Great Depression?

[JAMESBJOHNSON]

I read a business article earlier today. Some people are predicting a financial depression beginning in about 6 months. The housing market is expected to collapse and drag everything with it.

In 1926-28 Florida had bad hurricanes that seriously hurt real estate development. Real estate deflated and pulled the banks under. The Great Depression started here first.

We seem to be in the same scenario again. Florida had 2 seasons of bad storms, insurance is ruinously expensive if you can get it, and the real estate bubble burst.

Oh! WAL-MART is cutting worker hours instead of adding seasonal help.

 

[thebullet]

How bad is it? My wife's company asked the employees to pay for their own Christmas party. How bad is that?

I'm not sure the economy is going to tip over, but we are getting precariously close. On top of the faltering housing market, China is thinking about divesting itself of its trillions of dollar holdings, which will cause the value of the dollar to dive. The stock market seems to be ready to go into free-fall. Retail gas prices are back up over $3/gallon and climbing. Last I saw, wholesale gas was up to $93/barrel. Consumer confidence is declining and this may be a very bad consumer Christmas because of it.

Each of these indicators in and of themselves are worrisome but not fatal. But things are starting to accumulate. The economic downturn may be gaining momentum.

Sure hope this gloomy outlook is just a trend that will reverse itself.

 

[Roxanne Appleby]

Some people have been predicting a great depression in about six months for the past 60 years. It's a cottage industry. There's an entire library of books on it. New ones come out every year explaining why this time it's all but a done deal. They are always filled with facts and figures, trend-lines and projections, and many are quite convincing. Some of them do fairly well in sales, too.

 

[TheeGoatPig]

I'm actually counting on the realestate crash so that I can purchase my first place for cheap

 

[JAMESBJOHNSON]

RA

What you say is true, except we do have recessions and, rarely, depressions. They do happen.

So! The Arabs and Chinese own all our debt and Americans are defaulting on their home loans. The Arabs jacked-up the price of oil to get some of their money back, and the Chinese are going to revalue their money up...so where are we headed?

 

[Jenny_Jackson]

Going back to 1929 just before the "Great Depression", the stock market took a big dump of some 700 points. Chase and Morgan Banks jumped in and dumped millions into the market to shore it up.

For about six weeks, the market rose and fell almost normally until it finally crashed.

During the GHW Bush administration, the stock market took a big hit along with the economy. I can remember the Newsweek article calling it the biggest depression since 1929. At that time the market funds were overloaded with "go-go" stocks. The fund managers had thrown caution to the wind and went for higher than normal profits rather than solid investments. They paid the price. However, for the second time in history, the bankers stepped up and bailed out the market.

Things, under the second Bush Administration, are different. Now It's the banks that are in trouble. The real question is: Now will the market funds step up and bail out the banks or will they sit tight and let the economy collapse?

Interesting how much father and son are alike.

 

[thebullet]

Yes, who can read this situation anyway? Recession? Probably. Depression? Possibly. Full recovery? Maybe.

I heard on NPR today that in 1995, Congress passed a law to allow the Fed to regulate those unregulated banking and loan companies that were not covered by existing legislation. This was done because it was evident then that there were chances being taken in lending practices that could come back and bite everyone on the ass.

Alan Greenspan, given the legal authority to start regulating these organizations, refused to do so. The law was on the books, but it was never used. I heard Greenspan being interviewed a couple of months ago and he was dodging responsibility for any of this banking crisis. It appears he wasn't being entirely truthful.

 

[Pure]

there may be recession, but with military spending always possible to increase, there cannot be a depression. building a 1000 new fighter planes that either don't work, or fail in a year will "solve" any depression. or 10,000 tanks that are fine for most terrains... except desert!.

the story of a new satellite system, FIA, was just revealed; it failed as unworkable, although billions had been spent.

===

In Death of Spy Satellite Program, Lofty Plans and Unrealistic Bids

By PHILIP TAUBMAN
Published: November 11, 2007

By May 2002, the government’s effort to build a technologically audacious new generation of spy satellites was foundering.
The contractor building the satellites, Boeing, was still giving Washington reassuring progress reports. But the program was threatening to outstrip its $5 billion budget, and pivotal parts of the design seemed increasingly unworkable.

Peter B. Teets, the new head of the nation’s spy satellite agency, appointed a panel of experts to examine the secret project, telling them, according to one member, “Find out what’s going on, find the terrible truth I suspect is out there.”


The panel reported that the project, called Future Imagery Architecture, was far behind schedule and would most likely cost $2 billion to $3 billion more than planned, according to records from the satellite agency, the National Reconnaissance Office.

Even so, the experts recommended pressing on. Just months after the Sept. 11 terrorist attacks, and with the new satellites promising improved, more frequent images of foreign threats like terrorist training camps, nuclear weapons plants and enemy military maneuvers, they advised Mr. Teets to seek an infusion of $700 million.

It took two more years, several more review panels and billions more dollars before the government finally killed the project — perhaps the most spectacular and expensive failure in the 50-year history of American spy satellite projects. The story behind that failure has remained largely hidden, like much of the workings of the nation’s intelligence establishment.


But an investigation by The New York Times found that the collapse of the project, at a loss of at least $4 billion, was all but inevitable — the result of a troubled partnership between a government seeking to maintain the supremacy of its intelligence technology, but on a constrained budget, and a contractor all too willing to make promises it ultimately could not keep.


“The train wreck was predetermined on Day 1,” said A. Thomas Young, a former aerospace executive who led a panel that examined the project.
The Future Imagery project is one of several satellite programs to break down in recent years, leaving the United States with outdated imaging technology. But perhaps more striking is that the multiple failures that led to the program’s demise reveal weaknesses in the government’s ability to manage complex contracts at a time when military and intelligence contracting is soaring.


The Times’s examination found that the satellite agency put the Future Imagery contract out for bid in 1998 despite an internal assessment that questioned whether its lofty technological goals were attainable given the tight budget and schedule.


Boeing had never built the kind of spy satellites the government was seeking. Yet when Boeing said it could live within the stringent spending caps imposed by Congress and the satellite agency, the government accepted the company’s optimistic projections, a Panglossian compact that set the stage for many of the travails that followed. Despite its relative inexperience, Boeing was given responsibility for monitoring its own work, under a new government policy of shifting control of big military projects to contractors.

At the same time, the satellite agency, hobbled by budget cuts and the loss of seasoned staff members, lacked the expertise to make sound engineering evaluations of its own.

The satellites were loaded with intelligence collection requirements, as numerous intelligence and military services competed to influence their design. Boeing’s initial design for the optical system that was the heart of one of the two new satellite systems was so elaborate that optical engineers working on the project said it could not be built. Engineers constructing a radar-imaging unit at the core of the other satellite could not initially produce the unusually strong radar signal that was planned.

A torrent of defective parts, like gyroscopes and electric cables, repeatedly stalled work. Even an elementary rule of spacecraft construction — never use tin because it deforms in space and can short-circuit electronic components — was violated by parts suppliers.

By the time the project, known by its initials, F.I.A., was killed in September 2005 — a year after the first satellite was originally to have been delivered — cost estimates ran as high as $18 billion.

 

[Pure]

note to thebullet

the bullet Alan Greenspan, given the legal authority to start regulating these organizations, refused to do so. The law was on the books, but it was never used. I heard Greenspan being interviewed a couple of months ago and he was dodging responsibility for any of this banking crisis. It appears he wasn't being entirely truthful.

P: It could be the Greenspan, Rands most illustrious desciple, "bought" the line we hear from Amicus and Roxanne: THE MARKET will straighten things out, just keep the government out. The Market is wiser than any human command, being essentially omniscient [registering all relevant data].

Well, Liar, the market is doing that. What Greenspan neglected to do was remind Bush-- if he ever knew--- the story of Hoover and how the working of the market (1929) can play holy hell with a political career or a party's future of being in power!.

 

[Roxanne Appleby]

there may be recession, but with military spending always possible to increase, there cannot be a depression. building a 1000 new fighter planes that either don't work, or fail in a year will "solve" any depression. or 10,000 tanks that are fine for most terrains... except desert!.

Does this mean there would be a recession if the weapons worked?

 

[SummerMorning]

No, but it would be harder to sell that many planes. Planned obsolescence is a great make-work project. Planes and tanks that work without fault make less work than those which require follow-up maintenance.

Although - on the topic of planned obsolescence - I can hold up the example of my brother's Soviet made kid's tricycle. It was constructed some 36-37 odd years ago. My brother pedalled it for three years, then my sister, then me, and now my nephew plays with it. It's quite sad - it's a decent tricycle, goes faster than most plastic trikes on the market now, it doesn't break or anything ... and the company is probably kaput.

 

[oggbashan]

...
Although - on the topic of planned obsolescence - I can hold up the example of my brother's Soviet made kid's tricycle. It was constructed some 36-37 odd years ago. My brother pedalled it for three years, then my sister, then me, and now my nephew plays with it. It's quite sad - it's a decent tricycle, goes faster than most plastic trikes on the market now, it doesn't break or anything ... and the company is probably kaput.

I still use my USSR made Rangefinder and SLR cameras. I lent one of my Zenith SLR's and Russian telephoto lens to my youngest when she went on a safari tour in Africa. When her fellow tourists were running out of batteries for their cameras she kept on taking pictures with her manually cocked shutter. When a frisky lion club threatened to claw her, she hit it with the telephoto lens. The lion cub retreated, shaking its head. The telephoto lens was undamaged. It was also undamaged when the camera was shaken out of her hands and dropped to the ground on a jeep tour. The jeep stopped. My daughter retrieved her camera, blew the dust off it, and continued using it.

She still uses it.

My favourite USSR camera is my Zenith Photosniper. The design is bad for its purpose but can be used with practice. It comes in a substantial metal case that even I can stand on to get a better shot. Assembled it looks like something out of a 1960s spy movie but it is great for candid shots. The camera and large aperture 300mm lens are mounted above a rifle stock that looks like a Colt .45. The idea was that you view the target bird or animal through the fully-open lens and when the trigger is pulled the spring-loaded pre-set lens shuts down to the selected aperture and the shutter is released. Unfortunately the spring mechanism is so strong and heavy that it shuts the lens with a very loud "clang!" and gives instant camera shake. A typical Photosniper shot is a blurred image of an animal's tail or a blurred flurry of feathers. The solution is to shut the lens BEFORE sighting on the object. Then the trigger only releases the shutter and doesn't frighten the target away. The Photosniper does have batteries for its basic through-the-lens metering but will work happily with flat batteries or no batteries at all.

I expect to be using my Photosniper in 20 years time - I don't expect my digital camera to last more than a year or two.

Og

 

[ishtat]

I still use my USSR made Rangefinder and SLR cameras. I lent one of my Zenith SLR's and Russian telephoto lens to my youngest when she went on a safari tour in Africa. When her fellow tourists were running out of batteries for their cameras she kept on taking pictures with her manually cocked shutter. When a frisky lion club threatened to claw her, she hit it with the telephoto lens. The lion cub retreated, shaking its head. The telephoto lens was undamaged. It was also undamaged when the camera was shaken out of her hands and dropped to the ground on a jeep tour. The jeep stopped. My daughter retrieved her camera, blew the dust off it, and continued using it.

She still uses it.

My favourite USSR camera is my Zenith Photosniper. The design is bad for its purpose but can be used with practice. It comes in a substantial metal case that even I can stand on to get a better shot. Assembled it looks like something out of a 1960s spy movie but it is great for candid shots. The camera and large aperture 300mm lens are mounted above a rifle stock that looks like a Colt .45. The idea was that you view the target bird or animal through the fully-open lens and when the trigger is pulled the spring-loaded pre-set lens shuts down to the selected aperture and the shutter is released. Unfortunately the spring mechanism is so strong and heavy that it shuts the lens with a very loud "clang!" and gives instant camera shake. A typical Photosniper shot is a blurred image of an animal's tail or a blurred flurry of feathers. The solution is to shut the lens BEFORE sighting on the object. Then the trigger only releases the shutter and doesn't frighten the target away. The Photosniper does have batteries for its basic through-the-lens metering but will work happily with flat batteries or no batteries at all.

I expect to be using my Photosniper in 20 years time - I don't expect my digital camera to last more than a year or two.

Og

The Russians have always been good at rugged design eg's the T34 and the AK 47!!

 

[Roxanne Appleby]

The Russians have always been good at rugged design eg's the T34 and the AK 47!!

And infantry-proof tricycles!

 

[Pure]

pure //there may be recession, but with military spending always possible to increase, there cannot be a depression. building a 1000 new fighter planes that either don't work, or fail in a year will "solve" any depression. or 10,000 tanks that are fine for most terrains... except desert!.//




RA: Does this mean there would be a recession if the weapons worked?

well, weapons that work do not have nearly the stimulating effect on the economy, just as cars or lightbulbs that last do not help things.

weapons that are ether destroyed, non functioning or quickly obsolescent (un improvable) are best..... like the original M 16 rifle sent to vietnam, or the unarmored trucks or crappy body armor sent to Iraq.

---
http://www.paperlessarchives.com/vw_m16.html

There were a number of serious problems encountered during initial fielding. Initially, the [M-16] rifle was the target of criticism because it would unexpectedly stop firing. The fussy M16s responded poorly to wet, dirty field conditions, and often jammed during combat, resulting in numerous casualties. Keeping the gun clean in the field in Vietnam was difficult.

Modifications and a late 1966 redesign were made on the weapon, along with an effort to train the troops in its care and cleaning. The reliability of the M16 significantly improved. It proved particularly valuable in the close jungle firefights experienced during the Vietnam War. As a result of better training, preventive maintenance, and several design changes, the weapon that has become the standard issue rifle of the U.S. Army (3,690,000).

 

[Jenny_Jackson]

Something we seem to have forgotten, but want to forge ahead with anyway. How did we get out of the great depression? By entering World War II? That seems to be the thinking of the current administration, but that's entirely wrong. We didn't war our way out of the depression, we produced our way out of it. World War II was the vehicle, not the solution.

In the 70's we had a recession which we produced out way out of again. However, since then, the auto industry has moved to europe, Mexico and Canada. We no longer manufacture heavy machine tools in this coutry - those come from China. Even our gym shoes come from Southeast Asia. We are not the manufacturing power-house we were just a few years ago.

Whay? It's so much easier, profitable and tax-advantageous to out-source everything to foreign countries. Suppose we do have a recession (as if the housing market hasn't made that inevitable!). What are we going to produce to buy our way out of it? Ships? Other than nuclear submarines, we don't build them any more. Cars? That will help the Canadians but not us. Tanks? We are already building those for Iraq and are really part of the $Trillion Dollar Deficit problem.

I suppose we can produce more Doctors, Lawyers and Accountants. But that does no good. We can sell more insurance that people cannot afford. We can produce more clothing and home electronics in Tiwan and China, but that doesn't help us.

Alternatively, we can sell the rest of this country to the Asians and Middle Eastern countries and just foreget it.

 

[xssve]

Going back to 1929 just before the "Great Depression", the stock market took a big dump of some 700 points. Chase and Morgan Banks jumped in and dumped millions into the market to shore it up.

For about six weeks, the market rose and fell almost normally until it finally crashed.

During the GHW Bush administration, the stock market took a big hit along with the economy. I can remember the Newsweek article calling it the biggest depression since 1929. At that time the market funds were overloaded with "go-go" stocks. The fund managers had thrown caution to the wind and went for higher than normal profits rather than solid investments. They paid the price. However, for the second time in history, the bankers stepped up and bailed out the market.

Things, under the second Bush Administration, are different. Now It's the banks that are in trouble. The real question is: Now will the market funds step up and bail out the banks or will they sit tight and let the economy collapse?

Interesting how much father and son are alike.

Banks were in trouble back in the 80's too, overdevelopment in commercial real estate was the problem then. Real estate bubbles and credit abuse is a predictable thing in any republican administration, going back to at least the Civil War.

Greenspan was convicted of fixing gold prices in the Ninties because banks had overextended themselves on derivitives, to the point where a small change in gold prices inthe wrong direction would have caused a major banking collapse. A little known incident in economic history.

I predicted a housing market crash way back in '00, my timing was a bit off is all. There was a bit of turbulance and a rash of defaults a year or so later, but it was delayed by the fact that interest rates stayed low and consumer spending remained strong, just means it took longer and the crash will be harder.

 

[Roxanne Appleby]

well, weapons that work do not have nearly the stimulating effect on the economy, just as cars or lightbulbs that last do not help things.

weapons that are ether destroyed, non functioning or quickly obsolescent (un improvable) are best..... like the original M 16 rifle sent to vietnam, or the unarmored trucks or crappy body armor sent to Iraq.

---

It's a nice conspiracy theory, but it requires one to believe some implausible items. First and primarily, that Congress takes a long-term view when it passes a military approps bill. Of course they do not take a long term view, not in this or in any other thing they do. Everything is for immediate, short term political expediency.

Secondly, the incentives that operate in the military do not favor the development of weapons that break. Dumb ones yes, ones made for the last war not the next yes (vis. the "Crusader" mobile artillery thing), but not ones that do not actually do what their proponents say they will do, like shoot a shell of X weight Y distance. That can be bad for one's career.

Also, the military doesn't have to make weapons that don't work to garner future approps from Congress, because they can always claim that conditions have changed and the weapons bought under last year's budget are now obsolete, and you wouldn't want to send our boys into deadly combat equipped with less than very latest and best, now would you Senator? Of course not . . .

The most common reason weapons have problems is overreaching in technology. The colonels tell the contractor they want a plane that goes twice as far on a tank of gas but carries just as many bombs. Kinda like Congress ordering fleet mileage standards. "Don't bother us with the laws of thermodynamics - you figure it out!" Kinda like Canute thinking he can order the tides around . . .

 

[sr71plt]

[QUOTE-Pure]well, weapons that work do not have nearly the stimulating effect on the economy, just as cars or lightbulbs that last do not help things.

weapons that are ether destroyed, non functioning or quickly obsolescent (un improvable) are best..... like the original M 16 rifle sent to vietnam, or the unarmored trucks or crappy body armor sent to Iraq.[/QUOTE]

It's a nice conspiracy theory, but it requires one to believe some implausible items. First and primarily, that Congress takes a long-term view when it passes a military approps bill. Of course they do not take a long term view, not in this or in any other thing they do. Everything is for immediate, short term political expediency.

Secondly, the incentives that operate in the military do not favor the development of weapons that break. Dumb ones yes, ones made for the last war not the next yes (vis. the "Crusader" mobile artillery thing), but not ones that do not actually do what their proponents say they will do, like shoot a shell of X weight Y distance. That can be bad for one's career.

Also, the military doesn't have to make weapons that don't work to garner future approps from Congress, because they can always claim that conditions have changed and the weapons bought under last year's budget are now obsolete, and you wouldn't want to send our boys into deadly combat equipped with less than very latest and best, now would you Senator? Of course not . . .

The most common reason weapons have problems is overreaching in technology. The colonels tell the contractor they want a plane that goes twice as far on a tank of gas but carries just as many bombs. Kinda like Congress ordering fleet mileage standards. "Don't bother us with the laws of thermodynamics - you figure it out!" Kinda like Canute thinking he can order the tides around . . .

I didn't see that as a "conspiracy theory" at all. It was a good answer to a question that was posed--it didn't say anything about a conspiracy that I could see. At the base, the type of war we have in Iraq--and the money/effort going into weapons that don't work (ergo, don't constructively contribute to anything) and a situation that's going to give us nothing in the end--operates as a drain on the economy, not an impetous to a developing economy as WWII did. Iraq is just a drain on resources; it's not going to end up as pretty or an overall gain to the economy. If the same effort/funds had gone into updating infrastructure, the economy would be booming.

This isn't the result of any consipiracy--it's the result of dumb shortsightedness, cowboy politics, and a timid opposition.

 

[Roxanne Appleby]

I didn't see that as a "conspiracy theory" at all. It was a good answer to a question that was posed--it didn't say anything about a conspiracy that I could see. At the base, the type of war we have in Iraq--and the money/effort going into weapons that don't work (ergo, don't constructively contribute to anything) and a situation that's going to give us nothing in the end--operates as a drain on the economy, not an impetous to a developing economy as WWII did. Iraq is just a drain on resources; it's not going to end up as pretty or an overall gain to the economy. If the same effort/funds had gone into updating infrastructure, the economy would be booming.

This isn't the result of any consipiracy--it's the result of dumb shortsightedness, cowboy politics, and a timid opposition.

OK.

The big fallacy is that military spending or war is ever "good" for the economy. It ignores the reality that government can't spend or give away a single dime that it hasn't first taken from someone else, either living or unborn (in the form of deficit financing and debt). Also, the "broken window" fallacy first described by Bastiat, as related in wiki:

The parable describes a shopkeeper whose window is broken by a little boy. Everyone sympathizes with the man whose window was broken, but pretty soon they start to suggest that the broken window makes work for the glazier, who will then buy bread, benefiting the baker, who will then buy shoes, benefiting the cobbler, etc. Finally, the onlookers conclude that the little boy was not guilty of vandalism; instead he was a public benefactor, creating economic benefits for everyone in town.

The fallacy of the onlookers' argument is that they considered only the positive benefits of purchasing a new window, but they ignored the hidden costs to the shopkeeper. As the shopkeeper was forced to spend his money on a new window, he obviously could not have spent it on something else. For example, the shopkeeper may have intended to replenish his inventory, but now cannot do so for he must fix his window. The lack of inventory may drive customers to a competing shopkeeper, who gains at the other's loss.

Further, the extent of the damage may have required the shopkeeper to close his business until the damage was repaired, costing him revenue while still having expenses for rent and utilities.

Thus, the child did not bring any net benefit to the town. Instead, he made the town poorer by at least the value of one window, if not more.

Defense spending and war are vandalous child writ large.

 

[sr71plt]

OK.

The big fallacy is that military spending or war is ever "good" for the economy. It ignores the reality that government can't spend or give away a single dime that it hasn't first taken from someone else, either living or unborn (in the form of deficit financing and debt). Also, the "broken window" fallacy first described by Bastiat, as related in wiki:

In economic terms, war was just fine for at least the U.S. Japanese, and German economies (and probably several others as well). It spurred productivity, innovation, and both managrial and assembly-line efficiency in the U.S. economy, and, probably more important than all of those, injected women into the workforce as would not have happened nearly as rapidly absent the war. For the Japanese and Germans, it obviated what to do with obsolete factory facilities and practices--it leveled them all. And outside funds flowed in to build new, modern industries that, within decades, put the Japanese and Germans at the forefort of efficient, high-quality manufacturing and established two of the strongest national economies now in existence. (it it wonders for the South American economies, too, by the way.)

 

[Roxanne Appleby]

In economic terms, war was just fine for at least the U.S. Japanese, and German economies (and probably several others as well). It spurred productivity, innovation, and both managrial and assembly-line efficiency in the U.S. economy, and, probably more important than all of those, injected women into the workforce as would not have happened nearly as rapidly absent the war. For the Japanese and Germans, it obviated what to do with obsolete factory facilities and practices--it leveled them all. And outside funds flowed in to build new, modern industries that, within decades, put the Japanese and Germans at the forefort of efficient, high-quality manufacturing and established two of the strongest national economies now in existence. (it it wonders for the South American economies, too, by the way.)

War causes many things to happen that might have taken longer in its absence. Sometimes social change is one of them, such as an increased presence of women in the U.S. work force. Some of those accellerated changes may be good things. But as with the townspeople in Bastiat's parable, you ignore the "unseen," those advances that might have occurred but for the war's massive destruction of wealth and lives. Who can say whether the great scientist who might have discovered cold fusion or the cure to cancer was killed at age 18, torpedoed by a U-Boat in the North Atlantic, or blown up by an 88 shell at Stalingrad? What constructive purposes might have been acheived with the billiions of dollars, pounds, yen, marks and rubles that went into 500 lb. bombs and 7.92 mm rifle rounds?

 

[Le Jacquelope]

From a mystic angle, I believe in the Hindu cycle of Brahma, Vishnu, Shiva and Kali:

approximately (not exactly) corresponding to (re)birth, preservation, chaos and death, then (re)birth again.

You all should read "Generations" and "The Fourth Turning" by Strauss & Howe. America has repeatedly gone through this 4 part cycle, which typically lasts 80 years. The Kali cycle - the Revolutionary War (arguably a Brahma period, since we won), the Civil War and the period of the Great Depression up to World War II, most notably - have lead to the greatest progress.

My theory is based on the way Tokyo renovated itself after being pounded to rubble in World War 2: now they have bullet trains and we don't.


America needs a Depression; we need a catastrophic cleansing so that we can renew ourselves and rethink the way we run our society. At the rate we're going otherwise, we're going to stagnate, break up and die as a nation.

 

[Pure]

The Bogey Man in Roxanne's fairy tales

The big fallacy is that military spending or war is ever "good" for the economy. It ignores the reality that government can't spend or give away a single dime that it hasn't first taken from someone else, either living or unborn (in the form of deficit financing and debt). Also, the "broken window" fallacy first described by Bastiat, as related in wiki:


Quote:
//The parable describes a shopkeeper whose window is broken by a little boy. Everyone sympathizes with the man whose window was broken, but pretty soon they start to suggest that the broken window makes work for the glazier, who will then buy bread, benefiting the baker, who will then buy shoes, benefiting the cobbler, etc. Finally, the onlookers conclude that the little boy was not guilty of vandalism; instead he was a public benefactor, creating economic benefits for everyone in town.

The fallacy of the onlookers' argument is that they considered only the positive benefits of purchasing a new window, but they ignored the hidden costs to the shopkeeper. As the shopkeeper was forced to spend his money on a new window, he obviously could not have spent it on something else. For example, the shopkeeper may have intended to replenish his inventory, but now cannot do so for he must fix his window. The lack of inventory may drive customers to a competing shopkeeper, who gains at the other's loss.

Further, the extent of the damage may have required the shopkeeper to close his business until the damage was repaired, costing him revenue while still having expenses for rent and utilities.

Thus, the child did not bring any net benefit to the town. Instead, he made the town poorer by at least the value of one window, if not more. //

Rox: Defense spending and war are vandalous child writ large.

====
This is pretty silly stuff, roxanne, including its central premise:

the reality that government can't spend or give away a single dime that it hasn't first taken from someone else, either living or unborn (in the form of deficit financing and debt).

"OK, boys and girls" you say, "let's start with the point that the government is an evil, bloodsucking thing, a bogeyman that can never accomplish anything efficiently or at a decent price. All of its capital is stolen from private pockets, and is tainted from the start."

You invite us to believe, based on your antigovernment religion, that government related bonds are evil, and private ones are good. The government bonds "take" something out of various people's pockets, whereas private fund for bonds flow from people, magically, without any loss. If I buy a TVA bond, I'm $100,000 poorer; i've been robbed. If i buy a GE bond, i'm an investor with a $100,000 asset. That the latter has far more--though remote--chance of being worthless than the former is, of course, irrelevant in your eyes.

I realize that that TVA is not defense spending per se, but I know we'd hear the same tired arguments over its bonds that would be made over the present Government's selling bonds to the Chinese banks to finance overseas military actions. RA government can't spend or give away a single dime that it hasn't first taken from someone else,

As wiki recounts: //Opponents, such as Dean Russell in The TVA Idea, in addition to condemning the project as being socialist, argued that the TVA created a "hidden loss" by preventing the creation of "factories and jobs that would have come into existence if the government had allowed the taxpayers to spend their money as they wished." Defenders note that the TVA is overwhelmingly popular in Tennessee among conservatives and liberals alike, as Barry Goldwater discovered in 1964, when he proposed selling the agency.[1]//

IOW, [i'm inferring, on good evidence, that you'll say] if government-related fund raising is evil in general, doing so for domestic puposes is simply a particular instance, and i'm sure you're mentally stocked with right wing sermons on the topic of TVA.

I've appended a sketch of the TVA history below. It seems that by 1944, it was supplying 28,000 jobs, as well as generating electricity for 100s of thousands of people. It mostly got its money from TVA bonds, but obviously, once dams are built, it got further money from selling the electricity. Somewhere in the picture--i don't think a major part-- are Congressional appropriations. [I don't have the figures handy]

You further invite us to believe that the 28,000 jobs created are tainted.
Had private utilities done the job--- which they did not seem inclined to do; hence the TVA, in the first place-- their jobs would be good and honorable ones. Your right wing buddies, once the thing was built, tried to shut it down on principle; all uilities must be private. the SC disagreed.

One is at a loss to argue with such Manichean views. It's like arguing with a xian about the virtues of pre-marital sex. "But they enjoy it; everyone's happy and no harm is done."

"No matter," you say, "it's evil, it's using the organs in a way that God did not intend."

That the TVA raising and spending money is like "breaking a window" and somehow is a fallacy based on your little tale of a couple hundred years ago, is also patently ridiculous.

You may say that army buying a helicopter for 5 million dollars and sending it abroad where it's blown up, is somewhat like a broken window. Of course if Blackwater raised money and bought the copter, and it met the same fate, you'd talk a different tune. Blackwater stockholders would be better off, and their obtaining and using the copter was a source of honorable jobs.

Further if the government paid Boeing to make the copter, that would be evil, because the bond-raised money is evil. The contract benefiting Boeing stockholders and workers is irrelevant because of its evil origin. If Blackwater bought the copter from Boeing, from its stocks and bonds, that would be a stimulus to the economy, through enriching Boeing stockholders and providing work for Boeing employees.

I'm at a loss how to argue with anyone who thinks all government related spending and investment are evil, as are all its subordinate entities like the TVA organization. It's not an empirical argument, any more than the Pope's arguments about the evil of birth control. No matter what benefit i point out, you'll claim it's tainted, and roll out your axiom that "private enterprise" could have done better. People in the TVA region like the project, as wiki notes. "I don't care if a million people like fornication," the Pope says, "It's wrong."

=====



http://www.u-s-history.com/pages/h1653.html

[start]In October 1933, construction began on Norris Dam, named after Senator Norris, who had campaigned for the TVA's creation. The TVA engaged in one of the largest hydropower construction programs ever undertaken in the United States. Sixteen dams and a steam plant were constructed by the TVA between 1933 and 1944. At its peak, a dozen hydroelectric projects and the steam plant were under construction at the same time, and design and construction employment reached a total of 28,000 workers.


Each dam along the Tennessee Valley is unique in its design, but the TVA dams can be divided into two general types. The higher dams were built on the tributaries to the Tennessee River. Those dams flooded large areas of land and created huge reservoirs. Norris was 285 feet tall, Hivassee 307 feet, and Fontana 460 feet.


The dams along the Tennessee River were lower and broader. They were designed to control navigation and flooding on the Tennessee River. Locks allowed ships to pass from one dam to the next, which opened up a 650-mile channel to Knoxville from the Ohio River. Tonnage of river market trade increased from 32 million ton-miles in 1933 to 161 million ton-miles in 1942. The TVA dams served another purpose as well. They were a popular destination for tourists. During the depression, 1,000 people a day visited Wilson, Wheeler, and Norris dams.
Channeling the power of water


In the 1930s, nearly 90 percent of urban dwellers had electricity, compared to only 10 percent of rural dwellers. Private utility companies, which supplied electric power to most of the nation's consumers, argued that it was too expensive to string electric lines to isolated rural farmsteads. In addition, they argued that most farmers were too poor to afford electricity.


Rural electrification was based on the belief that affordable electricity would improve the standard of living and the economic competitiveness of the family farm. The Roosevelt Administration believed that if private enterprise could not supply electric power to the people, then it was the duty of the government to do it.

Most of the court cases involving the TVA during the 1930s concerned the government's involvement in the public utilities industry. By 1941, the TVA had become the largest producer of electrical power in the United States. That led to strong opposition from power companies, who were angered by the cheaper energy available through TVA, and saw it as a threat to private development.

They charged that the federal government's involvement in the power business was unconstitutional. During the 1930s, numerous court challenges were brought against the TVA. In the end, the Supreme Court ruled that the TVA had the authority to generate power, to sell the electricity, and to distribute that electricity. [end excerpt]

 

[Pure]

note to sr71

good points

In economic terms, war was just fine for at least the U.S. Japanese, and German economies (and probably several others as well). It spurred productivity, innovation, and both managrial and assembly-line efficiency in the U.S. economy, and, probably more important than all of those, injected women into the workforce as would not have happened nearly as rapidly absent the war. For the Japanese and Germans, it obviated what to do with obsolete factory facilities and practices--it leveled them all. And outside funds flowed in to build new, modern industries that, within decades, put the Japanese and Germans at the forefort of efficient, high-quality manufacturing and established two of the strongest national economies now in existence. (it it wonders for the South American economies, too, by the way.)

it might be added that the histories of major German companies through the war and into the aftermath are well documented. IG Farben and Volkswagen did just fine. On Volkswagen, its early encouragement by the Nazi govt, etc., see

http://www.theautochannel.com/news/2006/05/13/006613.html

Roxanne would like to change the subject:

Who can say whether the great scientist who might have discovered cold fusion or the cure to cancer was killed at age 18, torpedoed by a U-Boat in the North Atlantic, or blown up by an 88 shell at Stalingrad?

Wow, Rox, you're talking like a Red, not a capitalist. Bread for the peasants! For once we agree.

But the point is that the fellow killied at 18 is NOT part of the calculation of economic benefit made by either private corporate heads or public officials, legislators, etc. The W. Virginian poor kid killed in Iraq is simply written off. Although his wife may require what Rox would call an evil 'government handout' of $50,000, in other respects his death is 'off the books'. It will never be mentioned at shareholders meetings, or Republican or Objectvist gatherings, or in the US Congress except as 'noble sacrifice' that "preserved the American Way."

Blackwater profits DO matter. Roxanne, Ayn Rand style, says profit is the root of all that's good [in the economic sphere]. If i may adapt an old saying: What's good for Blackwater is surely good for America.

Blackwater profits and creative accounting discussed here:

http://www.thenation.com/doc/20060828/scahill