Recession this year

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16 responses to “Recession this year”

1. Greg

   First of all there will be no great recession in 2013 as I will bullet point what I think is relevant.

   1.) Smart people will not just offer prosperity, but during this tough time smart people will offer humility. Through their own resilience and their selfless offerings,they will not be loners but fearlessly uniting many of us against the same fear mongering that got us to where we are today.

   2.)Opportunities will abound and continue to abound through some measures started in Washington.

   3.) Consider that your protection will be your ability to help float other boats during and after a bad storm.

   It should be clear that fair tax policy should be a start to reducing the deficit. Increasing taxes on those making greater than $250,000 is one beginning step. There is no way around this because the economy as a whole needs to acknowledge that any recovery will not be possible if a the tax revenue dependency continues to fall on the greatest consumers of the middle class. These are the everyday spenders and therefore are the revenue generators for the same companies executive that see only the GOP ideas as the only way.
   Now in addition to this, preserve the same tax rates on those making under $250,000 but change the tax rate to those making $20,000 or less to zero. This can achieve a boost to the economy in the form of new spending. Growing the economy and lowering the unemployment rate. Since many people are now stuck in this “brave new world” of low paying jobs, this type of policy will be a significant pay increase for worker earning less that $20,000. And therefore offer a more dignified existence for people in this country who are potentially competing on a global scale with the lower paid people in countries like India and China.

   We cannot continue to assume that the best and the brightest are out to serve us when in fact they are about serving themselves first. Society is the integration of many factors that requires the organization of many forces. Continuing to amass wealth for a few who show no responsibility to the greater world around them only exasperates the an imbalance of power that has shown their only interest is to police what they already own.

   Today’s economy is no longer a product based economy. We are consumer based. Rewarding producers does not matter because of the global market place. Consumer based economy focuses on production with as few humans as possible. Today its about spreading the material wealth without getting too hung up on the few who make the gadgets. A machine that can produce can work on the moon without people. All we need is an efficient supply ship to bring to the goods back to us. We all must come to realize that the 20 th century is getting farther away with each tick of the clock. A time where producers got 2 weeks vacation and pension. Now we have machines that never sleep and are recession proof.

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   1. Mark Biernat

      Great comment, really.
      I would add one more reason why there might not be a recession in 2013, that is Oil. The USA and Canada are starting to produce oil at near record levels and this will be for the next ten years or so. With more supply of oil wheels of the machine will move easier.

      See I do not have a big problem with taxing the millionaires even though I tend to be libertarian. What the issue is, is taxing at all. Sure the rich compared to the poor or middle class is great in the USA. It is larger than it really ever has been, and you can see it. We all struggle to pay the bills with no real retirement savings while the elite many who did not get their money on their own merit enjoy the good life as Alphas in the world while we are Thetas or Betas at best. Some of us our Deltas and can barely get by. But the issue is not to make everyone equal but to pay the debt and fix the leak.

      So although I have no problem with a more egalitarian society I think the way to achieve this is with small government not larger. If the government was small and then we would all get rich.

      I think spending cuts, including the military should be a priority rather than tax increases.

      Government workers get paid way to much if you consider all the benefits etc they get.

      In my perfect world, spending cuts would be my first choice and I think the budget could be balanced with spending cuts alone. The problem as everyone knows is not spending on things like schools and science, but the massive transfer of wealth from the US social system, things that can not be cut because they are entitlements.

      Not cutting problems but waste would do it.

      Again the problem is not a social system, I have no problem with that, it is the way it is run, at grossly inflated prices for any basic procedure in the hospital, for example. Thirteen dollars for aspirin because we know the government will pay.

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      1. Greg

         Thanks you!
         I think you hit the nail right on the head with the 13 dollar aspirin. But in strange way that $13 aspirin goes to revenue and paychecks to a health care system that really is more about sick care than health. Economics is really a strange beast.
         Military spending could be greatly reduced but the military complex and its politics is all about a 2nd to none strategy. With this kind of thinking we will never have open dialogues with the intention of real peace. And therefore can never stop the spending that supports the endless adventures of keeping the peace.

         Energy is getting real interesting. One area of support I have for the present administration are the new cafe standards. And a 10% increase fuel economy could lead to a reduction of 2 million barrels per day of crude oil use. This would add $150 million per day to the pockets of every fuel consumer. If my math is correct, this would be like $50 billion dollars per year. In addition to this is the coming online of more solar and wind energy. Right now Germany is generating 20% of its energy with renewable. A cold northern European country has set the standard for an emission free
         energy technology which will replace all of its out dated coal burning facilities and taking off line nuclear facilities. A greater thinking along those lines and the real cost of energy being reduced can further offset the cost and stabilize the volatile energy markets.
         Perhaps the best way to manage a country of 3 million sq miles and 300 million people is to compress the size of government. What seems to me worse is that we have a government that thinks it has to manage 10 million sq miles, 2 billion people and 100 governments. In the end, you got to wonder why we celebrated the end of the cold when in retrospect we all seemed to be better off before it ended. The dividends of post cold war spending just never seemed to come true.

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         1. Mark Biernat

            In the long term this energy boom would be our saving grace if it were real. I think energy independence a policy that Obama will pursue, deploying new technology to drill in the USA will be a boom greater than the Internet boom. we will all get rich. Energy transformed Norway a small little fishing country to one of the richest countries in the world. The same can be said for any place that has oil from the Middle East to Texas. If cheap oil will flow from the USA than ‘happy days are here again”.

            I the short term the fiscal cliff is an issue.

            If the fiscal cliff isn’t addressed, I don’t think our tools are strong enough to offset the effects of a major fiscal shock – Bernanke

            The CBO said that the fiscal cliff will push the US into a recession fast. It is automatic almost. The thing is the world is not betting congress will let it go that far. Close door meetings are happening and progress is being made.

            Yet even still 2013 will not be an easy year economically. I look around and all I see is 10 dollar an hour jobs, and a lot of people at the hotel I run can not pay their bills with ease.

            I think in the USA everything costs and people make just a little. It is still a nice life here and an easy life, but the economy will not take off unless there is some innovation or development in the energy or technology sector.

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            1. glesson

               “According to CBO’s projections, if all of that fiscal tightening occurs, real (inflation-adjusted) gross domestic product (GDP) will drop by 0.5 percent in 2013 (as measured by the change from the fourth quarter of 2012 to the fourth quarter of 2013)—reflecting a decline in the first half of the year and renewed growth at a modest pace later in the year.”

               Don’t get too hopeful about negotiations because conservatives are absolutely and possibly irrevocably clueless about the concepts of dealing and compromise. Obama wants to put anything on the table that will get him the titles “above party politics” “statesman”: social security has already hit the table, and for why?

            2. Mark Biernat

               The basic idea is the USA has a spending problem. Consumers are in debt as is the government. Money is easy to spend but hard to earn and create wealth. The solution is simple. Cut spending until we can start paying down the debt. Why must ‘compromise equate with tax increases. Why not compromises be based on what is spent and with the common goal of a balanced or surplus budget until the debt is paid?

         2. RP

            Post cold war spending cuts is a myth, just like green house gasses. There is currently %.04 Co2 in the earths atmosphere and I for one, do not want to see it reduced. Maybe someone would really want to find out on their own what the difference is between an atmosphere of %.04 and %.02 would really do to this earth. Its all a shell game and a sham. Yes in Germany, the UK, and in the US there had been a reduction in coal based plants, in exchange for so called “biofuels”, but do we really know the effect of these biofuels? Yes its to burn garbage (including the plastic bags it comes in) and trees, trees cut from Canadian and New England forests. It was all given the green light by the EPA, as they totally dropped the monitoring of the emissions for the sake of doing in “dirty old coal”. Finally some one woke up at the “idiotic idea outta control” switch and recently there has been a switch back to thinking about “clean coal” (of which our nation is the Saudi Arabia). Some 75 plants were converted to that stupid “biomass fuel” (in the Americas’ alone) idea and nearly a hundred on the drawing board, thank god some one figured out cutting down trees and burning garbage wasn’t such a good idea after all. The real problem in this country is that our Colleges and Universities have become institutions unable and unwilling to produce analytically, critically-thinking, reasoning graduates that no longer can sense when they are being brain washed, and no longer question authority (like the ranting of most professors on campus), but instead have become en masse a collective of useful idiots in the truest sense.

            Global peace will never happen, just like there will never be an end to crime or murder. So, one must be prepared for every imaginable attack upon their country and, the biggest and wealthiest country will always be the biggest target. It is simply human nature to be jealous of they whom have more. Right now, for a wee little bit longer, we are that biggest wealthiest country, and every little despot wants to earn “cred” by trying to take us down a notch. However, this “lead from behind” strategy that our “glorious leader” has us bent on, if it is continued, will go a long way towards helping us, and the rest of the world, at taking us down a few if not many notches. Maybe back to the stone age, if Iran gets its way, and Pakistan falls as well. There is only one reason Iran is simultaneously developing ICBM’s and a nuclear bomb. Did ya notice that last week Iran signed a defense treaty with Putin? And we’ve been trying so hard at just getting along with everyone the last six years. What happened to the “Russia reset”, the “Arab Spring”, pulling out of Iraq, selling arms to Al-Qaeda in Libya so we didn’t have to go into Syria? Haven’t you noticed the world trends towards more violence when the US pulls back? Did you know for the first time since WWII, Japan has began to develop attack forces, which is against their own constitution? Because, they can no longer trust us, and because, China no longer fears us, it is moving to take islands away from Japan as well as other south Pacific islands. No! The world will never be heaven on earth, and there will never be a man made utopia on earth either. I would rather fight a half dozen Korean and Vietnam proxy wars than one end of the world nuclear war with Russia or China any day. I would rather lose 8,000 men taking Iraq than having 100,000 dead from a sarin gassing in NY Times Square, or a super bowl. Ronald Reagan proved it in the 1980’s that you get peace through strength and not through weakness. Yes we should walk softly, but we should also carry the biggest damned stick in the world.

            And as for our depression era economy, everyone that has been around long enough knows the true unemployment numbers are meaningless. They have taken everyone out of the equation that has stopped “reporting that they are searching for work” ie. everyone that has been unemployed passed the time their unemployment benefits have run out. They also take out those who have only been able to find part time work. That’s a hell of a lot of people left out of the unemployment numbers. The problem is they all get food stamps at that point, so we don’t see the millions unemployed standing in line at the soup kitchens like we used to in the last depression. Obama’s government has even gone so far as to add the part timers to the “new job creation” list. What BS! You tell someone who was last year making $60k now making $20k they’re gainfully employed. The truth is we still have one measurement left that can actually compare the economies of the past against those of current, it is called the misery index. Currently, we have a slightly worse misery index than that of the “great depression” of the 1930’s. Yet, if you listen to the state of the union, everything’s coming up roses for these Obama years. What in the hell will it take before our country’s media does its job? Aren’t they aware that Russia, Brazil, Iran, UAE, China, and the IMF are bent on dropping the dollar as the world currency? Don’t they realize the foolishness of a government run economy, which is Obama’s true hope and change for America. If the fall of the late great Soviet Union, and the Chinese thrust towards capitalism demonstrated anything, its that an economy run by a centralized government leads to nothing but starvation, and the destruction of ecological environments along the way. It is only through economic growth that all of the “save the planet” stuff and an economic safety net (for those who are less fortunate) can be paid
            for. Reagan as well as Kennedy proved that economic growth comes by lowering taxes and reducing the size of government. But the depression clamors on and last week we learned from Rand Paul that the Fed is now broke but “shh!” nobody tell anyone, its a secret. Because if anybody knew the truth, there would (and should) be a run on the banks, and then all the millions of 9mm rounds of ammunition that the US Post Office has been buying and stockpiling these last four years would come in handy. Yeah its a good thing the lefties hates guns so much cause then they’d be wondering why your local gun shops have been out of .22 caliber and 9mm caliber rounds for the last four years. Or better yet they’d be wondering why the Post Office has been buying all of them. Its because we are so close to an economic earthquake that when it hits (when the Fed can’t buy up any more of the T bills in Belgium), there will be blood in the streets. So a 2013 depression, no make that 2015. And Armageddon, a few years behind that.

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   2. glesson

      Although the best and brightest have shown repeatedly that they are intent on serving themselves at the expense of all others: co-lateral damage is of no consequence. they need to be held accountable and punished appropriately, considering the utter devastation inflicted.

      Reply
      1. John

         I think you and many others on this forum seem to be confusing “best and brightest” with “rich and powerful”. Other human characteristics such as aggression, honesty or altruism also play a part in deciding who rules. Some of the smartest people in history have remained poor all their lives.

         The botanist Joseph Banks, for example, was rich by inheritance but added little to our understanding of plants other than massive collections. On the other hand, following him was Robert Brown, one of the greatest ever minds in biology who discovered the cell nucleus, described Brownian motion and was the father of modern taxonomy, to name a few accomplishments, died poor.

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   3. Paul

      Why dont we just call it how we should see it…

      Our problem is the that the recession of 2007/2008 was the result of powerful influences from courts, president,and congress.

      Rome had the same problems. We will not fix our system of govt until the democrats and republicans have reduced their own time in office and become elected by public money and not private be they fromm democratic or republican sources.

      Not a simple fix I might add. Both parties have their own problems and to pit one against the other political party does not seek a solution in my opinion.

      Reply
2. Plasticmoney888

   From your list on Jobs that can not be exported easily..

   Retail jobs
   Medical care jobs
   Work for the Sheriff’s department
   Government workers
   Military
   Teachers
   Restaurant jobs
   Security guards
   Insurance companies
   Bank jobs

   I would add:
   Farming,
   Oil,&
   Nat Gas production jobs
   Most Alternative Energy jobs,
   Construction jobs, Homes, offices & commercial construction.
   Airplanes construction jobs,
   Sophisticated machinery,
   Chemicals,
   Pharmaceuticals,
   Biotechnology products.

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   1. Mark Biernat

      You are right those additional jobs are in the USA for the intermediate term, however, most can be done abroad. For example, chemicals and pharmaceuticals are already made in China. Everything can be shifted abroad unless you need to do it here, like a waitress.
      Farming, is done all over the world and imported into the US. Look at where fish come from, usually central America, or garlic from China. But consumers do like local produce so it will stay here in part. I look carefully where food is from.
      Oil and natural gas we have a lot of so these are good jobs. for the jobs you listed you just have to train yourself for years and hope they are not exported.

      Reply
3. Marc Jordan

   Doom and gloom, doom and gloom, doom and gloom, that’s they only thing that’s ever been written here. Doom and gloom.

   I’m not sure if this blog was around in 2009 but I would have liked to have read predictions from back then. “Obama is taking us into another Depression!” would probably have been one of the headlines. “Obama is soft on terrorism” would be another, followed by “Dow heading for 1500, sell everything while you can!”.

   I like to read both sides of the argument and what’s written here is worse than anything on Fox or Limbaugh. I’m not a huge fan of Obama but under his stewardship things have improved dramatically, whether you want to believe it or not (probably not). How many times have I pointed out here that GM and Chrysler were ten fingers and nine toes in the ground? Chrysler paid off their loans and GM announced they are buying back the rest of the outstanding government stock (probably because they want them off their back). The Feds are selling off the last of their AIG stock, at a huge profit may I add. Here is what Bloomberg wrote on January 28th about AIG: “Proceeds from the Treasury’s sale of its remaining AIG shares boosted U.S. profit on that bailout to $22.7 billion”. Notice the word “profit”?

   Doom and gloom.

   Now for the subject at hand, Asia. American manufacturing jobs are not coming back folks, so get your head out of the sand and move on. If I were an owner of a small American company making widgets and it cost me $15/hr for an employee to assemble it in Keyhole, Tennessee and I could get it done in China for $2.50, guess which one I would choose. Would you be the stoic American and say you are patriotic to the point where you would sacrifice all that profit in the name of American jobs, or would you send the assembly work over to Asia? Thought so. Don’t reply with the knee-jerk response that the $15/hr pay is the result of mandates and regulations that American business are forced to pay. Would you rather see the jobs back here at a competitive rate of, say, $3.00 an hour?

   We are slowly emerging from a major shock to the system and it’s not going to come easy nor quick. I’d like to leave you all with this article which I saved from 2009 which, just like everyone here, made bold predictions of what was to come. Reading it 4 years later it’s almost laughable. Let me remind everyone that we are days away from the Dow reaching a new high. Keep in mind that the market does not move by speculation but by confidence.

   smartmoney.com/invest/strategies/25-percent-unemployment-how-job-cuts-could-derail-the-recovery/

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4. Neo

   We are currently at the height in a shorter, contrived, economic bubble that includes housing. We never fully recovered from the old one. Like a series of after shocks after an earthquake, it could potentially trigger a bigger one.

   Some people are doing well while others are still recovering.

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   1. Mark Biernat

      Things are getting better generally. We are more than half way through 2013 and even my economic situation has improved. However, the economy has is not on firm footing. The debt and spending, which no one is talking about on these lazy days of summer is still out of control more than ever. People’s personal debt are slightly better off because so many people defaulted. Yet the fundamental problem is Americans are spending yet outsourcing of service and production is continuing and will continue. Unless you are a teacher or Nurse or Sheriff or Military or work for the government, something that you have to do in the USA, there is a chance your job can be outsourced. We are in phase 1.0 of this. This means the middle class does not have the earnings to spend in the USA.

      Take for example where I live, there are scores of bright people from India working hard. With electronic transmission of files, are you telling me services can not be outsourced to India and this will not continue? It does not matter here or there, there are people who will work for less to achieve a standard we have in the USA. They are the same culture of people. They can perform the same as Americans, does not matter in the USA or in India. People are all equal and it is just a matter of developing skills. The whole world is developing and now will compete with the USA.

      This will continue until wages are equalized. It does not matter the color or nation of a person, just the skill and wage. This will be a 100 year problem for the USA to maintain a relative standard of living. That does not mean we will be poor, but just not the richest and best place to live in the world in relation to other countries. It is usually relative decline, not absolute. Absolute decline can come from government expansion.

      The only thing a person can do is develop skills and be an entrepreneur.

      One the bright side, if you have invested in companies that do this, or do this yourself, your profits will be greater, but this is not the same as having a steady job with predictable wages. The USA has a lot of new oil and gas fields being discovered.

      Also if though entrepreneurship the USA continues to innovate, this will solve the problem.

      Reply
      1. Marc Jordan

         Mark, for once you and I see completely eye-to-eye on something.

         First off, as much as republican’s want to hide their head in the sand, yes, things are improving economically. Just yesterday it was announced that here in the US GDP growth for the previous quarter was revised upwards to 2.5%, which ain’t bad. Keep in mind that even in good economic times, 3% is the gold standard. Of course my conservative friends claim the Obama administration is playing with the numbers, which is a lot of horse crap as you well know. My friends also look at the unemployment numbers and while I agree that 7.5% is high, it should be noted that when the country is at full employment, as it was in 1999, the numbers were still around 5%. Given that, an 2.5% is pretty respectful when one considers the trauma the economy experienced in 2008.

         Outsourcing. You hit the nail on the head with this one too. As a software developer I feel the pressure every single day and I have lost clients who chose to send the work to India. Make no mistake, although they speak English, it’s not the Queen’s English and it may as well be Swahili. Also, the quality of the work coming from there is not great and most of the time it needs to be fixed and redone, adding to the costs. Add to the mix a 13 hour time time zone difference from the west coast and support becomes an absolute nightmare. I still contend that those companies paying $15/hr for an Indian is comparable to paying an American $40/hr when you take into account all of the headaches.

         You are also correct that it’s not going away and that this is only the first chapter. As much as I want to deny it, it’s here to stay and is only going to get worse. I’m not sure what the solution is – if there is a solution. One of the pledges Obama made in 2008 was to stem the loss of jobs due to outsourcing and in 2011 he attempted to do just that by moving forward with a tax proposal that would penalize American companies that ship jobs overseas. A Google search will reveal that the GOP shot this idea down because they considered it a new tax on American business and wouldn’t stand for it, even though the intentions were good. I’m not sure if it would have worked but it would have been worth a try.

         As far as your last comment is concerned, about energy, I’m wondering if that can actually help bring manufacturing back here. If energy became plentiful and cheap, it seems to me that the savings from that alone may outweigh the cheaper wages that make Asian manufacturing so appealing, especially at a time when it will increase for them.

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