Thread: What caused the recession?

Originally Posted by Bruno

The 1.7 million people in health care have jobs, aye... shuffling paper back and forth. The people providing the care would still do so no matter which system you had. It's all the excess people who add nothing of value and yet need to be paid that are what makes healthcare so expensive in the US. That, and the huge salaries of the lawyers and the large profit margins and the insurance companies.

For the purpose of your economy, those 1.7 million are worthless if they don't produce anything tangible.

I think you mistook my post as some sort of an argument against your point. I was just saying in response that was the only sector producing jobs, and without it we'd be in worse trouble than we are now... I'm not going to have the government healthcare debate right now. There's nothing profitable to be gleaned from that as it relates to this topic.

I will say that referring to the insured as some sort of measuring stick about who gets treated is dishonest. People get treated irrespective of their insured/not insured status.

That's beside the point. You're talking to someone in favor of some type of universal coverage

Cause 1: Greenspan, Bernacke, Geitner, Paulsen, et al.
Cause 2: See cause 1

I think one of the causes is the increased complexity of financial products - these complexities mask the true underlying nature of economics. Economics is simple in the end, really. And we all know when you screw with something simple and make it more complex, the ultimate outcome is a vibrating, battery operated 7-bladed razor that retails for 29.99 with a free set of steak-knives.

James.

Originally Posted by Jimbo

the ultimate outcome is a vibrating, battery operated 7-bladed razor that retails for 29.99 with a free set of steak-knives.

Oh, kinky! Makes me want to come ...or weren't you supposed to come first?
Please make sure you bring that exciting new product(s) over when you do!

point 1) Debt

In America's case point 2) In the 50's Ike let the watch industry go to Japan, in the sixties Johnson allowed Datsun and Toyota in the door, in the 70's Nixon gave our electronics industry to Japan while opening a door to China, in the 90's Bill Clinton repeatedly gave China Most Favored Nation Status despite their human rights record until the General Agreement on Trade and Tariffs came to pass. The endless supply of 3rd world slave labor combined with the fact that there are no restrictions on toxins wether in the air water, soil or product have sucked the manufacturing of the 1st world to the 3rd world, now there are very few manufacturing companies left, if you do not produce something, you create no new wealth.

The current pile of problems is the result of the refinance
insanity and the flip this house mentality.

Watch home improvement shoes where an "investment"
of $1000 in paint and simple stuff results in a $20,000 improvement
in market price. Yet the new owner will repaint anyway...

The refinance to 100% and beyond on homes games permitted folk
to purchase cars, boats, holiday spa trips to hither and yon. Now
the makers of cars, boats, Spa and trip folk are also SOL.

The refinance and zero down home loan games removed all the elasticity
from the system. When the string broke the refinance game
broke and the companies that sold and installed new washers,
granite counter tops, cars, etc all found the game was canceled.

It does not help to place blame but going back to the Clinton (timing)
era changes in banking regulation to allow more and more first
time home owners to get into the game as a clear inflection point.
The regulation changes facilitated first time home ownership but
also opened the doors to the refinance home owner home spiral
and bubble. I know that wealthy folk here noticed this and
some famous ones even spoke publicly in concern.

Sadly the Bush/Obama bank bail out was necessary... We are just now
seeing how deep and pervasive the damage had been.

Recovery is not going to happen based on the micro management that
some seem to want to promote. Recovery will depend on stability,
the fact that the US lame duck congress cannot act on the tax plans is
keeping companies from making decisions... Just too many unknowns.

In the US the plan of changing estate taxes from zero to 30% is insane.
Not that 30% is right or wrong but that the change size is so crazy.

Taxes for the rich... well that just holds those that have money enough
to act hostage. Worse squeezing the business deciders by the tender parts does
not make them feel secure and makes them unwilling to move or spend
money. The goose that lays golden eggs will not lay more if you squeeze
and abuse it.... It may get scared and stressed enough will stop laying eggs
(chickens do).

Congress in the US must decide what they want, act, and then restrain themselves
to small minor adjustments. Adjustments WILL be needed ... which implies that
law makers and regulators MUST pay attention, fire and forget is not an option.

Global politics and finances are much more complex. France, Ireland, Greece and
others are all in trouble for a variety of different reasons each of which needs to be addressed.

It is complecated and yet simple. Simple answer is that buying power of the masses has been crippled, complicated answer is everything behind that.

The rest of the world has free health care. Britain, Greece, France, Italy, Spain, Germany and almost all the rest of the EU are going broke. Health care or, anything else, that is handled by a bunch of bureaucrats will never fare well! Yes we need to fix our health care system but it is not all that broken, just expensive. Parts of Europe are letting old people go without operations because it is not "cost effective".

Your gas prices are high? Well that is because of the taxes that the bureaucrats put on your back....and you let them do it. In Great Britain you allow almost $2.00 a gallon tax. Let us "wasteful" Americans know how that works our for you. You are ready to lay off 640,000 government employees and they are going to raise the price to go to college, health care and almost everything you do. You are broke people! All the promises of government had outs are worthless the problem is once Socialism takes hold and everyone is "entitled" to "stuff " then they will riot in the streets to demand their "stuff ". To quote Margret Thatcher "The problem with socialism is that eventually you run out of other people's money [to spend]." You are running out....of other people's money....rapidly!

On America's attitude of using natural resources.....when you work you use natural resources. The US worker, typically, works far more hours per year than almost any European country. We produce more goods, GNP, than any country in the world. 2.5 times Japan, 6 times Britain.....

The problems that we have in America stem from the attitude that everyone should own a home even if someone else paid for it. Rubbish! Now we are paying the price. Greed by it's citizens, greed by the companies, and greed by politicians are the roots of the problems we are having.

This is not an "America is great" rant but it is a defense of just some of the good things that America has to offer.

Later,
Richard Adams

Hello HNSB,

I think it comes down to American greed, plain and simple.

That being said, I think America fundamentally changed, for the worse, on January 20, 1993. I am not sure how long, if ever, it will take to fully recover.

Thanks,
Mike

Originally Posted by riooso

The rest of the world has free health care. Britain, Greece, France, Italy, Spain, Germany and almost all the rest of the EU are going broke. Health care or, anything else, that is handled by a bunch of bureaucrats will never fare well! Yes we need to fix our health care system but it is not all that broken, just expensive.

It's true but you forgot the examples that are not favorable to US. Counting who's broke and who isn't is better measured by something like say the ratio of external debt/GDP. US owes 1 year worth (same as Italy), Canada 7 months, Russia 4 months, China less than a month.

Originally Posted by riooso

Parts of Europe are letting old people go without operations because it is not "cost effective".

I read in the news that a week or two ago, part of US decided to let young people go without operations, because there was no money. As far as leaving people go due to cost effectiveness, that's been going on in US for decades, except that the decision is made by private insurers rather than government employees. Somehow I don't think the person who gets the short end cares too much who cuts the pay check to the 'decider'.

Originally Posted by riooso

We produce more goods, GNP, than any country in the world. 2.5 times Japan, 6 times Britain.....

As I posted earlier the relevant numbers are per-capita. Then there's the question of whether you can just call GNP goods, or if it's a good measure of useful stuff. For example Qatar and Luxemburg have almost twice the GDP per capita of US, but I'm not so sure that by itself is meaningful. Luxemburg, for example, has external debt worth 40 years.

I agree that on average the US workers work longer, but that doesn't translate into a resulting better quality of life. The thing is that when you strip the political hot buttons and ask questions about the substance of things only, the answers people give are very different. The free market is nice as pure ideological concept, but just as socialism, when put to practice most people don't really like the results.

Of course, you're perfectly entitled to your rant, but I thought it would be worth correcting some misrepresentations.