www.bloomberg.com/news/2011-07-21/consumers-in-u-s-relying-on-credit-as-inflation-erodes-incomes.html

How much was given so far, how about $16 TRILLION.

 

The Fed Audit

 

"The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

 

"The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse.  In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans."

 

"For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed.  Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs."

http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

 

Note: While the link is to a senate site, this is not meant to be a politically focused item, just a place to find information and a link to the full document. Interesting how the MSM has been pretty quiet about this non-partisan report.

 

"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

 

In a nutshell, this is what's wrong with America. I finally watched "Inside Job" and was sickened. It's a shame the mainstream media has been so soft (well, not a shame since they are in bed with Wall Street and the colleges/universities protecting them).

I think this data shows a lot more than companies being reluctant to hire, they are still laying off a LOT of people. 18,000 new jobs in June won't even come close to touching the amount of people losing their jobs or entering the workforce.

 

Applications for U.S. jobless benefits rise

Claims jump to 418,000 from 408,000

 

"WASHINGTON (MarketWatch) — New applications for U.S. unemployment benefits rose last week in yet another sign that companies remain reluctant to hire, government data showed."

http://www.marketwatch.com/story/applications-for-us-jobless-benefits-rise-2011-07-21

 

Here is just a quick look at job cuts announced/implemented in just the last 2 weeks (and this is by no means a full list):

 

- 6,500 Cisco

- 10,700 Borders

- 200+ San Francisco Superior Courts

- 350 Whirlpool

- 625 City of Chicago

- up to 1,000 Goldman Sachs

- 6,500 Lockheed Martin

- 1,500 State of Connecticut

- up to 500 CA Tech

 

You left out 700 at Toledo Express Airport.

Here is something I found by doing a quick google....these folks have a nickname, The 99er's

 

....and a website for themelves...99ers Net

 

@@@

 

I was wondering about this because a secretary and I were at the copier the yesterday and she asked me if I noticed more homeless people.  Since I ride public transit and my lifeworld is pretty much inner city and cheap apartments these days I cant say I did. 

 

She says she seems to see more.  She says she sees them on Route 40 with their packs, hitting the road I guess.  She says shes more of this these days. (She lives in or near Springfield, I guess).

 

Didn't make much sense at first... unless you think of these guys hitchiking cross country.  It would be more uobstrusive to do this on something like US 40 since youd get busted by Ohio State Police for walking and thumbing down the interstate.

 

The glut of abandoned housing keeps a lot of homeless off the streets. That's why it's a bad idea to tear/burn everything down, because the homeless problem will become a lot more visible. Still, no doubt people are leaving Ohio in droves. A lot of homeless move to cities with milder winters where they won't freeze to death.

I actually think the homeless were more prominent in the '01 and early 90s recession than this time, even though the economy is in far worse shape this time (though old-fashioned industrial recessions - i.e. early 90s) tended to have spikes in homelessness more than the current version (also drug use and the urban crisis was far more prominent at that point).

I actually think the homeless were more prominent in the '01 and early 90s recession than this time, even though the economy is in far worse shape this time (though old-fashioned industrial recessions - i.e. early 90s) tended to have spikes in homelessness more than the current version (also drug use and the urban crisis was far more prominent at that point).

 

If I remember correctly from earlier posts, food stamp and government assistance is at an all time high. I also deal with a lot of non-profit assistance groups in my job and they have seen a noticeable spike in people and families needing help (and this is in a very affluent community).

This is only the first of several to come. It will be interesting to see how long the EU can keep this together.

 

Moody's warns Greek default virtually 100 percent

 

"ATHENS, Greece—Moody's downgraded Greece's bond ratings by a further three notches Monday and warned that it is almost inevitable the country will be considered to be in default following last week's new bailout package.

 

The agency said the new EU package of measures implies "substantial" losses for private creditors. As a result, it cut its rating on Greece by three notches to Ca—one above what it considers a default rating."

 

Read more: Moody's warns Greek default virtually 100 percent - The Denver Post http://www.denverpost.com/business/ci_18544046#ixzz1T84EQTLG

Read The Denver Post's Terms of Use of its content: http://www.denverpost.com/termsofuse

Back to the employment situation....the jobs are not going to come back.  Period.

 

The Times of India reports what the US media somewhat downplays:

 

US Companies Churn Out Profits but Cautious on Hiring

 

Lots of ground truth quotes in this article:

 

"Employers added fewer jobs in June than at any time in the past nine months, and the jobless rate rose to 9.2 percent, higher than when the recession ended in early 2009.

 

"We've never seen the kind of shedding of jobs that we saw in this recession. America's corporations have never been running so efficiently," said Ellen Zentner, senior US economist atNomura Securities in New York. "

 

Yay for efficiency!

 

and...

 

""The only major beneficiaries of the recovery have been corporate profits and the stock market and its shareholders," the study concludes.....

 

.....The high jobless rate is also keeping wage growth severely restrained in the US, which is also good for profit margins.

 

And:

 

"The message last week from the chief financial officer of one of the nation's industrial giants couldn't be clearer.

 

"We've driven all this cost out. Sales have come back, but people have not," said Greg Haynes, chief financial officer atUnited Technologies Corp. "It's the structural cost reductions that we have done over the past few years that have allowed us to see strong bottom-line results."

 

So we ARE in a recovery.  Profits are back.  This has not been just a recession, its been a massive structural adjustment to a new type of lean-employment economy.  And to a true global economy, where profits come from other parts of the world:

 

"Massive growth opportunities overseas, especially in China and other buoyant Asian economies, have some of the largest American companies on track for record profits, even if they're businesses are mostly treading water in the US."

 

I'm starting to think we need to stop talking about "recession" since we really aren't in one anymore.  We are transitioning to a new economy, yes, but we can't call it a recession if there is economic growth and profitability.

 

 

 

 

 

 

 

 

Maybe this thread should be renamed "US Economy: News and Discussion"  or "The Never-Ending Economical Talk Thread" or something?

Dumb Q - isn't joblessness part of a recession? Or is it only defined by company profitability?

The definition is two consecutive quarters of negative economic growth (i.e., GDP growth).  As far as the corporate sector's contribution to that goes, revenues actually are the real metric, not corporate profits (though of course there is a fair relationship there).

 

It's something of a shell game, too, because it doesn't measure or account for things like the amount of debt incurred to fuel that growth.  Thus, an economy overextended on credit could (purely hypothetically speaking, of course ...) look like it was booming.

Back to the employment situation....the jobs are not going to come back.  Period.

 

Correct, and recession has got nothing to do with it.

 

 

They should go back to GNP to more accurately reflect how nations' economies are doing at home. Probably ain't gonna happen though.

Or do both, because the comparison between the two could be informative for many countries (including the US).

I actually think the homeless were more prominent in the '01 and early 90s recession than this time, even though the economy is in far worse shape this time (though old-fashioned industrial recessions - i.e. early 90s) tended to have spikes in homelessness more than the current version (also drug use and the urban crisis was far more prominent at that point).

 

If I remember correctly from earlier posts, food stamp and government assistance is at an all time high. I also deal with a lot of non-profit assistance groups in my job and they have seen a noticeable spike in people and families needing help (and this is in a very affluent community).

 

I think I remember that on several occassions, from the news I think. It seems believable though because I worked in retail part-time a few years back in an upper middle class area, and it literally seemed like every fifth customer was swiping an EBT card. I also saw a lot of people who did not fit the stereotypical mold of a person who would be shopping with EBT. It also wasn't uncommon to see the "30K millionare" types come in and buy on EBT and enter a BMW in the parking lot. Additionally, the overwhelmingly majority of people I worked with also received some type of government assistance. So many that they would often openly talk about their EBT balances. I felt like I was practically the only one there who DIDN'T have an EBT card.

One of the main formulas for GDP is:

GDP (Y) is a sum of Consumption ©, Investment (I), Government Spending (G) and Net Exports (X - M).

 

Y = C + I + G + (X − M) 

 

So US Corporations can clearly have booming profits but the US economy could be in a recession (do to globalization). I don't look to the stock market as a gage of how the US economy is doing. Corporations may be doing well overseas but, if they are not hiring, producing or spending that money in the US then US GDP can still be in the gutter. I think we are seeing this type of wealth effect now taking place, were main street USA is still struggling along with small business, while the big boys take home some nice profits. Not saying this is right or wrong, but it is becoming a part of our economic reality.

Corporations may be doing well overseas but, if they are not hiring, producing or spending that money in the US then US GDP can still be in the gutter.

 

..yes, but the GDP has not been contracting...yet. 

 

Here are the GDP stats, by quarter:

 

2009

 

1:  (5.5)

2:  (  .7)

3:    2.2

4:    1.8

 

2010

 

1:  2.7

2:  1.7

3:  2.6

4:  3.1

 

2011

 

1:  1.9

 

...these are the final stats.  So, it looks like we left recession in the 3rd quarter of 2009 (first quarter of positive GDP growth in this time series).  Apparently prelimnary GPD numbers are due this week for 2nd quarter 2011.

 

 

 

 

Not sure if this was posted, but the Conference Board did a Leading Indicator release last week:

 

US LEI Increases

 

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.3 percent in June to 115.3 (2004 = 100), following a 0.8 percent increase in May, and a 0.3 percent decline in April.

 

 

..but the blurb goes on to say, after identifying potential drags on the economy over the past year or so, and the debt crisis as a potential issue for the future...

 

".... If these headwinds subside, the underlying trend of slow growth, as suggested by the LEI, should become more apparent over the next few months."

 

So, a growing, but fragile, economy.

 

 

 

Corporations may be doing well overseas but, if they are not hiring, producing or spending that money in the US then US GDP can still be in the gutter.

 

..yes, but the GDP has not been contracting...yet. 

 

Here are the GDP stats, by quarter:

 

2009

 

1:  (5.5)

2:  (  .7)

3:    2.2

4:    1.8

 

2010

 

1:  2.7

2:  1.7

3:  2.6

4:  3.1

 

2011

 

1:  1.9

 

...these are the final stats.  So, it looks like we left recession in the 3rd quarter of 2009 (first quarter of positive GDP growth in this time series).  Apparently prelimnary GPD numbers are due this week for 2nd quarter 2011.

 

 

 

 

 

I wasn't trying to say we are currently in a defined recession. But, what has become apparent is Wall Street profits are not translating into growth for America's Main Street. In the past the connection between to two was more pronounced.

 

As CincyDad posted in the past, when you take into account inflation, population growth etc. we really are not growing as a nation, we may actually be loosing some ground again. The IMF general considers a country with a GDP of 3% or less in a recessionary system.

 

Jeffery,

Your post and data that you provide are very helpful in this thread and are appreciated.

The earnings calls have been shocking with how much cash companies are holding onto.  Apple has enough cash on the books to pay off the budget deficits of California, Texas, Ohio, Wisconsin and probably a few more after that.  Sadly, most of that cash will go to increasing the manufacturing capabilities of Chinese, Korean, and Taiwanese companies and to buy American companies just to collect patents and/ore licesnses and sell/lay off the remainder of the assets.

They might just sit on the cash for now. Companies with lots of cash on hand are popular during rough economic times. They make risk-averse bondholders happy and stockholders like cash to a degree; though they might wish for the company to turn that cash into growth.

Like it or not, the government has to take the necessary action for the better of the country. And that means companies with a certain disparity between income of management and lower tier employees,  or obscenely high profits per employee have to be required to hire more people and/or increase wages for the lower tiers  at the threat of severe penalties if not....wait for it...partial or complete nationalization.

 

Say it with me. What is happening to the US is not sustainable. We are LOSING EVERYTHING!!!!!!!! and many if our employers are part of the problem. Big picture, people.

Nationalize Apple.  Yeah, good luck with that.  What should we expect in the government-issued iPhone 6, designed by the new Department of Consumer Technology, with review by a few standing and special committees of Congress and a blue ribbon panel of independent experts, before its introduction in 2016?  All that that would do is let Nokia and other foreign smartphone competitors back into a game that America, through Apple, has all but knocked them down and out of.

 

Also, nationalizing Apple means forcibly cashing out all the shareholders via eminent domain.  Its market cap as of close today was about $374 billion, or about 2.65% of U.S. GDP.  Google would be slightly more affordable at a meager $200 billion.  Amazon, you could pick up for $97 billion.

 

Likewise, I'm hardly a fan of giving the government ownership of Apple and Google and Amazon's databases of information about U.S. (and world) citizens.

 

The necessary action for the better of the country that the government can take is to leave the private sector alone as much as possible, especially the tech sector, which (not coincidentally) is among the least regulated and most innovative sectors in the country (and the world), and (also not coincidentally) is home to most of the companies profitable enough to have massive cash stockpiles.

 

Just out of morbid curiosity, what exactly do you plan on forcing profitable companies like Google and Apple to hire more people to do?

Yeah, let's leave the private sector alone; we all remember how much fun September 2008 was for the country.

 

And what would I do with companies with major disparities? I suppose I would issue profit sharing mandates with big and small companies in like industries. Or maybe I would issue direct correlation limitations between employees and executives' compensations ie the ratio can be no greater than x to y, so if the CEO wants more earnings, then the janitor gets some kind of proportionate raise. Or maybe I implement a special Reward for Fired tax, as in every dime of compensation an executive gets for bravely firing 1000 employees gets taxed 100% and reimbursed to those newly unemployed,

 

Or maybe I discuss ways of improving  the system with brilliant people who actually acknowledge there is something very wrong with these practically science fictional, disproportionate salaries and are willing to be daring, imaginative, and think outside the box instead of the usual ''Wah, free market this and tricke down that'' rhetoric will save us GARBAGE.

 

 

 

Profit sharing mandates?  Way to kill incentive to innovate.  Have you ever worked in an industry where it was critical to launch new products ahead of competition?

 

I have to laugh whenever I hear people so upset about corporations posting big profits or getting big tax breaks.  Consider for a second how many people are employed by Apple, GE (recently notorious for exploiting tax loopholes), or BP, or Boeing.  Consider how many people own stock in these companies.  Consider how many pension plans are invested in mutual funds which contain stock of these companies.  Then consider again who really loses when these companies are taxed to the point of barely being profitable (which seems to be the ideal level of most liberals).

In other words, you would drive American companies overseas at a faster rate than they're already leaving (including headquarters), spike unemployment through the roof, and make CEO pay primarily dependent on what industry the company works in rather than how well they run their company.  (Google's revenue per employee will always be many times that of McDonalds or Wal-Mart.)

 

What would the rational response of a company faced with crushing mandates like yours be?  Would it really be to meekly give in and allow the corporate treasury to be all but completely confiscated by a government determined to play backseat driver?  To hire a bunch of people who might be horrible fits for the company?  Or would it be a much simpler fight-or-flight response: stop those measures from getting enacted at all costs, and if that fails, get the heck off the sinking socialist ship?

Like it or not, the government has to take the necessary action for the better of the country. And that means companies with a certain disparity between income of management and lower tier employees,  or obscenely high profits per employee have to be required to hire more people and/or increase wages for the lower tiers  at the threat of severe penalties if not....wait for it...partial or complete nationalization.

 

Say it with me. What is happening to the US is not sustainable. We are LOSING EVERYTHING!!!!!!!! and many if our employers are part of the problem. Big picture, people.

 

Oh my gosh our government is too big and unsustainable as it is.  Your solution, nationalization, is a direct route to more inefficiency and corruption.

[quoteJeffery,

Your post and data that you provide are very helpful in this thread and are appreciated.

 

Thanks!  I dont post as much as I used to but this thread is one of the few places to talk about whats going on.  I think it has become more of a general 'state of the economy' thread, and as I say we might be in a new type of economy, which goes along with your comments that traditional definitions of recession, "growth", etc might not paint as complete a picture as they might have in the past.

 

Say it with me. What is happening to the US is not sustainable. We are LOSING EVERYTHING!!!!!!!!

 

Oh Well.

I did not mean to imply that we should nationalize Apple or any company with my post.  I should have stated such explicitly but my intent was something more akin to "with all the concrete in the Hoover Dam you could build a two lane highway to the moon" to convey magnitude since people generally agree the budget deficits of most of those states are huge.

Loretto, I think we know you didn't mean that; it was TBideon who suggested that.

U.S. durable-goods orders fall 2.1% in June

 

"It was the second large drop in the past three months for durable-goods orders, raising fears that manufacturing is running out of steam after leading a tepid recovery over the past two years. Without a strong manufacturing sector, it is hard to see how forecasts of a strong second-half recovery can be realized."

http://www.marketwatch.com/story/us-durable-goods-orders-fall-21-in-june-2011-07-27

^

Thats one of the leading indicators, too.

 

 

ruh-roh!

 

 

To....I forget whom. Eh, does it really matter? Not like I'm gonna convince you anyhow...

 

The reason I'm for nationalization, or at least issuing the threat of nationalization, or at least bringing up the topic for discussion, is that there needs to be massive overhaul in corporate America. Free market, or rather this virtually unrestrained free market we've been "enjoying" for some time now, has turned out to be a devastatingly damaging thing when you think about it; it's a big reason, perhaps the main one, why we're in this economic holocaust.

 

Companies have turned their backs on their employees so much since the late 70s/early 80s, and since the word "union" has become more or less an insult (for some legitimate reasons and some bullsh!t ones), workers have very few protections. Remember when people were up in arms about unemployment extensions, yet barely a peep was said about the '08 bank bailouts. No one ever chastises, I mean really chastises, top level guys who make millions off firing people and even more millions for exporting labor overseas; however, the suggestion of increasing taxes for those who can afford it without so much a GALANCE so our country can run sets off this incredible and inexplicable rage and $hit justifications, which are all saying the same thing in the end: "The rich eat first."

 

And with this argument that all taxes get passed onto the consumer, or the rich spend money so we shouldn't tax them more, then why don't you argue that the rich should spend NO money on taxes, and corporations should get to keep every dime they make. Wouldn't that be best for country, since the rich would spend all their "hard earned" money without the evil government (and subsequently, you know, giving it to those who can't survive without it) stealing from it through taxes.

 

Shareholders are now the only priority for companies -well, maybe, since managers and executives don't remotely have as much stake in the company as in better days of our country's past, and everyone else can go f themselves. Shareholders first, Americans second. Well, that's why we have a government in the first place, no? To protect life, liberty and property of the individual, remember?

 

And as to the threats of companies moving overseas or increased unemployment or yadda yadda, well, sure, that's a possibility. A little alarmist but always a possibility. But do you really think Apple will move every single job overseas if we implement some radical changes? You think they want to cut all ties with America's consumer base (a penalty I would impose for actions like that), and our trillions in GDP. Microsoft already made that threat some years ago, and last I checked their still enjoying Seattle.

 

Today Henry Ford would be called a socialist or an idiot for mandating his employees receive a good wage (so that they can buy his cars); they would say that because he was increasing his labor costs and lowering profits, he was thereby hurting the shareholders bottom line and probably committing corporate malfeanse or some garbage. How dare google give all their employees a 10% increase in wage? The poor shareholders!!

 

And that's what's happening. The middle class is being decimated because idiots refuse to acknowledge reality, that life is changing for the worse, that low skill middle class wage jobs don't exist, that we have 350 million Americans of whom so many are suffering, that companies just don't want to hire because the CEOs might make 50 million instead of 75 million; that everyone who is on unemployment actually is not lazy; rather, it's easier just to critique and chant free market at the top of their lungs, blind to this disaster.

 

 

 

 

Growth slows as labor markets ‘soft’: Beige Book

 

"The Beige Book, which is based on information collected on or before July 15, said growth has slowed in the majority of districts, particularly those nearest the Atlantic seaboard, with the Minneapolis district hurt by the now-concluded state government shutdown.

 

That represents a slightly worse result than the June 8 Beige Book, when seven districts grew at a steady pace. And it confirms economic data showing limp growth from April to June. The Commerce Department on Friday will report second-quarter gross domestic product, and economists polled by MarketWatch expect a limp 1.6% growth rate, worse than the 1.9% rate of the first quarter."

http://www.marketwatch.com/story/growth-slows-as-labor-markets-soft-beige-book-2011-07-27-149390?dist=countdown

I was going to go through this point by point, but I have neither the time nor the energy.  I'll just say that I disagree on basically all counts--the facts and the conclusions--and leave it at that.

Well, thanks for reporting that.

To....I forget whom. Eh, does it really matter? Not like I'm gonna convince you anyhow...

 

The reason I'm for nationalization, or at least issuing the threat of nationalization, or at least bringing up the topic for discussion, is that there needs to be massive overhaul in corporate America. Free market, or rather this virtually unrestrained free market we've been "enjoying" for some time now, has turned out to be a devastatingly damaging thing when you think about it; it's a big reason, perhaps the main one, why we're in this economic holocaust.

 

 

Stopped reading it....here.  The free market is to blame? 

Outsourcing jobs is so damaging to our country....the complete destruction of our middle class.....symptoms of relatively unchecked free market.

 

If I were to list a hierarchy of reasons for our collapse, then yes, our unchecked free market would be at the top.

Again, I can't believe that anyone can possibly describe the American economy as an "unchecked free market."  Have you ever even looked at a copy of the U.S. Code and C.F.R.?  Do you have any idea how massive a percentage of GDP is consumed by government spending (at all levels--federal, state, and local)?  How many different bureaucrats have to give their stamp of approval before someone can build a house in a typical Ohio city?  To open a restaurant?  Here's one for you regarding outsourcing: What takes longer and costs more, outsourcing a job to India or getting the exact same Indian worker an H1-B visa to work in the U.S.?  How much corporate debt of Fannie Mae and Freddie Mac (and other financial firms, for that matter) did the U.S. government bring onto its books rather than let the free market run its course and fossilize those dinosaurs?  Do you have any idea how long, and how much money, it takes to get a new drug through the FDA gauntlet, and what kind of anti-free-market barriers to entry that creates in that sector?  And, of course, we now have the newly-activist NLRB suing companies for trying to locate part of their production in right-to-work states.  We have Dodd-Frank, whatever that means (the bureaucrats are still working out just exactly how much power has been given them--no one really knows yet).  We have Sarbanes-Oxley, which is basically a huge financial gift to London (and other emerging world financial centers) because their capital markets are freer than ours.  Even before ObamaCare (denying people even the freedom not to participate in a market), the insurance industry was regulated at the federal level and at fifty different state levels.

 

(I'd also add that calling our current situation a "collapse" and some of the other apocalyptic words you've used on the past two pages seems a little high-strung.  Producers of non-essential goods and services like Apple wouldn't be booming like they are in a real meltdown.)

Again, I can't believe that anyone can possibly describe the American economy as an "unchecked free market."  Have you ever even looked at a copy of the U.S. Code and C.F.R.?  Do you have any idea how massive a percentage of GDP is consumed by government spending (at all levels--federal, state, and local)?  How many different bureaucrats have to give their stamp of approval before someone can build a house in a typical Ohio city?  To open a restaurant?  Here's one for you regarding outsourcing: What takes longer and costs more, outsourcing a job to India or getting the exact same Indian worker an H1-B visa to work in the U.S.?  How much corporate debt of Fannie Mae and Freddie Mac (and other financial firms, for that matter) did the U.S. government bring onto its books rather than let the free market run its course and fossilize those dinosaurs?  Do you have any idea how long, and how much money, it takes to get a new drug through the FDA gauntlet, and what kind of anti-free-market barriers to entry that creates in that sector?  And, of course, we now have the newly-activist NLRB suing companies for trying to locate part of their production in right-to-work states.  We have Dodd-Frank, whatever that means (the bureaucrats are still working out just exactly how much power has been given them--no one really knows yet).  We have Sarbanes-Oxley, which is basically a huge financial gift to London (and other emerging world financial centers) because their capital markets are freer than ours.  Even before ObamaCare (denying people even the freedom not to participate in a market), the insurance industry was regulated at the federal level and at fifty different state levels.

 

(I'd also add that calling our current situation a "collapse" and some of the other apocalyptic words you've used on the past two pages seems a little high-strung.  Producers of non-essential goods and services like Apple wouldn't be booming like they are in a real meltdown.)

 

Gramarye, I'm curious is there any regulation that you accept as necessary?  While there are some regulations that I agree could go or be adjusted, specifically the H1N-B, I am curious to see what your opinion is on the correct level of regulation. 

 

Also, most regulations were not created in a vacuum.  The FTA was created in response to "unethical sales practices, such as misrepresenting the ingredients of food products or therapeutic substances."

 

http://en.wikipedia.org/wiki/Food_and_Drug_Administration#History

Of course there are regulations that I would accept as necessary (including some that we don't have).  Obviously, there are many, many more that I would do away with or move in significantly more market-friendly (and simpler and less lawyer-heavy) direction.  However, I'm no anarcho-capitalist.  I certainly wouldn't do away with the Securities Act of 1933, for example, even though a very significant body of regulation has grown up around that.

 

Also, just for the sake of not losing focus: By far, my larger problem with the federal government is with its levels of taxing, borrowing, and spending, not its levels of regulation.  I was simply responding to a risible allegation that all of our economic woes are because America's market is too unchecked and needs to be more regulated, particularly when the regulations in question (given TBideon's posited series of ills) would be to deliberately force businesses to be more inefficient by proscribing practices such as outsourcing.  America's economy is clearly overregulated, but not nearly so clearly as it is overburdened with debt and government spending.

 

Finally, just a point of clarification: You said the FTA, but linked to the Food & Drug Administration (FDA) Wiki.  I presume you meant the latter?  (The FTA does exist--it's the Federal Transit Administration, but that's a pretty small agency within the DoT, and doesn't do much with unethical sales practices.)

 

I would concede the need for regulations to ensure food safety, and drug safety, for that matter.  I am more skeptical of the FDA's attempts to regulate or shift the American diet.  And the FDA's definition of "organic" reflects a lot more politics than nutritional science.  The real crime is the level of micromanagement and the number of regulatory hoops to jump through in drug development, however.  That's the one that costs billions and almost certainly costs lives (unless you really think that the drug companies are just waiting to start poisoning people and telling them it's good for them the moment the FDA steps out of the way).

Finally, just a point of clarification: You said the FTA, but linked to the Food & Drug Administration (FDA) Wiki.  I presume you meant the latter?  (The FTA does exist--it's the Federal Transit Administration, but that's a pretty small agency within the DoT, and doesn't do much with unethical sales practices.)

 

yes, got typing too fast.

 

I would concede the need for regulations to ensure food safety, and drug safety, for that matter.  I am more skeptical of the FDA's attempts to regulate or shift the American diet.  And the FDA's definition of "organic" reflects a lot more politics than nutritional science.  The real crime is the level of micromanagement and the number of regulatory hoops to jump through in drug development, however.  That's the one that costs billions and almost certainly costs lives (unless you really think that the drug companies are just waiting to start poisoning people and telling them it's good for them the moment the FDA steps out of the way).

 

I will admit that any form of micromanagement stunts most, if not all, forms of growth. 

 

I'm not not necessarily saying that the drug companies will start dropping anthrax into aspirin or anything but if a company knows that its competitor is developing a similar drug there will be corners cut to be first to market.  This happens more in the consumer product side, faulty items are pushed through that do have a significant affect on the population, ie. Toyota and faulty gas pedals.  Going that route with drug companies seems like opening Pandora's box a bit.

More job cuts coming to Wall Street

Commentary: Slowing business means fewer jobs in the long term

 

"HSBC Inc. and Credit Suisse are reportedly considering 10,000 and 2,000 job cuts respectively. In HSBC’s case, the cuts would come in its retail bank and in Credit Suisse’s case more than 4% of the workforce would be cut because trading revenue has slumped."

 

"The moves follow similar announcements at Goldman Sachs Group Inc., 700 jobs at Barclays and UBS, where a plan to expand Wall Street operations has been put on hold."

 

"It isn’t a stretch to think that employment could fall to 2003 levels, meaning another 50,000 job cuts."

http://www.marketwatch.com/story/more-job-cuts-coming-to-wall-street-2011-07-28

 

Boston Scientific to Reduce Staff by up to 1400

 

"The company announced a global restructuring program to eliminate unnecessary administrative positions and automate some production work. The company expects to shed between 1,200 and 1,400 employees by the end of 2013 through layoffs and attrition. Boston Scientific expects the cuts to save between $225 million and $275 million annually, some of which will be invested in other areas of the company. The company didn't specify which divisions would be cut.

 

The announcement came one day after Boston Scientific unveiled plans to expand operations in China, including the hire of up to 1,000 new employees."

http://abcnews.go.com/Business/wireStory?id=14177984

Container-Ship Plunge Signals U.S. Slowdown: Freight Markets

 

"Plunging rates for chartering container vessels that carry sneakers, furniture and flat-screen TVs may signal a U.S. consumer slowdown and losses for shipping lines in what is traditionally their busiest time of the year.

 

Fees for hiring vessels have fallen 9.3 percent since the end of April, according to the Howe Robinson Container Index, which tracks charter rates for a range of vessels. Last year, the index surged 56 percent in the period, as lines added ships on demand from U.S. and European retailers restocking for the back-to-school and holiday shopping periods.

 

“The troubling part is that charter rates are falling in the peak season,” said Johnson Leung, head of regional transport at Jefferies Group Inc. in Hong Kong. “Sentiment among consumers and retailers isn’t very strong.”

http://www.bloomberg.com/news/2011-07-27/container-vessel-rates-plunge-signaling-slowdown-in-u-s-freight-markets.html

 

A general observation. Yesterday the new IKEA in Denver opened. This is one of the largest IKEAs in the US. My wife loves IKEA and so we went on opening day. While it had large crowds, there really never was the long traffic lines, like and IKEA opening got a few years ago, or big lines to check out. They had a good crowd, but it was no way near what was being project for massive traffic congestion etc.

 

Don't be surprised if future revisions to these numbers don't turn both of them negative or right at it. This is the same thing they did before the 'great recession' was official. The GDP numbers just kept being revised downward until they couldn't hide it anymore. Add in that this upcoming quarter has already started with a July that has data worse than previous months. Layoffs are starting to pick up again and leading indicators are starting to show some significant downward movement over previous months. Add in the inflation during these quarters and we are back in recession levels.

 

GDP grows slender 1.3% in second quarter

 

"Gross domestic product expanded at a paltry 1.3% annual rate in the second quarter, the Commerce Department said Friday, below the 1.6% growth rate that economists anticipated."

 

"The new data on the inflation- and seasonally-adjusted value of all goods and services produced in the United States showed the economy barely grew at all in the January-to-March quarter, rising just 0.4% from the initially reported 1.9% improvement. At the same time, the government said the recession proved to be deeper than initially projected."

http://www.marketwatch.com/story/gdp-grows-slender-13-in-second-quarter-2011-07-29

Quick side note. If we were still calculating GDP like we did back before the early 90s GDP would have been negative since 2004. Meaning that we would have been in a recession for 6 years straight ,which is probably pretty close to what main street has been feeling overall.

 

http://www.shadowstats.com/alternate_data/gross-domestic-product-charts

^Yep, the only reason they changed GDP calculation was to hide the truth from the American public. The hardest-hit places like Toledo and Dayton were in recession for a decade.

Quick side note. If we were still calculating GDP like we did back before the early 90s GDP would have been negative since 2004. Meaning that we would have been in a recession for 6 years straight ,which is probably pretty close to what main street has been feeling overall.

 

http://www.shadowstats.com/alternate_data/gross-domestic-product-charts

 

This confuses me.  Regardless of how we calculate GDP, there still has to be a constant, no?  Meaning, if you define a recession in traditional terms, how can using a different calculation for GDP mean that we are in a recession now when GDP is still rising month over month (albeit veeeeery slowly).  Forgive my ignorance in economics.

Quick side note. If we were still calculating GDP like we did back before the early 90s GDP would have been negative since 2004. Meaning that we would have been in a recession for 6 years straight ,which is probably pretty close to what main street has been feeling overall.

 

http://www.shadowstats.com/alternate_data/gross-domestic-product-charts

 

The 'shadowstats' chart shows discrepancies even before the early 90's. I'd be interested to understand better the 'distortions in government inflation usage' that the chart has been adjusted for.