Economic Recovery

[adrian-fekula.livejournal.com]

2008 seems an eternity ago, but nonetheless we are still suffering from the same recession which began in that year. Both political parties have brought forward ideas to stimulate the economy, and some of those ideas have succeeded for a time, but eventually, their effects wore off. People in America, and indeed all over the world continue to suffer with no clear end in sight. So what can the government do to fix the problem. Well, that all depends on how quick of a recovery voters want, but the basic premise will remain the same for both parties.





The biggest problem facing any business is uncertainty. This has always been true. The problem with today's economy isn't that companies don't have any money to invest. On the contrary, financial firms are sitting on billions of dollars that should be getting pumped into the economy. However, there is uncertainty in the political sphere unfortunately, and therefore the dollars are not being invested. You see, businesses don't know what their tax rate will be in three days, they don't know what kind of regulations the government will impose on them next week, and they don't know who will be in office (or, for that matter, who will control Congress) next year to undo everything that has been done. It is no wonder that they don't invest their assets. It is simply too risky right now.

So we can all agree, both Democrats and Republicans, that the best way to fix the economy is for the government to bring certainty back to the economy. To do this, someone needs to win the next election by a wide margin. Unfortunately, this seems unlikely. It is almost certain that the Republicans will take over the Senate and hold on to the House in November. However, the White House is a long shot. Romney is pretty popular, but we have seen this before. People thought that Bush would lose his reelection campaign for sure, but he managed to stay for the second four years anyway. I doubt that Obama will be supplanted. This is unfortunate. As difficult for me as it is to say this, a Democratic Congress and White House would be better for the economy than a Republican Congress and a Democratic White House. Of course, a Republican Congress and White House would be even better than that, but what the economy most needs right now is certainty, and we will not get that certainty if the Congress and the White House are at odds with one another. 

So what can we expect if the Democrats manage to keep control of the White House and the Senate, and take over the House? Well, for one thing, more regulations on financial firms. Also, expect higher taxes on the wealthy and businesses. Government spending will also certainly go up. The cuts our government desperately needs will not even be considered, much less be passed. This will definitely slow the recovery. But we will have a recovery anyway. If businesses know where they stand, even if it is on less than ideal ground, they will begin to reinvest. There will be certainty. After all, businesses want to make money, and even if they will make less money than they would under Republicans, less money is better than no money. No money is what they make when they simply sit on their assets.

Now what if the Republicans keep the House and take the Senate and the White House? We will most likely experience a faster recovery. Fewer regulations on businesses, and lower taxes on businesses and the people who move the economy will allow financial firms and the rich to invest their money how they like. This will lead to a faster economic recovery.

Unfortunately, what we can expect is a Republican Congress and a Democratic White House. In that case, it will be surprising if the economy recovers in the next four years. Unlike Bill Clinton, who was a realist willing to work with Republicans (he was also pretty fiscally conservative anyway), Obama is an idealist, at his core unwilling to make concessions. Republicans too are now less willing to make deals than they were 16 years ago. The Tea Party movement, now a driving force in the GOP, sees any cooperation across the aisle as a betrayal, and any congressman willing to work with the opposition risks losing his seat in the next election.

This leads me to my final point. Government interference in the economy led us to this mess. Government has no business interfering with business. To quote Calvin Coolidge, "The business of the country is business." He meant that government should get out of the way of business so that the economy could grow uninhibited by government regulations. We as a country lost sight of this, and now we are paying for it.

Comments

[underlankers.livejournal.com]

Obama repeatedly has given the GOP everything it wanted and it kept pushing until it overreached itself. My empathy for the GOP when it raises this selective whining and pitching a fit like a three year old in a sandbox is about the level of that for a three year old in a sandbox throwing sand.

[underlankers.livejournal.com]

Oh, and you're citing one of the men whose policies led directly to the US outbreak of the Great Depression as a role model? I suppose that's like citing Paris Hilton as a role model for modesty.

[meus-ovatio.livejournal.com]

I'm sorry, how is their any uncertainty about what the government will do, when the government just bent over backwards to fuck everyone in the ass and save the financial sector at great cost to everyone but those firms? Don't give me this bullshit fairy-tale, as if anyone has any doubt about just how far the US government will go to fuck it's own people over to maintain the profits and bonuses of the gilded elite. Give me a break. Come back when you realize you're not talking to a bunch of kindergartners.

[devil-ad-vocate.livejournal.com]

I'll drink to that.

[eracerhead.livejournal.com]

Really, it's exactly the opposite of what you say.

http://www.foreignpolicy.com/articles/2012/05/21/the_government_we_deserve

[airiefairie.livejournal.com]

Nice text colours. How did you achieve this effect? =)

[peristaltor.livejournal.com]

Yes, I'd like to know too, so I can avoid printing the illegible.

[hikarugenji.livejournal.com]

However, there is uncertainty in the political sphere unfortunately, and therefore the dollars are not being invested. You see, businesses don't know what their tax rate will be in three days, they don't know what kind of regulations the government will impose on them next week, and they don't know who will be in office (or, for that matter, who will control Congress) next year to undo everything that has been done.

This is a tried and true Republican talking point, but it doesn't make much sense. There's always uncertainty because the president can change every 4 years and congress changes in between that. Republicans have only one thing to say on the economy -- make rich people even richer, and hope that everyone else benefits.

Deep spending cuts result in lost public sector jobs, leaving those people more dependent on government handouts and less able to spend money on goods. Businesses don't need to add workers or increase investment when nobody has any money to buy their stuff.

Obama is an idealist, at his core unwilling to make concessions.

Hahahahaha.

[jonathankorman.livejournal.com]

If only Obama were more like Bill Clinton. Republicans worked together with Clinton in joy and harmony!

[jonathankorman.livejournal.com]

The biggest problem facing any business is uncertainty

No. The biggest problem facing any business is lack of customers. If people are unemployed, or worried about becoming unemployed, or are getting paid low wages because their employers know that it will be hard for them to get other jobs, then they hesitate to spend money on products and services. There is no reason for a company to invest in greater capacity when they have no customers to take advantage of the fruits of that capacity. This in turn keeps unemployment high and wages low, perpetuating the problem.

[hikarugenji.livejournal.com]

Has the GOP been able to produce actual examples of business that want to hire new workers or expand their business, but are not doing so primarily because their taxes are too high, or there are too many regulations?

[policraticus.livejournal.com]

Teal? For a [Bad username or site: @ livejournal.com] post?

Pretty ballsy.

[rimpala.livejournal.com]

All it needs is some deer

[pastorlenny.livejournal.com]

Yeah, the damn gummint should never have rated those crap CMOs like they were top-grade paper. We need to elect better accountants!

[enders-shadow.livejournal.com]

I had to google CMO. I always heard them referred to as CDO. But yes.


It's wonderful how many crickets we hear when standard talking points BS is responded to with reality.

[fizzyland.livejournal.com]

Sure, government regulations are the problem.

Actually simplistic viewpoints are the problem - yours, the Tea Party, whoever wrote this poorly-thought out polemic.

[adrian-fekula.livejournal.com]

I wrote it. And its actually a pretty sound argument. It actually makes perfect sense. Please present a counter-argument instead of simply insulting it. I will reiterate my point, and you take it from there.

When businesses do not know what the political climate will be in the coming months, they do not know where to invest their money. They have the money, and they are simply not sure how much they will be taxed. They also don't know what the regulations will be. If Republicans get elected, I suspect that there won't be too many new ones. Do you agree with this premise? I hope so because it is self evident.

Now to the next point. Bill Clinton and the Republicans worked together much better than Obama and the Republicans do. That is a simple fact.

As for Calvin Coolidge, he presided over one of America's fastest periods of economic growth. A collapse in confidence because of an agricultural bubble led to the depression, not Calvin Coolidge.

This is my favorite comment: "I'm sorry, how is their any uncertainty about what the government will do, when the government just bent over backwards to fuck everyone in the ass and save the financial sector at great cost to everyone but those firms? Don't give me this bullshit fairy-tale, as if anyone has any doubt about just how far the US government will go to fuck it's own people over to maintain the profits and bonuses of the gilded elite. Give me a break. Come back when you realize you're not talking to a bunch of kindergartners."

Seriously? How is there any uncertainty? Let's see. Will the corporate tax rate increase? What will investment banks be allowed to invest in in the future? Will the Supreme Court overrule Obamacare? That last one is a big one. Health insurance is a huge business.

Or how about this one? "This is a tried and true Republican talking point, but it doesn't make much sense. There's always uncertainty because the president can change every 4 years and congress changes in between that. Republicans have only one thing to say on the economy -- make rich people even richer, and hope that everyone else benefits."

Deep spending cuts result in lost public sector jobs, leaving those people more dependent on government handouts and less able to spend money on goods. Businesses don't need to add workers or increase investment when nobody has any money to buy their stuff."

That's not true either. Presidents change constantly, this is true, but this particular president has changed the role of the presidency entirely. No previous president has taken so much power so quickly in the past, and none has proposed to take as much control over the economy either.

And this may not have come across well in the article, but I am not a fan of the Tea Party. I am naturally weary of any populist movement. I think Republicans should work with the Democrats, but I find it pretty unlikely.

[malasadas.livejournal.com]

That's not true either. Presidents change constantly, this is true, but this particular president has changed the role of the presidency entirely. No previous president has taken so much power so quickly in the past, and none has proposed to take as much control over the economy either.


Andrew Jackson, Abraham Lincoln, Theodore Roosevelt, William Howard Taft, Woodrow Wilson, Franklin Roosevelt, Linden Johnson, Richard Nixon and George W. Bush would all like to have a word with you.

Uncertainty

[russj.livejournal.com]

You make a valid point about people not wanting to start new ventures or make big purchases or investments in times of uncertainty. Everyone knows this intuitively. Just look how quickly individuals reduced their borrowing and started saving more, starting in 2008.

This suggests that the government should NOT be 'trying to boost' the economy. Every new regulation, tax, or law that affects the economy creates a changing environment and brings unintended consequences.

It's like trying to play a football game, and the referees keep changing the rules between each play. The government should NOT be playing favorites and changing the rules, but should enforce uniform rules on every player through the entire game.

While creating more regulations and incentives is seen as 'doing SOMETHING' by lawmakers, the media, and the public -- their effect is to slow the economy. The best thing for government to do is to do NOTHING, or else to repeal past incentives and laws.

[underlankers.livejournal.com]

Because we have so many examples of the US government not intervening that created prosperity, am I right? We have evidence for these assertions that's more than trite restatement of talking points, am I right?

[fizzyland.livejournal.com]

How has Obama "fundamentally changed the relationship between the people and their government"?

[dwer.livejournal.com]

Obama is an idealist, at his core unwilling to make concessions.

(http://s744.photobucket.com/albums/xx81/drewishdrewid/Macros/?action=view&current=koma-comic-strip-sometimes.jpg)

(http://s744.photobucket.com/albums/xx81/drewishdrewid/Macros/?action=view&current=1271965956849.gif)

I can't even had a discussion with someone who is so fundamentally wrong on basic facts.

[rimpala.livejournal.com]

there was a fact in this? Where?

[devil-ad-vocate.livejournal.com]

Home prices are increasing; consumer confidence is up; unemployment rate is dropping. We're not all farting rainbows yet, but things are getting better. The GOP prediction that Obama is destroying America hasn't come to pass. I agree that we will probably face another four years of government not being willing to govern, but business will recover without us sending children back to the factories or doing away with unions.

[rimpala.livejournal.com]

"We're not all farting rainbows yet"

Just give it time and keep eating those Skittles

[the-rukh.livejournal.com]

[fizzyland.livejournal.com]

Comic Sans?

[fornikate.livejournal.com]

this is impossible for me to read.

[kylinrouge.livejournal.com]

Judging by the replies so far by people who did read it, you're probably saving yourself some heartache.

[politikitty.livejournal.com]

If President Obama is president again, those problems are still there and we have to solve them. He knows that. We’ve had conversations where he’s told me he’ll go much further than anyone believes he’ll go to solve the entitlement problem if he can get the compromise. And I believe him. I believe he would. - Senator Coburn (R. Oklahoma)

[enders-shadow.livejournal.com]

The best way to fix the economy is with an increase in the minimum wage, a transaction tax on wall street, closing loopholes, protecting the estate tax, increasing the capital gains tax, and cutting military spending [while ensuring veteran benefits]

[rimpala.livejournal.com]

ok lets see here...wow that's a lot of teal



"2008 seems an eternity ago"
wish thinking, but some of us remember further back then that...

"but nonetheless we are still suffering from the same recession which began in that year. Both political parties have brought forward ideas to stimulate the economy"
Really? "No!" doesn't strike me as much of an idea

", and some of those ideas have succeeded for a time, but eventually, their effects wore off. People in America, and indeed all over the world continue to suffer with no clear end in sight. So what can the government do to fix the problem. Well, that all depends on how quick of a recovery voters want, but the basic premise will remain the same for both parties."
Recovery isn't not going to come fast or quick, we've taken a huge blow and though there has been improvements perfection is not going to come overnight, and all the wastefulness we enjoyed shortly before the recession certainly is not going to fix the problem but create the same problem again. So not only do we need to recover, but I feel we need to learn from our mistakes so that it doesn't happen again.

"The biggest problem facing any business is uncertainty. This has always been true. The problem with today's economy isn't that companies don't have any money to invest."
To me the biggest problem facing any business today is we keep using the recession as sort of an excuse, "oh it's tough times" "it's the sign of the times" "blablabla the times the times the..." Goddammit America! Nothing is ever going to be better if you keep feeling sorry for yourself...



"Now what if the Republicans keep the House and take the Senate and the White House? We will most likely experience a faster recovery."
2008 does seem like an eternity ago doesn't it?



"Unlike Bill Clinton, who was a realist willing to work with Republicans (he was also pretty fiscally conservative anyway), Obama is an idealist, at his core unwilling to make concessions."
Funny I remember Republicans hating Clinton, and so far I don't think Obama could ever yield enough as a president to make his critics happy. For someone who's taken the seat when the nation was at it's worst in a long time, a seat I don't envy in the slightest, there's not a lot I can complain about.



"Government interference in the economy led us to this mess."
Funny, it seemed like the banks have been a large part of it,

[dwer.livejournal.com]

Funny, it seemed like the banks have been a large part of it,

No, see, had we simply just left our corporate betters alone, EVERYTHING WOULD HAVE BEEN FINE!

[gunslnger.livejournal.com]

Also, your cut didn't work.

[anfalicious.livejournal.com]

Non-standard formatting! To the do not read pile with you!


Many consider it rude to use non-standard text as we have our text set up in our personal settings so we can actually read it with our screen/eye combo. But you're a special little snow flake so it's OK, right?

[rimpala.livejournal.com]

"Non-standard formatting! To the do not read pile with you!"

[ja-va.livejournal.com]

"The cuts our government desperately needs will not even be considered, much less be passed. This will definitely slow the recovery"

Actually, it is the other way around - the cuts will slow the recovery, increased spending will speed up the recovery.

[musicpsych.livejournal.com]

Is it certainty you want, or cooperation among lawmakers? That seems to be what you're getting at - for the executive and legislative branches to be in one party so they will work together to pass legislation. And it's not that Obama isn't willing to make concessions. You say yourself, "The Tea Party movement, now a driving force in the GOP, sees any cooperation across the aisle as a betrayal, and any congressman willing to work with the opposition risks losing his seat in the next election." Why won't the Tea Party make concessions? Because they want America to fail in the short-term because that will benefit them politically?

I don't agree about lack of regulation being a good thing. That lets banks and financial institutions make more messes of the economy. What we need is smarter regulation, but we do need regulation. Lack of regulation means that businesses can act unpredictably. In that sense, doesn't regulation equal certainty, which you claim is necessary for recovery?

[malakh-abaddon.livejournal.com]

How dare you interject a legitimate logical answer into this debate. Of all the nerve...

From what I could see of the post, yeah I think they want cooperation among lawmakers. The only way that will happen is if we have the Democratic Party, or the GOP in control, option three would be a new government, which is for the people by the people, not for corporations by the highest bidder.

I will not go so far as to say the Tea Party wants America to fail in the short term, I will say that they feel that this country needs to move in a different direction, and to some extent they are correct. I think we all want the same things, low taxes, government staying out of our lives, and we want things to get better. The problem lies with the notion that, while we all want things to get better, we all have our ideas as to how to make it better. Each side feels that the other is wrong, and their way can never possibly work.

Lack of regulation is never good, companies can do as they want with no recourse. Ideally there would be no need, as companies would take the time to protect their workers, protect those who reside around their locations, and protect the environment. However we are in a culture that dictates that maximum profit is king, and everything below that is a failure. Of course, that does not mean that we should have stupid trivial regulations. Well thought out regulations like Glass-Stegall should be considered as a return to sanity, but I expect to see less regulation from this point on, along with the relegation of the US to a third world nation.