NYT: Second US Recession Could Be Worse Than First

redrumloa · Aug 8, 2011

Second US Recession Could Be Worse Than First

If the economy falls back into recession, as many economists are now warning, the bloodletting could be a lot more painful than the last time around.
Given the tumult of the Great Recession, this may be hard to believe. But the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health — including jobs, incomes, output and industrial production — worse today than they were back then. And growth has been so weak that almost no ground has been recouped, even though a recovery technically started in June 2009.
“It would be disastrous if we entered into a recession at this stage, given that we haven’t yet made up for the last recession,” said Conrad DeQuadros, senior economist at RDQ Economics.

FluffyMcDeath · Aug 9, 2011

redrumloa said:
Second US Recession Could Be Worse Than First

What? A double dip? No-one could have ever imagined!!!

FluffyMcDeath · Aug 9, 2011

Just gotta come back and quote this from the article.

There is at least one factor, though, that could make a second downturn feel milder than the first: corporate profits. Corporate profits are at record highs and, adjusted for inflation, were 22 percent greater in the first quarter of this year than they were in the last quarter of 2007.

Anyone out there feeling that warm glow of profits? Who got those again? Was it any of you?

Dammy · Aug 9, 2011

redrumloa said:
Second US Recession Could Be Worse Than First

What people don't understand is that we have been out of the Great Recession since June of 09 (according to the US Government under Obama Administration). We are well within the Obama recovery which has been a complete disaster. Enter in the predictable results of fatally flawed Keynsian economic model, $5T debt increase, no job growth, crushing regulations, and a sword of Obamacare hanging over the heads of those who create jobs. What will be the second punch will be interest rates (inflation) raising on a sinking dollar value as we wait for the third disaster in the middle east to jack oil way up. Let me throw in US dollar losing reserve status for a quick 50% devaluation once the US dollar is no longer the world's reserve and you have a perfect storm. The late great US of A, RIP. US Greece will rise from the ashes, shackles in hand. China will take some lumps, but she will be the new Super Power.

FluffyMcDeath · Aug 9, 2011

Dammy said:
fatally flawed Keynsian economic model,

You can't keep blaming Keynes because no-one has been Keynsian in over 4 decades. Keynes says governments should take on debt in recessions but then tax it back once private industry picks up. This prevents private enterprise from contracting too much at the bottoms and prevents them from overheating at the tops.
The modern way this is done is by cutting interests in bad times (allowing more money to be created) and raising interest rates (far too late) to prevent overheating and to skim off profits into the banks.
Meanwhile governments cut taxes in the good times until there isn't much left to cut in the bad times.

Keynes believed that markets were subject to swings and human passions of optimism and fear and that governments should move in the opposite direction of private parties to balance out the swings. Post Keynesian Freidmanites and such believe that markets are perfect and frictionless and impassionate. Keynes was right and Friedman was wrong - but Friedman made more money for the banks and more power for the Federal Reserve.

FluffyMcDeath · Aug 9, 2011

NYT: Second US Recession Could Be Worse Than First

redrumloa

Active Member

FluffyMcDeath

Active Member

FluffyMcDeath

Active Member

Dammy

Member

FluffyMcDeath

Active Member

FluffyMcDeath

Active Member