Ohio changed from inventory tax to a percentage based on yearly sales, we saved thousands and don't have to play the shell game having lots of shipments magically "in transit" on the first of the year. I wasn't clear, mid range eateries have stayed the same in sales. I'm good there! Industrial stuff is slow but picking up.
A Roman circus where the lions eats the profits?????
Unka' George [George McDuffee]
------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
Too late for that. Time to bust the state into 3 parts.
And let the Urban areas sit in the dark and eat wallpaper, or move their companies into the Central Valley.
After all..we do have food, water and oil, and lots and lots of space.
That would make you and me very rich men.
Gunner
On Sat, 14 Feb 2009 14:01:40 -0500, the infamous "Buerste" scrawled the following:
Don't fret. Just charge (or delay) accordingly, Tawm, while reminding them that "Your lack of planning is not necessarily my crisis." You put yourself in a better position by calling, saying that you noticed that their product quantities are down, etc, and to order now before the 2009 price increase/delays" etc.
-- If we all did the things we are capable of doing, we would literally astound ourselves. -- Thomas A. Edison
I can't say exactly what the guy was trying to prove but you're right that his comparison is not a valid one. The current situation today isn't comparable to any other time. Too many things are completely different now. But one thing is similar, the economic situation we are in is a dire one. It could go either way. Without the proper ameliorative action we could spiral into a depression. On the other hand, if things are handled well, we can come out of this fairly quickly and can make the fundamental changes that will hold us in good stead for a long time. We have to see how Obama's team handles the problem. First thing is to see what, if any, effect the stimulus bill has. If it helps then we know we're on the right track. If it's too small and it doesn't make a significant improvement that may spell big trouble. Right now we have to see what Obama's leadership brings. But whatever happens we are in a very bad fix at the moment. That's about the only thing similar with the 1930s.
Hawke
I was remarking to Georges concern that there isn't funds set aside for oversight. If you remember pallets of money was shipped into Iraq with loose standards on accounting for it. That lead to cries of where did the money go.
How will the american people know the money spent for stimulus is well spent?
Does congress really want the funds properly accounted for?
Wes
So what? If we had just done nothing, let the government do nothing but sit on it's hands the Depression would have been over real quick? We should have just left it to business and the private sector to bring us out of the Depression? I can't say I've heard anyone say that, even the most simple minded fool. After all, most people think it was the private sector that brought us the Depression to begin with. Thinking that having the government stay out of it when the country was going into the worst economic period in its history is just plain stupid. This idea that the government can't do anything right and is the cause of our problems is crap. Well, it's true if republicans are running the government. Then you're right everything they touch they turn to shit. It's the opposite when they are where they belong...in the minority.
Hawke
A short-sighted employer let me go just before Thanksgiving . Three weeks later I got a call from a competitor . I'm makin' a bit less , but this shop is stable , and in a couple of years I'll be back up where I was . Only one day I've not worked a full day , which is remarkable for this time of year and the market conditions . And I coulda worked all day that day , but wanted some time with my wife ...
Hard to say if we have bottomed or not. The stock market has stayed fairly level during the last three months. Nucor is up about 10% in the last three months. GE is down about 25%. Danaher is flat.
The housing markets vary a lot depending on where you are and how hot the market was. As Ed said the housing market is stable in his neighborhood in NJ.
My guess is that we are near the bottem, but are likely to not move up much anytime soon. The local government is looking at raising taxes, which will keep a damper on things. The same thing will happen all around the country, but will be worse where the government expanded in accordance with Parkinsons Law. Or at least it corrolary. Government expands to spend all the tax revenues in boom years and raises taxes during any busts.
Dan
So, in the beginning of 2009, we are about where we were in early
1930, with respect to GDP drop and such.The difference is that in 1929 and prior, the government did not pump in ayn comparable amount of money, and now it did.
This is ominous.
Wes, I think that by now is it is clear that any activity leading to "creation of money", such as banking in all forms, need to be regulated with a very heavy hand.
It seems to be the case. I am slightly mopre optimistic, as I hope that the government will be able to inflate us out of this trouble. I have stopped making extra payments on my fixed rate mortgage because of this.
---------------- You need to check the historical record. Both the Republicans and Democrats in the 1932 elections ran on platforms calling for a balanced budget and were worried about inflation. This was the general wisdom and assumptions of the times.
Both Hoover and Roosevelt in the first stages of his administration tried to deliver on these promises. They cut Federal spending, increased taxes and duties, and restricted the FRB from buying securities in open market operations to restrict/avoid any increase in the money supply, as well as retaining the gold standard.
The effect was to amplify and exacerbate the disaster we now call the Great Depression, by further depressing spending.
Although most of the stock market losses were paper, huge amounts of real liquidity/capital had disappeared in the stock market crash, and a very real money panic / liquidity crisis resulted. This was not so much directly from the crash/market, as the side effects when the holding companies and investment trusts created as a result of the stock bubble collapsed.
The governmental actions of both the Hoover and early Roosevelt administrations simply made things much worse. This is indeed a case where the economy would have been better off if the government had done nothing, rather than exactly the wrong things, or the "right" things in a wrong way, e.g. the Reconstruction Finance Corporation.
It appears accurate to criticize the Roosevelt administration for not knowing what they were doing, but then no one else knew what to do either, in the sense of correcting the problems, other than trying to treat the worst symptoms such as setting up soup kitchens to avoid mass starvation and food riots.
Roosevelt's strength was that he would try something, and if it didn't work, go on to try something else, rather than keep beating a dead or dying horse.
We are extremely lucky to have the FDIC as this has avoided the money panic that occurred after the 29 crash.
It does however appear that several of the structural problems that amplified and injected the '29 market crash into the real economy are again at work such as grossly ineffective /inefficient corporate structure and governance [e.g. GM, Chrysler], grossly ineffective/inefficient bank/quasi bank structure and governance [e.g. BoA, Citigroup, AIG], and the wide existence of financial structures subject to chain reaction collapses such as large loans with covenants. As many of the corporations, particularly in commercial real estate, are closely linked, a default/bankruptcy in one major loan may well trigger a covenant breaches in a whole series of major loans, as a result of a series of asset/collateral losses. This is a very unstable situation.
It also appears that there were again huge amounts of stocks purchased on credit. Not so much by individuals through brokerage margin accounts this time, but by the hedge funds, using borrowing "under the radar" of the SEC, and other regulatory agencies. The feed-back effect is still the same: when stock prices drop, the hedge funds must sell their stocks to cover their loans, which causes further price drops.
Unka' George [George McDuffee]
------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
I bought the book. Arguably the 1929 investment trusts were of different natue than today's hedge funds, most of which do not try to simply buy stocks on margin.
Today's hedge funds seem to be doing very similar things to each other, though, such as statistical risk arbitrage (buying private issue bonds and shorting treasuries) or long/short stock buying where they are all long the same things and short the same things. This may also end up badly for them.
i
Any real economy effects of stimulus, would only be seen in 9 months or so. Everything else is just talk.
Oh, OK. I misunderstood.
We won't. The thing is, we wouldn't know if it was well-spent, either, if we knew where every dollar went. And any two economists would argue over each dollar if they knew.
I doubt it. But saying they do is good politics.
This whole thing has a hierarchy of objectives, and the first one is what I stated above. It's important to remember that real money doesn't disappear. It isn't "burned." Someone acquires it; for purposes of the stimulus, the key thing is that they spend it. One hopes that they acquire it by doing something useful, but that isn't essential to the first objective.
Then the people or companies that acquired that money when it was spent use it, one hopes, to expand their production because they now have a market that they didn't have before. And thus they hire some people, who thus acquire some money, and spend it. And so on.
The idea is to get money moving again -- the money has to acquire what economists call "velocity." I think John said something about this in the past day or two. The economy moves when money moves. When it doesn't move -- when it's used to retire debt, for example -- nothing positive happens to the GDP and only a small fraction goes toward investment. Mostly it just goes to retire the *banks'* debt, or to pump up their reserves. Those are good things but that's not what you need when the economy is stalled.
Now, while you're handing out money, it would be nice, as I said, if it was in exchange for doing something useful. And while the government is deciding what useful things that money might be used for, it would be nice if it was used to build things that would help our economy move ahead. Then the arguments start, between those with an agenda to, say, improve education, and health care, and infrastructure, and who think that those are the things by which we measure "moving ahead," and those who don't want to hand out money in the first place, but who *definitely* don't want to see government directing the expansion of the economic commons. In other words, they really don't want to see more money go to education, health care, etc.
The upshot is that we have a battle between those who have their eye on the first objective and who are willing to leave the question of which artery we're going to use to transfuse the money for later, as long as it's done quickly -- stick it in any old artery that's available -- and it doesn't get bogged down in arguments over unknowable details; and those who want to further another agenda by holding out until they coerce the first group to follow their tune.
The latter group happen to be the ones who presided over the collapse in the first place. They call themselves "conservatives," although many would argue with their self-described label. My hope is that they're ignored, that Frank Rich is right in his latest column:
-- Ed Huntress
You should be aware that there's a book that's acquired a lot of positive reviews, which is now the cornerstone of the argument that FDR extended the Depression by mean of his policies. This has now become the basis of an entire right-wing posture arguing that the Depression was a result of liberalism.
Gunner et al. quote it from time to time, but I've looked into it and I'm sure they haven't actually read it. They have read the blog comments about it, and it's now their gospel.
To analyze that argument requires some pretty deep knowledge of economic history, and there is no chance whatever that the righties here understand what the argument is or what they're talking about. But I just thought you should be prepared. If you get a response, it probably will be a URL pointing to the book or to someone's comments about it.
-- Ed Huntress
I almost sent you a link to that Ed, but figured you'd get to it on your own. He's certainly nailed my view of today's Republican party well enough. What the administration does next will reveal the motives behind the stimulus bill just passed.
JC
I never miss a Frank Rich editorial, just for the writing alone, even if I don't care about the subject.
Yeah, sometimes he rings the facts like a bell. There is a bit of wishful thinking in there but his analysis of what just happened hits several marks that most of the press missed. And to think, Frank Rich used to be stuck as a theater reviewer.
BTW, I have a short one for you and George from the March issue of _Harper's_ that I'm going to send you as soon as it becomes available. I have the print edition but they don't put it online for a while after that. It's Lapham's best editorial in many years, IMO.
-- Ed Huntress
Housing in California continues to drop like a stone down a hillside.
We have a second wave of subprimes coming do in the next several months from what I understand, and a credit card implosion on the horizon as people who have been funding their shotfalls on their cards all hit the absolute limits and go into default
Ive been told by someone who is very very smart on the subject..that we wont hit bottom until 2010 or early 2011.
I hope he is wrong...but so far..he hasnt been.
Gunner
"Upon Roosevelt's death in 1945, H. L. Mencken predicted in his diary that Roosevelt would be remembered as a great president, "maybe even alongside Washington and Lincoln," opining that Roosevelt "had every quality that morons esteem in their heroes.""
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