Allow Me to Depress You
I'm at the beach this week, the weather is excellent, the water is perfect, so what else can I do but show you this graph (top) from the always excellent CalculatedRiskBlog.com.
It's not a nice picture. It suggests that we're not turning a corner. That we're in bigger trouble than some people think we are.
If so, and if the graph below it is also relevant -- that one's from Business Insider, which has a 16-slide entry in the Most Terrifying PowerPoint Deck Ever contest -- then what's the next right step?
I ask because I pretty much know the next step the Obama Administration is going to take, because for them it's permanently 1975 -- more stimulus spending, backstopped by tax hikes -- but I'm wondering, perversely, if tax cuts aren't the thing? Tax cuts -- maybe even something like a 12-month payroll tax holiday for all Americans (which would disproportionately help the working American, always a good thing) to address the still-unfolding personal debt crisis and consumer confidence. But tax cuts aren't going to happen. And that, I'm pretty sure, explains those two graphs pretty well.
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Jun '10
Re: Allow Me to Depress You
Maybe the Californians will pack up and go to Oklahoma this time.
May '10
Re: Allow Me to Depress You
I was just going to comment that I was officially depressed. Then I read etoiledunord's comment and laughed out loud!
Jun '10
Re: Allow Me to Depress You
In Washington the Bureau of Alcohol, Tobacco and Firearms is a government agency. In New Mexico it's known as a convenience store. Anybody want to go in on a franchise? I figure a string of stores along I-40 between LA and Oklahoma City can't lose.
Jun '10
Re: Allow Me to Depress You
I propose we change that department to the department of Nachos, Alcohol, and Firearms.
If they give us a tax holiday next year (when I'm in grad school) instead of the last 2 years (when I had a real salary) I'm going to get stabby. I suspect it's a far too logical choice and would help business as well so I won't hold my breath on B.O. enacting such a thing.
May '10
Re: Allow Me to Depress You
These charts reflect yet another byproduct of Barack Obama's penchant for flowery rhetoric untethered from any real-world proposal. I can tell you from personal observation that most businesses are operating without an ounce of fat on their roster. Employers anticipated higher costs per employee under this administration, so they trimmed up after the '08 election. No one wants to be caught with a bloated payroll when higher payroll taxes and insurance mandates hit.
The problem is the administration and Congress refuse to say how much they want to take out of the economy's hide. I'm hardly urging the government to raise taxes (it would be a disaster), but employers are not going to hire until they have some certainty and can plan for it. The longer the administration refuses to define its intentions, the longer this staring contest with private enterprise will continue ("ok, you hire more people so I can collect more taxes; no, you tell me what you're going to do about the taxes and I'll think about hiring").
Here's a hint for a good, clear message - swear off tax hikes and you'll see employment increase.
Jun '10
Re: Allow Me to Depress You
This is not hard. The tax policies of John F Kennedy, Ronald Reagan and GW Bush showed the way to get an economy out of a recession. This regime instead is bound and determined to be Jimmy Carter 2.0
May '10
Re: Allow Me to Depress You
Nail on the head right here and applies to regulation as well as taxes. The government started re-regulating in January 2008 and hasn't finished yet -- as long as that continues. businesses are going to remain uncertain and unable to plan.
Stuns me how little the administration appreciates the weak economy has to do with them. They just don't get it. A little divided government post-November would go a long way to getting things back on track.
May '10
Re: Allow Me to Depress You
I think we are at a tipping point. If there is no republican tsunami in November that allows& drives a roll back/unfunding of the idiocies underway right now - then for the first time, the USA is going to experience capital flight. It will not be pretty or pleasant.
The basic Obama economic model is working well so far - change to the European model with 10%ish unemployment, low growth, high dependence, high taxation, crony capitalism where govt. picks winners and losers, high taxation for low service levels etc.
If this persists, or is percieved to be the likely outcome in early November, you ain't seen nothing like what will come.
Jun '10
Re: Allow Me to Depress You
The next right step? Elect grown-ups with the disposition to sit down and deal soberly and seriously with our fiscal house. Map out a 5, 10, 20, 50 year plan with milestones to bring debt under control. Do it in less than 2000 pages. Make it binding to future congresses (for periods no longer than 10 year blocks of time, to allow for necessary course correction). Elect leaders (not career politicians) who will go to Washington to do the hard things that nobody will like, and require sacrifice from all. Short-term pain for long-term gain. Maim and/or severely reduce the entitlement beast.
I can wish it, but it's not going to happen.
May '10
Re: Allow Me to Depress You
I'm always incredulous when I read the latest in a flurry of news pieces about the business owners who supported Obama's candidacy and now feel betrayed by his anti-business policies. Really, guys? The man is just doing exactly what he said he'd do throughout his campaign: forcibly redistributing capital and damn the consequences. Now everyone is just trying to protect what little they can, and the end result is going to be we all take this ride straight to the bottom. The only stocks I'd buy right now are firearms, ammunition, and alcohol. They may soon be our primary form of currency.
Re: Allow Me to Depress You
I think this is a crucial point, Steve. For these guys, things are working. That's really terrifying.
Re: Allow Me to Depress You
I'm troubled too, Andrew. It seems to me evident that many Americans, if we continue down this road, will simply not pay taxes. With such a huge percentage of Americans already not paying taxes, and of course a fair number of people in America who are not citizens also not paying taxes, the legitimacy of the current system is creaking. Confronted with this situation the inevitable federal response, I think, will be a big round of new targeted tax cuts -- i.e., you only keep your income if you do what you're told.
Jun '10
Re: Allow Me to Depress You
At which point the soft tyranny becomes hard. Or at least much less soft.
May '10
Re: Allow Me to Depress You
All this raises two questions for me. How much gold is everyone buying? And in what form?
Jun '10
Re: Allow Me to Depress You
I considered gold, but decided to pass. The problem with economic depression is that it can cause deflation. Gold won't necessarily hold its value.
I'm putting money into home infrastructure: cistern (2000 gal.), wood burning stove, vegetable garden and fruit trees, dry goods like beans, lentils, peas, barley, and flour, gasoline (w/ stabilizer), ammo, medical supplies, emergency radio and the like. Most of my conservative friends are doing likewise.
Jun '10
Re: Allow Me to Depress You
~Paules: I considered gold, but decided to pass. The problem with economic depression is that it can cause deflation. Gold won't necessarily hold its value.
I'm putting money into home infrastructure: cistern (2000 gal.), wood burning stove, vegetable garden and fruit trees, dry goods like beans, lentils, peas, barley, and flour, gasoline (w/ stabilizer), ammo, medical supplies, emergency radio and the like. Most of my conservative friends are doing likewise. · Jul 6 at 12:57pm
Don't forget ammo! Oh, you have that.
You know, I know many folks for whom this is actually a reality...
Jul '10
Re: Allow Me to Depress You
It won't be long before Obama suggests "Graph Reform."
May '10
Re: Allow Me to Depress You
I guess I believe that going into survivalist mode (dried beans, ammo, wood stoves, etc.) is not going to mean much if the entire country is a mess. If it is that bad, we'd better be emigrating to India ASAP. If we want to turn things around electorally, we should start talking more about Pelosi than Steele.
I do wonder how we can be productive as an economy when our most talented citizens seem to always be at the beach for a week......
Re: Allow Me to Depress You
I'm working, Duane. I promise. It's called "telecommuting," or something. Hard at work, seriously. Promise.
Please ignore the cocktail in my hand.
Jun '10
Re: Allow Me to Depress You
In reading these comments, and particularly the survivalist-themed entries, I'm reminded again of a long-ago Sunday morning chatfest. George Will and the assembled elites were discussing whatever particular disaffection gripped that land at that point, and he stated that the USA was still passing what he called the "Gate Test". Asked what he meant, he calmly stated that "our gate is still swinging in, not out".
Sure, crankiness was up, but nobody seriously considered getting the hell out of Dodge.
So my point is, Hollywood wing-nuts like Alec Baldwin and Babs Streisand (and their thumb-sucking threats over departing over "that Bush" notwithstanding), this is the first time in my half century that I've heard people...many of whom I even respect...seriously contemplate the possibility of blowing this pop stand for greener pastures.
I suppose we can all agree that these notions might be a skosh premature, but the fact that they are even gaining traction with normally sane folk surely speaks to a primal, hair on the nape of your neck sense that something is seriously amiss.
PS: I have no ammo, but the liquor cabinet at Chez Singlemalted is copiously stocked.