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HalfMooner
Dingaling
Philippines
15831 Posts |
 Posted - 12/06/2008 : 00:10:05
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Economic gurus have now declared that we are, and have been, in an economic recession since December, 2007. Causes of this recession seem to include the subprime mortgage crisis and banking failures. (Other contributing factors -- in my very humble opinion -- are runaway deficit spending by the Bush administration, tax breaks mainly for the wealthiest citizens, a refusal by US automakers to seriously invest in green vehicles, and a decline in the relative size and earning power of the American middle class.)
A recession is usually defined as "... a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year."
Though a "depression" is generally thought of as a very severe, and longer lasting recession, the term, unlike "recession," is not formally defined.
But it is defined vividly in the living memory of millions of people who survived the Great Depression of 1929-1939. My own father, at a healthy age of 93, is a child of the Great Depression. First-hand Depression tales were pervasive in my family when I was growing up. At our table, when we kids didn't eat everything put before us, we were not told of the starving masses in India or China, but of hungry times a generation earlier in America.
I grew up with two primary fears: Nuclear war, and Depression.
It may be too early to know if we are now in a depression. If we are, we are on the middle of the steeply-dropping graph line at its beginning, and when the economy bottoms out, we will be dragged along the crater's floor for years. It may turn out to be a "mere" recession, but if it is, it's the worst since the Great Depression. Like then, it started here, and it's rapidly spreading throughout the world. The automotive Big Three, long the greatest economic engine in the world, are begging Congress for money to avoid bankruptcy. Volvo's factories in Sweden are facing massive layoffs. (Volvo, owned by Ford, depends largely upon exports of its gas-guzzling large vehicles to the US.)
These are scary times. This is a big recession, at the least. If this is going to be a depression, it's certainly on track.
I welcome the input of others about the possible economic future, and how this economic meltdown may effect an already shaky world in a political sense.
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“Biology is just physics that has begun to smell bad.” —HalfMooner
Here's a link to Moonscape News, and one to its Archive. |
Edited by - HalfMooner on 12/06/2008 01:29:54
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Dude
SFN Die Hard
USA
6891 Posts |
Posted - 12/06/2008 : 07:40:45 [Permalink]
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Well, people aren't buying cars because they can't get financed. The banks, despite us bailing them out recently (our total in "bailouts" for the last year is something like 1.5 trillion...), aren't lending money! Apparently they have decided to impose a more strict criteria on who is, and isn't, qualified to get a loan.
As for the US auto industry... I'm of divided opinion. Part of me says let them burn, the useless bastards have refused to make fuel efficient cars for 40 years. Part of me doesn't want to see the rest of the economy take a hit when a couple million people (car manufacturing and the supporting businesses) lose jobs in a short period of time.
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Ignorance is preferable to error; and he is less remote from the truth who believes nothing, than he who believes what is wrong.
-- Thomas Jefferson
"god :: the last refuge of a man with no answers and no argument." - G. Carlin
Hope, n.
The handmaiden of desperation; the opiate of despair; the illegible signpost on the road to perdition. ~~ da filth |
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Simon
SFN Regular
USA
1992 Posts |
Posted - 12/06/2008 : 09:26:24 [Permalink]
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I am thinking that rather than bail the car industry out directly, it might be possible for the government to help obtaining loans, by picking up part of the interests (deductible,for example, of taxes).
This way, the government can also impose conditions, mainly, vehicles must be new or recent, made in America and eco-friendly.
This way, people would invest in new car, helping the car industry. The move toward greener cars will be greatly accelerated. Furthermore, more recent cars tend to be safer than older ones, so, we'd have the additional benefit of reducing the number of accident and their rate of fatalities... |
Look again at that dot. That's here. That's home. That's us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives. The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father, hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every "superstar," every "supreme leader," every saint and sinner in the history of our species lived there – on a mote of dust suspended in a sunbeam.
Carl Sagan - 1996 |
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Simon
SFN Regular
USA
1992 Posts |
Posted - 12/06/2008 : 09:27:35 [Permalink]
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| Forgot to mention,I read yesterday that the US had seen its highest number of lost jobs since 1974 this year. |
Look again at that dot. That's here. That's home. That's us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives. The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father, hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every "superstar," every "supreme leader," every saint and sinner in the history of our species lived there – on a mote of dust suspended in a sunbeam.
Carl Sagan - 1996 |
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Kil
Evil Skeptic
USA
13476 Posts |
Posted - 12/06/2008 : 10:20:02 [Permalink]
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Well Mooner it doesn't look good. I think a depression could be avoided if banks start lending again which means they need access to money too, which has been part of the problem. So far, I don't see that happening.
From my point of view we are in a depression. Every day I hear that the sector that has taken the most serious hit, at least at the onset of this downturn in terms of job loss is in construction. The industry that I'm in.
My father used to say; "The difference between a recession and a depression depends on whether you are the one with or without a job." From my point of view, I would have to agree. Whatever it is called officially, I'm facing a depression. Other than a few fix it things, I haven't had a call for over two months to even give an estimate on any real work. All that has saved me so far is that I am still on disability. But that runs out on January 1st. And whatever savings I had I to use to make up the difference to pay bills with.
If something doesn't change fast, I'm screwed. In my thirty years plus of doing what I do I have never seen it so bad that I couldn't at least make ends meet. But even with a large client base, no one wants to spend money now. And there doesn't seem to be much I can do about that. Perhaps some refi's with the new lower interest rate will help. I dunno.
I'm weighing my options and hoping that one of the contractors that I work for hooks a big one.
A publishing deal would be nice, but I suppose I would have to write an actual book to get one of those.
Is this a depression? It feels like one to me...
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Uncertainty may make you uncomfortable. Certainty makes you ridiculous.
Why not question something for a change?
Genetic Literacy Project |
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Simon
SFN Regular
USA
1992 Posts |
Posted - 12/06/2008 : 10:45:42 [Permalink]
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We have an economic saying back home that translates 'when the building industry is going well; everything is going well'.
Because it is one of the most costly, long term investment one can make, that is the first thing that gets put on hold when the sky gets cloudy...
Hope things improve for you Kil... |
Look again at that dot. That's here. That's home. That's us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives. The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father, hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every "superstar," every "supreme leader," every saint and sinner in the history of our species lived there – on a mote of dust suspended in a sunbeam.
Carl Sagan - 1996 |
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HalfMooner
Dingaling
Philippines
15831 Posts |
Posted - 12/06/2008 : 11:31:51 [Permalink]
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I feel for you Kil -- I really do, because my dad worked as a San Diego carpenter. As I was growing up, our family felt every recession up close and personal. My father hunted deer to help feed us, but told me that if things got bad enough, he'd hunt cattle -- and meant it.
BTW, my dad had the same sort of saying about the difference between a recession and a depression, something like, "It's a recession if your neighbor gets laid off. It's a depression if you get laid off."
I agree with Simon about needing to stimulate the demand side, not primarily the supply side. Even if we avoid a full-blown depression, we will probably require New Deal type jobs programs to recover.
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“Biology is just physics that has begun to smell bad.” —HalfMooner
Here's a link to Moonscape News, and one to its Archive. |
| Edited by - HalfMooner on 12/06/2008 20:02:59 |
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H. Humbert
SFN Die Hard
USA
4574 Posts |
Posted - 12/06/2008 : 11:34:44 [Permalink]
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Originally posted by Simon
Forgot to mention,I read yesterday that the US had seen its highest number of lost jobs since 1974 this year.
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1974 was the year I was born, so for me at least, I can honestly say it's never been this bad in my lifetime. Scary times, indeed.
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"A man is his own easiest dupe, for what he wishes to be true he generally believes to be true." --Demosthenes
"The first principle is that you must not fool yourself - and you are the easiest person to fool." --Richard P. Feynman
"Face facts with dignity." --found inside a fortune cookie |
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Simon
SFN Regular
USA
1992 Posts |
Posted - 12/06/2008 : 11:55:03 [Permalink]
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Originally posted by H. Humbert
Originally posted by Simon
Forgot to mention,I read yesterday that the US had seen its highest number of lost jobs since 1974 this year.
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1974 was the year I was born, so for me at least, I can honestly say it's never been this bad in my lifetime. Scary times, indeed. |
I was born in 1978 so, I concur.
Also, 1974 was when the effects of the first oil crisis was first felt. That is pretty big.
On an unrelated note, is it me or are all the economic crisis occurring in October? How comes?
| I agree with Simon about needing to stimulate the demand side, not primarily the supply side. Even if we avoid a full-blown depression, we will probably require New Deal type jobs programs to recover. |
Let's look at the situation from its bright side. An ambitious new deal program could be set up to help the economy switch from fossil toward more renewable energies... To birds with a tax-dollar shaped stone. |
Look again at that dot. That's here. That's home. That's us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives. The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father, hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every "superstar," every "supreme leader," every saint and sinner in the history of our species lived there – on a mote of dust suspended in a sunbeam.
Carl Sagan - 1996 |
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Hittman
Skeptic Friend
134 Posts |
Posted - 12/06/2008 : 19:11:29 [Permalink]
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| 1974 was the year I was born, so for me at least, I can honestly say it's never been this bad in my lifetime. Scary times, indeed. |
I was born in 1955, and it's never been this bad in my lifetime either.
And I'm afraid it's going to get much worse before there's any hint of it getting better.
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When a vampire Jehovah's Witness knocks on your door, don't invite him in. Blood Witness: http://bloodwitness.com
Get Smartenized® with the Quick Hitts blog: http://www.davehitt.com/blog2/index.phpBlog |
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Hittman
Skeptic Friend
134 Posts |
Posted - 12/09/2008 : 14:18:37 [Permalink]
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| Well Mooner it doesn't look good. I think a depression could be avoided if banks start lending again which means they need access to money too, which has been part of the problem. So far, I don't see that happening. |
It may be different in other parts of the country, but I had a meeting with a financial planner today who said that no one in my area (upstate NY) is having any trouble getting mortgages.
(I was moving all my money into t-bills. I think we're in for a long slide and haven't come close to the bottom yet.)
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When a vampire Jehovah's Witness knocks on your door, don't invite him in. Blood Witness: http://bloodwitness.com
Get Smartenized® with the Quick Hitts blog: http://www.davehitt.com/blog2/index.phpBlog |
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HalfMooner
Dingaling
Philippines
15831 Posts |
Posted - 12/09/2008 : 15:24:58 [Permalink]
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Originally posted by Hittman
| Well Mooner it doesn't look good. I think a depression could be avoided if banks start lending again which means they need access to money too, which has been part of the problem. So far, I don't see that happening. |
It may be different in other parts of the country, but I had a meeting with a financial planner today who said that no one in my area (upstate NY) is having any trouble getting mortgages.
(I was moving all my money into t-bills. I think we're in for a long slide and haven't come close to the bottom yet.)
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My dad was living in Arizona during the Depression. He said it hit there later than in other parts of the country, though it also lingered there until World War II.
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“Biology is just physics that has begun to smell bad.” —HalfMooner
Here's a link to Moonscape News, and one to its Archive. |
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HalfMooner
Dingaling
Philippines
15831 Posts |
Posted - 12/16/2008 : 19:51:34 [Permalink]
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Here are annual unemployment rates from the Great Depression. Note that unemployment had been very low in 1929, but shot up immediately after the Crash of 1929, and took a couple of years to reach the horrible 20%+ rates of 1932 to 1935. The recovery was also very slow, and it took WWII to really end the Depression. That was more than a decade of hard times.
Year Unemployment rate
1923-29: 3.3
1930: 8.9
1931: 15.9
1932: 23.6
1933: 24.9
1934: 21.7
1935: 20.1
1936: 17.0
1937: 14.3
1938: 19.0
1939: 17.2
1940: 14.6
1941: 9.9
1942: 4.7 |
For comparison's sake, unemployment in 2007 was 4.6%, and the November 2008 estimate is 6.7%. There is already serious talk of double-digit joblessness in 2009. If that happens, it would seem we'll be very much "on track" for another Great Depression.
In determining when and if what we're in qualifies for the unofficial "depression" designation, it may be well to watch these figures in the next months and years, with an eye on comparing them to the figures of the 1930's.
Another set of stats to compare would be inflation/deflation. I'll be trying to get those stats soon.
Edited to ad:
Wiki says:| The third was between 1930-1933 when the rate of deflation was approximately 10 percent/year, part of America's slide into the Great Depression, where banks failed and unemployment peaked at 25%. |
In contrast, so far consumer prices seem to indicate that "normal" inflation seems to have ended, but actual deflation is still very low.
But Wiki also says:| Some economists believe the United States may be currently experiencing deflation, as consumer prices dropped 1 percent in October, 2008, largely due to a steep decline in energy prices. This was the largest one-month fall in prices in the US since at least 1947. That record was again broken in November, 2008 with a 1.7 % decline. Some economists believe over the next two years deflation in the United States may lead to a deflationy spiral that could bring the U.S. into the next great Depression |
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“Biology is just physics that has begun to smell bad.” —HalfMooner
Here's a link to Moonscape News, and one to its Archive. |
| Edited by - HalfMooner on 12/16/2008 21:57:51 |
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Are we in a depression?
