angrymnk wrote:
This is almost as amusing as the presenter who was trying to convince the audience that while their 401k shrunk drastically, nothing really changed ( because you know, it is not really money, you still have the same amount of stock as you had yesterday.. ). Even more amusing, the very next day I heard people at work repeat it without being able to comprehend how badly they were just *******
Except the presenter was actually correct. If you have X shares of some fund, and the fund loses value because of a market crash, you still have X shares of that fund. When the fund regains its value (and it almost certainly will), your investment will regain its value as well. The worst thing you can do after a market crash is panic and sell your investments. When you do that you make those losses real. Until that point, they're just numbers on a ledger somewhere. Markets bounce after crashing, quite consistently. You want to be in the market to ride that bounce. Pulling out is a mistake. Arguably, you should be buying when it hits a floor (or just a low point near the floor), if you can.
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That said, since you want to branch out to other sectors of economy, we can certainly talk about how Bush made them better. He most certainly helped the war machine a fair bit. Though I am not sure that is the sector you were referring to.
Why use rhetoric instead of analysis? You jump on the "war machine" bit, to dig on the wars in Afghanistan and Iraq, but that's not relevant to this discussion. The computer market grew significantly during Bushs term. Cell phones grew massively during his term. Heck. Home electronics of all kinds grew during his term. Massively. Agro industry grew. Pharma industry grew. I believe even manufacturing (which has not been the strongest industry in the US for some time), grew during his term. Did they all grow as much as they could have? Hard to say. You'd have to put up something else to scale it against. But the point I was making is that the economy during Bush's term was hardly just "propped up by a housing bubble". That's the narrative folks love to use to excuse the poor performance of the Obama economy, but that's really not true, and there are far more direct and sensible explanations for our economic woes today.
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I also like the 3-4% GDP growth rate demand. But you know what? Since Obama's response was the wrong one, what would you do differently? I am totally serious.
The same thing I (and many other conservatives) said he should do back in 2009 when the subject first came up. TARP1? Fine. It directed funds to parts of the economy most directly hit by the crash. I thought at the time that some of the funds (a largish chunk actually) were misdirected, so we spent more than we needed to, but it did the job. What Obama should have done differently was that instead of trying to spend his way out of a recession, thinking somehow that government directed money transfers would do better than the market would, he should have lowered tax rates across the board (or at least not raised them), and basically allowed the players in the economy to keep more of the money they were earning so they could choose where to spend it. Even just a temporary 3-5% tax cut across the board would have resulted in a lot more money in the hands of consumers, investors, and businesses, while creating far less deficit along the way.
The core problem with Obama's approach to recovery rests on his assumed belief that the government knows better how to spend our money than we do. Sadly, this turns out to be false every single time, but many on the Left just can't let go of the idea. Spending money for a specific cause is one thing. If you think that only government would put money into building roads, or running schools, or doing research, then choosing to spend money on those things, while still debatable from a cost/benefit point of view, is at least a legitimate concept. But thinking that government will use money to build up the economy as a whole better than the private hands that money is currently in? Completely ridiculous. Governments are good at spending money to achieve specific non-economic goals. They are absolutely terrible at spending money in ways that actually create economic growth. It just doesn't work, and frankly I'm not sure why anyone would actually think it would work.
Sometimes even "doing nothing" is a better choice. If Obama had simply said "we spent money on TARP. The core problem has been alleviated, and we expect a rapid economic recovery as a result", the economy would have recovered much better/faster than it did. As I mentioned earlier, confidence is a huge factor in terms of recovery after a crash. If people believe the economy is/will turn around, they will put money into it in order to gain on that recovery. But if they think it's going to linger in a low state for some time, they'll hold off. They'll put their money elsewhere. They'll invest in loss reducing things rather than gain creating things. And as a result, the economy *will* recover more slowly.
A huge factor to the slow recovery was Obama himself. He projected the image of a man who didn't understand economics, and wasn't listening to people who did, and instead seemed to want to use the economic downturn as an excuse to embark on a social agenda based spending spree. And every player in the market basically sighed at that and realized they were going to be in for rough economic seas for some time. And yeah, perception becomes reality in that situation. Again, all he had to do was *not* push his recovery act, and the economy would have recovered better. And as I mentioned above, if he had instead simply put some temporary tax reduction measures (perhaps like the across the board $300/$600 dollar tax credits Bush did in 2002), it would have done a ton to help both consumer and business confidence in the recovery.
He just did everything backwards. And back then, conservatives predicted exactly what would happen. And by and large, what we predicted is what happened. The only people surprised when the economy didn't recover by 2010 (remember the whole campaign based on the "summer of recovery"?), was Obama and his economic team (and I suppose Liberals and Democrats who bought into their ideas). Everyone else was like "Um... We told you it wouldn't recover like past recoveries if you did that". We weren't surprised at all that things didn't recover as quickly as they should have. Obama didn't follow the same steps past presidents followed that were successful at creating quick recoveries. So why be surprised when he changes his actions, and the results change?
What's bizarre is when we can clearly point to the difference in his actions and those of past presidents, point to the predictions that his different actions would produce different recovery results, and then to the actual difference in the recovery itself, yet people will still insist they have nothing to do with each other. I'm just not sure how much more evidence is needed here. Previous 4 recessions all were addressed in similar ways, and with similar outcomes (relatively quick turnarounds). Obama does something radically different, and gets a different outcome (much slower turnaround). Why is this confusing to anyone? Likely cause and effect just aren't that hard to see here, unless you have ideological blinders in the way.