No Outlet

Reagan said “a recession is when your neighbor loses his job. A  depression is when you lose your job”.

Recovery, he continued, was when Jimmy Carter lost his job.  Well, we’ll have to work on that in 2012.  But until then, “recovery” really happens when you, the laid-off American, finally job up and get back to work.

And that is a great moment.  My only really significant period of unemployment in my life – my five months of unemployment and six more of subsistence-level contracting – was punctuated by a sudden burst of intense work at the end of ’03 and the beginning of ’04, as the Bush tax cuts kicked into high gear.  The dotbomb was a fairly short recession (depression, for me), and it ended because the economy, recovering fast, needed people, including me, to be getting the job done.

America is a big, throbbing place that needs people to do stuff.  We have incalculable pent-up demand for everything from bread to Escalades (or Priuses, or whatever) to houses to B-2 bombers.

Of course, companies need to feel that the recovery is solid enough to warrant hiring the people to start building all those Mister Coffees and Target stores and construction bulldozers and flavored condoms and everything else that makes up a consumer and capital market.

And they are, at the moment, not hiring.
And, as my radio pardner Ed points out, that’s the untold, scary story of this recession so far.

Why has this recession generated such bad job opening rates? Isidore quotes Robert Brusca of FAO Economics as saying that “fear is running the show right now,” and small wonder. Instead of trying to calm the nation, Barack Obama, Harry Reid, and Nancy Pelosi have transformed themselves into Chicken Littles, abandoning FDR’s “All we have to fear is fear itself” in favor of “We’re all going to DIE!” Why? Their stimulus package keeps losing support, and only fear can propel it to passage, but that same hysteria has employers locking their doors, which creates a self-fulfilling prophecy of economic doom.

Look, even if you leave party identification out of it – don’t bother with “Republican” or “Democrat” labels for now – we need a “Ronald-Reagan”-type personality in this nation to reassure people that the end is not near, that the sun will come up tomorrow, that best thing to do with wolves at the door is go outside and shoot them, tan their hides, and make a fortune on wolf-skin wallets.

Barack Obama, to date, is not that person.

Question for all you Obama supporters; do you think Pelosi, Reid and Frank will allow it?

12 thoughts on “No Outlet

  1. “And they are, at the moment, not hiring.”

    Are there inventory numbers out there. Seems to me, especially with housing and automotive, the we have a glut of stock out there that needs to be moved. Any kind of business related stimulus will go for naught. We need a two phased plan A) put money in the pockets of the middle class, those who will actually spend the money to lower the stock, create profit for the business, and entice them to hire/build. Then B) A business tax incentive to prompt them to grow without risk of a contraction. You can’t do B till there is growth happening again.

    There is much in the current stimulus bill that will help this, but about a 1/4 of it can be trimmed to allow for the market to correct.

    But back to my question, are there inventory numbers out there, cause I am only making an educated guess on the resting stock.


    *No name calling, finger pointing, or partisan talking points were used in the creating of this comment.

  2. Flash,

    For starters, could we drop the phrase “talking points” from all discussions? Everyone who has a partisan point of view is going to say things that have some similarities to his “side’s” “talking points”.

    Inventory: Over the weekend, NPR listed inventory numbers for new houses (enough to fill about seven years’ demand – although duh, everyone’s buying foreclosures!) and cars (I think it’s three years).

  3. “For starters, could we drop the phrase “talking points” from all discussions?”

    As soon as you stop using ’em! You mean you don’t have this bookmarked:

    They could have at least used their own RNC site and not a government one I am paying for!

    Anyway, I figured when I attempted to start an actual . . . dialogue, that I would get shot down right out of the gate with barely a response to my substantive post. Much to my surprise, I didn’t think it would be you!


  4. Um, I responded. Re-read my response – or read it all the way through for the first time, whatever applies.

  5. “are there inventory numbers out there”

    **looking at ‘mitch’s’ post again, chastising me in the first PP, for something not even said in the body of my post**

    Oh, yeah, I saw that blip in the 2nd PP, maybe I should have been more clear considering who is reading this. Are there actual hard numbers on inventory that are linkable and available from a website for review. Cause, yeah, I ‘hear’ a lot of thing on the radio, and read a lot of things on websites form political parties on both sides, but I’d like to, well, you know, see the actual numbers and make up my own mind, rather than rely on a decision that someone else is trying to make for me. Kind of like what you claim to do all the time . . . but don’t!


  6. “we need a “Ronald-Reagan”-type personality in this nation to reassure people that the end is not near…”

    Wink Martindale maybe? Wilford Brimley?

  7. All Flash is doing with his constant harping on “talking points” is admitting he has no rational response to them.

    Oh, and thanks for that link. I’d never known we had official guidelines. I’ll swallow that bill pill now! /sarcasm

    You expected home market recovery anytime soon? No. That market will tank for a long time — the time constant for that market is long, which is why it took a long time for the collapse to hammer the market. You’ll note that the collapse of the market in ’29 was presaged by a housing collapse in ’26 also caused by very liberal loan standards and official government policies subsidizing housing.

    The question is if we’ll allow the market to work out the losses, or whether we’ll try and do what the Japs did: prop up zombie banks and industries, shovel public money into public infrastructure projects that only suck money out of the economy, and lengthen the recession into a decade of pain. It seems that The One and Democrats really want us to turn Japanese.

  8. “”if we’ll allow the market to work out the losses, “”

    That is the only true long term fix here, and too many of you can’t seem to understand I agree with you on this primary premise. It doesn’t fit into your prefabricated guidelines to agree with someone who you perceive to be on your left.

    *back to my original comment*

    The dearth of Housing Inventory, and to a lesser extent, automotive inventory has to be sold off. The GOP proposal to extend tax credits to ALL home buyers, not just first timers is a GREAT way to do this. I think the credit is a bit high, making it more expensive then it needs to be. Remember, stimulus is putting money into the hands of those who will spend it, not those that have it already and will spend anyway.

    Furthermore, I have a real hard time with Business tax incentives in this first phase. With bloated inventories, passing out business tax cuts at this juncture will NOT be as fruitful as taking those funds and sending it to spenders, or saving those funds for a 2nd phase when the business will actually need it.

    So, the need to trim this bill down by eliminating business tax cuts, and delaying them till there is, in fact, a recovery makes much more sense. Otherwise, we will see nothing more then the blip we saw when President Bush passed out checks last Summer, and just be right where we are, with less funds to work with.

    So, to be clear:

    1) Ideally, the market needs to be more involved in this correction, becuase tinkering with it to much will only delay the inevitable. It is why I didn’;t like President Bush;s Bill,a nd why I have a problem with President Obama’s. I think the Moderate Republican’s in the Senate are the ones closet to being on track.

    2) I’m fine with using stimulus money to create incentive to spend, with targeted tax credits like the Home buyer credits and maybe even an Automotive buyer credit.

    3) Business cuts and incentives can wait, and as revenues increase, and inventories deplete, business owners will ramp up, and if it looks like there needs to be greater liquidity for them to keep up with the recovery, then revisit Business Tax credits at that time.


  9. “with someone who you perceive to be on your left.”
    You are to the left of all the regular commenters here other than Angry Clown and peev.
    The first step to the truth is an honest assessment while looking in the mirror.

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