Double-dip!

[metalblue]

A recession is two consecutive quarters of negative growth, that is the definition of a recession whether it exceeds that time doesn't matter. I am fully aware it is still a recession. So to highlight that it is now three quarters, which I'm sure we are all aware of, does not need highlighting, maybe just keep it to yourself next time.

Still not understanding the term "technical recession" then?

And you stated "two consecutive quarters of negative growth clearly defines IT as...." why refer to the current recession if simply giving the definition.

Glad you're back to calling it a recession rather than depression now though. Glad to have helped educate you.

This piece may enlighten you about labelling our current situation as a depression rather than a simple a recession which we know is two (or more) consecutive quarters of negative growth)

Krugman says he uses the term depression to describe today's economy because "it's qualitatively similar to the Great Depression." He tells NPR's Robert Siegel, "It is a sustained period of really lousy economic performance and an enormous amount of suffering."

Krugman worries that we're becoming accustomed to this reality. "We've kind of settled into the notion that this is the new normal," he says. "But it shouldn't be. And it's not something we should accept."

<a class="postlink" href="http://www.npr.org/2012/04/27/151473654/paul-krugmans-prescription-for-a-depression" onclick="window.open(this.href);return false;">http://www.npr.org/2012/04/27/151473654 ... depression</a>

There is not a clear definition of a depression, it is a normative concept and hence it's application to todays events splits opinion, that my view which I have garnered from reading Krugman and other works. However, your opinions are exclusively yours aren't they? You pass them off as your own because your ego can't deal with someone other than yourself taking credit for the opinion you have made.

Using words like "depression" help get your articles retweeted/quoted/and 5 minutes of fame...he is standing on the edge of a fiscal hole and telling them to dig deeper I'm afraid. My words of "wisdom": watch the US economy after the election...they need to deal with fiscal issues or QE might end up being numbered like a Now album (and we know the inflationary risks from that strategy although the fed seem oblivious given QE is "policy"....makes you wonder if the lunatics have taken over)

 

[city diehard]

Still not understanding the term "technical recession" then?

And you stated "two consecutive quarters of negative growth clearly defines IT as...." why refer to the current recession if simply giving the definition.

Glad you're back to calling it a recession rather than depression now though. Glad to have helped educate you.

This piece may enlighten you about labelling our current situation as a depression rather than a simple a recession which we know is two (or more) consecutive quarters of negative growth)

Krugman says he uses the term depression to describe today's economy because "it's qualitatively similar to the Great Depression." He tells NPR's Robert Siegel, "It is a sustained period of really lousy economic performance and an enormous amount of suffering."

Krugman worries that we're becoming accustomed to this reality. "We've kind of settled into the notion that this is the new normal," he says. "But it shouldn't be. And it's not something we should accept."

<a class="postlink" href="http://www.npr.org/2012/04/27/151473654/paul-krugmans-prescription-for-a-depression" onclick="window.open(this.href);return false;">http://www.npr.org/2012/04/27/151473654 ... depression</a>

There is not a clear definition of a depression, it is a normative concept and hence it's application to todays events splits opinion, that my view which I have garnered from reading Krugman and other works. However, your opinions are exclusively yours aren't they? You pass them off as your own because your ego can't deal with someone other than yourself taking credit for the opinion you have made.

Using words like "depression" help get your articles retweeted/quoted/and 5 minutes of fame...he is standing on the edge of a fiscal hole and telling them to dig deeper I'm afraid. My words of "wisdom": watch the US economy after the election...they need to deal with fiscal issues or QE might end up being numbered like a Now album (and we know the inflationary risks from that strategy although the fed seem oblivious given QE is "policy"....makes you wonder if the lunatics have taken over)

QE isn't working because the banks are len't lending, that's not the fault of the Fed. Moreover, however 'sensible' and 'serious' it is to say that we can have no more debt and we need to get our house in order isn't right. Believe it or not contractionary policies are contractionary not only is the coined "Expansionary fiscal contraction" oxymoronic it is also moronic. If everyone is slashing spending where is the recovery going to come from.

 

[SWP's back]

You pass them off as your own because your ego can't deal with someone other than yourself taking credit for the opinion you have made.

Not at all flower. One day, once you have your A level results, and once you have a little bit of work and life experience under your belt, after a wonderous time at Uni, you may also form an opinion of your own.

And the consensus of depression is a fall of 10% GDP. My source is the FSA handbook, I learnt it when I passed some exams a good while back.

ps - You didn't answer before when I asked if you are saying I am slagging off the discipline of economics and economists also. (I ask as I studied one at uni and would be classed to some extent as the other).<br /><br />-- Mon Jul 30, 2012 6:28 pm --<br /><br />

QE isn't working because the banks are len't lending, that's not the fault of the Fed.

You see I don't disagree with this. Nor do I contend that QE is highly inflationary. Not when everything is being paid back in time.

Banks should be forced to lend which goes against my oft-stated opinion that less legislation is a good thing, but what is the point of QE if the banks are simply sitting on the cash.

 

[city diehard]

You pass them off as your own because your ego can't deal with someone other than yourself taking credit for the opinion you have made.

Not at all flower. One day, once you have your A level results, and once you have a little bit of work and life experience under your belt, after a wonderous time at Uni, you may also form an opinion of your own.

And the consensus of depression is a fall of 10% GDP. My source is the FSA handbook, I learnt it when I passed some exams a good while back.

ps - You didn't answer before when I asked if you are saying I am slagging off the discipline of economics and economists also. (I ask as I studied one at uni and would be classed to some extent as the other).

-- Mon Jul 30, 2012 6:28 pm --

QE isn't working because the banks are len't lending, that's not the fault of the Fed.

You see I don't disagree with this. Nor do I contend that QE is highly inflationary. Not when everything is being paid back in time.

Banks should be forced to lend which goes against my oft-stated opinion that less legislation is a good thing, but what is the point of QE if the banks are simply sitting on the cash.

There is no point banks sitting on it, for them it is for a rainy day, which is why when QE was undertaken it should of I agree, been compulsory for the 'newly printed money' to be lent out.

Again belittling higher education despite yourself going through it and probably is an important part of where you are today, is bemusing to me why you would lambast someone who is going to go through the same process. I have formed my opinions, which have been influenced by others, that is how everyone does; so to say otherwise is just plain false. Moreover, you say that you participated in economics at Uni so it is staggering to me what little economic thought you either don't know or don't use in your flaky arguments.

Depression is a normative concept, I will state again and there is not an official definition for it.

 

[metalblue]

This piece may enlighten you about labelling our current situation as a depression rather than a simple a recession which we know is two (or more) consecutive quarters of negative growth)

Krugman says he uses the term depression to describe today's economy because "it's qualitatively similar to the Great Depression." He tells NPR's Robert Siegel, "It is a sustained period of really lousy economic performance and an enormous amount of suffering."

Krugman worries that we're becoming accustomed to this reality. "We've kind of settled into the notion that this is the new normal," he says. "But it shouldn't be. And it's not something we should accept."

<a class="postlink" href="http://www.npr.org/2012/04/27/151473654/paul-krugmans-prescription-for-a-depression" onclick="window.open(this.href);return false;">http://www.npr.org/2012/04/27/151473654 ... depression</a>

There is not a clear definition of a depression, it is a normative concept and hence it's application to todays events splits opinion, that my view which I have garnered from reading Krugman and other works. However, your opinions are exclusively yours aren't they? You pass them off as your own because your ego can't deal with someone other than yourself taking credit for the opinion you have made.

Using words like "depression" help get your articles retweeted/quoted/and 5 minutes of fame...he is standing on the edge of a fiscal hole and telling them to dig deeper I'm afraid. My words of "wisdom": watch the US economy after the election...they need to deal with fiscal issues or QE might end up being numbered like a Now album (and we know the inflationary risks from that strategy although the fed seem oblivious given QE is "policy"....makes you wonder if the lunatics have taken over)

QE isn't working because the banks are len't lending, that's not the fault of the Fed. Moreover, however 'sensible' and 'serious' it is to say that we can have no more debt and we need to get our house in order isn't right. Believe it or not contractionary policies are contractionary not only is the coined "Expansionary fiscal contraction" oxymoronic it is also moronic. If everyone is slashing spending where is the recovery going to come from.

To arbitrarily say it isn't working is a little disingenuous although I accept the general observation. Priority one of banks were to shore up its balance sheet (for basel stress testing) we have sov debt issues (incidently rated as risk free by governments) some banks are lending, especially to good projects, although you only need to look regionally at CDS rates for native banks to see where that makes no business sense...there is certainly a reluctance to cross border lend.

Out of interest, as you advocate such a policy, where would you spend tax payers money and why?

 

[SWP's back]

I only do it to pull your leg diehard as you bite. I apologise. I like you, I don't agree with all your politics but you're a clever lad and if more of our school levers were like you as opposed to being apathetic then the country wouldn't be in the state it's in.

 

[city diehard]

Using words like "depression" help get your articles retweeted/quoted/and 5 minutes of fame...he is standing on the edge of a fiscal hole and telling them to dig deeper I'm afraid. My words of "wisdom": watch the US economy after the election...they need to deal with fiscal issues or QE might end up being numbered like a Now album (and we know the inflationary risks from that strategy although the fed seem oblivious given QE is "policy"....makes you wonder if the lunatics have taken over)

QE isn't working because the banks are len't lending, that's not the fault of the Fed. Moreover, however 'sensible' and 'serious' it is to say that we can have no more debt and we need to get our house in order isn't right. Believe it or not contractionary policies are contractionary not only is the coined "Expansionary fiscal contraction" oxymoronic it is also moronic. If everyone is slashing spending where is the recovery going to come from.

To arbitrarily say it isn't working is a little disingenuous although I accept the general observation. Priority one of banks were to shore up its balance sheet (for basel stress testing) we have sov debt issues (incidently rated as risk free by governments) some banks are lending, especially to good projects, although you only need to look regionally at CDS rates for native banks to see where that makes no business sense...there is certainly a reluctance to cross border lend.

Out of interest, as you advocate such a policy, where would you spend tax payers money and why?

A big fiscal stimulus is needed and I would advocate many of Ball's Five Point Plan:

Repeating the bank bonus tax - and using "the money to build 25,000 affordable homes and guarantee a job for 100,000 young people"

Bringing forward long-term investment projects, such as schools, roads and transport, to create jobs

Reversing January's "damaging" VAT rise now for a temporary period

Immediate one-year cut in VAT to 5% on home improvements, repairs and maintenance

One-year national insurance tax break "for every small firm which takes on extra workers, using the money left over from the government's failed national insurance rebate for new businesses"

I would also on top of that have 4% GDP on capital spending for shovel-ready projects, eg. schools, roads etc.

The reasoning behind this is although a long read summed up well by Kalecki: <a class="postlink" href="http://mrzine.monthlyreview.org/2010/kalecki220510.html" onclick="window.open(this.href);return false;">http://mrzine.monthlyreview.org/2010/kalecki220510.html</a>

2. We shall deal first with the reluctance of the 'captains of industry' to accept government intervention in the matter of employment. Every widening of state activity is looked upon by business with suspicion, but the creation of employment by government spending has a special aspect which makes the opposition particularly intense. Under a laissez-faire system the level of employment depends to a great extent on the so-called state of confidence. If this deteriorates, private investment declines, which results in a fall of output and employment (both directly and through the secondary effect of the fall in incomes upon consumption and investment). This gives the capitalists a powerful indirect control over government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis. But once the government learns the trick of increasing employment by its own purchases, this powerful controlling device loses its effectiveness. Hence budget deficits necessary to carry out government intervention must be regarded as perilous. The social function of the doctrine of 'sound finance' is to make the level of employment dependent on the state of confidence.

His sentiments about the restoration of confidence is what this plan would achieve.

Similarly Krugman has a debate about the way in which to achieve recovery here which is what this plan achieves. Must watch.

[youtube]http://www.youtube.com/watch?v=_r-AKruzmkk[/youtube]

My earlier posts near the start of the thread sum up well my beliefs on what exactly is needed to recover and this would achieve it. Employment should be the focus and not this debt and deficit obsession we find ourselves conducting policy on, that's not to say to neglect it; but not now, which why I feel it is for ideological motives rather than pure economic reasons it is being conducted. Furthermore, historical evidence supports my claims most notably the recovery from the Great Depression was achieved by Keynesian policy.

Keynes contemporary Irving Fisher described Debt-Deflation which is starting to occur:


Debt liquidation leads to distress selling
Contraction of deposit currency, as bank loans are paid off, and to a slowing down of velocity of circulation. This contraction of deposits and of their velocity, precipitated by distress selling
A fall in the level of prices, in other words, a swelling of the dollar. Assuming, as above stated, that this fall of prices is not interfered with by reflation or otherwise, there must be
A still greater fall in the net worths of business, precipitating bankruptcies
A like fall in profits, which in a "capitalistic," that is, a private-profit society, leads the concerns which are running at a loss
A reduction in output, in trade and in employment of labor. These losses, bankruptcies and unemployment, lead to
pessimism and loss of confidence
Hoarding and slowing down still more the velocity of circulation.
The above eight changes cause
Complicated disturbances in the rates of interest, in particular, a fall in the nominal, or money, rates and a rise in the real, or commodity, rates of interest.
—(Fisher 1933)
[edit]

To correct this reflation is needed which what the plan I advocate will achieve:

Unless some counteracting cause comes along to prevent the fall in the price level, such a depression as that of 1929-33 (namely when the more the debtors pay the more they owe) tends to continue, going deeper, in a vicious spiral, for many years. There is then no tendency of the boat to stop tipping until it has capsized. Ultimately, of course, but only after almost universal bankruptcy, the indebtedness must cease to grow greater and begin to grow less. Then comes recovery and a tendency for a new boom-depression sequence. This is the so-called "natural" way out of a depression, via needless and cruel bankruptcy, unemployment, and starvation. On the other hand, if the foregoing analysis is correct, it is always economically possible to stop or prevent such a depression simply by reflating the price level up to the average level at which outstanding debts were contracted by existing debtors and assumed by existing creditors, and then maintaining that level unchanged.

 

[Bill]

Doomed we are all doomed

Or are we???

I notice you jump all over stuff like this.

Lots of people are fucked fella, well and truly fucked.

Just wait till the Euro finally goes pop and the shit will well and truly hit the fan.

I will of course eagerly await your usual response ;-)

you can't mend 10 years of mistakes in 2. i can see daylight but you are right its bloody hard going.

 

[metalblue]

QE isn't working because the banks are len't lending, that's not the fault of the Fed. Moreover, however 'sensible' and 'serious' it is to say that we can have no more debt and we need to get our house in order isn't right. Believe it or not contractionary policies are contractionary not only is the coined "Expansionary fiscal contraction" oxymoronic it is also moronic. If everyone is slashing spending where is the recovery going to come from.

To arbitrarily say it isn't working is a little disingenuous although I accept the general observation. Priority one of banks were to shore up its balance sheet (for basel stress testing) we have sov debt issues (incidently rated as risk free by governments) some banks are lending, especially to good projects, although you only need to look regionally at CDS rates for native banks to see where that makes no business sense...there is certainly a reluctance to cross border lend.

Out of interest, as you advocate such a policy, where would you spend tax payers money and why?

A big fiscal stimulus is needed and I would advocate many of Ball's Five Point Plan:

Repeating the bank bonus tax - and using "the money to build 25,000 affordable homes and guarantee a job for 100,000 young people"

Bringing forward long-term investment projects, such as schools, roads and transport, to create jobs

Reversing January's "damaging" VAT rise now for a temporary period

Immediate one-year cut in VAT to 5% on home improvements, repairs and maintenance

One-year national insurance tax break "for every small firm which takes on extra workers, using the money left over from the government's failed national insurance rebate for new businesses"

I would also on top of that have 4% GDP on capital spending for shovel-ready projects, eg. schools, roads etc.

The reasoning behind this is although a long read summed up well by Kalecki: <a class="postlink" href="http://mrzine.monthlyreview.org/2010/kalecki220510.html" onclick="window.open(this.href);return false;">http://mrzine.monthlyreview.org/2010/kalecki220510.html</a>

2. We shall deal first with the reluctance of the 'captains of industry' to accept government intervention in the matter of employment. Every widening of state activity is looked upon by business with suspicion, but the creation of employment by government spending has a special aspect which makes the opposition particularly intense. Under a laissez-faire system the level of employment depends to a great extent on the so-called state of confidence. If this deteriorates, private investment declines, which results in a fall of output and employment (both directly and through the secondary effect of the fall in incomes upon consumption and investment). This gives the capitalists a powerful indirect control over government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis. But once the government learns the trick of increasing employment by its own purchases, this powerful controlling device loses its effectiveness. Hence budget deficits necessary to carry out government intervention must be regarded as perilous. The social function of the doctrine of 'sound finance' is to make the level of employment dependent on the state of confidence.

His sentiments about the restoration of confidence is what this plan would achieve.

Similarly Krugman has a debate about the way in which to achieve recovery here which is what this plan achieves. Must watch.

[youtube]http://www.youtube.com/watch?v=_r-AKruzmkk[/youtube]

My earlier posts near the start of the thread sum up well my beliefs on what exactly is needed to recover and this would achieve it. Employment should be the focus and not this debt and deficit obsession we find ourselves conducting policy on, that's not to say to neglect it; but not now, which why I feel it is for ideological motives rather than pure economic reasons it is being conducted. Furthermore, historical evidence supports my claims most notably the recovery from the Great Depression was achieved by Keynesian policy.

Not sure where to begin with all that but lets start with the bankers bonus tax to create 100,000 jobs and 25,000 homes... How much is this tax going to raise? How is that going to pay for all this? It would need to be near £6bn to even begin to make it viable....and your deluded if you think that a total pot of what about £7bn will absorb a £6bn tax on it...where do we build them? once the homes are built what do we do next year build another 25,000 homes? And the year after? More schools? More police? More hospitals? More roads? Who pays for that? Bankers again? Is the demand there? I'd have more respect if they said we will raise a one off tax to pay back some/all the PFI at least that would be plausible.

 

[Rascal]

The govt says we have maxed out our credit card. Thats an analogy i dont agree with, as the country is not a household and is not subject to the same restraints.

Now take the govts household view and you borrow against assets generally, then i think what is happening is strange.

Household UK has enormous assets, yet a small amount of debt set against them. There has never been a been a better time to borrow as interest rates are so low.

If it was your house would you starve because you thought it was right to pay back your credit card or would you borrow to pay off the credit card and create income. The BoE is doing that through QE after all.