By what measure do you believe this recession has peaked?
Articles like this:
http://www.presstelegram.com/business/ci_12112246?source=rss
Brunt of recession may be over, but no growth yet
By Jeannine Aversa
The Associated Press
Washington - At least after a nerve-racking six-month descent, the economy appears to be leveling off. ... snip ... Stock investors, shoppers and home buyers are less jittery. Once-frozen credit markets are slowly thawing. And economic indicators that had been going from bad to worse are showing signs of stabilizing - though still at distressed levels. ... snip ... For now, said Brian Bethune, economist at the IHS Global Insight, "I think we can say we've gone through the most terrible part of the recession."
Originally Posted by BeAChooser
How come that wasn't needed in all the other recessions. Like the one in 1981-82 whose depth exceeded this one in indicator after indicator?
Because this one is more serious than the recession of 81-82, as has been pointed out to you repeatedly.
False. It is a fact that unemployment is still less than it was during the 1981-82 recession. And so are the many other indicators that I listed in past threads, which you and your side of this debate have simply ignored.
You do realize, don't you, that this is now officially the longest recession since the great depression?
So what? It's certainly not deeper than the 1981-82 or 1975 recessions (
http://www.internationalskeptics.com/forums/showthread.php?t=135124 ). The unemployment rate isn't higher. The decline in real GDP isn't greater. The decline in industrial production isn't greater. The 30 year mortgage rate isn't higher. The misery index is less. And perhaps it's only longer because the government chose to interfere in a massive way more than a year ago rather than stay out of it as they basically have in past recessions.
The previous record was 26 months, which we just surpassed. I guess the length of the recession is not one of your indicators.
Well, again, perhaps that's only because of the uncertainty that government threw into the mix by all their meddling and delayed decision making last year. All these promised bailouts did nothing but delay bankruptcies that are probably still going to take place. GM is an example. And instead of the economy roaring back like it has after past deep recessions, government interference and deficit spending may greatly prolong any recovery this time.
How about job losses? Well, according to this chart form calculated risk, we just passed 1981 in the percent job losses
I have no idea who put together your chart but the maximum national unemployment rate during the 1981-82 recession was clearly 10.8 percent (
http://investment-blog.net/us-doubl...-rate-of-1980-1981-vs-2008-2009-single-digit/ ) while it currently stands at less than 9 percent according to the Bureau of Labor (
http://www.bls.gov/news.release/empsit.nr0.htm ).
It has resulted in the near collapse of the US auto industry and the millions of jobs that depend on it.
The US auto industry is still going into bankruptcy ... despite all the money and attention government has thrown at it. Now had that happened 6 or 9 months ago when the auto industry realized the problem, things would probably already be improving. Those portions of the auto industry that make financial sense would have been sold to new owners who hopefully would have better ideas about how to manage a car company than the past owners ... probably better ideas than even Nancy Pelosi and Obama, who now seem to run the companies.
The profits the banks are reporting now are a joke, based on the treasury relaxing mark to market rules for their junk debt.
Yeah. But who interfered in the banking industry?
All government interference has done is allow the folks running these banks to continue the same sort of practices that got them into trouble in the first place. Now with government assurances that they'll be bailed out no matter how bad it gets.
The current stock market rally is likely a sucker's rally.
And why do you think that is? Because the market doesn't trust the solution that Obama and the government have offered. Why is it that after recessions where the government didn't intervene in any major way (and I've posted some of these examples in the past) ... and especially recessions where the government cut rather than increased taxes and spending, the market has come roaring back stronger than ever very quickly. Why is it that government interference has only prolonged the recovery of markets (take the Great Depression as an example).
If you check out the 4 bad bears chart, you can see that the current rally is not all that dissimilar to the rallies that happened 9, 15, 21, and 25 months after the stock market crash of '29, each leading to a recovery of 10% or more, but none halting the slide that eventually cost the Dow 89% of its value.
What have I been saying in thread after thread? Government interference is only making things worse. If you want to use the Great Depression as an example, let's do so. I'll simply repeat what I have previously posted to you.
From the time of the 29 crash through FDR's reign, the government almost quadrupled spending. It went from 2.5 percent of GDP in 1929 to 9 percent by 1936. And what happened?
During FDR's First Inaugural Address in March of '33, he stated (just like Obama has recently stated) that "our greatest primary task is to put people to work." The national unemployment rate at the time was hovering around 17 percent. And from 1934 to 1940 (the next six years), the median unemployment rate was 17.2 percent. It was 17.4 percent at the end of that six year period. All that increased spending didn't help unemployment AT ALL.
Let's look at the stock market. As you'll notice in
http://stockcharts.com/charts/historical/djia1900.html , the Dow was about 380 just before the crash in 1929. Hoover's doubling of government spending clearly had no positive effect over the next 2 years. The Dow just dropped and dropped ... down to a low of 42. Then, in the month's leading up to the 1932 election, the Dow began to climb ... back to about a 100. Obviously, that wasn't because of FDR's "New Deal" policies since they hadn't been implimented yet. The timing might suggest that folks just thought someone new in the Whitehouse would be a good thing. In any case, when FDR took office, the Dow stood at about 100.
In his first 100 days (like Obama is now trying to do), FDR instituted his New Deal. I suggest that even more optimism took the Dow to about 150 (sort of like now), where it stalled as the effects of that New Deal spending actually began to be felt in the economy. There really is no other explanation (you, of course, can try to offer one). The Dow remained about 150 for 2 years. In other words, all that spending and supposed job creation that was occuring was again having NO EFFECT.
Then, the Supreme Court struck down some key elements of the New Deal legislation, including the National Industrial Recovery Act, in July 1935, and the Agricultural Adjustment Act, in January 1936. Notice that at that moment, the Dow started climbing again, reaching 187 at the end of 1937. Like I've been saying, end government interference and the free market will take care of the problem.
But FDR couldn't leave well enough alone. During 1936 and early 1937, he packed the court with his own people, leading to reversals of the earlier Supreme Court decisions in the spring of 1937. This put power back into the New Deal agenda. And look what happened immediately after that? The Dow collapsed back to 100. In other words, interference again sent the Dow tumbling.
Yes, it did soon climb back up to 150 ... but it never got any higher. Seven years after FDR began the new deal, despite delta's in government spending (in terms of GDP/GNP) that are certainly comparable to what Obama has now proposed, the Dow was still less than half the 1929 value. Given the fact that in numerous other recessions and depressions where government didn't increase spending to that extent and even reduced it, the Dow was breaking new highs in 7 years time, a rational person would have to call Roosevelt's spending approach a FAIL.
Now I've already mentioned FDR's Secretary of the Treasury. Let's add another name. Arthur Schlesinger, Jr. He is an acclaimed New Deal historian and widely seen as an admirer of FDR. Yet, in his book "The National Experience" (from 1963), he wrote "Though the policies of the Hundred Days had ended despair, they had not produced recovery." If he could see it, why are so many liberals still regurgitating the myth that FDR's policies led to recovery?
The second collapse of the economy in September 1937 occurred in the midst of all that massive New Deal spending ... in the midst of government spending that was FOUR TIMES what it had been prior to the 1929 crash ... in the midst of spending at levels (as a percent of GDP) comparable to those Obama projects during his first term. Unemployment jumped from 14.3% to 19%. In just two months, 4 million people lost their jobs. National income fell 13 percent, production fell almost 50 percent and profits fell 78 percent. All far worse statistics than our current ones. To many it looked like the beginning of another depression.
Now tell us, gdnp ... would you have doubled government spending again in order to speed recovery from that second collapse? Of course you would have, if you REALLY believe the stimulus works. But FDR didn't. His main response was a relatively modest and quite delayed spending program. And lo and behold, the recession was over by 1939. So maybe FDR had finally learned a lesson that apparently you still haven't.
That lesson should be obvious. You can't spend your way out of recessions or depressions. Chances are, you will only make them worse. Even the Brookings Institute (a left-leaning organization even back then) seems to have recognized that truth. In 1935, it published a report on the impact of the New Deal's National Recovery Administration and concluded that "
on the whole it retarded recovery." So even they suggested FDR's approach was a FAIL. And in that 900 page report they published, they didn't claim "if only he'd spent more".
As further proof of what I claim, I challenge you to look at what happened in all the instances in our history where the government didn't increase spending during a recession or depression but instead cut it. Look at the recessions/depressions in 1815, 1837, 1873, 1893, 1920, 1958 or 1979. In every one of those, the government cut spending and in every one of them the economy recovered much faster than it did during the New Deal ... or now.
Consider the depression of 1837. It was so serious that 4 million people lost their jobs (that was a lot back then compared to the size of the population). Out of 850 banks in the US, 343 outright failed and another 62 partially failed. Property values that had been in a speculative bubble (much like ours) collapsed dramatically. It looked a lot like what you folks warn us will happen if we don't intervene in a massive way. And a democrat President, Grover Cleveland, in response just cut taxes AND spending. And lo and behold, the economy recovered relatively quickly.
In February 1921, President Harding inherited (like Obama claims he inherited) one of the sharpest recessions in US history. Unemployment rose over 700% in just one year. Production fell 23%. The stock market dropped 18%. Yet within a year, it was over and the economy was booming. What happened to make this possible? Perhaps the answer is that Harding cut government spending by 40%, instead of massively increasing it like FDR and Obama.
So in example after example ... that you simply ignore (because you want to believe an opinion based on *hope* and a false understanding of the New Deal) ... we see that cutting government spending led to recovery. Yet you and Obama insist we must raise government spending to unprecedented levels and saddle our children with over twice the national debt they now face. Like I've said before, I shake my head and roll my eyes.
