The Outlook For The US Economy
http://thedianerehmshow.org/shows/2013-03-11/outlook-us-economy
Last week the Labor Department delivered the best jobs report in more than four years. The Dow Jones industrial average posted record highs. And corporate profits continued to soar. There's good news to celebrate. But some economists and analysts say it's too early to pop the cork on the champagne. Millions of Americans are still unemployed or underemployed. Even though the private sector added 236,000 jobs in February, the public sector dropped 10,000 positions in the same period. Concerns are strong that sequestration cuts will cause the economy - and jobs growth - to slow. Diane and her guests offer differing views on the outlook for jobs and the overall economy.
Guests
Hedrick Smith
author of "Who Stole the American Dream?" and former Washington bureau chief for The New York Times.
Damian Paletta
reporter for The Wall Street Journal.
Edward Conard
author of "Unintended Consequences: Why Everything You've Been Told About the Economy is Wrong"; former partner at Bain Capital.
Comments
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The United States is a consumer based economy. The consumer has been taking it on the chin,in between body blows for decades. Ever shrinking paychecks,down to an all time low of 42.5% of the G.D.P.. In Ohio we have the added burden of 'Small Government" politics. That means tax hikes on the middle class,and working poor.No government regulation to slow price increases of utilities,and insurance costs. Not to mention the gouging by corporate America at the grocery store,and gas pump.
Is the show going to address the plight of the 47%`s..?? The folks whose wages are so low they no longer owe federal tax.Let me tell you,a ZERO tax liability is not heaven,but a hell.The 47% are millions of Americans whose wages are based on the Minimum Wage floor.. The poverty that comes with minimum wage jobs is NOT a high school kids,or part timer problem...It is the base wage used to determine wages at the work place, including Walmart,American #1 and largest employer..
I doubt a guest from Bain Capital will do anything but BOO HOO HOO,for the millionaires and billionaires.
Mr.Edward Conard appeared on Jon Stewart`s Comedy Central June 7.2012. He appears to be another "Trickle Down","Supply Side" true believer. It`s okay for him,I`m sure he quite wealthy. But what Reaganomics promised was," BUY ME A HAMBURGER TODAY,AND I`LL PAY YOU TUESDAY".. The promise of,give the wealthy a break today,and the wealth and prosperity will "TRICKLE DOWN'... That was 30 years ago,and we`re still waiting,all we ever got was the "GOLDEN SHOWER".
There were fewer than 5 billionaires in 1983,Forbes announced the top 400 not long ago. Those numbers reflect the largest redistribution of wealth in human history. Today`s "Trickle Down" "Job Creator" economics is like the child`s game of 'Musical Chairs'. As the "Job Creators" move American jobs to China,there are fewer and fewer American` working to pay the bills. Each time another chair is removed the uber wealthy "Job Creators' realize in time the burden of paying the ALL bills will be entirely their responsibility. THEY WANT NO PART OF THAT PROSPECT,THUS THE ATTACK ON OUR GOVERNMENT,THE "NANNY STATE" VILLAIN..
It looks like "deja vu all over again"... The bubble and bust deregulated economy of 1929,that crashed and gave us the "Great Depression". The Keynesian economics of FDR`s New Deal. The New Deal that cut unemployment from 25% to 15% in 4 years.The attempt by America`s most wealthy to overthrow FDR,by labeling him a Communist and Socialist.The AUSTERITY adopted in 1937,that slammed the brakes on the recovery. YEP,same ol ,same ol...
Graham,Leach,Bliley in 1998.. 10 years later the bubble bursts and we got the "Great Bush Recession". The Obama "Stimulus" and bailing out the banking dummies has the nation recovering.We got the millionaires and billionaires driving the country to revolution. And in the 5th year....AUSTERITY..That will grind us to a halt.
Yeah Yogi, it`s deja vu all over again..
Topic: Job Creators on Wall Street
Joe wants to expand his barbershop and hire another barber.
Dotty wants to expand her diner and hire another cook and waiter.
Do Wall Street “Investors” like Jamie Dimon lend them money and help them become job creators?
Jamie Dimon invest in Main Street?
What would Jamie Dimon rather do?
Has Jamie Dimon kept his brokers more honest than Louie the Bookie is kept honest by his employer?
JP Morgan Chase blows 10 billion? Sound investments? Investments in Main Street?
Brokers before the crash rigged the odds: 1/100 chance to win, 99/100 chance to lose. Cap losses, so they win.
Wall Street Computers Played GIGO (Garbage In Garbage Out), Junk=AAA, so Econometric Models Crash?
Would Jamie Dimon and company follow Adm. Hyman Rickover's steps who went down with each nuclear sub on its maiden voyage? Any similar personal investment (risk) by Jamie Dimon? Bet on it?. Why not ask Joe or Dotty from Main Street?
The Centers for Disease Control tracks down and isolates toxic and infectious substances; Yet, Wall Street Investor bred and spread toxic substances and called them assets?
Are Wall Street Barons Captains or Pirates of Industry?
Are Wall Street Barons Builders, Pillars of Communities or Fleecers, Skewers of America?
Jamie Dimon invest in America? Jamie Dimon a job creator? Is there a bridge to sell in Brooklyn?
BBB wrote:The Keynesian economics of FDR`s New Deal.
Thomas Sowell: Contrary to popular myth, FDR prolonged agony of Depression
"Guess who said the following: "We have tried spending money. We are spending more than we have ever spent before and it does not work." Was it Sarah Palin? Rush Limbaugh? Karl Rove?"
Not even close. It was Henry Morgenthau, Secretary of the Treasury under Franklin D. Roosevelt and one of FDR's closest advisers. He added, "after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot!"
http://www.deseretnews.com/article/700078558/Contrary-to-popular-myth-FD...
FDR's policies prolonged Depression by 7 years, UCLA economists calculate
"President Roosevelt believed that excessive competition was responsible for the Depression by reducing prices and wages, and by extension reducing employment and demand for goods and services," said Cole, also a UCLA professor of economics. "So he came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies."
"The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened."
http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression...
If i was part of the 1% I would be very worried about class wars. I am sure that was part of a contributing factor to the french revolution. Our country is very angry and armed. we need to get back to more of an even playing field
Your guest is incorrect govt. furlough is one day per work week; not one day per pay period. The result is a 20% decrease in salary; plus govt. employees have not received a cost of living increase for the last several years. The impact on counties and cities with large military bases will be greater than your guest appears to understand. Military suppliers will affected by the budget crunch. The Navy, Marines, and Army have stopped tuition assistance for service member a large impact on military quality of life and colleges which provide education to service members.
It is hard to take guests seriously when they make erroneous statements. One of the guests today, speaking of the sequestration and furloughs was obviously presenting information that he read in a newspaper. Military and civilian personnel are two totally different types of government employee. I will personally be furloughed two days each pay period, and that is significantly more than 5% of my pay. If an economist does not know that losing two workdays out of 10 is not 5%, what else is he getting wrong. Also, To say that there won't be a significant impact on the economy based on furlough days shows a lack of awareness, as I will have to limit many expenditures, cutting extracurricular activities for my kids, we won't be eating out at all, no cable, no cell phones, deferred maintenance on my home, deferred maintenance on my car, etc. I am not complaining because ultimately I am still employed, and we will survive, but that the broader impact on others (piano teacher, contractors, plumbers, etc.) is lessened to support a political argument just frustrates me to no end.
When Conservatives are asked,where on Earth has your "Trickle Down" economics policy worked..??.. Reply.... Hong Kong,China... The Imperialist community where the ruling class ruled,and the Coolie Class served... Not an appetizing picture..
The problems that are now being caused are the result of fighting multiple wars off budjet. We need to tighten things up and allow only those things which are trully needed to be reinststed. Also we need to put the wars we fight on budjet and raise taxes to fight them. this will act as another restrraint on future wars.
What does the shyster from Bain Capital think about capital gains tax or the cap on payroll tax, or tax on dividend trading? He talks about cuts in spending the Defense budget is our most bloated over spending joke. How many F35's do we need? When Ceo's congratulate themselves for sending jobs over seas with 7 digit bonuses and paydays how can he stand and say that that is feasible?
You interviewed a guest a number of weeks ago, Jeff Faux, who wrote the book "The Servant Economy" and I thought he explained very convincingly the reasons why this 'duel economy' came to be and why it is self perpetuating. There were similarities in his views and the guest you had last week who wrote the cover story "Bitter Pill" in Time Magazine. Isn't the ability to control where the money goes the real issue and the real problem?
James McMahon
The economy is affected by population. Note that the American population more than tripled during the 20th century—at a growth rate of about 1.3% a year—from about 76 million in 1900 to 281 million in 2000. It reached the 200 million mark in 1967, and the 300 million mark on October 17, 2006. Currently, population growth is fastest among minorities as a whole, and according to the Census Bureau's estimation for 2012, 50.4% of American children under the age of 1 belonged to minority groups. Isn't this negatively affecting our economy and will it not continue to do so?
It is difficult to have much sympathy for governement employees getting furloughed-- they work for an institution that is TRILLIONS of dollars in debt. what should they nexpect? In the real world they would be laid off/fired.They should be thankful they don't have to compete in the private economy.
Aye yi yi. Some economist say cut back. Most economist say that during a recession the government needs to spend...creating jobs like Roosevelts WPA.
Everything You've Been Told About the Economy is Wrong'? I largely agree, because most of what I've heard in the past couple of decades has been the canards of the marketolatrous, microeconomic, cranks. Hayek and von Mises were considered such in their day---though they were generally less radical than their current fanbase---and were it not for the influence of our largest property holders, not least due to the rewards available to the 'think'-tankers* who stroke the rich and moan at them, Stepford-like, that they are the _best_---these eminences would still be known as cranks.
(Why are there fewer jobs? Because we don' t need most of them any more...why not learn to do without them?, at one point we thought we couldn't live without serfdom, but circumstances alter cases.)
*The propertarian think-tanks were _founded_ for purposes of propaganda, not of actual scholarship; see
http://www.bbc.co.uk/blogs/blogadamcurtis/posts/the_curse_of_tina?commen...
Speaking of Germany - my relatives there do not understand when I talk to them about American credit cards and revolving debt on them at such high rates. The men think my German is bad when I explain it or I do not understand the credit system in the USA. My German is excellent. It is that they cannot wrap their minds around the consumer mentality of buy now and pay later at the high interest rates of credit card debt. It is all about responsible behavior in regard to money and finances.
No one is mentioning the main source of our economic - and other - woes. The world simply cannot support its population. In his 1992, "Earth in the Balance", I learned from Al Gore that the replacement value allowed for earth's natural resources in all of the econometric models is ZERO. This allows our leaders to act as if we'll never run out of materials, that we'll always be able to sustain the ever-growing markets required to make capitalism work. Until this fallacy is corrected, we're allowing ourselves to be duped.
What did FDRs WPA do? Not much. It was WW2 that ended the great depression. the late 30s were a bleak time economically.
2 issues
1 - People rely on continuous growth. The balloon only gets so big before it blows up.
2 - I make far less that $75,00 and do fine. Single father of 2. I have some extra money I could spend but I choose not to. I am choosing to live with less even though I coudl spend mroe. I am among a group of friends as well that theoretical economists seem to miss. We don;t need more and more to feel better.
I don't often have to turn off the Diane Rehm but I did today. I've read a bunch of Edward Conard's book, but I finally had enough of the lies. The man is a case. Every word out of his mouth was worthless and his ignorance is profound.
Why not actually have on people who have a grasp of reality? I mean controversy or controversy's sake? You somehow get to the truth by hearing a bunch of lies?
It's pretty simple to me, we have a federal government trying to do too much and it takes too much from the private sector to do it. Add on the layers of unnecessary regulations that accumulate by the thousands each year and we have what we have now, stagnation.
I have yet to hear anyone speak the truth about the current state of the U.S. economy.
The U.S. will never get back to 4% unemployment unless our wages, salaries, bonuses and profits become about 1/10 of what they are now and wages, salaries, and bonuses are spread more evenly across the private industry workforce. Prices of goods will fall commensurately allowing the U.S. to compete globally.
Wall Street needs to change back to being strictly financial utilities for private industry. Wall Street must stop trying to manufacture things to sell (i.e. derivatives, SWAPs, etc. in all their insider information glory). Tax them at 90%.
Wages, salaries and bonuses of public held offices and jobs have to be less than comparable private industry jobs. Yes, public offices and jobs help the private industry create wealth but they use up wealth at a rate of hundreds of times what they help create. A case in point: A billion dollars just for congressional salaries.
Foreign dumping of subsidized steel devastated our local steel industry in the late 70`s. In the 90`s an ally began subsidizing their auto industry,and actually became the #1 best seller.These days we have dumping of 'Clean Energy' products subsidized by China`s government,damaging our economy and crushing jobs like that at Solyndra. We need STATESMEN in Washington,not jerks who believe continually running for office is the job. STOP RUNNING,AND GO TO WORK..!!!
PLEASE,PLEASE,PLEASE,stop being Commie lovers,and give the American worker consideration.Senate Republicans filibustered and blocked legislation that would stick up for us. Instead of working for America,Senate Republicans filibustered helping, which keeps crushing the American Dream..
The American worker wants jobs,wants to contribute,wants to pay their bills and America`s. Stop berating and belittling working people.Stop glorifying wealthy people as the only positive being.Some say GOVERNMENT cannot create jobs.But,it sure can destroy them,without much effort.
The one e-mailer during the show made the best statement: "Where you were before the downfall of the economy determines where you are now in this hard-fought employment climate" (both ideologically and in reality). This also proves that infusing "job creators" with more dollars via new tax cuts wont spur investment in job creation. Employers are already sitting on trillions of dollars in reserves with limited hiring. Why would more dollars incentivize them to hire?
Unemployment News…The Good, the Bad, and Reality!
Employers...Shut Up & Listen!
Hedrick Smith is "right on".
The plutocrats are lying to protect their interests.
Service Economy was the slogan in the 1980’s meaning the corporations were going to operate offshore benefiting from cheap labor. Local work force would be eliminated. The cheap labor from countries like India were brought to the US for them to be trained in the US operating divisions by the same managers that were going to be eliminated after the operation would move to places like India, Ireland, Mexico or China. The government did her part by building more federal and state prisons knowing fully that the eliminating jobs would lead to more crime and those criminals had to be housed somewhere. The government would raise the taxes on those who can’t afford it and let the top 1% get richer. The Bush Administration even eliminated the requirement for corporations to report on the offshore employment – as that data would have made the American public more upset. As usual, the biggest losers were the middle class and largest gainers were the top 1% who had money to take advantage of the shifting trend. Federal Reserve lowered the interest rate on savings accounts to suck more money into Wall Street and boost the value of stocks for those who owned them or could afford them. Now we know what the term “Jobless Recovery” meant. Yet the interest rates on personal loans did not go down. Stock Market keeps emphasizing how important it is for you to keep pouring money into your retirement accounts so they have access to the pools of money where all your hard earned labor is stored.
Corporation productivity gain means the individual at the bottom now have to work two jobs (if they can find one) to be able to meet their living expenses. Just ask any lobbyist; who does the government really works for? It is very annoying for the politicians that they have to go through the ritual of elections every few years.
We here in Ohio are privatizing whatever government agency is`possible.Is it smart..NO.. However,the same mental midgets who created outsourcing,offshoring of wealth,NAFTA and CAFTA, and "Trickle Down",realize the damage they`ve done to the private sector.Now they must prop them up.
Is a company whose plants are in Beijing China really worth the value assessed by Wall Street..?? NO ...It`s a worthless asset. The value is there only as long as the Chinese government says.
The callers lined up appropriately today along the lines of net worth:
Callers who are well off lined up with Mr. Conrad.
Callers who are eking out a living line up with Mr. Hedrick.
And the well off are predictably afraid of losing what they have while the rest are hoping for some glimmer of improvement. Thus they line up as fiscal conservatives (don't change anything) vs. fiscal liberals (PLEASE change SOMETHING). It's not personal - it's just business (to paraphrase the Corleones).
BUT, perhaps the US is something a bit more than "just business" - otherwise Marx was right about dialectical materialism. Let's hope a moderate compromise can be struck which benefits all citizens, not just those with hefty influence.
By the way, historically, Secretary Morgenthau was perpetually at odds with FDR and, at one point, talked FDR into some austerity with the insistence of conservative Republicans in Congress .......and the predictable occurred: the Great Depression got worse and remained longer. The "stimulus" forced on the US by WWII brought the real end even though the full employment involved so many tragedies in global death and destruction. The GI Bill of that era provided a huge educational boost, a housing boom, and a true spike in the economy. Contrary to Mr. Conrad, there was a great deal of "innovation" in the 50's which commenced after WWII, perhaps not in the areas he would acknowledge. Anybody ever hear of transistors replacing vacuum tubes, pre-fab houses at lower prices, cars with turn signals and tail lights, Japanese industrialism (inspired ironically by the American quality guru J. Edward Deming), the Marshall Plan for Europe, and the Volkswagen Beetle ??
Face it - conservatives can afford to wait things out while the rest sink lower and lower - it's borne out in the stats.
For one hour, the three guests endeavored successfully demonstrate that they didn't have a clue or had become talented yarn spinners. Hopefully, the audience will accept everything they said as pure fiction.
Fortunately, for those who are interested, the truths are available to all in the public library. However, you will have to do some real work (critical thinking) keeping in mind that the true condition of our social state remains unchanged over thousands of years. To this end, read and reread The Prince. There are few sources of such timeless wisdom regrading man.
When you have educated yourself, you will see clearly that our proplem, greed for riches and power is not one that can be solved and forgotten but one that is always with us and only constant vigilance and prosecution can keep greed in check.
The Great Depression gave us a body of law, enforcement infrastructure and motivation that largely kept greed in check. However, good times dimished vigilance and enforcement, rewrote law, and brought us full circle back to the state where greed is king.