What coming recession?

[WriterDom]

Someone mentioned a coming recession almost like they were hoping for one. And granted 2000 wasn't a good year, and 2001 started even worse. But we've had rate cuts almost every month this year. They typically take 6 to 9 months to even be felt. And the tax rebates have only reached a little over half the taxpayers. Am I the only one who thinks things will get better soon?

 

[shadowsource]

probably

Greenspan went mad last year raising iterest rates to make up for having screwed Old Bush in 1992. But he went too far. Now it's too late for the cuts to help. Too many investors are waiting the the long rise to resume. It will not. AS such, I am waiting for a recession so that market will complete its hideous adjustment and I can reinvest my savings in a faqr less pleasant market than we've come to expect. Americans don't seem to realize that the entire world has slipped into recession - typical for folks who think the rest of the world doen't matter. But it's very possible that we have entered a long, little growth period: Just as the investors of the 70s keps looking for inflation for much of the '80s, 90s investors will be looking for unrealistic returns for the next five years. They won't get them. And SS privatization will not happen as people come to realize that the stock market gains are the result of SPECULATION, not some sort of private entitlement for American smartasses. What goes up must come down, at least substantially - until it does, the economy cannot replenish itself for a new cycle. We are in recession, and Bush can only cook the books for so long. The worst part will be watching him try to get out of it....

 

[Dixon Carter Lee]

And if we just give trickle down economics a little more time I'm sure it will work too.

 

[Thumper]

It has been put forth many times on here and elsewhere that the boom of the 90's was directly related to the tax cuts enacted by Reagan and that the slowdown we are experiencing now is a result of the Clinton years.

I seriously doubt that those holding office have much of an influence on the economy other than a psychological one.

The rampant gains of the past few years can be more likely attributed to the technological explosion and the rise of the Internet. Everybody wanted to try the new toy out.

Corporate America can only blame themselves for the downturn we are in. Somewhere along the line they moved away from long term growth as a goal and focused on stock price. AAnything that drove a stocks price up was looked at as a good thing. One of the methods of manipulating stock price was downsizing. Everytime a company announced a layoff the stock price went up. For a few years during the 90's this was offset by the dot-com feeding frenzy. Overvalued stocks and unbridled optimism spurred it on.

But the real base of our economy is the services and goods we actually produce and those who buy them. Stagnant wages and increased buying on credit led to the disappointing Christmas season last year for retailers. In short...our cards were maxed out. Declining sales led to reports of decreased profits(not losses mind you just less profit) which led to stockholder panic which led to sell-offs which drove the stock index down.This caused CEO's to layoff more workers to reverse the downward spiral which led to more consumer(worker) skittishness.

Our economy depends on the worker to make the goods and also to buy the goods. If we don't buy...you can't sell. If the corporate execs have all the money then we can't buy.

Tell me why a CEO can justify 23 million in bonuses a year when his company has had to lay off thousands?

This downturn will continue until Corporate America gets it's head out of it's ass.

 

[miles]

If the corporate execs have all the money then we can't buy.

WHAT?


Tell me why a CEO can justify 23 million in bonuses a year when his company has had to lay off thousands?

Who is that?


The rampant gains of the past few years can be more likely attributed to the technological explosion and the rise of the Internet. Everybody wanted to try the new toy out.


This downturn will continue until Corporate America gets it's head out of it's ass

Let me see.......Corp. America has created a recession. Who provided the goods and services that fueled the high tech explosion? Al Gore?

 

[Thumper]

If the corporate execs have all the money then we can't buy.

WHAT?


Tell me why a CEO can justify 23 million in bonuses a year when his company has had to lay off thousands?

Who is that?


The rampant gains of the past few years can be more likely attributed to the technological explosion and the rise of the Internet. Everybody wanted to try the new toy out.


This downturn will continue until Corporate America gets it's head out of it's ass

Let me see.......Corp. America has created a recession. Who provided the goods and services that fueled the high tech explosion? Al Gore?

Corporate America rests solely on the backs of the working class.

You must think an exec makes a decision and it magically comes to fruition.

Workers make the shit..
Truckdrivers carry the shit..
Clerks sell the shit...

Execs take the money and hide it away and give the rest of us an "Attaboy pat on the back"

Yes Corporate America created the recession by their shortsighted focus on stock price rather than long term growth.

And to answer your first question...the goods and services that they are trying to sell...

If we(the consumer) don't have any money, or confidence that our jobs are secure then we can't afford to buy the goods and services Corp America is trying to sell.

If my income had gone up the same as(as a percentage) the wealthiest 20% I would be a whole lot better consumer and in turn the execs would be making money off what I buy.

Simple economics.

 

[miles]

Your explanation makes less sense than your post

Which CEO has to justify $23M in bonuses?


If my income had gone up the same as(as a percentage) the wealthiest 20%

Well, come up with a product or idea, work your ass off, and if there is a market for it, you might become wealthy, too.

Or is it the fault of the "wealthy" you don't earn as much as they do?

 

[Thumper]

You misunderstand

I do not want to be wealthy...

But the wealthy owe it to the working class for making them wealthy....they can't do it by themselves...

And BTW a majority of the super rich never worked for it....they inherited it..so the idea that you can work your ass off and get rich is bogus...

I'll bet I can work circles around most CEO's...

Fault?

Ah I see the blame word again.....seems the right wing likes that concept...

My point is this, if a company sees a 20% growth why is it that the CEO's get massive bonuses and the workers get 2% if that?

They made it.

Let me guess....if we do enter a recession exec pay will continue to flourish while the rank and file will get jackets instead of COL raises.

The 23 mil figure is the average bonus received by CEO's at 65 different companies that had massive layoffs.

 

[miles]

Never mind. I give up.

 

[shadowsource]

Overproduction

Leaving aside questions of morality, corporate America ultimately overproduced (it's not germane that they overpaid themselves at the top). Now no one needs to buy as many goods & services. The system has gummed up. Once that happens, it's anyone's guess how that gets corrected. US consumers can't fix it, and seem less and less inclined to do so. The rest of the world is actually in worse shape, and won't help. That's why we will soon find that we are already in recession. The stock market exists as an indispensable means of debating these issues. It always takes a while to find out what anything, in fact, meant. And if you're historically correect, and no one agrees with you, you can easily lose your shirt by the time they figure out that your position was correct. I simply see very little reason why the economy should grow much at all for a while. WriterDom's early posting implies that this is somehow disloyal to the commonweal. Funny.

 

[shadowsource]

More ont the whole schmear -

From Paul Krugman, an economist:Truth and Lies

NYT Op-Ed Columns Archive

Dishonesty in the pursuit of tax cuts is no vice. That, in the end, will be the only way to defend George W. Bush's deceptions.

Let's remember the way the debate ran during the spring. Back in May, The New Republic's cover showed a picture of Mr. Bush, with the headline "He's Lying." Inside were two articles about the tax cut. One, by Jonathan Chait, showed that -- contrary to administration claims -- the tax cut would mainly go to the richest few percent of the population. The other was an excerpt from my own book "Fuzzy Math," refuting the administration's claims that it could cut taxes, increase military spending, provide prescription drug coverage and still avoid dipping into the Social Security surplus.

The New Republic cover caused much tut-tutting; the magazine's editors were accused of hyperbole, of rabble-rousing. But the headline was a simple statement of fact. Mr. Bush was lying. It was obvious from the start that the administration's numbers didn't add up.

And in case you were wondering, the administration is still lying. I could explain at length how the Office of Management and Budget has cooked the books so that it can still claim a surplus outside of Social Security over the next two years. But here's an easy way to see that the numbers are bogus: O.M.B. claims that the budget will show a surplus of $1 billion this year, and another $1 billion next year. Ask yourself how likely it is that revenues and outlays in a $2 trillion budget would line up that exactly. Then ask yourself how likely it is that they would line up that exactly two years in a row. The O.M.B. numbers are the result of desperate backing and filling -- shift some revenue from this year to next year, then move some of it back, then change accounting rules that have been in place for 65 years, then bump up the estimate of economic growth -- all so that the administration can pretend that it is keeping its promise.

The Congressional Budget Office, which does honest work but under certain constraints -- more on that in a minute -- is supposed to release its own estimate today, but the main results have already been leaked. They show a deficit outside Social Security this year, a tiny surplus next year, then a return to deficit in 2003 and 2004. And these numbers, read properly, flatly refute two of the arguments you'll hear over the next few days.

First, the administration will tell you that the return to deficits is the result of the economic slowdown. Not so: the C.B.O., like the administration, assumes that the economy will recover next year, but projects that we will be in deficit through 2004. Why? Because the tax cut grows over time, and the revenue lost because of that growing tax cut is more than the revenue gained from economic recovery. Why has the prospect of surpluses been replaced by the prospect of deficits, even after the economy recovers? To coin a phrase: It's the tax cut, stupid.

Second, the administration will try to blame big spenders in Congress for the deficits. But who are these big spenders? The only major new spending items in the C.B.O. projection are for defense and education -- both in response to administration initiatives. And it's the administration, not the Democrats, that has described the defense increase as a mere "down payment" on much larger future sums.

Those future defense increases aren't in the C.B.O. projection, because the rules under which C.B.O. operates force it to project the budget as if current policy will remain unchanged. So the C.B.O. projection leaves out the budget-busters it knows are out there, such as Donald Rumsfeld's next installment and the cost of fixing the alternative minimum tax. Put those items in, and the picture is clear: the surplus is gone, and we won't see it again as long as the tax cut goes through as scheduled.

I'll turn in future columns to the reasons why this year's deficit is not a bad thing, but those future deficits -- which will be much larger than the C.B.O. projects -- are very bad things indeed.

But the important point for now involves honor and credibility. Mr. Bush promised not to dip into the Social Security surplus; he has broken that promise. Critics told you that would happen; they have been completely vindicated. Mr. Bush told you it wouldn't; he lied.

 

[WriterDom]

Re: More ont the whole schmear -

From Paul Krugman, an economist:Truth and Lies

NYT Op-Ed Columns Archive

Dishonesty in the pursuit of tax cuts is no vice. That, in the end, will be the only way to defend George W. Bush's deceptions.

Funny how you have cut and pasted more than my one thing but you remain in the favor of the King.

could it be the message and not the messenger?


only the King can answer that

but sadly, I'm ignored. I think. I hope.

 

[Thumper]

That's the usual

Never mind. I give up.

...response to irrefutable logic.

In summation.

If those who buy things don't have any money left to make those purchases then all the CEO wizardry in the world won't get things sold.

The largest portion of our population makes less than $100,000 per year....this is the buying public errrr consumers. If we have no confidence we quit spending.

How tough is that to understand.

If the company is doing well enough to give execs 100% raises then it certainly should be doing good enough to give those who made the goods more than the usual 2-3%.

 

[Guest]

You can take Wallyhell as a fine of how to get rich and screw labor doing it.

The average Wallyhell person makes just above minimum wage here in my town. Fortunately for our manager, Wallyhell is basically the only game in town and people either drive or shop here. We have hired 234 people since March 2001. Our store has a full complement of 210 people. Are we seeing a problem here? Customers constantly complain that there are no people on the floor to help them, we're understocked, and the lines at the register are usually at least 5 people deep. Why? They hired 10 new people two weeks ago. Two of them are still with us. The reason? "I don't get paid enough to put up with this shit." Which means working nine hours one day (one off for lunch) and coming back the seven hours later to do nine again. Getting no back up from management when a customer complains. There are two sides to every story. "We're not anti-union, we're pro-associate!"

I realize this is bottom rung, unskilled labor. But there is something incredibly wrong with a job that will not give a person full time hours, 35-40 a week, unless that person has "open availability." Open availability means they schedule you whenever the hell they want. Never the same in a row, and always to the point you can't work there and have an outisde life.

The 25 richest people in america. Eight of them are Waltons. I get paid just above minimum wage and eight waltons are billionaires. They didn't get it anywhere else. No, I don't think I should get paid 20 bucks an hour to cashier, but I do think that I should be able to get a relatively set schedule and enough money that I don't have to get a second job just to pay the rent.

That's standard practice.

There is a recession and we're in it. It may or may not get better, I have faith that the 500ish people who hang out in congress can come up with something. You can tell because layoffs happen left and right. Layoffs = recession. Toshiba is laying off 20,000 globally. Kansas Western Something or other, the corporation that runs the utilities in the state of Kansas. It's CEO made 4 million dollars last year, plus bonuses and expense account. It's in financial trouble and wants to raise taxes to pay for it.

Corporations do not get the point that the people who buy things that keep them alive are the ones they are laying off and firing. If they have no jobs, they can't buy things. They can't buy things, corporations lose money and lay more people off. It's a basic economic priniciple that capitalism ignores. Why? Because labor is the greatest expense and the easiest to get rid of to show good short term gain. They look like geniuses, they keep their reports looking good, and they keep their investors happy. Long term, however, you get into things like recession because the buyers aren't there anymore.

Credit is the next reason we're hitting a recession. People get too much on credit that they can't pay for. We are an instant gratification culture. We want it, we want it NOW, not next week. A salesman says that you can drive home in that brand new {car of choice} today that you have to finance, rather than the cheaper used car in the back row that you may actually have the cash to pay for. You want a system for your car? Finance it. You want a new couch? Finance it, hey get that big screen while you're at it, can't live with it right? New clothes, new cell phone, new shoes, jewelery, no cash, finance it! Get laid off, go bankrupt and work in Wallyhell. Hey, at least you got your health.

 

[KillerMuffin]

That was mine. Damned cookies.

 

[miles]

..so the idea that you can work your ass off and get rich is bogus...

More irrefutable logic.

 

[Thumper]

Damned cookies...

Make mine Oreos.....

Or Lorna Doones with a gallon of milk.

Or rallying cry shall be...

"LET THEM EAT COOKIES!!!"

 

[Thumper]

Yep.

..so the idea that you can work your ass off and get rich is bogus...

More irrefutable logic.

I live it.

 

[miles]

So, no one has ever become rich because they had a great product or service, and worked their ass off to become successful?

I'm trying very hard to understand your thinking.

I'm guessing that you think because you work your ass off, and you aren't rich, that it can't/isn't being done? Forget about those that inherited money.

 

[miles]

Let me guess....you are a union member.

 

[KillerMuffin]

Some people don't want to get rich. Some people just want to keep their jobs. Some people would like to get paid what they're worth.

Don't be such a blind extremist. There is a middle ground.

Lee Iacocca got paid boucoup bucks in salary and bonuses. He turned Chrysler around, made it productive, no one got laid off, and during his reign as King Chrysler, he made the company viable. He made the argument to the US government that got him the bail out money to do that. Why? Cause he knew that laying off his own customer base was only going to put his corporation under. He got money from an outside source citing that if Chrysler went under well over 500,000 people would be suddenly unemployed with skills that they could not take elsewhere. We were in the middle of a recession when he did this. He paid his workers, he kept his workers, and he made Chrysler successful.

Labor deserves to get a job and to not get cut out of it the moment things get bad. It's very suspicious that in the midst of all this "we can't afford to keep ya, bud, sorry." the CEO and upper management gets a year end bonus and a salary in the millions. Why don't they start with a pay cut.

 

[Guest]

Re: Re: More ont the whole schmear -

Funny how you have cut and pasted more than my one thing but you remain in the favor of the King.
could it be the message and not the messenger?
only the King can answer that
but sadly, I'm ignored. I think. I hope.

Who exactly is the King? I've just cut and pasted for the first times in months, when I realized how much people hate it. I did it because a) these threads are kind of insider jobs for us psychopoliticos b) I'm a vicious hypocrite c) they were very germane to what we are discussing, which is a serious damned issue. I don't complain about your Miller letter, which i found interesting. But I guess I'd say that I'll never start a string with a quote! T way lies terminal opprobrium. People seem to mind less if you paste something truly relevant (or nutty, or lewd, or about cats) into a string. Cheers, MillerLusterMan

 

[shadowsource]

that was me -

just up there.

 

[dza]

ok here we go

firstly, for the excessive layoffs this country and indeed globally (well not counting Europe, its next to impossible to lay people off there), unemployment #'s are still relatively stable and on the low side at that.

secondly, most of those layoffs, in fact almost all at giant corporations are in the form of early retirement for many executives and middle management (many already made redundant by recent mergers). these people are getting paid hefty amounts of money, stocks, etc... to retire, which helps explain the massive "one-time charges" companies are taking this year in an effort to get next year's payroll #'s down.

thirdly, inflation is almost at 0, even with fuel prices flucuating wildly.

forthly, of course some exec's are paid way too much, and the minimum wage should be a living-wage, maybe 10.50 an hour, though that would come at the price of inflation, thats just the way in works.

fifthly, PLEASE ENOUGH of the Clinton caused the slowdown/recession (though we are NOT in one currently). This is stupid, moronic, right-wing, fox news-feed bullshit. when times were a booming republican leadership in the congress was lining up to take credit "he's stealing our policies, blah, blah, blah" but now that Jane yuppie can't get 15% returns on her Roth, they blame Clinton. Priceless.

Sixthly, for any one interesting in predicting economic cycles, firstly, good luck, secondly, look almost exclusively at productivity and inventory numbers. manufacturing output and new home sales. almost anything else is speculative.

and remember the stock market is not the best indicator of this countries fortunes, not even close.

 

[Thumper]

I like that guy...up there...dza is the name...

miles...nope, not a union memeber but I do support them within reason as a balance...

It is true that most of the layoffs are buyouts and the usual attrition but the publicity involving them is what drives the consumer confidence down.