Will There be a Recovery?

[ensho]

http://counterpunch.com/


Economists will scoff at the question in the title. But that’s because they are trying to fit the present into the past.

-snip-

Economists and the policy-makers they advise are thinking in the past, a time when low interest rates stimulated consumer and investment demand, thus lifting the economy. Today the low interest rates threaten the dollar, discourage foreigners from lending more to the US, and deprive Americans of interest income necessary to their ability to pay their bills.

-snip-

The United States is walking on quicksand. It is dependent on foreigners for the funding to conduct the day-to-day operations of its government. Its economy is a hollow shell reduced to dependence on a financial sector that is discredited worldwide. America’s government believes that its foreign wars of aggression are more important than any domestic needs, including the health care of its population.

Now that its supply route to feed its war of aggression in Afghanistan is threatened, the American government has the delusion that it will be able to supply its army in Afghanistan through thousands of miles of Eastern Europe, Russia, and Central Asia. Only a government totally oblivious to reality would imagine that Russia’s Putin, whose nose is rubbed in excrement every day by the US government, will permit America to transit Russian territory to resupply US imperial legions in Afghanistan.

What we are witnessing is a once great power engaging in fantasy to disguise from itself that it is a failed state.
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bring all the military home, train them in the ways of HAZMAT to clean up military toxic messes here in the US.

that will free up money to use on fixing our crumbling country.

[Rosa Luxemburg]

1. got to get the housing crisis sorted

[melm00se]

8. actually it is more than

just the housing crisis, it is the entire credit (personal, company, corporate and government) issue straightened out.

For too long have americans been spending and spending and spending, dipping into the financial (and credit) reserves to fund an unsustainable lifestyle of consumerism and consumption.

The lessons of the Great Depression were lost when the adults of that era began to die out.

There used to be a mentality of: debt is bad and, in most cases, something to be avoided at all costs and if you had to go into debt you paid it off as fast as you possibly could but, sadly, that mindset is now shrinking.

If you have any grandparents (or parents) alive who still live this lifestyle (no/low debt) ask them:

How many credit cards do you have? (1 in 7 Americans carry more than 10 credit cards
How much of a credit card balance do you carry, month to month? (the average american household carries ~$9000 in credit card balances)
(please note that these numbers take into account the approximate 55% of americans either have no credit cards or carry no balance - altho confirming that number is difficult as 90% of Americans are either liars or in denial about their debt situation)

[Rosa Luxemburg]

9. what to do about the credit issue?

offer incentives?

[melm00se]

10. not sure

the government stepping in and helping out those who are overextended is a slap in the face of those who do play by the rules.

It's not overly fair that those who dug themselves into a hole should get off paying $1 for every $1.50 - $2 borrowed (that's just an example - as those who played by the rules get no such assistance).

Perhaps letting people get creamed and paying the price for being stupid may be the best way (but also the most heartless) way of reorienting people's values as it comes to debt.

[The_Commonist]

2. No.

There will not be a recovery.
That's because we are not in a "recession."
We are in a paradigm shift.
The age of cheap gas, cheap consumer goods, cheap credit and infinite growth is over.
There are two ways out of this mess.

1. Kill off half the people on the planet. This is the Neo-Cons' plan. I'm actually surprised that they haven't gotten farther along in this project.
2. Re-adjust our expectations.

I'm going with #2.

[YOY]

4. There are easier ways of killing half the planet...cleaner too.

A pre-engineered pandemic comes to mind. My money says that some countries already have a "poison and (properly limited quantitied) remedy" on hand. Perhaps I am being tinfoilish...

[SOS]

3. No

Look at Ireland's complete destruction.
We are six months behind them.

[OhioChick]

5. No Jobs Equal No Recovery. n/t

[depakid]

11. Some sectors are expanding and hiring

http://www.businessweek.com/ap/financialnews/D95391000.htm

[tuckessee]

6. No.

Because nothing has been done to address the problems.

[Warpy]

7. Not until the demand side is shored up

The supply side is bloated but there are few customers. The rich are not going to expand any production and hire more people until they have customers for the goods and services. They are not in the business of providing jobs as welfare programs. They want to make a buck on every one of them, and they can't make a buck without customers.

We're at a crossroads. Our oil dependent industries have largely been exported. We lack the infrastructure to build new industries on renewable energy. If we as a country are willing to put the Pentagon on a diet and tax the rich to create the infrastructure on which a new industrial base will sit, then there will be a great recovery. If we keep putting bandaids on a dying system, there will not.

Still, the coming year is likely to suck as the second shoe of mortgage defaults drops. Whether or not our fine government is desperate enough at the end of it to do what needs to be done will probably depend on their own cash flow.

[HughBeaumont]

14. They're going to have to do something.

Taxing the wealthy NOW, not in 2010, seems to be the best plan, at least to get infrastructure revenue going. Because you KNOW the Obama administration isn't going to cut the Penta-sewer off right away.

CEOs need to show some humility as well.

[HughBeaumont]

12. Nope. Wealthy CEOs love cheap foreign labor and masturbate to pictures of cash stacks.

And until this ends, you'll have no growth or replenishment in the blue collar section and continue to bleed jobs off and on-shore to foreign graduates.

Somewhere along the way, CEOs seemed to forget that you kind of need to employ workers and pay them a living wage if you expect them to, you know, buy your products or services. The more people are employed at a living wage, the more products and services get purchased. Just throwing that little bit o' common sense out there.

But hey, just ignore me and keep firing people. You know, because THAT's certainly going to help things.

[KharmaTrain]

13. Depends On Your Definition Of Recovery

I see this as the hang-over not just of the past 8 years, but of the past 30...starting with Raygunomic in the 80's that went from bubble to bubble. Except for the tech boom of the mid 90's, the economy has been detached from reality...companies basing stock prices on estimates rather than earnings and consumers using easy credit to replace a declining wage scale. The destruction of the economic infrastructure has been widespread and in some cases can't "recover".

Bringing the troops home will bring both savings and allow this country to divert those resources into rebuilding part of the infrastructure, but a new one will have to be built. We'll need to return to a cash and carry society that will mean a slow recovery of both the credit and consumer markets. The days of maxing out the cards is over.

But also there's going to be a need for corporate America to restructure...the top down/trickle down game is over. The empty malls will be visible proof of that. Investment will be needed in restoring small business and localism that creates jobs and competition, but the results will take time.