• Security incident: ISF was recently accessed by intruders. Please change your password, and change it anywhere else you used it. Read more

Recession ended in June 2009

An L-shaped recovery.

Please explain 'L-shaped recovery'? (I'm not an economist - duh). :D *

Why did you remove the part about food stamps?

http://www.boston.com/news/nation/w.../08/05/food_stamp_use_hit_record_408m_in_may/

That is factual information and not me ranting and raving.

* Ah, thanks Google. We'll see if stagnation continues or we simply have a continued erosion of people's economic situations (which isn't a flat-line but a downward traversal). Some estimates are that flat-line stagnation will equal continued downward traversal since the leveling out from current numbers has to be reconciled with increases in population over the next few years.
 
Last edited:

From your link ... "The number of Americans who are receiving food stamps rose to a record 40.8 million in May as the jobless rate hovered near a 27-year high, the government reported yesterday."


Can you imagine what Pelosi and other Democrats in Congress would be saying if these stats were occurring under a Republican administration. Instead, she just smiles and gleams "It's the best bang for the buck".
 
Last edited:
Please explain 'L-shaped recovery'? (I'm not an economist - duh). :D *

Why did you remove the part about food stamps?

Because it wasn't particularly relevant to answer your question.

No one here is denying that things suck, and I don't think anyone here is minimizing your personal pain. I still have a job, and not a day goes by that I don't find myself thinking "there but for the Grace of God go I."

But rhetoric and rants aren't really helpful to the process of getting the economy back on its feet, or the process of turning the L-shaped recovery in to a U-shaped one (yes, there's a whole alphabet soup of them). And one of the things that is helpful is figuring out what the current situation is. Are we in a recession ("things are getting worse"), or are we in a stagnation ("things just aren't getting any better")? Because there are different things that need to be addressed at different stages.
 
Are we in a recession ("things are getting worse"), or are we in a stagnation ("things just aren't getting any better")? Because there are different things that need to be addressed at different stages.

Or, perhaps different sectors of the economy are behaving differently. I'm not disagreeing with you, it's just that some aspects can be regarded as still contracting while some are stagnant (at poor levels) and some are growing. To lump it all together (while technically/mathematically doable) in a way to put a smiley on the overall economy, it doesn't offset the aspects that are still hurting, which are not negligible.
 
Now because these kind of reports come out so greatly delayed, this time next year they may release a report stating that we double-dipped this summer, and that we are currently in recession as well.
 
But rhetoric and rants aren't really helpful to the process of getting the economy back on its feet, or the process of turning the L-shaped recovery in to a U-shaped one (yes, there's a whole alphabet soup of them).

Maybe a better question to ask is what made this an L-shaped recovery (has recovery really started happening yet, by the way?) in the first place? Because that might point to a solution. :D
 
Maybe a better question to ask is what made this an L-shaped recovery (has recovery really started happening yet, by the way?) in the first place? Because that might point to a solution. :D

I see it by looking at our most recent career fair on campus.
two years ago, practically no company was hiring. The number of companies at the career fair was down by ~40 % and those who were there weren't generally resumes. Students graduated with only ~ half having jobs.

Last year, more companies came, and about 80-90% of our graduates had job offers by the time they graduated in may.

This year, our job fair was packed to the rafters. Students had 2-4 interviews on average (for both internships AND jobs). I expect a number of them to have offers by the end of this semester, well before they actually graduate.


So, yes. I do see recovery.
 
Maybe a better question to ask is what made this an L-shaped recovery (has recovery really started happening yet, by the way?) in the first place? Because that might point to a solution. :D

The countries experiencing more of a U shape recover have a few things in common. The first is that their banking systems are stronger either because they didn’t crash as hard or received more help then the US system.


The second is that they were both willing and able to increase spend the money required to stimulate their economies. IOW they were more fiscal responsible between 2002-2008 and spent in 2009-2010 instead of spending between 2002-2008 and then trying to cut back 2009-2010. Despite the deficits the US was running under Bush it could still afford enough fiscal stimulus to promote a recovery, unfortunately dogmatic political opposition to sound policy has stifled any growth.
 
Maybe a better question to ask is what made this an L-shaped recovery (has recovery really started happening yet, by the way?) in the first place? Because that might point to a solution. :D

Insufficient stimulus size.

The countries that had a large (in proportion to their economy) stimulus tended to experience a V-shaped recovery.

The countries that had a moderate (in proportion to their economy) stimulus tended to experience an L-shaped one.

The countries that had no stimulus or that had austerity measures forced upon them are still in active decline (i.e. still in recession).

Of course, since the USA was ground zero for most of the structural problems leading up to the recovery (most notably the housing bubble, the CDO mess, and the lack of lending standards), economists also pointed out that the recession would hit the US more severely than many other places, and so the stimulus would need to be concomittantly larger.

This isn't news -- the reality-influenced section of the economics profession pointed this out in late 2008, and pointed out that the planned stimulus was too small and would result in at best an L-shaped recovery.
 
The countries experiencing more of a U shape recover have a few things in common. The first is that their banking systems are stronger either because they didn’t crash as hard or received more help then the US system. The second is that they were both willing and able to increase spend the money required to stimulate their economies.

I presume Germany is one of the countries you mean?

Let's take a closer look and see if you are painting a complete picture.

These articles have a different view than you for the cause of their recovery …

http://uk.reuters.com/article/idUKTRE67U19520100831

Aug 31, 2010

German unemployment fell in August to its lowest since November 2008

… snip ...

Exports have driven the rebound but consumer morale, long seen as Germany's weak point, is also increasingly upbeat.

http://www.bloomberg.com/news/2010-...-month-as-rising-exports-bolster-economy.html

German unemployment declined for a 14th month in August after surging exports and investment fuelled record economic growth in the second quarter.

… snip …

Chancellor Angela Merkel’s Cabinet is tomorrow set to approve a second package of spending cuts and revenue-raising measures to tackle the budget gap

http://www.theglobeandmail.com/news...e-germanys-secret-to-recovery/article1659177/

Aug. 01, 2010

… snip …

While the rest of Europe is just beginning to crawl out of crisis and into the first tentative rays of growth and recovery, Germany is positively booming. Export sales are up dramatically, spurred especially by Chinese sales

… snip …

Germany did something different. While its neighbouring countries spent hundreds of billions bailing out banks, financing infrastructure and stimulating the economy (they just described Bush and Obama's approach, by the way :D), Chancellor Angela Merkel’s conservative-liberal coalition government also took a very large, unique gamble by spending huge sums of money bailing out its work force.

In a system known as kurzarbeit, or “short-time work,” the German government pays up to two-thirds of the salary of employees who would otherwise be laid off, as long as they remain employed. The employer is expected to cover any hours actually worked and to keep up their pension and benefit payments.

… snip …

For Germany, it has been a huge gamble, for if the economic downturn lasts beyond 2010, the cost of having millions of private-sector employees effectively on the state payroll will become unaffordable and counterproductive, triggering an even worse crisis.

Now before going on, I would point out that the US has also recovered from many, many recessions that were no more severe than what Germany experienced in just as fast a manner without kurzarbeit … simply by doing nothing, so it's not entirely provable that kurzarbeit did anything that wouldn't have happened anyway had Germany done nothing.

And here's one more article …

http://www.becker-posner-blog.com/2010/08/german-employmentposner.html

All these countries [including Germany] except Australia had before the economic crisis a higher personal savings rate than the United States. And all without exception derived a much higher fraction of their national income from exports than the United States. Because of our very low personal savings rate, and the (related) fact that most savings were in the form of home equity and (directly or indirectly) common stock, the crash of 2008 ushered in a protracted period of stagnant consumption spending as frightened American consumers increased their personal savings rate from 1.7 percent three years ago to 6.4 percent today. Producers and distributors in the third quarter of 2008 and in 2009 could foresee a sustained period of subpar demand, and so laid off many workers and have been slow to rehire them, anticipating that demand for goods and services will not increase substantially for some time.

In other advanced economies, higher personal savings and greater reliance on export earnings created expectations of more rapid economic recovery. Consumers would have less incentive to increase their savings further and thus reduce consumption; so businessmen could expect demand to revive sooner than in the United States. They could also expect their export markets to rebound soon, knowing that major importers of technologically advanced manufactured goods, such as China, India, and Brazil and other Latin American countries, had been hit less hard by the economic crisis. The quicker a solid economic recovery is expected to occur, the less prone employers are to lay off workers, because laying off and rehiring are costly, and the costs may well exceed a short period in which employees are not busy because demand for the employer’s product is weak.

Oh and by the way …

http://www.bt.com.bn/business-world/2010/10/01/german-unemployment-lowest-1992

October 1, 2010

GERMANY'S unemployment rate fell to its lowest level in more than 18 years in September … snip … The fall was the 15th drop in a row and took the adjusted jobless rate down to 7.5 per cent from 7.6 per cent in August. That was also the lowest level since April 1992, according to Bundesbank figures.


Imagine that. In Germany, the LOWEST the unemployment rate has been in the last 18 years is 7.5%. Between 2000 and 2006, it averaged OVER 10% unemployment. Here: http://upload.wikimedia.org/wikiped...ate.svg/795px-GermanyUnemploymentRate.svg.png . Now looking at that chart, you might wonder what happened in the early 1970s when unemployment rates in Germany suddenly began to skyrocket. Well the answer is simple. Up until that time the Social Democratic Party (SPD) … i.e., socialists … did not control the country. From 1949 to 1966, the SPD was only an outsider … the opposition party. Then in 1966 it became part of a winning coalition led by the Christian Democratic Union Party. Then in 1969, the SPD won the majority of seats itself and dominated the government until 1982. That was time enough to establish Germany as a social welfare state with unemployment steadily climbing to over 8% and rising. And you can see from the chart, after the other parties took over, they managed to get the unemployment growth stopped and it started to drop ... back down to well under 8% by 1992. Then the SPD began to regain their strength. They took complete control in 1998, by which time unemployment was over 10% and held it until 2005 ... with unemployment still over 10% ... when their hold began to weaken. As their hold weakened, the unemployment rate has dropped. In the current government they are now the minor party of a three party coalition with their support now down to less than 25% in national polls. So maybe that's the real reason for Germany's current 18 year low in unemployment rate and economic recovery. Different thinking than the sort of thinking promoted by US democrats/progressives/socialists/communists. :D

Now just for contrast, in the US the highest the unemployment rate reached during the post war period was slightly over 10.8% for the briefest of times in late 1982. Here: http://static.seekingalpha.com/uploads/2008/10/30/saupload_unemployment.jpg . Most of the time it was well below Germany's 7.5% . In fact, during a republican controlled congress in the late 90s, it fell to 4%. Here: http://perotcharts.com/images/indicators/indicators05-640.png . In fact, as you can see from that chart, then even with George Bush Jr, who you folks so despise, in the Whitehouse, the unemployment rate in the US barely climbed above 6% after a recession and the economic turmoil following 9/11. Then, during the time when Republicans controlled Congress, it fell steadily … below 5% for two years of Bush Jr's term. It only started going up when democrats took over both houses of Congress at the end of his term.

I think there's a lesson in all the above, but those who vote for democrats just seem completely deaf to it. Deaf to history in general. :D
 
I presume Germany is one of the countries you mean?

Let's take a closer look and see if you are painting a complete picture.

These articles have a different view than you for the cause of their recovery

Yes. As usual, you're cherry-picking linkspam because it tells lies that comforts you.


I think there's a lesson in all the above,

There is indeed. BAC tells lies.

But that's a lesson we all learned quite some time ago.
 
Quote:
I think there's a lesson in all the above,

There is indeed. BAC tells lies.

But that's a lesson we all learned quite some time ago.

Specifically, what in my post was a lie?

Back your claim, otherwise one can conclude it was nothing more than a baseless personal attack inspired by your inability to actually refute the content of my post.
 
Specifically, what in my post was a lie?

As usual, specifically every word in it. I think the inter-word spaces were not necessarily untrue, but given your track record I wouldn't go bail for their truthfulness, either.
 
Specifically, what in my post was a lie?

Specifically? How about the fact that you reference a German austerity program. In fact government spending in Germany has increased at a significantly faster rate then the US. You also spam a lot of false hypotheticals regarding “why Germany has had high unemployment for the last 20 years” Perhaps you should ask yourself what major change Germany underwent 20 years ago...

As drkitten points out, however, nothing in your post reflects realty.
 

ISF - Join now!

Every member here is approved by hand. No bots, no spam, just people who care about evidence and honest debate.

Membership is free!

Create your free account

Back
Top Bottom