Second Recession in U.S. Could Be Worse Than First

[alp227]

Source: The New York Times

If the economy falls back into recession, as many economists are now warning, the bloodletting could be a lot more painful than the last time around.

Given the tumult of the Great Recession, this may be hard to believe. But the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health — including jobs, incomes, output and industrial production — worse today than they were back then. And growth has been so weak that almost no ground has been recouped, even though a recovery technically started in June 2009.

“It would be disastrous if we entered into a recession at this stage, given that we haven’t yet made up for the last recession,” said Conrad DeQuadros, senior economist at RDQ Economics.

When the last downturn hit, the credit bubble left Americans with lots of fat to cut, but a new one would force families to cut from the bone. Making things worse, policy makers used most of the economic tools at their disposal to combat the last recession, and have few options available.

Read more: http://www.nytimes.com/2011/08/08/business/a-second-recession-could-be-much-worse-than-the-first.html?pagewanted=all

[ixion]

1. Until we admit that this is a depression, we are not dealing with the problem

part of the problem is that this has thus far been treated as a recession, which it is not.

[ozone_man]

6. Quite true.

We never left the first recession, and it is no ordinary recession/depression. Economists! What are they good for? They can't predict, they only tell us what we already know.

[jwirr]

15. Our divided country may be in both a recession and a depression

depending who you are talking about - the rich or the lower 98%. For the rich it is just a slow down in earnings - for the rest of us it is a disaster. Too bad that the government statisticians do not recognize this.

[No Elephants]

18. +1 Newspeak is the language of politics.

[Initech]

26. Yup - we're in Great Depression 2, and as long as Fux News is calling the shots...

We'll always be in total denial about it.

[liberalmike27]

34. pretty much all I had

Yes, this is a depression, not a recession. It doesn't seem quite as bad as the last one, why? Because at least a few of FDRs fixes were still in place, sadly though, not the banking regulation part that kept commercial banks separate from customer banks. But give the republican tea party time. They'll make sure we're in a hole so deep, all they'll need to do is bring a backhoe in to dump dirt on top of us for disposal, at least the ones that don't want to join up and fight their oil wars.

And two, who in the world ever said we came out of the first one? They keep calling it a double dip, but I think you've got to pull out before you can dip again. For like dip with a bump in the middle.

[Bonhomme Richard]

2. A lot of the companies able to weather the first round, including mine, are

now seriously on the ropes. These are companies that have been around a while and made modest profits in the past. The smart ones kept a decent cash margin to get through rough times. Another dip is going to decimate them.
Winter is coming in more ways than one.

[sadbear]

3. Be sure to thank a teabagger

[No Elephants]

19. Bush, Paulsen, Bernanke and Geithner are not Teabaggers, only Republicans.

And a handful of Teabaggers got into Congress only in January of 2011.

If a Teabagger tells a member of government to jump and the member of government says "How high?" is it the fault of only the Teabagger?

Would you expect government to obey a five year old taking a tantrum

[bhikkhu]

4. The Teaparty Recession will be a doozy!

...actually it might not be - looking at the same information, last time there was "a lot of fat to cut", this time everything is running lean and trim. I could lose more in property value if that tanks further, but it makes no difference - I couldn't sell the house if I wanted, and my credit is way to bad to consider refinancing or anything.

[No Elephants]

20. The Tea Party Recession? Really? How many Teabaggers got elected to Congress and when?

We need to stop making believe we're at war with Eastasia and face the real problem: Government has been working for the wealthy for a long time. Tax laws, trade policies, anti-labor policies, whatever.

For instance, EFCA did not die in a Tea Party Congress. We have not even had one of those yet. Nor did it die in a Republican Congress.

And the Tea Party did not form the Cat Food Commission and appoint a Republican to head it. Or knock Medicare for all when running for President, after having supported it when running for state Senator.

Unless we finally, finally identify our real problems, we are highly unlikely to remedy them.

[bhikkhu]

32. Obama's policies have given us growth, and would continue to do so

...had we not gotten 87 teabaggers who have the repugs by the balls, and effectively obstructing every bit of legislation that would improve things. Not that this is a stable situation or likely to go on long, but they ran on "bringing down anything to do with Obama", and have been fairly effective.

The most recent "victory" is keeping revenue out of the debt deal, which they were pretty much solely responsible for (according to every account I have read), and which is the specific cause of the credit downgrade, as cited in paragraph 4 of the S&P release.

If we go into a recession, it will be linked to perhaps three things - the Fukushima disaster, the Eurozone crisis, and the downgrading of US debt.

[roxiejules]

5. Monday: G7 commences the biggest market intervention...

in history to prevent the final Ponzi unwind...



http://www.reuters.com/article/2011/08/08/us-crisis-g7-statement-idUSTRE7763AB20110808

[Muskypundit]

7. There isnt much more to give.

Before the recession I guess the middle class was kind of o.k, with a little bit of wealth to shared sacrifice away to the rich. But now.... another downturn would turn into a depression. I have a feeling this will not get better until the wealth is decimated to such a degree that the 5% have no more blood to suck from us, and start to starve themselves.

But, then again, probably not. Every unbelievably poor nation in the history of the world has had its ruling class whose luxury and privilege is impossible to distinguish from any other elite in any nation.

[cstanleytech]

11. Well, there are always solutions

Like say the one used in 1789 in France as an example.

[No Elephants]

21. The French used 1776 as their model.

[cstanleytech]

33. Yup, yet another example and back then there were real mad tea party members to

though not like the current mad tea party members as the ones in 1776 were mad/angry the tea party ones now are mad/crazy.

[OffWithTheirHeads]

8. Dosen't the first recession have to end before you can have a second one?

[bhikkhu]

10. We've had 18 months of basically positive numbers, GDP growth, 2 million jobs created...

etc. "Recession" is a term with a specific definition, and it isn't what we were in the last 18 months (or whenever the official end was - I don't recall exactly).

So if we go into recession, it will be a new one, with a new cause. The first was a subprime meltdown/credit crunch under the mismanagement and malfeasance of the repugs. The second, if we go there, should definitely be named the Tea Party Recession.

[cstanleytech]

13. I think it can be avoided if the republicans would stop trying to make things worse on purpose

in their attempts to oust Obama and instead pull their heads out of their ass and do the tax reform we need done to improve the revenue from the ultra rich and mega corporations.

[jwirr]

17. I heard that Paul Ryan is now ready to take revenue. Now after he and

his buddies have gone too far. Wonder if he still thinks Ayn Rand is so hot?

[No Elephants]

28. Are Obama and Geithner ready to take revenue, though? It was

Obama who traded away revenue to Mitch McConnell for one single extension of unemployment benefits while Democrats still had strong majorities in both houses, not Ryan, not Reid, not Pelosi.

[cstanleytech]

31. I believe he did that because he thought by then the economy would recover

since it hasnt really recovered because the corporations and wealthy sat on the money rather than hire new workers I am assuming that tax hikes on the rich and mega corporations are back on the table, we shall see though.
One thing I can say with almost absolute certainty though is that if a republican wins the presidency you wont see any tax hikes for the rich at all.

[No Elephants]

27. My former boss used to say, "Figures lie and liars figure." Also, Please see Reply 20.

[placton]

9. I love this idea that the GREAT DEPRESSION - THE SEQUEL

ever went away. For most of us, the economy is still in the shitter, with no hope in sight. Of course, some rich folks made money off the Obama/Bush tax cuts, and other gifts from the 2 worse presidents in history (back to back, no less), but puh-leese dont try to sell us on the idea there was a "recovery"!

[No Elephants]

29. If investors and banksters make money, that's a recovery anymore. Main Street can suck it.

[Imagevision]

12. Second recession to hit by November 2011

[jwirr]

14. You have heard of witch hunts - if the economy gets worse I am afraid

we will have Tbagging rethug hunts. Angry people do dangerous things. And this time it is not even hard to know who is to blame.

[lunasun]

23. No - most of the mob will be after Obama's ass

as planned

[No Elephants]

30. Please see Reply 20. The same people are to blame who were to blame for 1929.

Only this time, FDR was not in the WH during the period in which we hoped to recover.

In fact, Krugman dubbed it the second coming of Hoover.

[bhikkhu]

36. Here's a list to think about:

http://planetpov.com/2011/02/13/a-short-list-of-pres-obamas-accomplishments/

I don't think, at this point, ignoring the last two years serves any good purpose, nor does coming up with narratives about how it just "doesn't count", "didn't happen", or is simply "insufficient". Two years of undoing 8 years of a malignantly rotten farce of a government. I don't want to go through that again, not just to satisfy someone's pinched little narrative of distrust!

[obxhead]

16. You must have come out of the first recession to go into a second.

A headline closer to the truth would read "The US recession is likely to continue and get even worse."

[Amonester]

22. How to get out of 'it': round up all the rich f*ckwads WHO DON'T WANT TO PAY TAXES

Just those who DON'T WANNA.

Let those who WANT TO PAY MORE TAXES (like Warren Buffet, for instance) do so, willingly.

For the f*ckwads who DON'T, seizure.

[buckrogers1965]

24. The Great Recession Deepens.

This would be a better headline. 50 million people are on food stamps at this point, this is basically 1 in 6 people at the soup lines. This is worse than the great depression.

If you count unemployment in the same way they did during the great depression, then we are at about 21.5% unemployment. <http://www.shtfplan.com/headline-news/the-real-unemployment-rate-215_07022010> During the great depression the unemployment rate hit a high of 25% but dropped back down to about 16% in a few years.

We are bad off, but not quite as bad as the Great Depression. But this is because we have been propping everyone up with 11 trillion dollars of deficit spending over the past 30 years. It is like when you get a credit card and live high on the hog in college for a year. Until you max out that card.

When we stop spending and start paying this is going to kick the chair out from under us. It is going to get real ugly.

[blank space]

25. The corporate profits will not add any benefit

to the US economy, they are not being taxed properly (for fear that the companies will head off shore).
They are doing this anyway - the companies are simply investing their profits off shore in order to create new markets in those countries in order to create consumers etc.

The reduction of all workers to a global minimum wage is now almost complete - the only way Americans will be able to get jobs is when they accept those jobs for the same price (wage) as Latinos, Chinese etc. Moreover there will be no jobs until the regulations are also all removed.

The corporations are playing to global rules (there really are none which restrict corporations only those which enable them), while Countries are playing by sovereign rules (union, environment, work conditions, health care etc).

The only way countries are able to stay relatively healthy and wealthy is by socializing their profits and not just their losses - as can be seen in the Scandinavian countries. The us is the exact opposite.


The only consequence is a downgrade of the entire American society, country, to a level below that of Latin America, China, India before there is any new investment in its consumers. Unless the US embarks on a radical program of socializing the profits then this is the only possible outcome.

There is only one alternative to this position - and as terrifying, and radical as it is - I genuinely think it is a possibility.

The US military has a sole responsibility - to protect the People of the US from threats domestic and foreign.

The threat of a total collapse of the US economy through unrepentant greed of the ruling elite poses a grace danger to the continuity of the military - the recent threats to its budget are evidence enough of this reality. The military would without doubt see what is happening right now as being the gravest danger imaginable to their continued mission - they are under a real obligation to respond.


The military response could come in many forms - from a simple sit down and a bit of a pow wow with the top politicians to start taxing the crap out of corporations and elite - with a similar pow-wow with the global corporate elites, who at this stage are still American. Not for much longer. The most extreme form would come in a a public statement of imminent threat, as in declaring the ongoing economic disaster poses a national security threat - which it clearly does.

I do not think the military would ever intervene directly in US politics - however I think this is going to be the only thing which will make the Republicans realize that if they completely strip the farm of its goods, crops, machinery, and capital then there will be nothing left of the farm - the military will make this very, very clear that it is not acceptable.

The US has been a military based capitalist economy for at least 150 years, so watching the republicans strip it bare and sell it off may be really great for the greed of the wealth - but at the end of the day there are some incredibly scary people and institutions whose job it is to make sure America survives who will step in and put and end the to ridiculous shenanigans of these dangerous fools. It absolutely will happen, happens in every single country, from Egypt to France.

Either cool intelligent democratic socialist heads will prevail, or else incredibly logical and ruthless democratic socialist heads will prevail - self destructive, masochistic greed is the natural conclusion of all societies, just as ruthless utilitarian responses are the cure.

The only question about when this happens, because it will - the dye is cast, is whether it happens in a premeditated preventative fashion, or as a reaction to national unrest. I can very much see the later being the catalyst for any real and decisive action, however you will no doubt see military rumblings before things get wildly out of hand, but nothing decisive until there is real unrest. The military is already playing the security card.

Will absolutely happen - only a matter of time.


I know this is an extreme paradigm - but there really is no alternative. The Executive, Judicial and Legislative branches are all completely broken, while the fourth estate is just as gone. I see no other branch left - while the military is the most loyal, most powerful, most decisive and interestingly most honest, despite the corporate corruption in manufacturing and contracting.

[No Elephants]

35. SR, MA.

Second Recession, My Ass.

[chervilant]

37. Well, now...

For 2007-2010, real GDP decreased at an average annual rate of 0.3 percent; in the previously published estimates, real GDP had increased at an average annual rate of less than 0.1 percent.

This is current GDP Data, released at "8:30 A.M. EDT, FRIDAY, JULY 29, 2011BEA 11-38" by the US DOC, BEA. I copied the entire press release, fearing it would have a briefer lifespan than an ice cube in a forest fire. I have seen NOTHING about this data in the M$M or on either of the 'left-leaning' blogs I frequent.

In other words, by definition, our nation has been in a depression these past four years. However, just as they did in the 80s, the Big Dogs in the financial arena are obfuscating and/or omitting key information, so that much of the citizenry remains deluded and/or uninformed.

Of note is the fact that our much vaunted financial 'experts' stopped using the word 'Panic' to define 'economic downturns' after the Knickerbocker Trust got it's knickers in a bunch...

[tama]

38. It's just money

and what is money? Yup, artificially created scarcity of food, clothes and shelter. Shops and malls are very inhospitable, unlike friends, humans to each other respecting hospitability, hospitability of this planet, they don't give food clothes and shelter to the wayfapring man without this funny thing called "money", made of numbers and other symbols.

It's nothing real, a no-thing, purely symbolic. Hypnotized by money-symbolism and the eye on top of the pyramid (cf. mothers tit and nipple giving white and greasy milk) we forget what is real. Real like a smile, a touch, music, giving and sharing food and shelter. CLAP CLAP! Wakey wake up! :)

[Javaman]

39. While I understand what you are saying...

trying convincing the poor of that.

[Hydra]

40. Economically, it's true

This is all a planned culling, and completely unnecessary.

That said, most of the people I've explained this to and offered solutions are still hung up on the green pieces of paper.

The fear of change is killing us.

[Javaman]

41. yeah, almost 300 million of us are still "hung up" on it.

until something else comes along to replace it, it's what we got.

[Hydra]

42. Some people among those 300 mill have done something

http://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States

Printing their own dollars, time banking and bartering. Small, but a start.

[lovuian]

43. Depressions have one solution and that is giving people

JOBS!