[Amibguous Cad]

This mentality is largely why we have the problem we have. Our economy, and much of the housing bubble was running off of malinvestments. Having the government come in and double down on bad projects just to get the money flowing is not a reliable long term fix. The best way to fix the economy is to ignore all "quick fix" solutions like stimulus or quantitative easing or the gold standard. We need long lasting reform. We need to restructure the financial sector so that people have more access to credit thru alternative means. That also means protecting people's money so this asinine idea that we pour inflation and kill people cash value and savings is out of the window. That will not spur investment. We need to deregulate and improve existing regulation that impede economic growth. Case in point our IP law is practically strangling major sections of the tech industry, most notably in the news today smartphone patents. It is incredibly ironic that the country where it's citizens and leaders are constantly demanding things like "alternative energy" and the like put up roadblocks everyday to new companies and ideas, either unwillingingly of knowing full well what they are doing. The recession killed the housing market, which construction jobs and the revenue they brought in. We need to replace it as soon as possible by encouraging people to spend wisely and into productive ventures. The recession showed how mismanged many countries economies are. We aren't going to fix anything by inflating our way into new cash and doubling down ont he same mistakes. We know that won't worl, as evidenced by all the people who cited Japan in this very thread.

All of these things are good ideas and would make us more prosperous, but none will solve unemployment.

Ditch all the unproductive regulation you'd like, install a competent IP regime, and we'll be richer, but we'll still be at 8 percent unemployment. And we will continue to be so until central bankers decide to combat the crisis.

[speculawyer]

The median house price is 183k. The median household income is around 50k. The average person can't afford the average house.

Meh . . . they can afford it. Get a down payment and mortgage for 3X your salary.

[speculawyer]

There ARE easy solutions, such as this one: http://www.neogaf.com/forum/showthre...856&highlight= It massively reduces drop out rates (40% attendance rate to 90%), reduces crime, creates jobs, improves health, embellishes our urban environments with greenery, reduces pollution, etc., all the while being inherently profitable on its own, without counting the positive social and economic impacts for society itself and the inherent reduction in government spending to correct all of those same ills.

That had nothing to do with energy though.

[Puddles]

Thats about the way I see it too. The system, at its roots, is built on a ponzi scheme of bunny money (reproduces like rabbits) therefore the boom and bust cycles are unnatural as a stable economic system creates stable growth. But that isn't how you create multi-generational legacies now is it?

Would you believe that there were far more busts, and they happened far more regularly, before the creation of the Federal Reserve?

[zethren]

Growing population, less job opportunities, student loans. There is an awful large hump for young people to hurdle over.

Gone are the days of going to college, start your career right out of college, work in your career for 30 years, retire.

I think things will get better, but honestly just do your best to hunker down while things are the way they are now. That way you're prepared if things actually do get worse.

[Neo C.]

Companies don't invest unless people are spending money. Nobody starts a company up to make a product unless they know they'll make their money back in a defined amount of time, that's what the government is for.

It's an egg and hen problem. Around the world, there are lots of people with more than enough cash to spend, and there are companies with cash ready to invest. Very few have taken the opportunity to invest money though, because everyone is waiting for a trend or a hype to follow.
The main problem I see is that hoarding money is less risky than investing it. We should turn this around and make investment a better alternative than hoarding money, for example with higher tax on assets and estate tax. The latter should push the rich old people to pass their wealth to the younger generation before they die. It's one of the reason why the youth keep struggling: The current old generation has a higher life expectancy than the generations before, thus keep the wealth for a much longer time. And when they pass, the wealth goes to their children who are already in their 50s or 60s. How can you expect with the current cycle of heritage to have a healthy environment for investments?

The best way to fix the economy is to ignore all "quick fix" solutions like stimulus or quantitative easing or the gold standard. We need long lasting reform. We need to restructure the financial sector so that people have more access to credit thru alternative means. That also means protecting people's money so this asinine idea that we pour inflation and kill people cash value and savings is out of the window. That will not spur investment. We need to deregulate and improve existing regulation that impede economic growth. Case in point our IP law is practically strangling major sections of the tech industry, most notably in the news today smartphone patents. It is incredibly ironic that the country where it's citizens and leaders are constantly demanding things like "alternative energy" and the like put up roadblocks everyday to new companies and ideas, either unwillingingly of knowing full well what they are doing.

Also this.

[Megalodactyl]

Well. It is, we didn't have a globalized economy that we all relied on. We outsourced everything, and that crippled local economy. Heres my question, where are jobs going to come from now? Now that all of the factory/mom and pop/everything, is gone from our country? Tech-jobs aren't going to bring back a lot of basic jobs in the mid-west, who were reliant on factories that sustained towns for generations. This attitude is putting your head in the sand, and just hoping its going to be ok. Thats why neither political party can do a single thing about this, it is more a purchasing attitude that drove us into failure. Cheapest product drove out a lot of jobs for people in the country. People have to start supporting their local economy, although it may be more expensive, but it will provide jobs. In thenpursuit of cheaper products, we got rid of the little industries we had here. A temporary lower quality of life is mandatory. So that the future can be better Thats not coming back with time, and inaction.

Well said.

[Zyzyxxz]

It's an egg and hen problem. Around the world, there are lots of people with more than enough cash to spend, and there are companies with cash ready to invest. Very few have taken the opportunity to invest money though, because everyone is waiting for a trend or a hype to follow. The main problem I see is that hoarding money is less risky than investing it. We should turn this around and make investment a better alternative than hoarding money, for example with higher tax on assets and estate tax. The latter should push the rich old people to pass their wealth to the younger generation before they die. It's one of the reason why the youth keep struggling: The current old generation has a higher life expectancy than the generations before, thus keep the wealth for a much longer time. And when they pass, the wealth goes to their children who are already in their 50s or 60s. How can you expect with the current cycle of heritage to have a healthy environment for investments? .

Too bad most voters are old and they will only support their self interests.

[Puddles]

The reason "class warfare" and "the 99%" are (rightfully) becoming a thing?

Corporate profits just hit an all-time high:

http://www.businessinsider.com/corpo...ime-low-2012-6

Businesses are hoarding cash:

http://articles.businessinsider.com/...orations-moody

Yet we have 8% unemployment, and declining wages for those who are employed.

Capitalism might be the best system we have, but it isn't exactly doing a bang-up job of things.

One way or another, we have to get all that money flowing in the economy, and yes, redistribute it. Whether by directly confiscating it, or by providing economic incentives that would have the same result, this needs to happen.

I don't see things improving until the idiotic bootstraps mentality is thoroughly expunged from this planet.

[mackattk]

The reason "class warfare" and "the 99%" are (rightfully) becoming a thing? Corporate profits just hit an all-time high: http://www.businessinsider.com/corpo...ime-low-2012-6 Businesses are hoarding cash: http://articles.businessinsider.com/...orations-moody Yet we have 8% unemployment, and declining wages for those who are employed.

Yup, I hate how companies put profit at the top over everything else. They would rather screw 6000 employees to gain .1% profit. When is enough money enough? Its a vicious cycle, because these companies aren't happy unless they make more money than they did in that period of the year previous. So that means not replacing people who are fired/retire/quit and stagnating wages to get that tiny amount more of profit.

I have many friends who have not had any raises in the past 3-4 years. The company I work for, earlier thid year the boss pulled me into his office and said that we won't be able to give our raises this year because of current market conditions, etc. A week later, the main office sent out an email how profitable of a company we are and how much better over last year we were doing. I didn't get a raise last year either.

Meanwhile everything around me keeps getting more and more expensive.

[RDreamer]

Yup, I hate how companies put profit at the top over everything else. They would rather screw 6000 employees to gain .1% profit. When is enough money enough? Its a vicious cycle, because these companies aren't happy unless they make more money than they did in that period of the year previous. So that means not replacing people who are fired/retire/quit and stagnating wages to get that tiny amount more of profit. I have many friends who have not had any raises in the past 3-4 years. The company I work for, earlier thid year the boss pulled me into his office and said that we won't be able to give our raises this year because of current market conditions, etc. A week later, the main office sent out an email how profitable of a company we are and how much better over last year we were doing. I didn't get a raise last year either. Meanwhile everything around me keeps getting more and more expensive.

I can't say I hate companies or blame them for what they're doing. That's the game we've created. If, for example, the NBA made what is now worth 3 points worth 10 points and people just abused the hell out of that I'm not going to hate the player. He's playing to win. I'm going to hate the idiot that would keep that rule in place to allow it to happen. The player is always going to play the game to the fullest extent. Companies are always going to seek as much profit as they can. That's the role of the player, and that's the role of the company. The role of government is to create an environment, to create a game, that balances and is sustainable. We need forces working against the force of corporate profits above everything. We need a government that realizes money will move upward and then stagnate, and has the balls to take some from the top and put it back on the bottom so that it'll float back up again. We need stronger unions again. We need a change in attitude in this country so that people realize government isn't a business. It's highest interest should be people. It should maximize the welfare of the people in its jurisdiction. And when we finally do that, American freedom won't be gone, like so many on the right seem to believe. You'll still profit. You'll still have rich people, but the system will work again for everyone. We can't get there until people quit voting and quit allowing our government to be nothing but corporate interests. Corporate interests are already powerful enough. Don't hand them the goddamned government, too. Don't let them write the rules. Don't let them be the referees.

[BravesCountry]

Then stop the corporations. Putting higher taxes on them would be the first step. The only thing I'm sure about is: The economy (and employment) won't get back to the better by just waiting for better times. You have to push the rich to invest their money, otherwise new jobs won't happen. It's ridiculous how much money is sitting in the bank, because everyone is afraid of investing.

You can't just raise taxes on corporations and expect things to get better. Thing would actually get worse. Basic finance would tell you that if you want more people investing, lower the taxes on corporations. Taxes on corporations in U.S. are already one of the highest in the world, and it slows down a lot of investment that would happen otherwise

[demon]

You can't just raise taxes on corporations and expect things to get better. Thing would actually get worse. Basic finance would tell you that if you want more people investing, lower the taxes on corporations. Taxes on corporations in U.S. are already one of the highest in the world, and it slows down a lot of investment that would happen otherwise

Didn't somebody already post this in this thread?

http://www.huffingtonpost.com/2012/0...n_1196875.html

[Zyzyxxz]

You can't just raise taxes on corporations and expect things to get better. Thing would actually get worse. Basic finance would tell you that if you want more people investing, lower the taxes on corporations. Taxes on corporations in U.S. are already one of the highest in the world, and it slows down a lot of investment that would happen otherwise

What? You got some info to back that up? Because I thought it was the complete opposite.

[KHarvey16]

CBO did their update to the budget and economic outlook. Wouldn't you know it, cutting the deficit is a terrible idea:

http://cbo.gov/publication/43539

[GloveSlap]

I can't say I hate companies or blame them for what they're doing. That's the game we've created. If, for example, the NBA made what is now worth 3 points worth 10 points and people just abused the hell out of that I'm not going to hate the player. He's playing to win. I'm going to hate the idiot that would keep that rule in place to allow it to happen. The player is always going to play the game to the fullest extent. Companies are always going to seek as much profit as they can. That's the role of the player, and that's the role of the company. The role of government is to create an environment, to create a game, that balances and is sustainable. We need forces working against the force of corporate profits above everything. We need a government that realizes money will move upward and then stagnate, and has the balls to take some from the top and put it back on the bottom so that it'll float back up again. We need stronger unions again. We need a change in attitude in this country so that people realize government isn't a business. It's highest interest should be people. It should maximize the welfare of the people in its jurisdiction. And when we finally do that, American freedom won't be gone, like so many on the right seem to believe. You'll still profit. You'll still have rich people, but the system will work again for everyone. We can't get there until people quit voting and quit allowing our government to be nothing but corporate interests. Corporate interests are already powerful enough. Don't hand them the goddamned government, too. Don't let them write the rules. Don't let them be the referees.

Perfectly said. I hate greedy people, but I expect it as an inevitability at this point.

[Izayoi]

Corporate profits just hit an all-time high: http://www.businessinsider.com/corpo...ime-low-2012-6 Businesses are hoarding cash: http://articles.businessinsider.com/...orations-moody

Clearly less regulation is the answer!

Corporations have proven that if you give them an inch, they will take a mile. They will continue preying on the working class until the government steps in and says enough is enough.

With this political climate, I seriously doubt that will ever happen. Both parties have been bought and paid for by corporations for a long time now, and I seriously doubt that will change in any of our lifetimes.

[Sohter.Nura]

Ever since the 70's and early 80's the U.S has been on a trajectory of a third world country model. Yes, this is the new norm =/ it's only gonna get worse.

[zugzug]

I still support the revolution where the common people rise up and publicly murder every 1%'er out there this wealth income discrepancy is utter bullshit

This Bernie Eccelestone atittude is the worst thing going for this planet.

[amrihua]

If the Bush tax cuts for the super wealthy are allowed to expire and taxes are raised on the super rich and lowered on middle and lower class and wars are avoided things will improve quickly.

[mackattk]

I still support the revolution where the common people rise up and publicly murder every 1%'er out there this wealth income discrepancy is utter bullshit This Bernie Eccelestone atittude is the worst thing going for this planet.

Maybe not that extreme. But I would love a real life nationwide version of the movie Trading Places.

[FroJay]

The problem is also that greed has taken over completely, gone are the days of raises when companies made big profits. That is a problem that starts in economics classes around the country. In my econ class last year we had to buy a book authored by Ben Bernanke. One of the lines of drivel in it was about a business being solely for the purpose of increasing profits.

Of course a business should be profitable, but this type of thought process starts somewhere, and when it starts in econ 1001.....well?

[WickedCobra03]

I still support the revolution where the common people rise up and publicly murder every 1%'er out there this wealth income discrepancy is utter bullshit This Bernie Eccelestone atittude is the worst thing going for this planet.

Yeah, like instead of the sports section being on the end of the news at 11 every night, just replace that with a public hanging.

I feel like you wouldn't even need to do every 1%... I am just saying do it to the key players in the banking industry, the scum CEO's; Wal-Mart, McDonalds Goldman Sachs, ect just to show what can happen to them. I am not a huge fan of violence, but nothing scares them, they are basically protected... Bernie Madoff is the exception.

[-COOLIO-]

the US is hugely in debt, the wealth distribution is horrible, and other economic super powers are rising up. shouldn't the standard of living in the US just keep getting worse? that's my prediction.

[saltinekracka]

Can anyone explain why the Dow is basically back to pre-recession levels when the economy is doing so poorly?

[Darkkn]

The problem is also that greed has taken over completely, gone are the days of raises when companies made big profits. That is a problem that starts in economics classes around the country. In my econ class last year we had to buy a book authored by Ben Bernanke. One of the lines of drivel in it was about a business being solely for the purpose of increasing profits. Of course a business should be profitable, but this type of thought process starts somewhere, and when it starts in econ 1001.....well?

Yeah, there is not good enough anymore(if there was ever?). It's a big problem when the 'system' or the 'game' is modeled in a way that encourages greed and it's been hammered so much to us that even average people defend corporations saying 'well, corporations need to make a profit' like that is the only way the world could work. It's like everyone has accepted that this is how things are and therefore it's all logical and therefore justified.
Mechanics of the capitalist game has taken completely over things like ethics and morals.

[RDreamer]

the US is hugely in debt, the wealth distribution is horrible, and other economic super powers are rising up. shouldn't the standard of living in the US just keep getting worse? that's my prediction.

The "debt" shouldn't make an actual difference, though because politicians are running around screaming about the scary number and trying to implement austerity measures, yeah the standard of living could get worse.

And, yes, the wealth distribution will likely continue to get worse, and that'll affect the middle class, which is slowly disappearing.

Can anyone explain why the Dow is basically back to pre-recession levels when the economy is doing so poorly?

Because businesses aren't actually doing bad. Corporate profits are at all time highs. They've just learned to cut even more corners and make do with less employees. Basically, trickle down economics don't work.

Our unemployment is also higher than it should be because we downsized the government during this time. If we hadn't lost those jobs unemployment would be at least a full percentage point lower.

[Acheron]

This mentality is largely why we have the problem we have. Our economy, and much of the housing bubble was running off of malinvestments. Having the government come in and double down on bad projects just to get the money flowing is not a reliable long term fix. The best way to fix the economy is to ignore all "quick fix" solutions like stimulus or quantitative easing or the gold standard. We need long lasting reform. We need to restructure the financial sector so that people have more access to credit thru alternative means. That also means protecting people's money so this asinine idea that we pour inflation and kill people cash value and savings is out of the window. That will not spur investment. We need to deregulate and improve existing regulation that impede economic growth. Case in point our IP law is practically strangling major sections of the tech industry, most notably in the news today smartphone patents. It is incredibly ironic that the country where it's citizens and leaders are constantly demanding things like "alternative energy" and the like put up roadblocks everyday to new companies and ideas, either unwillingingly of knowing full well what they are doing. The recession killed the housing market, which construction jobs and the revenue they brought in. We need to replace it as soon as possible by encouraging people to spend wisely and into productive ventures. The recession showed how mismanged many countries economies are. We aren't going to fix anything by inflating our way into new cash and doubling down ont he same mistakes. We know that won't worl, as evidenced by all the people who cited Japan in this very thread.

Japan didn't inflate or engage in sufficient stimulus. It took interest rates to zero and performed over a decade of small scale stimulus, enough to survive but hardly live.

The post is a great example of writing something without content. Patent law may be a cost of doing business (and may be worth reducing) but those same laws existed in the 60s, the 90s and the 2000s, our current issue cannot be caused by that.

I think the thread shows people are a bit off-target of what we are talking about, the "new normal" refers to chronicly high unemployment and anemic growth, it's not like off-shoring, mechanization and patent trolling just skyrocketed in 2008. They're long run issues, with in most cases an ambiguous impact.

What is unambiguous are the following: 1) Growth is weak 2) Unemployment is high 3) Corporate profits and cash piles are at record levels 4) Governments are able to borrow at record low rates because investors and financial institutions don't feel optimistic about ANY investment opportunity 5) Confidence is lagging what it should be

All of these things can be fixed by expansionary fiscal policy because monetary policy has limits, it has created a liquidity trap where holding money is preferable to investing in plant and people.

Yes recessions are often caused by malinvestment destroying value and impacting confidence. THAT IS WHY GOVERNMENTS INTERVENE. They are the last bastion of demand, the investor with limitless confidence and longest timelines. Smart investment is done by the market, it has a great track record overall. But when we are clearly running below capacity, when investment clearly is below where it should be, when the smart bets aren't being made it must fall to government to do what is necessary to restart the cycle.

http://www.nytimes.com/2011/04/10/bu...view.html?_r=1
There is no empirical evidence that are issues are structural. It may be fun, compelling, grandiose to talk that there must be a great national effort at renewal, that the paradigm must shift. However we have simply faced a similar crisis as Sweden had in the 90s, as Japan did in the 90s as the US had in the 30s, and we have failed, blanked and dithered on following the known and established blueprint to solving the crisis.

[ToxicAdam]

Tepid growth seems okay to me. This obssession with material wealth and 4-5 percent gains is what causes these panics in the first place.

We just need government policies that are going to make sure that those that are in the most need are having those needs met. I think they are falling behind a bit.

Overall the world (and country) is a better place.

Our lakes and rivers are cleaner than ever before. We are more concientious of our environment than ever before. Our fishing and hunting stocks are incredibly plentiful. Violent crime continues to trend downwards. There is an incredible focus on children and educating and protecting them. Some might even say too much. Our vehicles and transportion are safer and more durable than ever before. We are living longer and we are saving more babies from early deaths. Our homes are almost twice the size of what they were 40 years ago. Inflation is being kept in check. There is more entertainment and ways to view that entertainment than ever before.

on and on ...

So, basically the problem lies with high school educated people finding jobs and helping give more purpose to their life. Seems like simple problem to fix, if people just acknowledge the reality and help pay to allieviate it. Everyone has to pay more.

[Acheron]

Can anyone explain why the Dow is basically back to pre-recession levels when the economy is doing so poorly?

The cash piles of large corporations are put into short-term investments in the financial market because they don't need the money to invest in expanding workforce or capacity unless it's known demand will rebound. Since nobody is willing to expand, demand doesn't grow and more money just stays in bank accounts or goes to stock and bond markets. It's self-fulfilling.

[Acheron]

Tepid growth seems okay to me. This obssession with material wealth and 4-5 percent gains is what causes these panics in the first place. We just need government policies that are going to make sure that those that are in the most need are having those needs met. I think they are falling behind a bit. Overall the world (and country) is a better place. on and on ... So, basically the problem lies with high school educated people finding jobs and helping give more purpose to their life. Seems like simple problem to fix, if people just acknowledge the reality and help pay to allieviate it. Everyone has to pay more.

I'm happy that you can tell the unemployed that the world is a better place because we ought to live below where we could be. Expanding at anything less than capacity is a robbery of the next cohort's future.

[SiteSeer]

Can anyone explain why the Dow is basically back to pre-recession levels when the economy is doing so poorly?

financial leveraging

[ToxicAdam]

I'm happy that you can tell the unemployed that the world is a better place because we ought to live below where we could be. Expanding at anything less than capacity is a robbery of the next cohort's future.

But, the world is a better place. A life is more than a job. Although, I realize that for many it is the foundation of their identity, it's also important to realize that it does not define who you are.

It's also not unique to these people. Billions of people before them have suffered through joblessness and still carried on.

As technology continues to erode 'work', we need to redefine who we are and what is most important in life.

[thirty]

Can anyone explain why the Dow is basically back to pre-recession levels when the economy is doing so poorly?

fire people here and outsource everything=profit but the bubble will bust once people start breaking and everything slows down because after firing enough people they've destroyed their very own consumer base.

[Sanky Panky]

Can anyone explain why the Dow is basically back to pre-recession levels when the economy is doing so poorly?

The market rebounded a bit with QE1, then again with QE2, then now idiot traders have mass orgasms when the Fed hints at another QE3, or when Draghi farts in their direction. It's basically priced in. Market action has nothing to do with fundamentals. It's all hope for more money to keep inflating asset prices.

Another key element is extremely low volumes in the markets, so what are left trading are the algorythm traders and managers hoping for another cash injection from the fed. They have programs that interpret headlines, so even rumors cause a jump in the market. The retail investors and mutual fund investors have left in droves.

Market is set for a wake-up call. It's just taking longer than it did last year. September is critical.

Edit. Funny, just as I was typing my post, Bernanke said "There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery." (which is no different than before), and another rumor from Europe that "ECB considering setting yield band targets under new bond buying programme according to sources." (of course against what Germany says). The markets of course surged. The new normal also includes markets run by central banks.

In other news,

U.S. Stocks Rise As Fed Sees ‘Scope For Further Action’
http://www.bloomberg.com/news/2012-0...e-changed.html

Bad news means hope for QE3... stocks go up!

[Ikael]

I think that this crysis is more political than economical, as strange as it sounds. Look elsewhere people. I see no global meltdown in Canada, Indonesia, Singapore or Australia, hell, there are even several reports that Africa is at long last pulling herself out of the hole. What I see is a Japanese - like reclutance to change ossified societal and goverment practices, keeping zombi industries alive (let them being investment banks, car plants or whatever) at the expense of the productive sectors of the economy.

Entrenched interests are getting protected at the expense of the middle class as a result from a higher interaction / representation of already stablished lobbies (let them being corporative, political, economical or clientelar) due to the nature of Democracy. Rather than an agent of change, Democracy seem far more suitable for keeping the statu quo rather than modify it, as counter - intuitive as it sounds.

[Dorrin]

I'd like to add that even if the unemployment numbers were to come down not all jobs are the same. I think this point gets lost a lot in the discussion. We have gone from highschool grads making good hourly salaries with benefits and pensions to 10 bucks an hour no benefits. Now we are seeing college grads, white collar workers etc drop from say 60k with benefits to 30k no benefits or minor benefits and a shitty 401k.

So even unemployment were to improve and that is a big if, the life of the US worker is slowly winding its way down.

[zugzug]

It is shocking that the normal citizen accepts this life without pension or benefits.

I realize that a person takes any job he can get to live on, however these richy richy people just scamming others by removing pensions and benefits need to die and die publicly.

the same way people just accept that Social security belief that Social security won't be around when they need at their old age. Just Laff that people think its ok to think like this.