If you want real economic recovery, you have to get two things:
(1) Government must cut spending and quit bailing out failed ventures.
(2) Loosen the restrictions on businesses and entrepreneurs.
Stossel gives us a good picture of how the American spirit can deliver on the latter.
Only 13,000 jobs added in the entire [expletive] month of June??? That means about 9 jobs per day per state. This is pissing into a forest fire.
While I enjoy my iPhone, I have no use for AT&T. They have engaged in false marketing, their networks are of dubious reliability, and–quite frankly–the only thing they have going for them is their exclusive contract with Apple for the iPhone.
That, too, is about to change.
There are lots of new phones entering the market. HTC has a couple fine Android phones. Google has its Nexus One, which–in my estimation–is overpriced. One thing I am noticing, though: other than the iPhone, AT&T is not offering the leading-edge phones. And, given that they are about to lose their exclusive hold on the iPhone, it remains to be seen what moves they have up their sleeve.
And one more thing: when my contract is up, I’m ditching the iPhone for a Droid.
The House passed–by a vote of 409-5–a bill that gives people who signed purchase contracts in April, until the end of September to get their deals done.
Under current law, homebuyers who signed purchase agreements by April 30 have until Wednesday to close on the sale to qualify for tax credits of up to $8,000. The bill would give buyers until Sept. 30 to complete their purchases.
The extended deadline only applies to people who signed purchase agreements by April 30. The National Association of Realtors estimates that about 180,000 homebuyers who already signed purchase agreements are likely to miss the Wednesday deadline.
I’ll tell you exactly what this is: pure panic by the House.
(1) Parties that signed purchase agreements at the end of April, and have not completed their deals now, have little or no chance of getting it done by September.
(2) The Republicans–until today having rediscovered their austerity–overwhelmingly supported this nonsense.
(3) This bill will not generate one new home purchase, as it only applies to those agreements signed at the end of April. It is merely an attempt to prop up those purchases that already were reported at the end of April. Otherwise, April’s reports will have to be revised downward, and the situation will look even bleaker.
Both sides know the situation is far more dire than is being reported. Home sales plummeted when the tax credit expired. States are facing unprecedented financial crunches. Over a quarter-million teacher jobs will be eliminated. State employees–once regarded as “secure”–are now facing layoffs. Once-sacrosanct pension systems are now facing the prospect of insolvency. Europe is on the verge of collapse, as they are having trouble getting investors to buy their debt.
The party is just getting started, and the House has panicked.
Courtesy of Robin Dembroff of the Evangelical Outpost. I’ll comment later this week. What are your assesements?
this one, I’d say our country is headed for the crapper.
Seriously, what on earth was she smoking?
In May, I mused that Kagan is probably a sacrificial lamb, and that Obama will end up nominating someone else–perhaps even more liberal than she is–in her stead.
She’s now looking like a slightly more polished, left-leaning version of Harriet Miers.
Right now, I’d say she will probably get the confirmation. But it may very well be close.
Too bad that the ruling was only a 5-4 decision. This should have been a no-brainer, as the Constitution is very clear on the subject, and the framers left quite a paper trail explaining what their thoughts were on the subject.
This just shows that having a Nobel Prize is no substitute for intelligence. While Krugman is correct in that the current crisis is shaping up to be more like a depression–at least as serious as the years after the panic of 1873–he is totally out of his mind when he says that the problem is inadequate spending.
In the face of this grim picture, you might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.
As far as rhetoric is concerned, the revival of the old-time religion is most evident in Europe, where officials seem to be getting their talking points from the collected speeches of Herbert Hoover, up to and including the claim that raising taxes and cutting spending will actually expand the economy, by improving business confidence. As a practical matter, however, America isn’t doing much better. The Fed seems aware of the deflationary risks — but what it proposes to do about these risks is, well, nothing. The Obama administration understands the dangers of premature fiscal austerity — but because Republicans and conservative Democrats in Congress won’t authorize additional aid to state governments, that austerity is coming anyway, in the form of budget cuts at the state and local levels.
Why the wrong turn in policy? The hard-liners often invoke the troubles facing Greece and other nations around the edges of Europe to justify their actions. And it’s true that bond investors have turned on governments with intractable deficits. But there is no evidence that short-run fiscal austerity in the face of a depressed economy reassures investors. On the contrary: Greece has agreed to harsh austerity, only to find its risk spreads growing ever wider; Ireland has imposed savage cuts in public spending, only to be treated by the markets as a worse risk than Spain, which has been far more reluctant to take the hard-liners’ medicine.
Paul, where have you been for the past 6 months? The European Zone is on the verge of default. They aren’t spending more, because they can’t! If you have credit cards with balances totaling $20,000 (with a balance of $5,000), then that means you can hypothetically spend $15,000. Right?
Well, not really.
What happens if the credit card company decides that your credit line is too high and, say, cuts it down to $10,000? What happens if the credit card company starts hiking your interest rate because they have figured that–due to your balance-to-credit ratio, you are now at a higher default risk? What happens when Experian, TransUnion, and Equifax see your change in credit situation, and knock your score down below 700?
Answer: Your power to spend has been crimped badly.
Oh, and your ability to recover will depend on your securing a job that will cover your living expenses AND provide a reasonable chance for you to pay off the debts that you ran up.
Well, that is what is happening in Europe. Greek bonds are now junk. Their interest rates are high as a result. Spanish bonds aren’t a whole lot better, so they have to pay a higher rate for their borrowing.
Over here, we’ve spent an insane amount of money to prop up our GDP. What happens when that money runs out?
For economic recovery to be durable, the economy would need to be able to produce above and beyond the debt incurred during the recession. Evidence in the housing market suggests that this is NOT the case: the first-time homebuyer credit has expired, and housing purchases have plummeted. This in spite of interest rates at all-time lows!
Because our monetary creation depends on credit creation, we cannot create money unless we have investors who will lend it (buy bonds) to us.
China–one of our major creditors–is already getting antsy about our spending. And as we keep incurring the debt, we put ourselves in the position of being dependent on MAINTAINING that level of spending.
Government cannot spend that way ad infinitum, so when the government eventually pulls back we will need GDP growth exceeding 10% per year just to cover the debt obligations and infrastructure that government has artificially created.
When Keynes was faced with the issue of “what happens in the long run”, his answer was “in the long run we are all dead.”
Trouble is, what happens when the long run arrives and we are not dead?
The long run has arrived.
If you think I’m a tough old bird on the feministas–Vox Day makes me look like a metrosexual wuss.
If what he was saying was true only in the secular world, it would be bad enough. But it is a very real war in the Church as well. The sooner we burn the metrosexual Jesus at the stake, and preach to both sexes the way the Apostle Paul did, the better.
