Warren Buffett says for all practical purposes we are in a recession. He must be wrong.
Dow down almost 400 points
- Thread starter cycloneworld
- Start date
Warren Buffett says for all practical purposes we are in a recession. He must be wrong.
The big hitters claim Thursday of 100 points was a non event. Yet Friday was a major turn. The speculators are driving up the oil price basically with no bad news. It could be a wild Monday. Watch the international markets on late Sunday. The market could act like the weather.
:wideeyed:
So, is the sky falling, or isn't it? :wink:
Greed, excess, and fiscal irresponsibility will kill the US well before any of FDR's originally implemented policies will. Greed, excess, and fiscal irresponsibility devastated the US once already, which is what led to FDR getting elected in the first place.
Which in turn started the US on the path to become a military and economic superpower.
Your understanding of history is flawed; The Great Depression wasn't caused by "greed and excess", it was caused by poor economic policy and international relations incompetence on an epic scale.
FDR started the ball rolling, that will eventually crush the US; just as Lincoln's Federalism will eventually destroy the constitution.
I'll really tick you off when I state that FDR's policies prolonged the Great Depression, which only really ended in 1961, thanks to the socialist programs and "help the little guy" policies of the Great Communist himself....
I will admit that both of those occurences was bound to happen eventually; If not FDR and Lincoln, it would have been someone else. It's what happens as societies grow older and more decrepit.
I just think it's important not to view past leaders through idealistic prisms.
And, no, 5.5% unemployment is really nothing to worry about, yet. Especially in a presidential election year....
Here's a link to a non "OMG, the SKY IS FALLING!!!!!" site. It's called the Bureau of Labor Statistics.
http://www.bls.gov/web/cpseea1.pdf
5.5% is nothing. We've seen worse every decade of the 20th century. Heck, we've seen nearly DOUBLE that in both the 80s and the 90s....
But the point is, what do you think the gov't should DO about it? Personally, I think the best thing to do is to decrease tax rates on corporations and investing.
http://www.bls.gov/web/cpseea1.pdf
5.5% is nothing. We've seen worse every decade of the 20th century. Heck, we've seen nearly DOUBLE that in both the 80s and the 90s....
But the point is, what do you think the gov't should DO about it? Personally, I think the best thing to do is to decrease tax rates on corporations and investing.
I would add we (as in our government) should also cut spending thereby strengthening the U.S. dollar. But what do we know? We will raise spending and cut taxes. Better yet, we will increase taxes and spending. The beauty is we will think it's the other party's fault. YEEE-HAW!
I don't care about gas, but if those sons a betties raise the price on my roman candles and bottle rockets I am starting a revolution. Can I get an amen?
What were the underlying reasons for pursuing those bad policies?
How do you know this?
I would say that "populism" and "little guy" politics set the stage for it.
Buying on margin was promoted as a "give the little guy a chance to compete" theme.
Economic isolationism was promoted on a "protect US workers and business" platform.
Combine this with the poor condition of Europe, economically, and you have the "perfect storm" economically speaking.
Hmmm... Who is currently campaigning on those very three issues right now, for President? Here's a clue: His last name starts with an "O", and ends with a "bama".....
I have a Master's Degree in International Relations, a B.A. in History, and I "keep an oar in", research-wise....
Wasn't one of the primary reasons for the depression the huge amount of debt amassed by consumers and businesses, resulting in massive bank failures (and losses of $billions in customer deposits) when those debts couldn't be repaid? Is that what you are getting at with "buying on margin", or are you talking about individuals getting into the stock market?
Consumers took loans to buy things they couldn't afford. Businesses borrowed to expand production, although demand didn't warrant the level of expansion that occurred. When the survivng banks cut off credit, wages were such that consumers could not mass consume the goods that were being mass produced. As such, further expansion by business ceased.
I agree that reaction to the Smoot-Hawley Tariffs probably had a devastating effect on agricultural commodity prices and the agricultural sector, as the US was exporting food at the time. I'm not sure how much other stuff was being exported by the US back then.
I think Bernancke and others also cite poor Federal Reserve policy as well, at least as a reason for worsening the problem.
According to this survey by Whaples, it seems that economists are split when asked if the New Deal lengthened the Great Depression. Is there a newer survey than this one?
EH.R: FORUM: The Great Depression
If I read this right, as far as response to the proposition that the New Deal lengthened the Depression, the response from economists was 27% Agree, 22% Agree with proviso, and 51% Disagree, while for historians the response was 6% A, 21%AP, 74 D%.
Tastes like a recession, smells like a recession, feels like a recession. Nope, officially not yet a retraction for the last quarter. May be a different story in four months if gas stays above $4.00. A lot of jobs will disaapear if gas prices stay high. Probably $5.00 diesel is here also. Darn Germans.
Buying on margin - yes. Business debt - yes.
Consumer debt - no. Large amounts of consumer debt in America is a relative new concept; circa early 1970s. The home mortgage is also relatively new as a popular vehicle. As late as the early 1960s, nearly everyone who owned a house, owned it outright.
Lots of people lost property due to tax liens. But lots of farmers lived in subsistence farms back then, and had extremely low cash-generation capabilities.
It may "feel" like a recession to you, but trust me, I've lived through 1974-1976. As well as 1987. As well as 2000-01. This doesn't "feel" anything like a recession to me. At least, yet. Doesn't mean we're not possibly heading that way.