On Nov 29, 7:28*pm, wrote:
On Nov 28, 6:56*am, Dave wrote:



I fail to see how putting more crap on credit cards helps the economy in
the long term. *The sooner you realize that you are screwed, the sooner
you will take steps to mitigate said screwedness.

Barack Obama says that we have to "jolt" the economy. That certainly
makes sense, if you take the media's account of the economy
seriously-- but should the media be taken seriously?

Amid all the political and media hysteria, national output has
declined by less than one-half of one percent. In fact, it may not
have declined even that much-- or at all-- when the statistics are
revised later, as they very often are.

- We are not talking about the Great Depression,
- when output dropped by one-third and
- unemployment soared to 25 percent.

? What Were the Real Un-Employment Numbers
for the Great Depression ?

Actually the 25% was only for White Males
Over the Age of 18 and Under the Age of 60
[Over the Age of 16? and Under the Age of 65?]
# Subsistence Farmers {Share Croppers et al}
did not Count as Employed or Un-Employed.

* Did not include White Women@ ~67%
# Women working in the Home {Maids etc} or
Women with Home Based Businesses {Laundry}
did not Count as Employed or Un-Employed.

* Did not include Blacks and Asians @ ~75%

* Did not include Mexicans @ ~80%
# Many Mexicans moved back to Mexico
during the Great Depression

Again the 25% Figure often cited for the High
Un-Employment Number of the Great Depression
was not a true count by Today's Standards of
Full Employment for All. {Figure the True Number
was roughly between 33%~42%}



What we are talking about is a golden political opportunity for
politicians to use the current financial crisis to fundamentally
change an economy that has been successful for more than two
centuries, so that politicians can henceforth micro-manage all sorts
of businesses and play Robin Hood, taking from those who are not
likely to vote for them and transferring part of their earnings to
those who will vote for them.

For that, the politicians need lots of hype, and that is being
generously supplied by the media.

Whatever the merits of trying to shore up some financial institutions,
in order to prevent a major disruption of the credit flows that keep
the whole economy going, what has in fact been done has been to create
a huge pot of money-- hundreds of billions of dollars-- that
politicians can use to give out goodies hither and yon, to whomever
they please for whatever reason they please.

No doubt we could all use a few billion dollars every now and then.
But the question of who actually gets it will be strictly in the hands
of Barack Obama, Nancy Pelosi and Harry Reid. It is one of the few
parts of the legacy of the Bush administration that the Democrats are
not likely to criticize.

Much as we may deplore partisanship in Washington, bipartisan
disasters are often twice as bad as partisan disasters-- and this is a
bipartisan disaster in the making.

Too many people who argue that there is a beneficial role for the
government to play in the economy glide swiftly from that to the
conclusion that the government will in fact confine itself to playing
such a role.

In the light of history, this is a faith which passeth all
understanding. Even in the case of the Great Depression of the 1930s,
increasing numbers of economists and historians who have looked back
at that era have concluded that, on net balance, government
intervention prolonged the Great Depression.

Many of those who have, over the years, praised the fact that this was
the first time that the federal government took responsibility for
trying to get the country out of a depression do not ask what seems
like the logical follow-up question: Did this depression therefore end
faster than other depressions where the government stood by and did
nothing?

The Great Depression of the 1930s was in fact the longest-lasting of
all our depressions.

Government policy in the 1930s was another bipartisan disaster.
Despite a myth that Herbert Hoover was a "do nothing" president, he
was the first President of the United States to step in to try to put
the economy back on track.

With the passing years, it has increasingly been recognized that what
FDR did was largely a further extension of what Hoover had done. Where
Hoover made things worse, FDR made them much worse.

Herbert Hoover did what Barack Obama is proposing to do. Hoover raised
taxes on high-income people and put restrictions on international
trade, in order to try to save American jobs. It didn't work then and
it is not likely to work now.

Perhaps the most disastrous of all the counterproductive policies of
the federal government was the National Industrial Recovery Act under
FDR, which set out to do exactly what the politicians today want to
do-- micro-manage businesses.

Fortunately, the Supreme Court declared that Act unconstitutional,
sparing the country an even bigger disaster.

Today, it is unlikely that the courts will let anything as old-
fashioned as the Constitution stand in the way of "change." In short,
the economy today has some serious problems but things are not
desperate, though they can be made desperate by politicians.

http://townhall.com/columnists/Thoma...jolting_the_ec...

http://www.globalresearch.ca/index.p...t=va&aid=10977



The financial crisis is deepening, with the risk of seriously
disrupting the system of international payments.

This crisis is far more serious than the Great Depression. All major
sectors of the global economy are affected. Recent reports suggest
that the system of Letters of Credit as well as international
shipping, which constitute the lifeline of the international trading
system, are potentially in jeopardy.

The proposed bank "bailout" under the so-called Troubled Asset Relief
Program (TARP) is not a "solution" to the crisis but the "cause" of
further collapse.

The "bailout" contributes to a further process of destabilization of
the financial architecture. It transfers large amounts of public
money, at taxpayers expense, into the hands of private financiers. It
leads to a spiraling public debt and an unprecedented centralization
of banking power. Moreover, the bailout money is used by the financial
giants to secure corporate acquisitions both in the financial sector
and the real economy.

In turn, this unprecedented concentration of financial power
spearheads entire sectors of industry and the services economy into
bankruptcy, leading to the layoff of tens of thousands of workers.

The upper spheres of Wall Street overshadow the real economy. The
accumulation of large amounts of money wealth by a handful of Wall
Street conglomerates and their associated hedge funds is reinvested in
the acquisition of real assets.

Paper wealth is transformed into the ownership and control of real
productive assets, including industry, services, natural resources,
infrastructure, etc.

Collapse of Consumer Demand

The real economy is in crisis. The resulting increase in unemployment
is conducive to a dramatic decline in consumer spending which in turn
backlashes on the levels of production of goods and services.

Exacerbated by neoliberal macro-economic policy, this downward spiral
is cumulative, ultimately leading to an oversupply of commodities.

Business enterprises cannot sell their products, because workers have
been laid off. Consumers, namely working people, have been deprived of
the purchasing power required to fuel economic growth. With their
meager earnings, they cannot afford to acquire the goods produced.

Overproduction Triggers a String of Bankruptcies

Inventories of unsold goods pile up. Eventually, production collapses;
the supply of commodities declines through the closing down of
production facilities, including manufacturing assembly plants.

In the process of plant closure, more workers become unemployed.
Thousands of bankrupt firms are driven off the economic landscape,
leading to a slump in production.

Mass poverty and a Worldwide decline in living standards is the result
of low wages and mass unemployment. It is the outcome of a preexisting
global cheap labor economy, largely characterized by low wage assembly
plants in Third World countries.

The current crisis extends the geographic contours of the cheap labor
economy, leading to the impoverishment of large sectors of the
population in the so-called developed countries (including the middle
classes).

In the US, Canada and Western Europe, the entire industrial sector is
potentially in jeopardy.

We are dealing with a long-term process of economic and financial
restructuring. In its earlier phase, starting in the 1980s during the
Reagan Thatcher era, local and regional level enterprises, family
farms and small businesses were displaced and destroyed. In turn, the
merger and acquisition boom of the 1990s led to the concurrent
consolidation of large corporate entities both in the real economy as
well as in banking and financial services.

In recent developments, however, the concentration of bank power has
been at the expense of big business.

What is distinct in this particular phase of the crisis, is the
ability of the financial giants (through their overriding control over
credit) not only to create havoc in the production of goods and
services, but also to undermine and destroy large corporate entities
of the real economy.

Bankruptcies are occurring in all major sectors of activity:
Manufacturing, telecoms, consumer retail outlets, shopping malls,
airlines, hotels and tourism, not to mention real estate and the
construction industry, victims of the subprime mortgage meltdown.

General Motors has confirmed that "it could run out of cash within a
few months, which could prompt one of the biggest bankruptcy filings
in U.S. history". (USNews.com, November 11, 2008)) In turn this would
backlash on a string of related industries. Estimates of job losses in
the US auto industry range from 30,000 to as much as 100,000.(Ibid).