Addressing Fears of Recession
http://thedianerehmshow.org/shows/2011-08-23/addressing-fears-recession
President Obama says the U.S. is not facing another recession. But he acknowledges an unemployment rate that is too high and an economy that's not growing fast enough. He has been criticized for not moving more quickly to ease regulations that business and industry view as overly burdensome. Today the White House announced new regulatory reforms to address those concerns. It expects the measures to save businesses billions of dollars, spurring them to hire workers. And the president will outline a jobs program after Labor Day. In this hour, economic experts weigh in on ideas to spark growth of the economy and jobs.
Guests
Jared Bernstein
senior fellow, Center on Budget and Policy Priorities; former chief economist and economic policy adviser for Vice President Biden.
Phillip Swagel
professor at the University of Maryland School of Public Policy, senior fellow Milken Institute and assistant secretary for economic policy at the Treasury Department from 2006 to January 2009.
Eamon Javers
Washington correspondent, CNBC.
Zanny Minton Beddoes
economics editor, The Economist; formerly, economist at the International Monetary Fund.
Russell Roberts
a professor of economics at George Mason University, Distinguished Scholar at the Mercatus Center and a research fellow at Stanford University's Hoover Institution.
Program Highlights
Although President Obama insists that we are not headed for another recession, many Americans consider the wild fluctuations in financial markets and poor economic indicators as harbingers of a double-dip. Our guests discussed some of the reasons behind the current economic crisis, including the housing bubble, and offered some policy suggestions they think will help get the country out of it.
- "I think the crisis of confidence is real. I think there is a lot of concern and legitimate concern about where the economy is heading. I think no good economist should predict a recession or not. I don't think we really have any idea of what's going to happen. There could be a bunch of good news that comes along, and suddenly things look rosier," Roberts said."
- "You have every reason to be frightened of the stock market right now when it's doing this kind of thing every day. But unemployment, still very high. I mean, if your brother-in-law is still out of work, and - you're going to feel it. And it's going to scare you that you might be out of work. And housing - this is an economic crisis that started in the housing sector," Javers said.
- "We are in a world where we had a huge housing bubble that's bust. We've got very over-levered consumers. We have consumers, therefore, that are reluctant to spend more, reluctant to borrow more. That's an ongoing drag on the economy. So people who've looked at those kinds of situations in the past - and there haven't been that many of them - said that this recovery was always going to be a weak and feeble one," Bedoes said.
- Diane asked the guests what one thing they would each do right now if they could to help spur economic growth.
- "There's no silver bullet. But here's an idea for you. It's called FAST, fix America's schools today. There are 100,000 schools out there, public schools. And almost every one of them is in an ill state of repair. They need insulation. Many need retrofits, new windows, new boilers. Think of the energy efficiency savings," Bernstein said.
Comments
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It's laughable when I hear liberals complain about corporations shipping jobs over seas. A liberal in a Toyota or Honda is as common as flies on shi--. The parking lots are always filled at the Chinese outlet store Walmart. Why should corporations be held to higher standard than you hold yourself. Obviously consumers have no problem exporting jobs, the corporations only give you what you want, cheap foreign made goods.
In my household over the past 30 years we purchased eleven new vehicles, all American makes made in this country. We try to buy American made products whenever possible. We put our money where are mouth is, we do not try to put other peoples money where are mouth is like the progressives do, hypocrites!
Sane,
You must not live in Texas. All of the cities and counties are struggling to keep from going bankrupt this includes furlough days and not filling needed open positions and layoffs.
The Texas legislature just cut the funding for schools by a significant amount causing larger class sizes because the schools had to terminate hundreds of teachers. They also appropriated much of the revenue that the counties and cities once called their own as well, and we still have an enormous hole in the bianual funding of government.
Texas is no bed of roses. The model is a mirage. Rick Perry is serving coolaid. I Live here.
The speakers are correct that no simple answer exists to turn the economy. However, hoping for an improvement in the behavior of Washington's polliticians is essentially doing nothing. So here are a couple of ideas that from my experience as an economic development consultant of 20 years, who daily works with companies can at least get cash flowing: 1) banks need to lend money. If government is required to back up the loan with a guarantee, then make it so. The flow of cash will ease some of the resistance by the private sector entities to spend. 2) "intelligent infrastructure". The demand for infrastructure is limitless but the availability of funding is limited. The integration of technology, construction and services would be an appealing private public partnership, would create real jobs, spawn new economic activity and increase the efficiency of the exisiting infrastructure. Imaging your car being able to communicate with bridges/streets/intersections adjusting routes and speed to get you where you need to be as quickly and safely as possible. The integration is akin to the phone, home, TV integration already underway.
Everybody has been talking about "confidence" this week, postulating that perhaps we will "cause" a double dip because we're talking about it. Here is a contrary view: perhaps we have yet to address the underlying causes of this economy because we haven't really given it a label that deserves some sense of urgency. "Depression" is something that would probably get the juices going. Or maybe "Economic Debacle of Immense Global Proportions" would get everything going.
There is a stark contrast between the sense of urgency displayed by the Bush and Obama Administrations in 2008 and early 2009 to address the "liquidity" problems of the banks, and the sense of urgency there seems to be about the growing jobs deficit. It is sadly clear that when Wall Street is in trouble, everyone in Washington jumps to put out the fire, but when Main Street is in trouble, Washington is fine with taking its sweet time.
I have three ideas to help fix the economy.
First; increase import taxes. It is cheaper to ship an item to the United States from Taiwan, than it is to send the same item to main land China. Take an average of what we pay for import taxes, for our products going to other countries and increase our Import taxes to the average . Even if we just increase the Import tax to the match the tax we have to pay to the country we are trading with, will help the economic recovery.
Second; increase taxes on companies that export jobs overseas. Make it more economical to keep jobs here by taxing them excessively for sending jobs off shore. Close loop holes that allow companies that have majority of their holdings in the US and claim headquarters off shore for lower taxes.
Third; cut the pensions of all the retired diplomats on the congressional and governmental roles. Why should our elected representative make more money and have better health care retired than we do when they retire.
I think a flat federal tax could be a good option for raising immediate capital. It would be the most fair tax. 2 percent could raise billions very quickly. Interest payments are killing us. And of course our ongoing wars are killing us and others and draining the economy. As long as people make money from war and destruction they will continue down the same path. WE have the best government money can buy.
Let them Eat Cake
That was the position of the Aristocrats and Royalty just before they lost their heads.
China is moving towards a consumer driven economy, but with low wages the average consumer has little money?
China's one child rule will have the biggest effect; China is the fastest aging country in the world.
A cheap workforce is at a serious disadvantage when it comes to retirement planning and we are following in China's footsteps.
Stocks are down as are home values due to lack of Demand. Older folks are cashing out but younger folks can no longer afford to buy due to stagnate real wages and the elimination of pensions and funding of 401k's which were a big part of previous American Demand.
Younger American workers are delaying marriage and starting a family, college graduates are moving back in with parents and grandparents are raising grandchildren.
It's funny to hear of complaints about a "permanently unemployable underclass" by those so apparently invested in having one. I think the focus belongs on corporate welfare and the ridiculous excesses. and as Russell said, the Wall Street bailout was a travesty.
What is, was, and will be needed are jobs, education and renewal - and it should be obvious the neocons fought that for years and most notably in the current session. It was Obama who supported the small business tax credit for hiring - a stimulative measure that I doubt could be repeated (let alone improved) with this congress.
John C.: John Stuart Mill had remarkable vision - this led him to oppose the capitalism he was originally a "father" of. :)
Bobby - "The best government money can buy" - that's a keeper!
Why is a handout an insult when a human being is receiving it, but not when a corporation is receiving it? One of the panelists asked "Do you really want to live in a society where everyone gets a handout?" As if the answer was obviously "No."
My answer is that I want to live in a society where people who need help get it. Where helping people is viewed as a hand up, not sneeered at as a handout. That is good for us all. And not only in a feel good way. Our businesses need a market with consumers who can pay.
Maybe the administration would have done what one of the very thoughful callers suggested, and mandated that the bailout dollars be used to pay down mortgages, instead of just giving it to the banks, if it hadn't been for our national admiration of money and the rich and tendency to trust bankers and business people because they are viewed as achievers. Teachers, firemen, and others who are in helping professions are given lip service but government didn't think to help them pay mortgages with ballooning rates [that should have been illegal].
Yet, the discussion this morning reflected that the reason businesses are uncertain is that they don't know if customers will come in the door. Business people need to realize that when they oppose any expenditure, they are opposing measures aimed at the survival of their own market. Many American businesses are in the process of destroying our home market. They are assisted by academics and other intermediaries who act as if anything other than helping business is foolish and treat such suggestions in a dismissive way. They are also helped by rank and file citizens who are so angry at their own losses that don't want others to get/have anything. This is a suicidal situation for our country.
@Monte:
Just for the record, GM and Ford now make the majority of their cars overseas, and Toyota and Honda have plants in the United States. So, chances are, your much despised "liberals" are now buying made in America cars also. Of course, your home is probably cluttered with Chinese made goods, whether you like it or not, since many amenities simply cannot be purchased from an American manufacturer anymore (like your TV).
As for hypocrisy, since you are a self-professed conservative, you must recognize the hypocritical nature of your statement, namely that if you believe in "market forces", then you should recognize that for the consumers who buy the Japanese cars, the domestic Triumvirate of GM, Ford, and Chrysler, failed to produce a product that competed with their Japanese counterparts so as to convince that consumer to buy "domestic". Thus, the "magic hand of the market" worked, and the domestics lost.
But, maybe you're suggesting that "liberals" should not adhere to these "market rules"? Perhaps you would rather that "liberals" be forced to buy products from domestic manufacturers that they deem to be inferior in quality or price? That would keep jobs from being shipped overseas, wouldn't it? But, of course, that would involve a "nanny state" government stepping in to force these people to ply their hard-earned dollars to these companies and their products.
Sounds like you have your own set of varying hypocrisies to sort out. Oh, and I guess that leaves us with one final one, since I'm sure your a self-proclaimed "good Christian" and all: let he without sin be the first to throw stones. People in glasses houses made in China shouldn't either ;-)
If I was not clear before, I do consider Texas as a poor southern state. Statistics prove that point.
Biggest problem is with brainwashed public. They were trained to associate "patriotism" with what is good for plutocrats or large corporations. The often toothless and without medical insurance southerners feeling rugged and patriotic, fighting to impose this "ruggedness" on more prosperous states, fighting benefits for which they do not pay in the first place.
Mark corich wrote:
"First; increase import taxes.".
"Second; increase taxes on companies that export jobs overseas."
That is one approach. Increasing taxes to match labor differential might induce companies to come home. But it is the "stick" approach. I prefer the carrot. Cut corporate tax rates for manufacturers from 35% to 0. Corporate taxes are currently less than 2% of GDP. Watch companies stream home.
"Third; cut the pensions of all the retired diplomats ... ".
I'm all for that. The immediate "life time benefit" for somebody that serves one term is BS. Nobody gets that in the private sector. If these officials really want to serve, let them serve. They're getting paid for their service. When they're done, they're done. Get a job in the private sector that provides health care like the rest of America.
I used to listen almost daily to NPR and Diane. There is nothing like truth telling here anymore.
For example, raising the retirement age is the exact opposite of what we should be doing. We have structural unemployment for a lot of reasons. Baby boomers like me who are underwater in their homes, lost their retirement savings (my down payment for my home taken from retirement funds went poof!), and are facing increasing demands in the workplace in order to compensate for the 'recession' should be put in the position to retire earlier, not later. Students leaving college can't get into the job market. People like me have a wealth of expertize to share. We should be passing on what we know by training our youth. Instead, we are going to have to work harder and harder and postpone retirement to our seventies, if we don't collapse before then.
Here is the rest of what I was trying to say:
The gross imbalance in distribution of wealth has caused the wheels of capitalism to fall off. The hoarding at the top has created a situation in which there is simply not enough money in the pockets of the masses to drive the economy.
Unless we increase taxes on the wealthy, the USA is toast and with it the world economy.
Don't expect me to waste my time listening to the kind of propaganda I heard today. I have to spend my time reading books and articles which try to approach the truth.
Mitt Romney is demolishing his La Jolla mansion to rebuild it FOUR times larger. This is the best alternative we have on the Republican side of the Presidential race? Is this a joke? Is the planet a joke to all of the super wealthy?
I think they fantasize they can buy immortality. Guess what? Even if that is possible in the near future, due to scientific advances concerning aging, karma will out. Maybe they can buy immortality, but it will surely be a living hell they have sentenced themselves to.
I didn't listen to the whole program, but what I heard enraged me.
The 'bailout' could have paid off every mortgage in the USA, instead it went down a hole and into the pockets of the very people who caused the collapse.
I was disheartened to hear a called blaming house flippers for the collapse. Nonsense: the bankers and their helpers, e.g. the industry responsible for triple A rating junk, caused the collapse.
I am waiting for a true FDR type Democrat to stand up. In his/her absence, there are plenty of insightful people all over the world who could deliver better analysis and commentary than the people I heard today.
This is not reasoned analysis: It is structured ideological lying. When was the last time you had on a Bill Moyers type who speaks truth to power?
Shame.
Marvin, I see postal workers in my neighborhood and in the post office often and they are not goofing off. Their lines move faster than those at many private sector stores.
You need to look around at food and clothing distribution too. In my community this is already done by non-profits and in many cases the food is supplied by them as well. Maybe you should volunteer for Second Harvest, or Meals on Wheels, or start a food drive at your work or church and take the food to the food bank so you can see we are talking about people like you. As for health care, do you want your local non-profit hospitals to assume the full burden of medicaid? This is billions, and your hospitals couldn't pay for it and would have to close. Good luck to you then when you or your kids catch TB, AIDS or MRSA via one of the people you were too cheap to help treat. Or when you are mugged or shot by a drug addict who needed residential treatment but couldn't afford it.
Sam in Texas wrote"Just for the record, GM and Ford now make the majority of their cars overseas, and Toyota and Honda have plants in the United States. So, chances are, your much despised "liberals" are now buying made in America cars also."
Answer- It did not start out that way, Toyota And Honda have (ASSEMBLY) plants here. The profits and engineering and parts manufacture go to Japan.
"As for hypocrisy, since you are a self-professed conservative, you must recognize the hypocritical nature of your statement, namely that if you believe in "market forces", "But, maybe you're suggesting that "liberals" should not adhere to these "market rules"? Perhaps you would rather that "liberals" be forced to buy products from domestic manufacturers that they deem to be inferior in quality or price? That would keep jobs from being shipped overseas, wouldn't it?
Answer- I never said the American consumer should be forced to buy American nor did I say I supported import duties. It's my opinion that it is in our interest as a country to freely choose to buy American. (JOBS) As I said before, your all for more jobs as long as it does not cost YOU anything.
"Sounds like you have your own set of varying hypocrisies to sort out. Oh, and I guess that leaves us with one final one, since I'm sure your a self-proclaimed "good Christian" and all: let he without sin be the first to throw stones. People in glasses houses made in China shouldn't either ;-)"
Answer- No not really, I am consistent and honest with myself. I am an atheist, I am not perfect but I am intelligent enough to admit when I am wrong. You are not. It is the duty of every American to "throw stones" at our government when it has so obviously gone wrong. Government welfare programs are making everything you seek to improve worse!
"Ramona wrote:
Here is the rest of what I was trying to say:
I think they fantasize they can buy immortality. Guess what? Even if that is possible in the near future, due to scientific advances concerning aging, karma will out. Maybe they can buy immortality, but it will surely be a living hell they have sentenced themselves to."
After his obsession with making money and Enemies ruined his health, John D. Rockefeller was reduced to living on Human Milk (From Poor but worthy Mothers, no doubt).
Read a selection from Dale Carnegie-
http://books.google.com/books?id=zHBEKfn52l4C&pg=PA278&lpg=PA278&dq=Rock...
Monte Haun mchaun@hotmail.com
"kathleen wrote:
I am in Rep Boehners district north of Dayton Ohio helping take care of elderly parents. Recently talked with a layed off GM worker who had just applied at Wal Mart where is 18 year old daugher was employed. In Boehners district a Delphi plant on Needmore Rd that had employed 3000 jobs was just leveled. Getting rid of the evidence of the failing economy.
That is the state of the economy. Bring those MSM cameras to Boehners district.
August 23, 2011 - 10:50 am"
I wrote this in 2007-
"Whether work is outsourced or done with immigrant labor, it does not have to be cheaper. Delphi has manufactured auto parts for years, but recently, the business has become more competitive. Its not like it costs Delphi 5 times as much to make a starter, but maybe just a little bit more. American businesses have stayed competitive by technology and capital investment and with tiny wage concessions Delphi could have continued. But its a lot of trouble and the sight of all that cheap labor is just too tempting. So the owners and managers can sit on their butts and take it easy without the need to scramble to stay competitive, while they rake in big salaries and profits. Monte Haun mchaun@hotmail.com
By mchaun | Mar 13, 2007 1:52:00 AM"
And I would add, that Business has never forgiven Labor for organizing and are willing to lose money, if necessary, to hurt the American Worker. Look at what the Airline Industry did to themselves in order to screw their Unions!
It was Detroit, in the 1960-1970s, that talked down American cars with their BS about workers sabotaging the cars they were building, yet I have never heard of a single recall attributed to UAW Members.
Monte Haun mchaun@hotmail.com
A brand new car every two or three years, on average. Conspicuous consumption, much? No wonder you're a regressive--you are part of the problem. No household needs a brand new vehicle every two or three years! Your money could easily be spread to many more mouths, if it weren't for your personal greed. Disgusting.
Which blogger here or radio guest can claim to be smarter than Warren Buffett? Which candidate? Bachmann? Romney? Obama?
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Buffett is the best at what he does, touted by people in the business of finance the world over, and is certainly no liberal. He simply states: stop coddling the rich. The maldistribution of wealth in the United States right now is horrifying. Buffett knows his history and that we have been going along like the Calvin Coolidge and Herbert Hoover driven economies, and if we do not remove (and reverse) tax cuts (and loopholes) for the rich, we are certain to enter a Depression equal to that which hit in 1929.
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Right now the top 20% Americans own nearly 90% of our country's total wealth (one fifth owns nine tenths), which is criminal. And the rich cannot (and will not) create the necessary jobs. They're having too much fun lounging around playing monopoly (the Dow Jones). It was Franklin Roosevelt who said that when the rich fail to create jobs then the government must do so.
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Today's guests sounded sterile, stuck inside the same paradigm of supporting a model of wild-west capitalism that has never worked. Tea Party (nothing like the Boston Tea Party), Republicans, and corporate Democrats (along with think tanks and corporate radio), and goose-stepping academics--are all shouting out in support of a few (greedy) percent of our country, many of whom accrue more wealth in one day than a working class member does in 2 years!
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Reverse NAFTA and decades of corporate tax cuts, and create jobs; otherwise a less civil party will rise up demanding the leissure class give back HALF their wealth (or risk their heads).
It is troublesome to hear people talk about "Washington" being disfunctional and there being "no adults in the room." Republicans have been out to make Obama a one term president since he was inaugurated, and have stonewalled everything he has proposed. The "debt cieling" media event, that was never a big deal when a Republican was president, is just another example. It is conscious politics, setting up for a Republican governor to run against Obama without the tarnish Obama has gotten from being part of the senseless debacle forced on him. This candidate will no doubt promise to reach across the aisle, with no more chance of success than Obama had. (One of your panelists suggested that those sorts of promises should stop, but they won't.) Obama could be a better leader than he has been, but he is only part of the disfunction or the playground because that is the campaign decision Republicans have made. Credit or the lack of it should go where it is due.
My response to the last sentence: Yes, through an act of Congress. Generally, religions and faith groups teach and preach that basic human needs are rights and should not depend solely on generosity and empathy. (gall bladder operation) And I believe that the so-called religious community has intentionally became silent recently, because their members disagree, and are vacating the pews. Thank you for your comment.
Monte, I questioned about acting on your civic duty to expose the non-qualifying handouts.
One more direct question--Should the nanny state ignore the basic human needs of citizens? Even when their lives may depend on them?
I don't think President Obama can do anything but campaign. He and the Republican designee Mitt Romney are both heavily funded by Wall Street interests and low wage employers who are content with the present economy.
The days of a Constitutional republic are over because the legislatures (search ERIC) and the courts are rubber stamps for corporation policy. Now law and precedent are being twisted into pretzels as fascist radicals propose Constitutional amendments negating human rights.
The economy is real to me as I drive by fallow fields, empty homes, shuttered businesses and abandoned factories each day. It's tougher each week to qualify for a food card in my county and the food bank shelves are dwindled to discards.
On Oct. 6, 2011 I will join the occupation of Washington, DC for as long as it takes or I can. I expect a draconian backlash from the fascists.
John Doe wrote:
"Right now the top 20% Americans own nearly 90% of our country's total wealth (one fifth owns nine tenths), which is criminal. "
And you just want to "spread the wealth around", right John? If the rich won't do what you want with their money, hell, just take it from them!
This is just another facet of the liberal progressive mantra:
"You are entitled to my opinion". Whether it's how best to drive the economy, how big the government should be, or what the rich should do with their own (legally gotten) money.
/
sane wrote:
Between 2000 and 2009 our multinationals shed 2.9 millions of jobs in US while creating 2.4 million of jobs overseas.
Most of those jobs were probably subsidized by US taxpayers through generous tax breaks (se GE).
insane:
Wonder how many government jobs have been created since 2009? Think GM.
"Marvin Wagner wrote:
Monte, I questioned about acting on your civic duty to expose the non-qualifying handouts.
One more direct question--Should the nanny state ignore the basic human needs of citizens? Even when their lives may depend on them?"
Marvin:
If those people are healthy enough to work, they can work for their tax payer sponsored benefits while they find a full time job. Democratic Governor Tommy Thomson who was governor of Wisconson and President Bush's first Homeland security secretary had a law pass that if a person was out of work and on benefits, he/she would work so many hours in the day to pay some of those benefits off.
Kudos Monte:
Meangreen
Jlynwood and Sane:
You both do not know enough about Texas. Many major corporations are moving down here because of less regulation, no state income tax, great tort reform.
Just today, it was announced that businesses would be charge 6% less on insurance premuims due the recently passed tort reform. Hopefully this will be passed on to the consumer.
to Ecgbehrt:
----
Sure the Rich made their money legally (at least some of them did some of the time), but the rich most often put the type of legalities in place (with their money) so that they could live off the labor of the working class "legally." And roughly 99% of those who are rich were born into rich families already (tell me what did they "earn"?). I have no problems with that some will make more than others. But no man is worth 400 times more than another man working the same amount of hours. That's not capitalism, that's the sign of a society in decay. When rich politicians redistribute wealth from the working class to add more to the wealthy, that's the sign of a society in decay. When a political party (the tea party) is created by a PR firm working for the insurance industry to deprive the common person basic health care, that's a sign of a society in decay. And when people are hurting in a deep recession, losing jobs and health insurance and homes, and the government awards tax cuts and bailouts for the rich while cutting programs for the poor and elderly, that's a sign of a society in decay.