economics: good news

Trust krw to find something even more fatuous to say than James Arthur has already come up with.

I see your point, but I don't think it's "forced" - it's just how the system is supposed to work.

There is a good case to me made for something like the Scots Free Banks but 1) they're not widely known and 2) it would be hard to explain them. They *actual* free market things, therefore people really don't want that...

There's an Actual Konspiracy here :) but it's codified in law and quite explicit.

I don't agree - there are no bond market participants that are screaming. Krugman's phrase is "the invisible bond vigilantes."

In the '90s, there *were* bond vigilantes. There are none now.

This is really critical, for that's how markets would signal "enough!"

Well, that's not been shown. Equities have been pretty good, actually. And that's sort of the role Treasuries are supposed to play - in a climate of poor GDP growth, they're a ... backstop.

Right. That's by design.

Right now, people don't want the wealth to invest or consume - they want it to self-insure against the economy. In 2013, we should see consolidations pick up. When that runs its course, then the next up cycle starts.

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It has been a FACT for a number of years now,that a 100 percent tax on everyone and everything cannot possibly cover the national debt.

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Where did you live the last five years? Money is not at all a problem. Most wealthy people and companies are sitting on tons of cash since years. They are not lending or investing it, that's the issue.

I know such people personally.

Because of screwed-up tort law and the dems did not do squat about that. Everyone knows why.

That's true, but you don't seem to have the foggiest clue about America.

Yup :-(

Just the compliance costs, meaning the money I have to pay my CPA to prepare an every increasing stack of paperwork, has gone up tremendously under this administration. This is money people can no longer invest into creating work for others.

It's actually worse. In the last few years an astounding number of folks have given up looking for a job so they don't show up in the unemployment numbers anymore. They moved in with their parents. At age

That was a good one! :-)

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Every business person knows exactly what they pay their CPA to fill in onerous paperwork. They've never got a clue about the abuses the paperwork is designed to prevent.

It looses it's rhetorical force when you notice that James Arthur is the shallow end of the gene pool, and there's no way we are going to ever get him thinking more deeply about nonsense he's trying to sell us.

I did see one small chink in the armour recently - he actually admitted that the US GDP had been rising since Obama came to power - though he did go on to say that the rise was artificial and would go away when the stimulus stopped, which concedes - for the first time - that the stimulus is having some effect (though not an effect he can approve of, since it's being managed by a Democrat administration).

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Right. They've got tons of cash, but not so many tons that they are willing to risk any of it by investing it in the economy as it is. The problem is more business confidence than cash per se, which is exactly what Keynes pointed out in the 1930's and what Keynesian deficit- financed stimulus spending is designed to stimulate.

The problem isn't that the potential investors lost all their money in

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You know what they claim to be anxious about. What you are actually hearing is excuses not to invest now, before the economy has fully recovered.

The US legislatures are full of lawyers, and medical malpractice cases are welfare for lawyers (of which the US has an extravagant over- supply).

I don't share the point of view which you and James seem to find congenial, but since there are aspects of US life about which neither of you seem to have the foggiest clue, this probably isn't a particularly meaningful or convincing assertion.

It is probably the hysterical "doom and gloom" attitudes of such right whiners that is causing business people and investors to continue feeling hesitant to start up and expand or invest in companies. Perhaps part of the continued Repugnican tactics to trash the economy as long as a Democrat is in power. They are sure sore losers!

Hooray for "Kenyan" stimulus spending! :)

Paul

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We aren't talking about the little guy like you and me, we are talking serious business. Millions, tens of millions. Those folks have no fear. They think strictly risk - reward. Less Reward -> less risk. Simple, really.

No. What I am hearing is strictly a risk - reward calculation. In the same way that countries with wanton spending problems can't float bonds unless they pay a commensurate premium over the current interest rates. Except when they can sock it to other countries like they do in Europe now.

Yup. And that's the fundamental problem. Predominantly a Democrat one but Republicans are not a whole lot different in that respect.

When was the last time you were intimately involved in an advisory or participatory role in the venture capital funding of a particular company?

Wrong. In my case it is the filling out of the _same_ information but it goes to another agency, on different forms. Because it is obviously asking too much of government agencies to connect their computers.

Besides wasting money on the filing end this is also a major waste of taxpayer monies in these agencies.

There you go again with your adhiminems. It's unprofessional.

Filling the shallow end with buckets from the deep end has a similar effect to most stimulus money. It evaporates.

Yesterday they listed one line item that is being "rectified". The government sells its GM shares. The taxpayer supposedly gets to lose another $1 billion on that line item alone.

Fewer than half of the US congresscritters are lawyers (60% of Senators and 37% of Congressmen). It's still three times what it should be, but it's not as bad as one would expect.

The taxpayer will lose over twenty times that. The whole GM thing was a disaster and probably can't be made better. The company will probably go under within the next ten years (or be bailed again).

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I try not to feed straight trolling. It's not always easy to tell.

Regardless, in O/T conversation, I try to offer reasonable responses to important arguments of the day--responses other people may not have considered, might find interesting, or which they might not have had the time to find themselves--and back these up with objective data.

For example, the BLS employment graph cited above. It clearly, unequivocally excludes--in an engineering impulse-response sort-of- way--the Keynesian stimulus hypothesis. You can easily see the effect of Bush's massive stimulus, then Obama's, and the Tea Party election of 2010.

Prior to my post(s), could you have objectively shown there were no net jobs from Obama's first term, let alone stimulus, or that the vast bulk of the jobs Obama claims came long after he lost control?

Employment is a lagging indicator, but posited as rapidly responding to stimulus by Krugman, Obama, etc. That was Obama's rationale for doing it. The graph proves it false, for any reasonable value if "lagging."

I find an objective post-mortem of Obama's stimulus failure in engineering terms interesting. If the word 'Bill' offends you so much, just skip his comments and read mine. :-)

There's another possible explanation: massive new taxes on the horizon, combined with new regulations, cost a fortune. You might consider that.

Or, if you've already started companies, as I have, and you see an opportunity, go for it. Strangely, that's not happening. Not even among progressives.

Sandy showed razing buildings raises GDP, but it's not constructive. Neither is redistribution. Try thinking out of the box, and you'll see it.

Obviously we can borrow $5 trillion dollars and throw a big party. The question is whether that creates anything lasting--it doesn't--and what that leaves to clean up: debt.

It should be just as obvious that if nothing lasting has been created-- as you acknowledge implicitly above--recovery after the party requires recovering when you're hung-over, plus servicing the new debt burden. IOW, you're no better off, plus you have a huge debt.

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They think exactly the same way as we do, and the perceived rewards when the economy is in recession, or stuck in slow growth - as it is at the moment - are less, so they are less inclined to invest and the economy remains in slow growth. It's not entirely rational, but Daniel Kahneman's "Thinking, Fast and Slow" spells out why we are not entirely rational, and he got a Nobel Prize for Economics for the insight.

They think it is strictly a risk-reward calculation, but they aren't being quite a rational as they like to think.

It must be close to twenty years ago now, and it was a very minor role. I'm still close to the friend involved, and he's had a good idea recently, and another of my friends is helping him realise that, but there aren't any venture capitalists involved this time around.

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They most certainly do not. But you have stated at the end of this post why you can't understand this. Because you do not know these people. I do.

Investment in markets such as med devices have almost nothing to do with the economy. Same in oil and gas, and many other markets.

Those guys are as rational as it gets. That's what they are paid for.

So it's you who doesn't have the foggiest clue about this matter.

The BLS data is handy for that--they let you plot the total number of

If you plot 20 years, you can easily see where we should be based on normal population growth. We're roughly 12 million below trend.

Plotting the last five years makes the stimulus look rather silly--all the gains came well after, during the alleged gridlock.

I should probably post a graphic somewhere.

It wasn't literally true. He'd want the gov't to get someone else to do it. :-)

They received roughly $100B in cash assistance, and (last I looked) had a market cap. value of $41B, just a year and a half or so later. (The latter figure includes property, plant, equipment, good will, etc.)

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The time constant for creating real jobs is probably in the 5-20 year range. Stimulus is AC-coupled... you get a spike followed by a droop, and it probably settles below the starting baseline.

The time constant for destroying businesses and jobs is much shorter. You can demolish a building lot faster than you can build one.

Hardly anyone thinks strategically, long-term, any more.