Worried about a recession?? Here's the solution s/m

Today, President Bush held a news conference where he discussed the �way forward� for the economy in 2007. Renowned Morgan Stanley economist Steven Roach says the the �odds of the U.S. economy tipping into recession are about 40 to 45 per cent.� New York Times columnist Paul Krugman notes that �the odds are very good � maybe 2 to 1,� that the U.S. will teeter toward a recession in 2007. Bush�s solution? �Go shopping more.�

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With the "bubble bursting" in regards to the housing market and rising fuel prices, do you think a major recession is on the horizon in the US?

When the labor market weakens, workers have less bargaining power with their employers. As a result, wages are trailing more than 2 percentage points behind inflation over the last year.

Wages are virtually the entire income for most workers. If the purchasing power of their wages falls by 2 percent, this is the equivalent of a 2 percentage point increase in their tax rate.

This is worth thinking about. Most workers in the country have just seen the equivalent of a 2 percentage point increase in their tax rate, and it has gotten almost no attention. By contrast, Senator McCain is claiming that the economy will collapse if we increase the tax rate by 3.6 percentage points for people who can't remember how many homes they own.

It is easy to understand how a typical family experiences real hardship when their wages don't keep up with the price of food, gas, and heating oil. It's a bit harder to understand how the folks who can't keep track of their homes will suffer by restoring tax rates to the Clinton-era levels.

This brings us to the other important point about the Friday jobs numbers. The economy is in bad shape and getting worse. This disaster is happening while we are experimenting with the tax policies advocated by Senator McCain. We have an economy that is now shedding jobs at the rate of almost 100,000 a month. There is no prospect of turnaround in sight. We could have half a million fewer jobs by the time the next president is sworn into office than we do today.

This is the Bush-McCain economy. Senator McCain may have forgotten, but President Bush already tried his economic policies and the results are not good. We have just been through a business cycle in which the wage of the typical worker and the typical working family fell. This is the first time that has ever happened.

As bad as the situation is, it will surely get worse as the recession deepens. Wages and incomes will fall further behind inflation as the unemployment rate continues to rise. By contrast, the Clinton-era tax rates were associated with the most prosperous period since the early seventies.

As I have written many times, Clinton's policies do not deserve all the credit for the prosperity of the late 90s, and President Bush's polices do not deserve all the blame for the economy's poor performance in the current decade.

However, it strains credulity to argue that the Clinton-era tax rates are a recipe for stagnation, while the Bush-McCain tax cuts for the rich are the road to prosperity. When he pushes his tax cuts as a remedy for the economy's ills, Senator McCain is effectively imitating Groucho Marx's famous line: "what are you going to believe, me or your lying eyes?"

At this point, McCain should be embarrassed to even say that tax cuts for the rich help the economy. Tax cuts for the rich help the rich, they don't help the economy. It's that simple.

This economic catastrophe was many years in the making. There is no painless way to recover from the collapse of the housing bubble and the correction from an over-valued dollar. We do know that Senator McCain's plan to keep giving the rich more money is not a road to prosperity because that is exactly what we have been doing.

We can't know exactly how Senator Obama will address the economy's problems if he takes office in January in part because we don't know exactly where the economy will be. However, a plan that focuses on supporting ordinary workers and promoting clean technologies, is likely to produce much better results than policies that are focused on redistributing even more income to the wealthy.

has anything to do with it? Hey, that's what republicans want, big business to grow fast--no regulation--me, me, me...

How about all those families that are going to suffer from this. Did they ask for it too?

was coming long before the "experts" knew it. All they had to do was to be Americans who were trying to fill up their gas tanks, feed their families and try to hang on to their jobs. I just read an article the other day where someone in the government finally admitted that we've been in a recession that they believe will last another 14 months. (Can't remember who said it; will try to find the link.) This is after months and months of denials, although most everday folks felt like they were in a recession long before hearing it "officially."

If they are only now admitting to a recession, that tells me that we're in the beginnings of a full-fledged DEPRESSION.

Add terror threats, a war between Iran and Israel and the USA, perhaps provoking a terror attack (real or "false flag"), people becoming so poor in this country that their fear is replaced with anger, and voila!! The US soldiers that are lying in wait for us to "misbehave" as tensions arise so they can keep us in line, just might have their work cut out for them...especially if we suffer another attack on our soil.

We've got crooks running the Treasury Department, all chosen from the same failing companies for which they worked.

The Wall Street "crisis" came on so quickly and so urgently that nobody knew what to do.

Well, Bush knew what to do. First, he hired Henry Paulson of Goldman Sachs fame, the company that received a $3 billion payout, who then went on to appoint Michael Alix to "oversee things." This is the same Michael Alix who was in control of "overseeing things" at Bear Stearns (we remember how well that whole Bear Stearns thing worked out.) Paulson then went on to appoint Neel Kashkari (another Goldman Sachs graduate).

Bush has selected these men, either personally or through Paulson, because he knows that THEY know how to play the system and accentuate the greed. He hired people who aren't on America's side at all. They're part of Bush's "Haves," and the rest of average Americans -- the "have nots" -- aren't even in the picture, except as it pertains to how much money has been stolen from our accounts. Bush has always has been about greed. He still is. When a government begins to buy banks, it's at the very least socialism (if not, more accurately, fascism). For all intents and purposes, this money could easily be in Bush's pockets. We don't and won't know this because this particular sweetheart deal came with NO oversight and NO transparency as conditions on the part of Bush. By the way, Bush bought a ranch in Paraguay.

Basically, Bush had a lot of knowledgeable, independent people who had NO conflict of interest from having been senior executives of the failed companies from which he could have chosen.

Instead, he chose those who were at the very top to the crooks (if not the crooks themselves.)

In short, Bush hired the foxes to watch the hen houses. No doubt in my mind that Bush's pockets are going to be pretty full soon if they're not already.

The arrogance with which these auto executives presented their testimony is reminiscent of all the arrogant people who surround themselves with the Arrogant-In-Chief.

In the middle of all this, though, I do see somewhat of a silver lining. The less money people have to spend, the lower prices will be forced to go -- all that supply and demand stuff.

Enter Obama's "bottom-up" theory. Once the lives of the least of us can improve a bit, that will hopefully trickle up to everyone else.

I also heard an excellent idea on TV recently: That every single CEO of a company should NEVER earn more than the President of the United States. I kind of liked that one.

P.S. I apologize if this post doesn't make any sense. I'm very heavily medicated right now and probably shouldn't even be at the computer. I've tried to write this as coherently as I could. If I failed, I apologize.

Government website now offers 'suicide warning signs' for victims of recession

When the government starts warning you not to commit suicide, you know things have gotten bad.

The US Department of Health and Human Services now has a webpage for the current recession, "Getting Through Tough Economic Times." Headlined under the Substance Abuse & Mental Health Services Administration (www.samhsa.gov/economy/), the guide offers tips on "how to deal with the effects financial difficulties can have on your physical and mental health." The site went public Tuesday.

The remainder of the story is at: http://rawstory.com/news/2008/Government_website_offers_suicide_warning_signs_0331.html

So, this "man of the people" who funds the loony left and wants all the rest of us to be communists rakes in $billions from the recession. He's out there picking up stuff at bargain-basement prices just like JP Morgan and his kind did.

homes, natural disasters unattended to, collapsing bridges, earmark bridges. Address those first, save flag for later.

Unemployment rate soars to 8.1 percent
Employers resort to even bigger layoffs as they scramble to survive
BREAKING NEWS
The Associated Press
updated 8:02 a.m. CT, Fri., March. 6, 2009

WASHINGTON - The nation's unemployment rate bolted to 8.1 percent in February, the highest since late 1983, as cost-cutting employers slashed 651,000 jobs.

Both figures were worse than analysts expected and the Labor Department's report shows America's workers being clobbered by a relentless wave of layoffs.

The net loss of jobs in February came after even deeper payroll reductions in the prior two months, according to revised figures. The economy lost 681,000 jobs in December and another 655,000 in January.

Since the recession began in December 2007, the economy has lost 4.4 million jobs, more than half of which occurred in the past four months.

Employers are shrinking their work forces at alarming clip and are turning to other ways to slash costs � including trimming workers' hours, freezing wages or cutting pay � because the recession has eaten into their sales and profits. Customers at home and abroad are cutting back as other countries cope with their own economic problems.

With employers showing no appetite to hire, the unemployment jumped to 8.1 percent from 7.6 percent in January. That was the highest since December 1983, when the jobless rate was 8.3 percent.

All told, the number of unemployed people climbed to 12.5 million. In addition, the number of people forced to work part time for "economic reasons" rose by a sharp 787,000 to 8.6 million. That's people who would like to work full time but whose hours were cut back or were unable to find full-time work.

Meanwhile, the average work week in February stayed at 33.3 hours, matching the record low set in December.

Construction companies eliminated 104,000 jobs. Factories axed 168,000. Retailers cut nearly 40,000. Professional and business services got rid of 180,000, with 78,000 jobs lost at temporary-help agencies. Financial companies reduced payrolls by 44,000. Leisure and hospitality firms chopped 33,000 positions.

The few areas spared: education and health services, as well as government, which boosted employment last month.

General Dynamics Corp. said Thursday it will lay off 1,200 workers due partly to plummeting sales of business and personal jets that forced it to cut production. Defense contractor Northrop Grumman Corp., and Tyco Electronics Ltd., which makes electronic components, undersea telecommunications systems and wireless equipment, also are trimming payrolls.

"This is basically cleaning house for a lot of firms," said John Silvia, chief economist at Wachovia. "They are using the first quarter to cut back employment and figure out what they want."

Disappearing jobs and evaporating wealth from tanking home values, 401(k)s and other investments have forced consumers to retrench, driving companies to lay off workers. It's a vicious cycle in which all the economy's negative problems feed on each other, worsening the downward spiral.

"The economy is in a tailspin. Businesses are jettisoning jobs at an unprecedented pace," said Richard Yamarone, economist at Argus Research.

The country is getting bloodied by fallout from the housing, credit and financial crises_ the worst since the 1930s. And there's no easy fix for a quick turnaround, economists said.

President Barack Obama is counting on a multipronged assault to lift the country out of recession: a $787 billion stimulus package of increased federal spending and tax cuts; a revamped, multibillion-dollar bailout program for the nation's troubled banks; and a $75 billion effort to stem home foreclosures.

Even in the best-case scenario that the relief efforts work and the recession ends later in 2009, the unemployment rate is expected to keep climbing, hitting 9 percent or higher this year. In fact, the Federal Reserve thinks the unemployment rate will stay elevated into 2011. Economists say the job market may not get back to normal � meaning a 5 percent unemployment rate � until 2013.

Businesses won't be inclined to ramp up hiring until they are sure any economic recovery has staying power.

The economy contracted at a staggering 6.2 percent in the final three months of 2008, the worst showing in a quarter-century, and it will probably continue to shrink during the first six months of this year.

Fed Chairman Ben Bernanke told Congress earlier this week that recent economic barometers "show little sign of improvement" and suggest that "labor market conditions may have worsened further in recent weeks."

Consumers� growing frugality has hammered automakers, among other industries. General Motors Corp.'s auditors on Thursday raised "substantial doubt" about the auto giant�s ability to continue operations, and the company said it might have to seek bankruptcy protection, sending its shares below $2.

Bill Hampel, chief economist for the Credit Union National Association, said his group�s members are reporting record increases in deposits. Government figures show the savings rate jumped to 5 percent in January from zero last spring. That�s the highest rate since 1995 and a much faster shift than he had expected, Hampel said.

Consumer spending makes up about 70 percent of the economy. It topped out at 71 percent in 2005, Hampel said, but will likely drop by 2 to 3 percentage points over the next few years.

Increased savings can actually lower economic growth. Economists call it the �paradox of thrift�: What�s good for each of us individually � being thrifty, limiting our spending � can worsen a recession when everyone does it all at once.

Hoffman said about half the 6.2 percent drop in economic output last quarter was attributable to lower consumer spending.

Move the state of Israel to Virginia, Jerry Fallwell and Pat Robertson can fight over the honor, and see how much y'all love Israel then.

This was an article from the St. Petersburg Times Newspaper on Sunday. The Business Section asked readers for ideas on "How Would You Fix the Economy?" I thought this was the BEST idea....I think this guy nailed it!

Dear Mr. President,

Patriotic retirement:

There are about 40 million people over 50 in the work force - pay them $1 million apiece severance - no tax - with the following stipulations that they must do:

1) They must leave their jobs...... Forty million job openings - Unemployment fixed.

2) They must buy NEW American cars....... Forty million cars ordered -Auto Industry fixed.

3) They must either buy a house/pay off their mortgage ..... - Housing Crisis fixed.

Can't get any easier than that! Way cheaper than the cost of what's going on now!

SUGGESTED SOLUTION TO CARMAKER'S CRISIS, AS WELL AS SOME ENVIRONMENTAL ISSUES

Maybe I've gone off the deep end - but I'm so sick of hearing about the big 3 bailout requests I've come up with a serious suggestion to help them.

I think its environmentally, morally, and financially irresponsible for the government to give tax breaks to those who buy NEW cars (much less bail out the manufacturers). The majority can't afford them anyway (or can't guarantee they'll have a job to make payments on them tomorrow), and we already have enough cars! Backyards and junk yards are full of cars because we can't get parts for them! How many economy cars that were good on gas are sitting in junkyards - because we don't have the parts to keep 'em on the road?

Why can't we get parts? The greedy corporate suits in Detroit figured if we couldn't get them, we'd be forced to buy new cars whether we wanted to or not! So they won't make them. I guess their plan didn't work, because when we bought new cars, we bought them from someone else.

I believe replacement parts manufacturing can be profitable - as the few little companies that make replacement parts for classic cars can prove. It might not restore the bonus of every deprived CEO in Detroit, but it could save quite a few line jobs. There is no longer a big market for new cars - but there's a constantly growing market for replacement parts. Its better than continuing the denial that Detroit has been in for the last decade - clinging stubbornly to the myth that we LIKE what they make, that we WANT it, and that we can AFFORD it, and that every one of us pines away for shiny new giant gas-guzzler in our driveway. We like what they USED to make, the muscle cars, the economy cars, the cars that were our sentimental favorites back in the day, when cars didn't cost the price of a house, and lasted longer than the 5 year warranty! They still have the blueprints to make the parts for those models, as well as parts for later-model cars past their warranty. That's what we want, what we can afford - and the sheer volume of parts purchased would make them a profit as well as helping the little guy with bad credit survive. Not everyone can get a loan for a new car - or even a used one - but those that can't could probably come up with the price of a needed part

I propose we reduce the production of new cars drastically. Instead we revamp a large number of our factories to manufacture parts for the cars that already exist (if we really MUST bail out the big 3, let's insist they put the money toward this). Alternatively, we insist that for every new car they manufacture - they must manufacture a certain number of essential repair parts for their discontinued models (which, according to recent news - will be most of them). This creates jobs, renews the jobs at some of the small non-union subcontracting plants that had to close when told to stop making the parts, or at least saves the jobs of UAW workers who were making unwanted new cars. Let them close their dealerships - but keep the dealer repair shops open. We then give tax credits for anybody who takes classes on repair - this creates jobs, as more people would rather fix it versus junk it (and can certainly afford the part easier than a whole new car). We give tax credits to anyone who gets a non-running vehicle operational again, we give tax credits for anyone who opens a repair/refurbishment shop, we give tax credits to junk yards that reduce their scrap heaps. Much better than a tax credit encouraging people to take on even more debt for a new car!

If some of elderly vehicles are unsafe by today's standards, we could manufacture parts that make them safer and update them, depending on the needs of each model. Surely the powers that be could run a scan for every VIN and get the statistics for how many models of each are currently still on the road (just like they do when there's a safety recall), and decide from there on whatever issues need addressed.

We should also consider legislation that insurance companies stop totalling vehicles without proof that their repair will be more expensive than a new car. "What a car is worth" needs to be restructured - what is the environmental/financial impact of junking it worth - the cost of a new one? If an old paid-off car ran perfectly fine before the wreck - should it be totalled because the damages came to a couple bucks more than the Blue Book value? I really don't think so! In this economy, having a paid-off vehicle with the option of keeping minimal insurance on it is nearly priceless!

We found out during the last couple years that we really can't afford a brand new McMansion, and we don't actually need one either, and we're much better off with less house than our budget can stretch to cover. Many of us know the same thing about the brand new car, but we don't have a choice because we can't fix the old one, and can't trust that the used one we buy will have parts available for it when it breaks down. That needs to change. We need more cost-effective options and we WANT the choice of fixing what we already paid for, instead of being forced to buy ever-more expensive brand new ones again and again and stuffing the landfills indefinitely!

My solution also applies to large appliances. Our landfills are full of them! The manufacturers of refrigerators, washers/dryers, riding lawnmowers, etc. should be required to produce a set number of repair parts for their older models - instead of making commercials about a lady throwing her old one off a cliff simply because she's tired of it!

Do we really want to be a nation of salesmen and consumers? I think we'd have more pride, strength and better ability to make it through these hard times if we replaced our salesmen with repairmen, blind consuming with sensible choices, and learn to one-up the Joneses with how much we saved from the landfill instead of how much we spent. Let's stop planned obsolescence and let the companies that refuse to give up the practice go belly up! They deserve it - they are trashing the environment as well as ripping off their customers - deliberately manufacturing products to break down in a couple years is just morally wrong. Lets make if fashionable to preserve and restore instead of consume and discard! I hope I'm not the only one that's tired of this - so is anybody with me on this? If you're in favor spread the idea! Discuss this with everybody!

Peter Peterson. (Photo: Reuters)

Peter Peterson is coming to get your Social Security and Medicare. Peterson was the commerce secretary in the Nixon administration. He then went on to make billions of dollars as one of the top executives at the Blackstone Group, a private equity fund. Mr. Peterson is known as one of the top beneficiaries of the fund managers' tax break, through which he personally pocketed tens of millions of dollars.

Mr. Peterson has been using his Wall Street wealth to attack these social insurance programs for decades, but he recently stepped up his efforts. Last year, he spent $1 billion to endow the Peter G. Peterson Foundation to further his efforts.

In politics, it's not easy to counter the impact of $1 billion. In addition to its money, the Peterson crew enjoys the support of many important news outlets, most importantly The Washington Post, which pushes his line on both its editorial and news pages.

In fact, The Post even went so far as to identify Peterson's foundation by its boilerplate, an organization that "advocates for federal fiscal responsibility," instead of telling readers of its political leanings, the normal mode of identification for such organizations. (The Center for Economic and Policy Research was established "to promote democratic debate on the most important economic and social issues that affect people's lives.")

While the Peterson crew may have the money and the support of the media, the rest of us can rely on logic and ridicule to counter the attack. In this spirit, we have the Peter G. Peterson Intergenerational Fairness Tax Credit. (Mr. Peterson is apparently fond of having things named after him. In addition to his new Peter G. Peterson Foundation, he also has a think tank named after him, the Peter G. Peterson Institute for International Economics.)

The Peterson tax credit would essentially take the Peterson crew at their word. They claim that they are worried that huge tax burdens will leave future generations worse off than the generations that preceded them.

This isn't true. There is no plausible scenario, short of war or environmental disaster, that would leave future generations worse off than their parents or grandparents. But we don't have to argue with the billionaire; let's just give future generations the option to trade places with their parents or grandparents who made out so well.

This is where the tax credit comes in. The tax credit would allow an individual to trade her after-tax income for the after-tax income that someone born 20 or 40 years sooner would have earned at the same age. For example, if someone born in 1990 believes in 2020 that their grandparents got a better deal, they would simply check off the year 1940, and they would have their taxes adjusted so that they would have the same after-tax income of a person born in 1940, when they were also age 30.

Of course, the young ones would end up big losers in this story. Real wages, on average, will be more than 50 percent higher in 2020 than they were in 1970. Even if tax rates were, on average, 5 percentage points higher, workers in 2020 will still have after-tax wages that are more than 40 percent higher than their counterparts in 1970.

This means that anyone who chose to take advantage of the intergenerational equity tax credit would end up as a big loser. That is why it can help solve the deficit problem. If people check off the tax credit, they will pay more in taxes and, therefore, increase government revenue.

It might be hard to convince large numbers of people to voluntarily pay more in taxes. This is where the Peterson Foundation comes in. They are spending huge amounts of money trying to convince young people that they are being ripped off by their parents and grandparents. They are even promoting front groups of young people to advance this effort.

With his billion dollars, Peterson could convince a huge number of gullible young people to tax advantage of the intergenerational equity tax credit. Insofar as he is successful in this effort, he can help to generate billions of dollars that can be used for items like health care, preschool education, and other pressing needs.

So, let's join efforts with Mr. Peterson and encourage his followers to take advantage of the Peter G. Peterson Intergenerational Fairness Tax Credit. There is a word for taking money from willfully ignorant young people who would deny their parents and grandparents the Social Security and Medicare benefits they need to survive: justice.

what all they put into this bailout bill? I'm half scared to know what all kind of crap they put in there to entice some of these politicians to vote for it. What was in it for them that they finally said "yea" to?

When Dodd gave a speech about the bill last night, I wanted to throw something at the TV. He was all praising the people who are to blame for this and saying that they were such great help during these proceedings. He is lucky I couldn't reach through the TV and choke him.

If necessary we will heat our home totally with fireplaces. Plenty of wood and a good outdoor kitchen of Dutch ovens so we can feast without a speck of energy. Might not like it too much but we could survive with kerosene lamps for light of which we have a number. No internet but oh well......

Has anyone thought that just eating may be a problem? Someone mentioned $10 loaf of bread. We are among the fortunate who live on a farm. We have farm animals and an abundance of wildlife. We know how to raise a garden and how to roam over the hills and gather wild food that is etable. If we enter the next GREAT DEPRESSION, we'll be fine....provided we can keep those who don't have a clue of how to survive from stealing from us. Might be a good time to read up on the Foxfire series of books instead of spending so much time squabbling about who will be the best (WORST) president.

No doubt this is a centrist Democrat. Being Republican, I didn't even know if any centrists were left now that they've been hijacked by moveon, who has openly bragged about owning the Dems.

Incidentally, the Dems had enough votes to pass this thing day one. They know better than to do that and end up being responsible. This is why we're subjected to this dog & pony show by them now.

And to think, they are not only working on a filibuster-proof election and an Obama presidency. Can y'all afford this tax ticket? I know I can't.

Worried about a recession?? Here's the solution s/m

With Recession Looming, Bush Tells America To �Go Shopping More�