Author Topic: primitives get depressed about no depression  (Read 1186 times)

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Offline franksolich

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primitives get depressed about no depression
« on: January 25, 2008, 04:23:56 PM »
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x2753737

This is a long read, but it's well-written, and while there are some things with which one might disagree, there are other things with which one might agree.  I am truly surprised the lynx primitive hasn't been mausoleumed yet.

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Zynx  (1000+ posts)       Wed Jan-23-08 09:22 PM
Original message
 
Why do so many here believe that the next Great Depression is always around the corner?

Even by the standards of the pre-New Deal economy, the Great Depression is a bit of an anomaly. Things like a more vibrant central bank, deposit insurance, and a whole bevy of financial regulations make another Great Depression quite unlikely. Economics, my field of study, is hardly a perfected field, but huge strides have been made. There are certain things we know now that we never used to.

For example, we used to think that above all else the government needed to run a budget surplus and the central bank had to keep money tight in a downturn to preserve the integrity of the dollar. We now know that is folly.

The Federal Reserve used to think that when interest rates went up due to inflation, it was wise to increase the money supply to reduce interest rates. Well, that was a horrid idea as it led to incidents like the 1970s inflationary outbreaks. We will never make that mistake again, at least intentionally.

Also, contrary to popular belief, stock market crashes do not cause recessions or Depressions. The stock market crash of 1929 did not cause the Great Depression. Anyone who has studied the Depression knows that the economy was already clearly deteriorating and that the stock market's October crash was merely an indication, not a cause, of the economy's malaise. Now it is true that unregulated banks did own stocks in their asset portfolios. We don't allow that anymore. However, it is important to point out that by April of 1930, the Dow Jones Industrial Average had nearly wiped out its losses from October. This did not either cause an economic recovery, nor did it indicate one. The stock market can move entirely on its own.

I honestly think people here have apocalyptic views of the American economy as if it is somehow pre-ordained that the whole economy will contract to 0 at some point. The truth is that this economy is very resilient. Even in severe recessionary years since WWII, the GDP has almost never contracted more than 2%, if it ever has. Will these be difficult times? Oh yes. Is this probably going to be worse than 2001? Maybe. Will the stock market decline more than 2000-2002? Most likely not. Will your bank go under? 99.95% likelihood that it won't and even if it does it will simply be bought up by another bank and your deposits will be safe.

The primitives won't have any of it; they want so badly for a depression to occur that it's a raging conflagration, this particular campfire.

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Atman  (1000+ posts)       Wed Jan-23-08 09:50 PM
Response to Reply #7
 
32. I have absolutely NO faith that the government will be truthful about this

In fact, they've been lying for years re: unemployment, by using a different set of numbers than have been traditionally used. We're actually closer to a 9% unemployment rate, for starters. Robert Reich stated today that a drop in housing values of 20-50% is a very real possibility.

I firmly believe that Bush and the GOP leadership would poke their own eyes out with flaming sticks before they'd allow anyone to be able to say that the situation is worse than under Carter. With Bush, it's all about keeping up appearances and creating legacies. He/they would lie about anything, and I don't think we'll know the true story about how bad this economy is until it is much too late.

Hey, what do you have against beagles, anyway?

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Atman  (1000+ posts)       Thu Jan-24-08 09:27 AM
Response to Reply #96
 
100. I'm not refuting that the correction wouldn't be "normal"...

...but that's not going to mean squat to the people that financed their lives on the equity in their homes, or bought at the peak. They were dumbasses, and should have/could have seen this coming like we brilliant DUers did (LOL!), but that doesn't mean it won't hurt and it doesn't mean it won't have an impact on the economy. When a house loses 50% of it's value, you're not making that back up again any time soon. Kiss it off. It's gone.

You're right...it'd suck to be one of them. I'm not, fortunately! My wife and I consciously and deliberately stayed out of this market because I kept saying "This is stupid...I'm not paying half a million dollars for a three bedroom ranch. That's not sustainable!" I've made plenty of stupid decisions in life, thankfully this wasn't one of them.

In this Bush economy, the worst economy since Stanley met Livingston, Pedro Picasso and his wife, one and a half incomes (one hers, half his) could even consider a $500,000 house?

What's up with that?

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Tyler Durden  (1000+ posts)       Thu Jan-24-08 10:11 PM
Response to Reply #56
 
161. Wait. 

It'll happen.

Possibility (Strong this time) + Enough Time = CERTAINTY

And I lived through the big, bad 1978-1979 hit. And there WERE programs to keep you eating and housed if you ran out of cash or unemployment that are not here now.

If another 1978 happens, I'm headed for the HILLS.

The lynx primitive keeps begging to be mausoleumed:

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Zynx  (1000+ posts)       Wed Jan-23-08 09:37 PM
Response to Reply #12
 
14. If you knew a damn thing about the Depression you would know it was accompanied by deflation, not inflation.

Second, inflation is not as bad as it was in the 1970s and none of those recessions compare to the Depression.

Third, I have seen the stock market MUCH more volatile than this. Remember 2002?

Fourth, the stock market does not cause economic downturns. Did you read my post?

Fifth, jobs are closer to an all time high than an all time low. Unemployment is one fifth the rate it was during the Depression.

Sixth, the dollar being devalued has virtually nothing to do with the business cycle.

One hopes Pedro Picasso, not only the media analyst on Skins's island, but also the economics analyst there, takes note of the final sentence, above.

It starts getting nasty about midway through:

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onenote  (1000+ posts)      Wed Jan-23-08 11:44 PM
Response to Original message
 
59. because despite self congratulatory posts about how much smarter DUers are than everyone else there are people who post here who don't know history or economics.

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Zynx  (1000+ posts)       Thu Jan-24-08 07:30 PM
Response to Reply #59
 
120. They don't even know the basic statistics or information at all.

I am simply astonished.

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Name removed (0 posts)      Wed Jan-23-08 11:45 PM
Response to Original message

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Name removed (0 posts)      Wed Jan-23-08 11:47 PM
Response to Reply #61
 
62. Deleted message

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The sad news, the really sad news, is that the primitives who make sense are not prominent primitives, while the primitives who don't make sense are prominent and popular primitives.
Democrats: A bunch of rich people convincing poor people to vote for rich people by telling poor people that other rich people are the reason they are poor

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Offline Carl

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Re: primitives get depressed about no depression
« Reply #1 on: January 25, 2008, 05:10:09 PM »
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Atman  (1000+ posts)       Wed Jan-23-08 09:50 PM
Response to Reply #7
 
32. I have absolutely NO faith that the government will be truthful about this

In fact, they've been lying for years re: unemployment, by using a different set of numbers than have been traditionally used. We're actually closer to a 9% unemployment rate, for starters.

Nothing sums up DUmmie think any better.
When the facts don`t fit the desired belief one changes the facts.

Offline Lord Undies

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Re: primitives get depressed about no depression
« Reply #2 on: January 25, 2008, 06:13:58 PM »
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Rabrrrrrr  (1000+ posts)         Fri Jan-25-08 04:12 PM
Response to Reply #211
267. Sadly, a lot of people assume if you use logic and truth you hate their emotional attachments
   "The stock market reflects the economy, it does not drive it" means that you think welfare should be cut so that you can buy another Porsche that you force your illegal immigrant Mexicans to spit shine with their dicks every morning.

If you talk about interest rates in a factual way, it means that you're just pissed off that your leather sofa got another hole in it from one of your caviar champage parties when one of the guests dropped their $75 cigar on it.

I don't know why this is, but it is one of the pathologies of DU.

Remember, this country is filled with 299,000,000 people who have no ****ing clue how money works, and out of those 299,000,000 are 150,000,000 evenly divided between liberal and conervative who think they know more about economics than the economists, and spew their shit everywhere.

We have about 1,000,000 people who actually have a decent understanding of how the economy, the market, and money in general work.

The same with science, too - 150,000,000 people who don't know shit about it, but can go on at length about why the WTC *really* fell or how we could have perpetual motion machines today if the scientific conspiracy cabal didn't stop all the *real* scientists who've invented perpetual motion.

America is a land that celebrates ignorance. Which is sad, because we're also the land that had created some of the world's most stellar universities.

What a fascinating DUmmie thread.  I read the entire thing.  I posted the quote above because it is very telling.

Although it is touched on briefly in the DUmmie sewerline, as they do love to talk about the two-ton elephant in the room, they very much dismiss the three-ton elephant in the room.  That three-ton elephant is that most of the DUmmies are wishin' and hopin' and swayin' and prayin' for an economic catastrophe because they believe it would be the quickest path to socialism.  They also want to destroy the economy in order to destroy the republican party which the believe is forever tied to President George W. Bush.  Nothing they say is backed by rational thought.

The DUmmies desires' do not match reality, so they froth at the mouth towards the posters making levelheaded sense.  Logic is standing in the DUmmies' way.   Off with its head!

Offline Lauri

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Re: primitives get depressed about no depression
« Reply #3 on: January 25, 2008, 06:27:23 PM »
my in laws tell me about when their interest rates for mortgages was 18 percent... and they were good, stable middle class people. no credit debt really... ever.

this was in the mid 70s... so, they cant tell me its a worse now as it was back then. i aint buying it.

Offline miskie

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Re: primitives get depressed about no depression
« Reply #4 on: January 25, 2008, 09:21:23 PM »
uhoh.. A Dummy not blaming Booooooosh ?!?  That kind of insubordination must not be ignored!!!11!!!!

Offline jukin

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Re: primitives get depressed about no depression
« Reply #5 on: January 26, 2008, 09:55:09 AM »
my in laws tell me about when their interest rates for mortgages was 18 percent... and they were good, stable middle class people. no credit debt really... ever.

this was in the mid 70s... so, they cant tell me its a worse now as it was back then. i aint buying it.

I first tried to buy a home in the late 70s, 23% interest. All of the DUmmys forget (or never lived through) Carter's reign of incompetence: 23% mortgage interest, 12% unemployment, and 11% inflation. Add in gas lines, mid-wifing islamic terrorism and giving the Panama Canal (eventually) to the chicoms and that is why they created a MISERY INDEX.
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