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If it is in fact a component of a normal business cycle then the failure should be very easy to quantify and correct. Especially one that you say will self correct.
Please read what I stated, I stated that "business cycles and bubbles are a normal part of capitalist economies". I did NOT state that bubbles are "a normal business cycle". Bubbles have been occurring for centuries and they go above and beyond the normal business cycle and yet they are a naturally occurring economic phenomena.
Bubbles will self-correct, but it usually takes much longer than your typical business cycle. That is because the boom causes a lot of imbalances, a lot of resources get poorly allocated, etc.
Quote:
Originally Posted by lumbollo
A cycle is predictable and if a cycle is predictable then it's components are predictable.
Firstly, as I noted above, bubbles and the business cycle are two different things. Secondly even the normal business cycle is not predictable.
No, not really. And like the other fellow you are equivocating the colloquial term with the technical term. The business cycle is a cycle in the sense that relative stability -> boom -> bust -> recovery -> relative stability tend to occur in sequence again and again. Yet, when the boom/bust occurs, how big the boom/bust is, how long the recovery is, etc are all unpredictable. And, its only a rough cycle in that the economy does not always recovery to a state similar to the pre-boom state. The same sort of dynamics exist in weather/climate and for good reason, both the climate and the economy are examples of complex dynamical systems.
But financial bubbles are really not cyclic, they always collapse but the economy is rarely ever the same. They cause widespread damage and major shifts in behavior generally fellow.
But financial bubbles are really not cyclic, they always collapse but the economy is rarely ever the same. They cause widespread damage and major shifts in behavior generally fellow.
Indeed.... Yes you finally said something that I agree with. The question remains. What has been fixed with the economy to fix this financial bubble? It hasn't popped yet given the government is blowing as hard as it can to keep it inflated by borrowing unprecedented amounts of money.
When the government runs out of breath is when it gets interesting. Prognostications that we are in some sort of recovery by the pundits are nonsense. Recovery by definition means restoration previous state. It's an obfuscation of the colloquial term with the technical term just as you mentioned above.
This is why I can ask the question, "What has been fixed?" The technical answer should be obvious.
The question remains. What has been fixed with the economy to fix this financial bubble? It hasn't popped yet given the government is blowing as hard as it can to keep it inflated by borrowing unprecedented amounts of money.
The bubble has already collapsed, suggesting we are still in a boom is just ridiculous. It will take years for things to adjust totally, but that does not mean the bubble has not collapsed yet. The time to ask "how to fix the bubble" was 4-5 years ago.
I also don't think the government is trying to re-inflate the bubble, rather they are trying to limit the damage from the collapse. They are taking the "remove the band-aid slowly" approach. The government could not re-inflate the bubble even if they wanted to.
Quote:
Originally Posted by lumbollo
Recovery by definition means restoration previous state. It's an obfuscation of the colloquial term with the technical term just as you mentioned above.
Sure, the term "recovery" is used in a very misleading fashion in the media. When the economists say "recovery" what they mean is rather different than what the average person thinks when they hear the word.
But I don't mind, a big part in recovery is a positive shift in consumer sentiment. Does not really matter if its based in reality or not, the shift in sentiment will in a sense create the reality.
The economy will continue to deteriorate, because there is no reason for it to improve. You cannot repair a building with foundation problems by giving it new paint and landscaping. You must repair the foundation. Does anyone see any meaningful investment being done in our infrastructure or manufacturing industry? How about education, trade deficits, banking reform, or wealth distribution? These are the areas of disease in our economy. All that is being done is creation of more and more debt to purchase short term feel good solutions like unemployment, and health care. If you do nothing to solve a problem, and only take actions that will make it worse, you will get results accordingly. I believe it will take more pain before the people will educate themselves as to what the problems really are. Once they understand the problems, perhaps we can begin to work on the solutions.
Exactly. I am sitting back waiting for all the nuts to start burning down cities.
I am in disagreement with the authors thought on how the "angry" people will translate. There will be a lot of mobs out there, but it won't be against each other. The rich and corporations will be first. Each other will be later. Though I don't see why a mob would go after a farmer that can successfully grow food. I would see that mob protecting that asset.
The putting a "happy face" on it media had expected a job gain this past month. They did this by removing 600,000 unemployed from being counted in the BLS statistics. Despite this, the economy still racked up a stunning 85,000 in additional job losses.
Expect more rigging of statistics to hide the real pain out there and brain dead reporting from the likes of NBC and it's finance and cable by products. (cnbc, cnbcw, msnbc, etc)
The US economy has now produced a net of 0 jobs in the last decade. So much for the economy based on buying and selling paper, irresponsible real estate development, and cost cutting by shifting production overseas. It's a damning indictment of this kind of business plan.
While the economy produced 0 jobs the work force grew by 28 million.
This can't be sloughed off as some type of "cycle". We have had 0 job growth and 0 stock market growth over a period of 10 years. This is unprecedented in the USA's history and something we have not seen in any working person's memory.
So again I think I can stand up to what I said earlier:
What has been changed to fix this economy?
Answer: Not one damn thing and despited the gerry rigging of economic statistics in an attempt to hide it and making credit available as never before, it's not fixed. In fact it's worse than ever before. We are just seeing the beginning.
The putting a "happy face" on it media had expected a job gain this past month. They did this by removing 600,000 unemployed from being counted in the BLS statistics. Despite this, the economy still racked up a stunning 85,000 in additional job losses.
Expect more rigging of statistics to hide the real pain out there and brain dead reporting from the likes of NBC and it's finance and cable by products. (cnbc, cnbcw, msnbc, etc)
The US economy has now produced a net of 0 jobs in the last decade. So much for the economy based on buying and selling paper, irresponsible real estate development, and cost cutting by shifting production overseas. It's a damning indictment of this kind of business plan.
While the economy produced 0 jobs the work force grew by 28 million.
This can't be sloughed off as some type of "cycle". We have had 0 job growth and 0 stock market growth over a period of 10 years. This is unprecedented in the USA's history and something we have not seen in any working person's memory.
So again I think I can stand up to what I said earlier:
What has been changed to fix this economy?
Answer: Not one damn thing and despited the gerry rigging of economic statistics in an attempt to hide it and making credit available as never before, it's not fixed. In fact it's worse than ever before. We are just seeing the beginning.
A similar pyschological situation happened during the Great Depression. Government spending and programs started to make people feel like things were getting better and the stock market had a temporary bull period before things got even worse going into the mid 1930's. The government just stopped it getting worse for a short time and then made it even worse by its own intervention.
A similar pyschological situation happened during the Great Depression. Government spending and programs started to make people feel like things were getting better and the stock market had a temporary bull period before things got even worse going into the mid 1930's. The government just stopped it getting worse for a short time and then made it even worse by its own intervention.
Sorry, but this is not inaccurate. The depths of the depression were in 1932, the situation was much improved (but not good) by the mid 30's. See:
Secondly, in terms of the stock market. I'm not even sure what you are talking about, there was a small bull run right after the first crash in 1929's. But that was in no sense due to government intervention. After that it was pretty much straight down with the bottom being in 1932.
The government's stimulus greatly improved the economy from 1932 to 1936, there was another dip in 1937. Guess why? The same sort of misguided political pressure that exists today.
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