My last post, cause it's late; although I respect your viewpoint I have no understanding of the opinion you're taking on the manner. Let me tell you about some people that I know; I work with some non-profit organizations, and much of my work involves getting out-of-work or homeless individuals housing and employment opportunities. These are not just the permanent homeless; alot of lower-middle class workers are now losing the grip. It's back-breaking because there are so many applicants, so many homeless in our city. And this is only one organization in one city in the entire nation. My best friend moved in with his new wife two years ago; they're now facing possible foreclosure.
These are the people I know; that I know all these people seems to refute your notion about the lack of destitute people and dire situations in this country. I'm not going to say that due to my personal experience, the majority of people in this country are facing significant difficulty; I will say that it goes against progress to assume that since you and yours are taken care of, so goes the nation. And I think the facts, figures, and testimonies of middle-class individuals throughout this country are proof. Unemployment has skyrocketed this year so far; they're not just making this stuff up. And I think it's best to trust the large numbers of middle and working class men and women in this country who claim to be facing significant difficulties, and not say that they're fooling themselves.
The numbers just don't bear out Obama's claim that we're in the worst economy since the Great Depression. But, unlike in other areas of public policy, saying it over and over might just make it come true.
everybody wants the most they can possibly get
for the least they could possibly do
Well far be it from me to try to refute point by point, an economist who has the time and inclination to do this for a living. I'm a community organizer who's in danger of being let go in the next few days (but this is all mental, right?). Some things he said, though struck me not as outright lies, but avoiding some facts to better make his point. For example,
His quote:
"In a new working paper, economist Edward Leamer of UCLA's Anderson School of Management shows that changes in the unemployment rate, payroll jobs and industrial production almost precisely explain every recession as officially determined by the National Bureau of Economic Research. At present, only the unemployment rate exceeds the recession threshold. The other two factors are far from it. According to Leamer's paper, we'll only fall into recession "if things get much worse.""
These points may technicially be true, but he omits some points. For one, our economy is not and cannot be measured by the same barometers of Great Depression-era America. Industrial automation has skyrocketed since that time period so many years ago. The signs of a depressed economy may have used to be that industrial production would drop along with unemployment but since companies, particularly factories and assembly lines, need less workers due to automation, those two attributes of a recession can be less irrevocably tied. One can go down without the other, and due to automation (and illegal immigration, gloablization, etc) is it that surprising that unemployment has skyrocketed without the industrial production of our country taking an equally massive hit?
About wages; he mentions that wages have not decreased during the Bush administration, and he's right. But where he mentioned inflation earlier in his article to make a point that supported his argument, he forgets to bring it up here, because it largely renders his argument entirely invalid. Wages have gone up, but inflation has outran these wage increases. Using hypothetical numbers, what good is touting a $2.00 increase in wages as a success when inflation has increased most goods by $5.00 to $10.00? I could paint a rosy picture of the economy also if I chose to ignore the facts that did not agree with my hypothesis.
His quote:
"Turmoil" in the debt markets? Sure, but we've seen plenty worse. According to the FDIC, there have been a total of 13 bank failures in 2007 and so far into 2008. There were 15 in 1999-2000, the climax of the Obama-celebrated era of Clintonian prosperity. And in recession-free 1988-89, there were 1,004 failures -- almost an order of magnitude more than today. Since the Great Depression, the average number of bank failures each year has been 94."
My final point is this quote. Again, he may be technically telling the truth but he is stretching it to a nearly obscene point. I'd expect that from a politician, but I don't want to hear it from an economist trying to give a sober and realisitc analysis of the state of the economy. He says that the number of banks that have fallen this year compared to decades past (again, this goes to my point that trying to compare the stability of the economy today to the past using the same rules is kind of foolhardy) has been miniscule, and I'm prepared to take his word at the numbers. However, do you think these "dozens of bank failures" that have occurred were constantly giants like Bear Sterns, AIG and Lehman Bros.? He gives me no evidence to assume that the bank closings he's speaking about in years past are not Bear Sterns-esque examples but closings of the First Bank of Poughkeepsie branches. That these bank failures of the past were not accompanied by 1000-point drops in the Dow like the most recent bankrupcies and bailouts have been leads me to believe it's the latter, and him failing to mention that makes me call into question his stats.
Basically, his analysis is that the economy is in good shape is only if you apply the same measuring sticks of today to the Great Depression, which even to my feeble economic mind seems laughable. The world has turned upside down several times since then; we may have to re-examine how we gauge economic prosperity.
Comments
This is pretty much what I'm getting at:
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/12/AR2008091202415_pf.html
The numbers just don't bear out Obama's claim that we're in the worst economy since the Great Depression. But, unlike in other areas of public policy, saying it over and over might just make it come true.
for the least they could possibly do
His quote:
"In a new working paper, economist Edward Leamer of UCLA's Anderson School of Management shows that changes in the unemployment rate, payroll jobs and industrial production almost precisely explain every recession as officially determined by the National Bureau of Economic Research. At present, only the unemployment rate exceeds the recession threshold. The other two factors are far from it. According to Leamer's paper, we'll only fall into recession "if things get much worse.""
These points may technicially be true, but he omits some points. For one, our economy is not and cannot be measured by the same barometers of Great Depression-era America. Industrial automation has skyrocketed since that time period so many years ago. The signs of a depressed economy may have used to be that industrial production would drop along with unemployment but since companies, particularly factories and assembly lines, need less workers due to automation, those two attributes of a recession can be less irrevocably tied. One can go down without the other, and due to automation (and illegal immigration, gloablization, etc) is it that surprising that unemployment has skyrocketed without the industrial production of our country taking an equally massive hit?
About wages; he mentions that wages have not decreased during the Bush administration, and he's right. But where he mentioned inflation earlier in his article to make a point that supported his argument, he forgets to bring it up here, because it largely renders his argument entirely invalid. Wages have gone up, but inflation has outran these wage increases. Using hypothetical numbers, what good is touting a $2.00 increase in wages as a success when inflation has increased most goods by $5.00 to $10.00? I could paint a rosy picture of the economy also if I chose to ignore the facts that did not agree with my hypothesis.
His quote:
"Turmoil" in the debt markets? Sure, but we've seen plenty worse. According to the FDIC, there have been a total of 13 bank failures in 2007 and so far into 2008. There were 15 in 1999-2000, the climax of the Obama-celebrated era of Clintonian prosperity. And in recession-free 1988-89, there were 1,004 failures -- almost an order of magnitude more than today. Since the Great Depression, the average number of bank failures each year has been 94."
My final point is this quote. Again, he may be technically telling the truth but he is stretching it to a nearly obscene point. I'd expect that from a politician, but I don't want to hear it from an economist trying to give a sober and realisitc analysis of the state of the economy. He says that the number of banks that have fallen this year compared to decades past (again, this goes to my point that trying to compare the stability of the economy today to the past using the same rules is kind of foolhardy) has been miniscule, and I'm prepared to take his word at the numbers. However, do you think these "dozens of bank failures" that have occurred were constantly giants like Bear Sterns, AIG and Lehman Bros.? He gives me no evidence to assume that the bank closings he's speaking about in years past are not Bear Sterns-esque examples but closings of the First Bank of Poughkeepsie branches. That these bank failures of the past were not accompanied by 1000-point drops in the Dow like the most recent bankrupcies and bailouts have been leads me to believe it's the latter, and him failing to mention that makes me call into question his stats.
Basically, his analysis is that the economy is in good shape is only if you apply the same measuring sticks of today to the Great Depression, which even to my feeble economic mind seems laughable. The world has turned upside down several times since then; we may have to re-examine how we gauge economic prosperity.