Politics (formerly Election 2012)

[Koatanga]

ps: QE3 and stimulus is the difference that happened between UK and US.
UK did some in 2009, and stopped.
US continued. Go see which one is doing better.
It's still anemic keynesian policies, if only the USA Jobs act passed...
http://www.nytimes.com/2012/09/17/opini ... .html?_r=0
To strenghten the point, inflation did not falter on QE1 or QE2.

I'm not an economist, so this is a genuine question, rather than a baiting post.

The US manipulates the economy by buying debt from banks. When the bailout occurred, the US gave money to the banks to prop them up.

Why not channel this money through the people? Rather than Person A defaulting on his mortgage and losing his worthless home, and having the government cover the mortgage, who not pay off, or pay down, Person A's mortgage so that the bank still gets the same amount of money, but instead of adding another vacant property to the depressed housing market, Person A retains his home and potentially has more discretionary income to circulate through the economy.

Similarly, the government could incentivise people to buy these vacant homes by offering to co-pay mortgage payments. The additional demand for housing would increase interest rates and make it worthwhile for banks to lend again.

Simply buying debt from banks has the same net effect - the government gives banks money. However, rather than giving the money directly, if it was channelled through people, those people would have more to spend at local shops, for christmas presents, on new iphones, etc., which would then stimulate the economy from the ground up a well as helping property values, and therefore overall wealth, to increase.

[Melathys]

You would think the first two of the criteria to take part in the debates should be enough. If there were dozens of parties doing so, I could then understand the last one requiring 15% polling, but there isn't. So far as I can tell, there's only one other party with the organization to get a presidential candidate on enough ballots to theoretically win.

http://www.usnews.com/news/blogs/Ken-Wa ... al-debates

[Skye1013]

Oh Romney... you so silly...

[Melathys]

I would post a facepalm pic, but there isn't one big enough...

[Malthrax]

One more reason *NOT* to vote for Obama:
http://www.foxnews.com/entertainment/2012/09/25/madonna-calls-president-obama-black-muslim-says-shell-strip-onstage-if-wins/?intcmp=features

[Cogglamp]

I'm not an economist, so this is a genuine question, rather than a baiting post.

The US manipulates the economy by buying debt from banks. When the bailout occurred, the US gave money to the banks to prop them up.

Why not channel this money through the people? Rather than Person A defaulting on his mortgage and losing his worthless home, and having the government cover the mortgage, who not pay off, or pay down, Person A's mortgage so that the bank still gets the same amount of money, but instead of adding another vacant property to the depressed housing market, Person A retains his home and potentially has more discretionary income to circulate through the economy.

Similarly, the government could incentivise people to buy these vacant homes by offering to co-pay mortgage payments. The additional demand for housing would increase interest rates and make it worthwhile for banks to lend again.

Simply buying debt from banks has the same net effect - the government gives banks money. However, rather than giving the money directly, if it was channelled through people, those people would have more to spend at local shops, for christmas presents, on new iphones, etc., which would then stimulate the economy from the ground up a well as helping property values, and therefore overall wealth, to increase.

First, I think the logistics of that would be a complete disaster and fraud run rampant through a cash drop like that, either on the receiving end or predatory tactics once you've been sent your big fat check.

But let's say we could get around that. At the end of the day, you're describing a short term consumer based increase in the economy. It's not a long term solution. Short term prices would rise but ultimately the sugar high would wear off. Would it possibly help? No one really knows but, I think very little of that money you're referencing would go to durable goods orders, business start ups, long term investments that would actually increase GDP or job growth.

The jobs we lost haven't come back and most likely won't come back as they were primarily financial/professional service related. They've been replaced with lower paying jobs. You can see this when looking at wage growth pre 2007 (3.3% or so) versus what we've seen the past couple of years (1.8% or so, actually turns negative when you account for inflation).

We're still in a de-leveraging economy. We never really got out of it. The baby boomer generation is beginning to ride off to the sunset. By taking their money out of growth/higher risk investments and putting it towards wealth preservation investments all while interest rates are low creates a double whammy. Lower interest rates create larger liabilities for pension funds and the lack of capital available in growth sectors inhibits growth.

Now, most investment firms are calling for people to stay in stocks but I really think that party has to come to a stop at some point. The economic fundamentals don't support the sky high prices of equities. It's being artificially inflated by "flight to safety" money as Europe/Asia looks around and can't find anything worth investing in so they dump it over here creating a frothy market. The short term bonus check you're referring too would really only exacerbate the problem. Way too many dark clouds on the horizon (fiscal cliff, Europe, China's flagging "growth", BRIC countries in general hitting a wall, etc). They may not be coming our way at the moment but when it does, it could get even uglier than it was in 2009 because we are essentially out of lives in this video game.

I would have rather seen the monetary policy gurus find a way to divert that money towards R&D instead of supporting asset prices.

[Skye1013]

One more reason *NOT* to vote for Obama:
http://www.foxnews.com/entertainment/2012/09/25/madonna-calls-president-obama-black-muslim-says-shell-strip-onstage-if-wins/?intcmp=features

What celebs do/don't do based on who wins isn't really a basis for choosing who to vote for is it? I'd rank that up there with voting for the better looking one. Don't get me wrong, I'm sure people do it, but to me, it doesn't really seem like a smart way to pick.

[Brekkie]

I would have rather seen the monetary policy gurus find a way to divert that money towards R&D instead of supporting asset prices.

I'd agree. There's that trade-off though. With stimulus, you can have speed of impact, or you can have a high multiplier, but it is difficult to get both at the same time.

[Cogglamp]

I would have rather seen the monetary policy gurus find a way to divert that money towards R&D instead of supporting asset prices.

I'd agree. There's that trade-off though. With stimulus, you can have speed of impact, or you can have a high multiplier, but it is difficult to get both at the same time.

I don't disagree with the tradeoff. However, this is the bed we made and we've had entirely too much focus on financial/professional services over the past 20 years. R&D has become an afterthought for many companies. I really feel our short sightedness has caused this now long term problem.

It's cache, but we need a breakout "lunar event" to kick start it again because we're funding R&D in drips and drabs and it's not working.

http://www.economist.com/node/21560863

It's a short article and highlights some of the R&D issues we've had over the years.

[Klaudandus]

I think I'll start posting my political amusements here instead...

Corporations are people; Teachers, not so much.
This is coming from someone who had a dinner where he raked in 6 million dollars from a Beverly Hills dinner.
http://www.latimes.com/news/politics/la ... 7962.story

[Fivelives]

It disgusts me that people who are that stupid are allowed to be presidential candidates. I know 6 year olds that understand why airplane windows don't open.

[Koatanga]

I would have rather seen the monetary policy gurus find a way to divert that money towards R&D instead of supporting asset prices.

R&D toward what? US labour is way too expensive to produce anything domestically for sale on the world market, and things produced for the domestic market represent a net loss in trade balance as you pay foreign suppliers for some or all of the raw materials, but don't recoup any money in off-shore sales. See: auto manufacturing. If there was a global market for poorly-made, inefficient, expensive behemoths, Detroit wouldn't be dead.

R&D generally ends in a licensed product that is then produced in the East for worldwide distribution, but that opens the door to the knock-offs market, and shifts the profit to foreign manufacturing companies, with the US companies only getting royalties, not jobs.

The challenge the US faces is how to shift out of a service economy when the rest of the world is paring back on service spending in the name of cost-cutting and efficiency, and when the financial service industry basically collapsed.

I reckon the US expectation for standard of living is artificially inflated during a time of heavy spending (multiple wars) and economic downturn, and that the American people are going to have to get used to the idea of making a lot less money in order to compete on the world stage before R&D will reap any dividends in the creation of new jobs.

[Koatanga]

I would have rather seen the monetary policy gurus find a way to divert that money towards R&D instead of supporting asset prices.

R&D toward what? US labour is way too expensive to produce anything domestically for sale on the world market, and things produced for the domestic market represent a net loss in trade balance as you pay foreign suppliers for some or all of the raw materials, but don't recoup any money in off-shore sales. See: auto manufacturing. If there was a global market for poorly-made, inefficient, expensive behemoths, Detroit wouldn't be dead.

R&D generally ends in a licensed product that is then produced in the East for worldwide distribution, but that opens the door to the knock-offs market, and shifts the profit to foreign manufacturing companies, with the US companies only getting royalties, not jobs.

The challenge the US faces is how to shift out of a service economy when the rest of the world is paring back on service spending in the name of cost-cutting and efficiency, and when the financial service industry basically collapsed.

I reckon the US expectation for standard of living is artificially inflated during a time of heavy spending (multiple wars) and economic downturn, and that the American people are going to have to get used to the idea of making a lot less money in order to compete on the world stage before R&D will reap any dividends in the creation of new jobs.

[Aubade]

It disgusts me that people who are that stupid are allowed to be presidential candidates. I know 6 year olds that understand why airplane windows don't open.

I've never seen ANYONE That stupid try to run for any elected office. Completely baffles my ind that people are voting for him.

[Fridmarr]

I think I'll start posting my political amusements here instead...

Corporations are people; Teachers, not so much.

Meh, lets have a little semblance of fair play here. I get that you're mostly echoing the headline of that article, but it's main stream media, so some critical thought is generally required.

First, I'd start with the notion that corporations and unions are largely considered similar entities in the political sphere. Both tend to have large amounts of resources and often lobby for short-sighted legislation which supports their interest and only their interest. So it then becomes a bit dishonest to equate a corporation with itself, while equating the teachers union with teachers. Further taking that to the next level and suggesting that Romney believes a public institution is a person, but that a private entity (the teacher) is not a person is just too much spin even for this thread.

I think it's hard not to recognize Romney's point which is pretty valid. That public employee unions do often create a conflict of interest, and it's one that has played out to the detriment of many state budgets around the country. These are an ever growing group of people that are very active in the democratic process, contributing significant sums of money to the people who are then supposed to negotiate with them on behalf of the public. I don't think any of that can reasonably refuted.

Now, I don't really agree with his solution (as generally vague as it is), if you are going to allow private funding of campaigns, then you don't get to cherry pick who it comes from, but that's a far cry from suggesting that he's saying that teachers should be personally limited in their contributions beyond the normal limits.

Edit: As for the airplane comment, I'm a bit surprised by the reaction (and the equally dumb comments people are making), but while it's certainly boneheaded I think I understand what he was getting at. Besides, it could be much worse: http://www.youtube.com/watch?v=zNZczIgVXjg