If you want to put an across the board tariff on China for currency manipulation, that might be a good idea but you don't want an across the board tariff and the reason is oil.
If you force oil prices through the roof, that would cause a deep recession. Oil price shocks literally are correlated to recessions and that would do 'er.
The two major causes of the trade deficit are China and oil. I overview this every month.
But you cannot do tariffs on oil, not with absolutely nothing in place to reduce foreign oil import dependencies, it would crash the economy for certain.
China, on the other hand, is where most of our manufacturing jobs have gone and they are committing all sorts of brazen trade violations, currency manipulation being just one.
There have been bills in Congress and it's amazing, they have almost all in Congress as co-sponsors yet magically are never brought to the floor for a vote.
One thing that was bad was June's durable goods, here
While the report is for June, new orders affect Q3 in terms of later shipments.
GDP is 71% personal consumption, 12.7% exports, imports subtracts off about 17%, investment is about 12.6% and government about 20%.
These components do vary quarter to quarter but personal consumption is always around 70%.
Durable goods report is manufacturing, so it's being produced, not consumed. That said, a drop in new orders isn't too good for further down the line.
Bottom line, even if GDP goes negative, the problem is corporations now routinely fire people the minute they see any negative anything, even when their profits soar.
I still do not expect anything like Q4 2008, Q1 2009. If it goes into a double dip, I expect it to be mild..
but how long does one have to have a lost decade, an economy not growing enough to create jobs, sustain it's population, before the NBER calls this a depression or something more significant beyond keyword recession.
In other words, this isn't looking too cyclical, as in a couple of quarters, to me.
"Iraq and Afghanistan have added $4 trillion to the national deficit of $14 trillion."
Michael, I've been reading your byline for years now and while I appreciate the spirit and even some of the research that goes into it, I'm getting really sick and tired of seeing mistakes like this. The national deficit is about $1.7 trillion. The national DEBT is $14 trillion. When you make easily avoidable blunders such as this (don't you do any proofreading whatsoever? I'm beginning to doubt it), it doesn't exactly instill us with a sense of your credibility to speak on any matters.
They know they can't lose. They know that people will vote to authorize them to continue the war against us. Okay, so only half the electorate still votes, but that's enough for them to claim legitimacy, the consent of the governed. And that half will never give up their vote because it is their precious right to vote for people who won't represent them. It is their voice in government to vote for people who will not allow public opinion to influence policy decisions. Why, if they didn't vote, the bad guys would win--never mind that no matter how often they vote and no matter who they vote for, the bad guys always win anyway.
What would happen if the corporations spent their usual billions of dollars to get their puppets elected and nobody except the 2% who benefit from corporate-run government voted? Would anyone still believe that the government is still legitimate and still has the consent of the governed? But then we'd lose our credit rating and no other country would loan money to us. We'd be bankrupt. Well, we are anyway. But as long as that credit rating holds, the government can continue to borrow money with which to wage profitable wars abroad, all the while moaning that it is too broke to provide jobs here at home.
If we didn't vote, the government would fall. Then we could write a new Constitution that vests power in the hands of the people instead of in the hands of "representatives" who don't represent us. We could institute honest elections where the popular vote in the final say and cannot be overruled. We could renounce any debts incurred without our consent and put the crooks who fleeced us in prison. We could send the war criminals to the Hague to be tried.
Not that there's the slightest chance that this will happen. The 50% who vote will always turn out to do their civic duty to a state that is destroying them. They'll continue to vote to empower the 2% because they believe that some day they'll win the lottery and will be in that 2%. They know the odds, but it's the only hope, the only chance they've got. And politicians know this, so they sell themselves as agents of hope and change. And it doesn't really matter how many of us stop voting because there's another sucker born every minute who will sell their grandchildren's future for the right to cast a ballot that doesn't even have to be counted for somebody they won't be able to hold accountable until long after the irreparable damage is done and cannot be undone.
The act of voting is the act of declaring oneself incompetent and appointing guardians to manage one's affairs. What's tragic is that no matter how many times those guardians steal the funds they were entrusted to manage on our behalf, that 50% will keep voting to authorize them to do so because THEY REALLY ARE INCOMPETENT. Oh sure, they can pay their rent and taxes if they happen to be lucky enough to have a job, but they're incompetent to make decisions about how their tax money should be spent. If they had power, they'd do exactly what our politicians do because they, like the representatives they vote for, care only about themselves and have no concern for others. Lacking social consciousness and guided solely by greed, they sympathize with the crooks they elect because they aspire to be crooks like that, or at least admire those who achieve that goal.
Great article, as usual, Michael. Of course having repeated the same things over and over for years, we do get better at saying it. The problem is that the few who can understand what we're saying are not the majority. The majority will continue to support predatory capitalism even while it roasts them, eats them, and picks their bones. To put limits on capitalism would not only be socialism, but it would put limits on their dreams of becoming greedy crooked pigs like the people they vote for. I agree with everything you say, except the last part of your comment responding to Robert. Our politicians are exactly like the people they represent. If voters weren't every bit as evil as the people they vote for, they wouldn't be voters, they'd be revolutionaries.
They allowed a war based on a lie and did nothing about that lie when they found out.
What kind of people are these? Certainly not like those they represent. Congress is the servant of big money, loyal and larded with gratuities. They are the true enemy of the state.
This whole theater is all about creating a massive "crisis" and then claim "they had to" in order to "compromise" and thus avoid "disaster" by "default" ....
and that's why they just royally F@@$'ED old people, sick people and pretty much 99% of Americans.
It's just positively disgusting. I know default is real, but this is unreal. They are putting a gun to the head of America with their manufactured political theater, all to slash social safety nets.
Notice how they have the entire press not talking about that outrage, instead their political theater?
Of the reports over the last month, how many have focused in on the actual cuts and the fact Americans, more than ever, need social security and health care?
I think McCain had a lot to recommend him as, you might say, the last moderate Republican standing.
What decided me against McCain was when he began to campaign on getting us into yet another war, namely, the Russo-Georgian War. I recalled what happened in the Clinton administration after Clinton campaigned on getting the U.S. involved in the Yugoslavian Civil War (or War of Independence of Croatia, etc.) -- we actually got into the Yugoslav conflict! That was unconstitutional, dangerous and unnecessary (most likely not something that Clinton inherited by way of NSC pre-existing policy, at least not as more than just another option on the table).
So, it looked to me in 2008 like McCain might actually get us into a war with Russia. A lot of world powers have gone up against Russia, actually moving into Russian territory, and all have met with disaster.
Also, McCain was openly teemed up -- through a major D.C. professional lobbyist firm -- with the then-president of Georgia.
BTW: I am not here judging the merits on either side of the Russo-Georgian (South Ossetia) war. It's just that I thought (and continue to think) U.S. involvement in that war, at a time when we were already involved in at least two major wars of occupation, was extremely dangerous. I thought then (and continue to think) that McCain -- all due credit to the man for his combat and POW experiences -- was actually still fighting the Vietnam War. I appreciate the sentiment, but I don't think that our global security policy should be determined by sentiment.
Very good suggestion. To understand our allowed ballot options, we need not only the "worse" and "worser" categories but also the "worserer" category. Maybe some day we may reach the "worserest" and that will finally be the "End of the World As We Know It"!
"Boehner will let this go through just to save face and possibly his job."
Is it possible that Boehner will do what is in the best interests of his personal financial condition, consistent with avoiding investigation of said condition? And is it possible that some politicians do not make any distinction between their political ambitions and their ambitions for their personal fortunes?
"The Tea Party mantra is all about the US Govt staying our of our lives and living within their means."
Yes, exactly, the so-called 'Tea Party' has a "mantra" and not a message!
Yes, the TP has a "mantra," because the TP is religious in nature.
And, like many religions, self-anointed leaders of the TP are profiteering opportunists. In particular, TP opportunists are limited-partnered up to exploit insider information to play the precious metals markets like an over-amped electric guitar.
Yes, the TP is all about keeping U.S. government out of any possible investigation of the rampant corruption in Congress!
"We need some real policy changes from financial, tax incentives to hire Americans to invest, start, move production back to the U.S., we need infrastructure, way cheaper continuing and higher education and a host of other policies." --- Robert Oak
Looking at "tax incentives to hire Americans to invest, start, move production back to the U.S." -- would not a 15% Across-the-Board Tariff (ABT), or some kind of equitably applied VAT if you prefer that term, accomplish much of the same objectives while increasing revenue for such expenses as federal support for education?
The problem with "tax incentives" is that they so often end up as tax loopholes. The end result is a system dependent on politically-inspired preferences that are counter-stabilizing and that, in the long run, inhibit the growth of a free enterprise economy.
Yes, I've heard the spin ... the only reason that the Great Recession continues is some nebulous "anti-business" atmosphere that is entirely due to "the liberals" and/or "the Democrats" and/or "the leftist mass media" (the last referring to, like, CNN ... all of them except FOX).
So, thanks to 'brleed' for putting an apt tag on this particular little subsystem of the greater GOP delusional system.
Well, we've seen nothing to indicate the economy would turn around. We have "anti" policies in place to promote job creation.
I expect at max, GDP to be below 2.0% and possibly hovering around zero.
I think to go strongly (i.e. < -0.5%) negative, we need another event. Now that could happen, from a U.S. default to a major disaster to an implosion in Europe (financial)...
The situation is bleak, for we need some real policy changes from financial, tax incentives to hire Americans to invest, start, move production back to the U.S., we need infrastructure, way cheaper continuing and higher education and a host of other policies.
Instead we have conservative Republican Obama with crazy people waiting to take him down.
Notice this? Agendas that are corporate globalization agendas, will increase wealth redistribution, more poverty, income inequality are being advanced by Obama and many Democrats while the GOP now has an increasing fold of pure bat shit crazies in it.
The spirit of your comments are that Americans are stupid for letting in most of the immigrants that we currently do, because they will cost the government so much money.
You do realize that, don't you?
Most of the immigrants we get are here due to family petitioning and refugee claims. While you and your wife went on to get advanced degrees and make more than an average income, many (if not most) immigrants we admit end up being a financial drag on us who earn average to below average wages their entire working lives. Some of the older immigrant parents we admit never work a single day in America but we end up paying for their SSI and medical costs. It's a great financial deal for the US taxpayer, isn't it?
So now that you are US taxpayer yourself -- one who is very conscious of benefits received for payments rendered -- would you advocate getting rid of the costly system that led to your presence here?
"I am asking you Robert, where was my safety net when I needed it?"
This is a curious comment in the middle of the rest of what you say.
Is your complaint that when you made less and as a new immigrant you didn't qualify for government help you couldn't get government assistance and now that you've been here more than five years, you make too much to receive it?
If you had two kids in New Jersey schools most of the time you've been here, the tab to the district was way more than what you paid in state and local taxes, especially in the early years. As you know, educational spending in NJ is very high, about the highest in the nation. So your family received many thousands of dollars in educational subsidies from your fellow townspeople and New Jerseyans.
In addition, if you came to America not speaking English, then I would think you came via a family reunification visa or by being a refugee. What did we ask of you when we admitted you to this country?
Why are you so critical of our system? After all we have a much smaller social safety net than any of First World nation except Japan, as I have found to my sorrow now that I have been jobless for so long.
Except for our financial situation, things haven't changed that much here since 1999. You knew what you were getting into and if you didn't like it, you should not have come here, frankly.
I'd be the last person to say that newcomers can't complain about something, but if you're going to complain about the American perspective and system as a whole, well -- you're the one asked to come here, we didn't ask you!
I thought Bush was worserer. Cheney said "Deficits don't matter" and "It's our due," and Bush saluted. I voted for Obama in 2008 because I couldn't stand the thought of Phil Gramm deciding economic policy after the raping the country was taking. Now, I'm wondering if I didn't really vote Republican in my confusion -- we seem to have two Republican Parties, one masquerading as the Democratic Party. If Obama lets the tax cuts for the rich stand, that will confirm my belief -- and the Cheney Cabal will have won.
you're right, thank you. budgets, national debt and deficits are confusing enough.
If you want to put an across the board tariff on China for currency manipulation, that might be a good idea but you don't want an across the board tariff and the reason is oil.
If you force oil prices through the roof, that would cause a deep recession. Oil price shocks literally are correlated to recessions and that would do 'er.
The two major causes of the trade deficit are China and oil. I overview this every month.
But you cannot do tariffs on oil, not with absolutely nothing in place to reduce foreign oil import dependencies, it would crash the economy for certain.
China, on the other hand, is where most of our manufacturing jobs have gone and they are committing all sorts of brazen trade violations, currency manipulation being just one.
There have been bills in Congress and it's amazing, they have almost all in Congress as co-sponsors yet magically are never brought to the floor for a vote.
One thing that was bad was June's durable goods, here
While the report is for June, new orders affect Q3 in terms of later shipments.
GDP is 71% personal consumption, 12.7% exports, imports subtracts off about 17%, investment is about 12.6% and government about 20%.
These components do vary quarter to quarter but personal consumption is always around 70%.
Durable goods report is manufacturing, so it's being produced, not consumed. That said, a drop in new orders isn't too good for further down the line.
Bottom line, even if GDP goes negative, the problem is corporations now routinely fire people the minute they see any negative anything, even when their profits soar.
I still do not expect anything like Q4 2008, Q1 2009. If it goes into a double dip, I expect it to be mild..
but how long does one have to have a lost decade, an economy not growing enough to create jobs, sustain it's population, before the NBER calls this a depression or something more significant beyond keyword recession.
In other words, this isn't looking too cyclical, as in a couple of quarters, to me.
"Iraq and Afghanistan have added $4 trillion to the national deficit of $14 trillion."
Michael, I've been reading your byline for years now and while I appreciate the spirit and even some of the research that goes into it, I'm getting really sick and tired of seeing mistakes like this. The national deficit is about $1.7 trillion. The national DEBT is $14 trillion. When you make easily avoidable blunders such as this (don't you do any proofreading whatsoever? I'm beginning to doubt it), it doesn't exactly instill us with a sense of your credibility to speak on any matters.
They know they can't lose. They know that people will vote to authorize them to continue the war against us. Okay, so only half the electorate still votes, but that's enough for them to claim legitimacy, the consent of the governed. And that half will never give up their vote because it is their precious right to vote for people who won't represent them. It is their voice in government to vote for people who will not allow public opinion to influence policy decisions. Why, if they didn't vote, the bad guys would win--never mind that no matter how often they vote and no matter who they vote for, the bad guys always win anyway.
What would happen if the corporations spent their usual billions of dollars to get their puppets elected and nobody except the 2% who benefit from corporate-run government voted? Would anyone still believe that the government is still legitimate and still has the consent of the governed? But then we'd lose our credit rating and no other country would loan money to us. We'd be bankrupt. Well, we are anyway. But as long as that credit rating holds, the government can continue to borrow money with which to wage profitable wars abroad, all the while moaning that it is too broke to provide jobs here at home.
If we didn't vote, the government would fall. Then we could write a new Constitution that vests power in the hands of the people instead of in the hands of "representatives" who don't represent us. We could institute honest elections where the popular vote in the final say and cannot be overruled. We could renounce any debts incurred without our consent and put the crooks who fleeced us in prison. We could send the war criminals to the Hague to be tried.
Not that there's the slightest chance that this will happen. The 50% who vote will always turn out to do their civic duty to a state that is destroying them. They'll continue to vote to empower the 2% because they believe that some day they'll win the lottery and will be in that 2%. They know the odds, but it's the only hope, the only chance they've got. And politicians know this, so they sell themselves as agents of hope and change. And it doesn't really matter how many of us stop voting because there's another sucker born every minute who will sell their grandchildren's future for the right to cast a ballot that doesn't even have to be counted for somebody they won't be able to hold accountable until long after the irreparable damage is done and cannot be undone.
The act of voting is the act of declaring oneself incompetent and appointing guardians to manage one's affairs. What's tragic is that no matter how many times those guardians steal the funds they were entrusted to manage on our behalf, that 50% will keep voting to authorize them to do so because THEY REALLY ARE INCOMPETENT. Oh sure, they can pay their rent and taxes if they happen to be lucky enough to have a job, but they're incompetent to make decisions about how their tax money should be spent. If they had power, they'd do exactly what our politicians do because they, like the representatives they vote for, care only about themselves and have no concern for others. Lacking social consciousness and guided solely by greed, they sympathize with the crooks they elect because they aspire to be crooks like that, or at least admire those who achieve that goal.
Great article, as usual, Michael. Of course having repeated the same things over and over for years, we do get better at saying it. The problem is that the few who can understand what we're saying are not the majority. The majority will continue to support predatory capitalism even while it roasts them, eats them, and picks their bones. To put limits on capitalism would not only be socialism, but it would put limits on their dreams of becoming greedy crooked pigs like the people they vote for. I agree with everything you say, except the last part of your comment responding to Robert. Our politicians are exactly like the people they represent. If voters weren't every bit as evil as the people they vote for, they wouldn't be voters, they'd be revolutionaries.
They allowed a war based on a lie and did nothing about that lie when they found out.
What kind of people are these? Certainly not like those they represent. Congress is the servant of big money, loyal and larded with gratuities. They are the true enemy of the state.
This whole theater is all about creating a massive "crisis" and then claim "they had to" in order to "compromise" and thus avoid "disaster" by "default" ....
and that's why they just royally F@@$'ED old people, sick people and pretty much 99% of Americans.
It's just positively disgusting. I know default is real, but this is unreal. They are putting a gun to the head of America with their manufactured political theater, all to slash social safety nets.
Notice how they have the entire press not talking about that outrage, instead their political theater?
Of the reports over the last month, how many have focused in on the actual cuts and the fact Americans, more than ever, need social security and health care?
I'm positively sickened.
The BBC piece is well worth reading.
I think McCain had a lot to recommend him as, you might say, the last moderate Republican standing.
What decided me against McCain was when he began to campaign on getting us into yet another war, namely, the Russo-Georgian War. I recalled what happened in the Clinton administration after Clinton campaigned on getting the U.S. involved in the Yugoslavian Civil War (or War of Independence of Croatia, etc.) -- we actually got into the Yugoslav conflict! That was unconstitutional, dangerous and unnecessary (most likely not something that Clinton inherited by way of NSC pre-existing policy, at least not as more than just another option on the table).
So, it looked to me in 2008 like McCain might actually get us into a war with Russia. A lot of world powers have gone up against Russia, actually moving into Russian territory, and all have met with disaster.
Also, McCain was openly teemed up -- through a major D.C. professional lobbyist firm -- with the then-president of Georgia.
BTW: I am not here judging the merits on either side of the Russo-Georgian (South Ossetia) war. It's just that I thought (and continue to think) U.S. involvement in that war, at a time when we were already involved in at least two major wars of occupation, was extremely dangerous. I thought then (and continue to think) that McCain -- all due credit to the man for his combat and POW experiences -- was actually still fighting the Vietnam War. I appreciate the sentiment, but I don't think that our global security policy should be determined by sentiment.
Very good suggestion. To understand our allowed ballot options, we need not only the "worse" and "worser" categories but also the "worserer" category. Maybe some day we may reach the "worserest" and that will finally be the "End of the World As We Know It"!
"weeping and wailing and gnashing of teeth"
"demons dragged kicking and screaming"
"It reminds me of that scene in The Exorcist"
"They will say anything in a variety of voices"
Thanks to 'Bruce Bishop' for an excellent parody of TP religious rhetoric!
Of course, Bishop's comment is wholly political and intended as a parody of the TP --
"Kudos to ... the brave citizen legislators ... elected to fight this battle."
LOL. Thanks for the humor!
"Boehner will let this go through just to save face and possibly his job."
Is it possible that Boehner will do what is in the best interests of his personal financial condition, consistent with avoiding investigation of said condition? And is it possible that some politicians do not make any distinction between their political ambitions and their ambitions for their personal fortunes?
"The Tea Party mantra is all about the US Govt staying our of our lives and living within their means."
Yes, exactly, the so-called 'Tea Party' has a "mantra" and not a message!
Yes, the TP has a "mantra," because the TP is religious in nature.
And, like many religions, self-anointed leaders of the TP are profiteering opportunists. In particular, TP opportunists are limited-partnered up to exploit insider information to play the precious metals markets like an over-amped electric guitar.
Yes, the TP is all about keeping U.S. government out of any possible investigation of the rampant corruption in Congress!
"We need some real policy changes from financial, tax incentives to hire Americans to invest, start, move production back to the U.S., we need infrastructure, way cheaper continuing and higher education and a host of other policies." --- Robert Oak
Looking at "tax incentives to hire Americans to invest, start, move production back to the U.S." -- would not a 15% Across-the-Board Tariff (ABT), or some kind of equitably applied VAT if you prefer that term, accomplish much of the same objectives while increasing revenue for such expenses as federal support for education?
The problem with "tax incentives" is that they so often end up as tax loopholes. The end result is a system dependent on politically-inspired preferences that are counter-stabilizing and that, in the long run, inhibit the growth of a free enterprise economy.
Yes, I've heard the spin ... the only reason that the Great Recession continues is some nebulous "anti-business" atmosphere that is entirely due to "the liberals" and/or "the Democrats" and/or "the leftist mass media" (the last referring to, like, CNN ... all of them except FOX).
So, thanks to 'brleed' for putting an apt tag on this particular little subsystem of the greater GOP delusional system.
Well, we've seen nothing to indicate the economy would turn around. We have "anti" policies in place to promote job creation.
I expect at max, GDP to be below 2.0% and possibly hovering around zero.
I think to go strongly (i.e. < -0.5%) negative, we need another event. Now that could happen, from a U.S. default to a major disaster to an implosion in Europe (financial)...
The situation is bleak, for we need some real policy changes from financial, tax incentives to hire Americans to invest, start, move production back to the U.S., we need infrastructure, way cheaper continuing and higher education and a host of other policies.
Instead we have conservative Republican Obama with crazy people waiting to take him down.
Notice this? Agendas that are corporate globalization agendas, will increase wealth redistribution, more poverty, income inequality are being advanced by Obama and many Democrats while the GOP now has an increasing fold of pure bat shit crazies in it.
That's just disastrous.
What a mess.
I think I could use "What a mess" as a comment on a good 3/4 of what is posted here.
So many messes, so much at stake, yet we see so little being done, except for adding new messes.
What a mess.
The spirit of your comments are that Americans are stupid for letting in most of the immigrants that we currently do, because they will cost the government so much money.
You do realize that, don't you?
Most of the immigrants we get are here due to family petitioning and refugee claims. While you and your wife went on to get advanced degrees and make more than an average income, many (if not most) immigrants we admit end up being a financial drag on us who earn average to below average wages their entire working lives. Some of the older immigrant parents we admit never work a single day in America but we end up paying for their SSI and medical costs. It's a great financial deal for the US taxpayer, isn't it?
So now that you are US taxpayer yourself -- one who is very conscious of benefits received for payments rendered -- would you advocate getting rid of the costly system that led to your presence here?
"I am asking you Robert, where was my safety net when I needed it?"
This is a curious comment in the middle of the rest of what you say.
Is your complaint that when you made less and as a new immigrant you didn't qualify for government help you couldn't get government assistance and now that you've been here more than five years, you make too much to receive it?
If you had two kids in New Jersey schools most of the time you've been here, the tab to the district was way more than what you paid in state and local taxes, especially in the early years. As you know, educational spending in NJ is very high, about the highest in the nation. So your family received many thousands of dollars in educational subsidies from your fellow townspeople and New Jerseyans.
In addition, if you came to America not speaking English, then I would think you came via a family reunification visa or by being a refugee. What did we ask of you when we admitted you to this country?
Why are you so critical of our system? After all we have a much smaller social safety net than any of First World nation except Japan, as I have found to my sorrow now that I have been jobless for so long.
Except for our financial situation, things haven't changed that much here since 1999. You knew what you were getting into and if you didn't like it, you should not have come here, frankly.
I'd be the last person to say that newcomers can't complain about something, but if you're going to complain about the American perspective and system as a whole, well -- you're the one asked to come here, we didn't ask you!
I thought Bush was worserer. Cheney said "Deficits don't matter" and "It's our due," and Bush saluted. I voted for Obama in 2008 because I couldn't stand the thought of Phil Gramm deciding economic policy after the raping the country was taking. Now, I'm wondering if I didn't really vote Republican in my confusion -- we seem to have two Republican Parties, one masquerading as the Democratic Party. If Obama lets the tax cuts for the rich stand, that will confirm my belief -- and the Cheney Cabal will have won.
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