Double-Dip Recession a 'Virtual Certainty'

[HAL 9000 96]

Again, more context from Big Dog to allay the low level hysterics:

That said, pumping 780 billion over the course of 2 years into a 14 trillion a year economy (that's 2%) isn't going to have the shop explode. What it did accomplish is to stop the downward trajectory that the economy was on.

[JohnSmith2007 353]

Again, more context from Big Dog to allay the low level hysterics:

I doubt if the stimulus did anything. We hit bottom despite the stimulus. It did nothing except put us further in debt. This was just an excuse to spend on all the pork barrel both sides wanted without justifying it. To hell with the government. They are the cause of the bad economy.

[lostinblue 1,989]

http://online.wsj.com/video/the-big-interview-with-david-rosenberg/156FFDD8-BB91-4C48-BF9C-91397BE10A0D.html

[SupportGeek 21]

No it isn't. People without jobs cannot spend because they don't have any. People with jobs worry about losing their jobs in today's market so it would be foolish to spend money they may need later to survive. This isn't about the people not doing their "jobs" and spending like a sailor on leave and to hell with tomorrow. The way for business to overcome the uncertainty and start hiring again is for the government to create conditions that reduce that uncertanty. If they think higher business taxes are on the way and more regulation is on the way they will not hire. This is 100% the governments fault, not the people who are trying to survive.

Seems more like its the fault of business and employers for creating an environment where jobs are scarce, and people are afraid to lose their jobs for any reason whatsoever. No loyalty to good workers, no commitment to them, and in return, no reciprocation, stop treating employees like office supplies. They bred this situation of fear and economic uncertainty, no one else.

Businesses want more people to spend? Commit to your employee, give them reassurances that they will still have a job a year from now, or 2 years unless they #### up horribly. People will spend money if they know they can eat next month....

[Pinocchio Liberal 268]

Seems more like its the fault of business and employers for creating an environment where jobs are scarce, and people are afraid to lose their jobs for any reason whatsoever. No loyalty to good workers, no commitment to them, and in return, no reciprocation, stop treating employees like office supplies. They bred this situation of fear and economic uncertainty, no one else.

Businesses want more people to spend? Commit to your employee, give them reassurances that they will still have a job a year from now, or 2 years unless they #### up horribly. People will spend money if they know they can eat next month....

So if you had 10 employees and you could only pay 5 you would be loyal and keep them all? no matter what? (time passes) Now 10 people are out of work and your bankrupt!

Edited August 17, 2010 by Col. Lingus

[Mr. Big Dog 10,747]

You get over yourself. If stimulus worked we should be booming.

No, if it had failed, we'd still be in a recession.

The fact we are not proves that it does not work.

Again, the fact that we're out of the recession proves that it did work.

Tax breaks is the best way to stimulate the economy.

Actually, tax breaks is about as weak a stimulus you can provide. You should read up on that.

Let the people and business keep the money that is theirs and the government should just butt out.

Businesses have raked in huge profits already in 2010. Are they creating jobs with all this wealth? No. There goes your stupid theory...

They are the cause of the recession and the reason we still have one.

We're not in a recession anymore. We've had several quarters of expansion. Read up on that, too.

[Mr. Big Dog 10,747]

I doubt if the stimulus did anything. We hit bottom despite the stimulus. It did nothing except put us further in debt. This was just an excuse to spend on all the pork barrel both sides wanted without justifying it. To hell with the government. They are the cause of the bad economy.

Facts be damned, eh? Take a comparative look at Ireland (austerity) and Germany (stimulus) and tell me who is looking better both from an economic recovery and fiscal perspective. And if you don't want to look, Germany is doing great while Ireland is still struggling. Deficits in Germany will go down due to their growing economy and Ireland's deficits continue to expand despite their austerity measures. Wanna take a guess why? Yes, because the Irish government felt that combating debt was more important that jump-starting the economy. And now they're left trailing the rest of Europe (except for Greece) in their economic recovery.

[JohnSmith2007 353]

No, if it had failed, we'd still be in a recession.

Again, the fact that we're out of the recession proves that it did work.

Actually, tax breaks is about as weak a stimulus you can provide. You should read up on that.

Businesses have raked in huge profits already in 2010. Are they creating jobs with all this wealth? No. There goes your stupid theory...

We're not in a recession anymore. We've had several quarters of expansion. Read up on that, too.

What planet are you on? We are in dire straights right now. The economy isn't any better than it was 18 months ago. In many ways it is much worse. The stimulus did absolutly nothing to help. The expansion is just fudging the numbers to make sheep like yourself think the stimulus worked. Unemployment is still around 10%, the deficit is skyrocketing, business is not expanding and people are losing all hope. My god man, look around!

[Mr. Big Dog 10,747]

What planet are you on? We are in dire straights right now. The economy isn't any better than it was 18 months ago. In many ways it is much worse. The stimulus did absolutly nothing to help. The expansion is just fudging the numbers to make sheep like yourself think the stimulus worked. Unemployment is still around 10%, the deficit is skyrocketing, business is not expanding and people are losing all hope. My god man, look around!

I live on planet earth. Question is where do you reside? I see new faces in the building. Why? Well, because we're hiring. Doors were all but closed for two fcuking years and now we're open again. We're re-starting major development projects that have been on ice for the past two years. Things are moving where I work. And things are moving all the same at our competitors.

You can repeat that bullshite of the stimulus having done nothing to help the economy all you want but it's still bullshite. Look at corporate profits in 2009 and 2010. You'll see a trend that should surprise you. Are businesses hiring as rapidly as one would wish? No, they aren't. But that's not for a lack of money.

Despite profits, US corporations won't hire American workers

Big American companies may never rehire large numbers of workers. And they won’t even begin to think about hiring until they know American consumers will buy their products.

By Robert Reich, Guest blogger / July 27, 2010

Second-quarter earnings reports are coming in, and they’re making Wall Street smile. Corporate profits are up. And big American companies are sitting on a gigantic pile of money. The 500 largest non-financial firms held almost a trillion dollars in the second quarter, and that money pile is growing larger this quarter. Profits that plummeted in the recession have bounced back. Big businesses have recovered almost 90 percent of what they lost.

So with all this money and profit, they’ll start hiring again, right? Wrong – for three reasons.

First, lots of their profits are coming from their overseas operations. So that’s where they’re investing and expanding production.

GM now sells more cars in China than it does in the US, but makes most of them there. The company now employs 32,000 hourly workers in China. But only 52,000 GM hourly workers remain in the United States – down from 468,000 in 1970.

GM isn’t just hiring low-tech assembly workers in China. Last week the firm broke ground there on a $250 million advanced technology center to develop batteries and other alternative energy sources.

You and I and other American taxpayers still own over 60 percent of GM. We bought GM to save GM jobs, remember?

GM officials say no American taxpayer money is being used to expand in China. But money is fungible. Because of our generosity, GM can now use the dollars it doesn’t have to spend in the United States meeting its American payrolls and repaying its creditors, for new investments in China.

Second, big U.S. businesses are investing their cash in labor-saving technologies. This boosts their productivity, but not their payrolls.

Last Friday, for example, Ford reported a $2.6 billion second-quarter profit. The firm is already more than two-thirds the way to equaling its record 1999 profits. But due to labor-saving technologies, Ford now has half as many employees as it did a decade ago.

Wall Street analysts are happy with Ford’s “commitment to keeping capacity in check,” according to the Wall Street Journal. Ford shares rose 5.2 percent Friday. “Keeping capacity in check” is the Street’s way of saying “no new hiring.” In fact, the Street is advising investors to sell the stocks of companies that talk openly of expanding capacity.

Finally, corporations are using their pile of money to pay dividends to their shareholders and buy back their own stock – thereby pushing up share prices.

Last Friday, GE announced it would raise its dividend by 20 percent and reinstate its share-buyback plan. It’s GE’s first dividend increase since the company cut its dividend in early 2009. As a result, GE shares are up more than 5% in the past few days.

Bottom line: Higher corporate profits no longer lead to higher employment. We’re witnessing a great decoupling of company profits from jobs.

The next supply-side economist who tells you companies need more incentive (i.e. lower taxes) before they’ll hire is living on another planet.

The reality is this: Big American companies may never rehire large numbers of workers. And they won’t even begin to think about hiring until they know American consumers will buy their products. The problem is, American consumers won’t start buying against until they know they have reliable paychecks.

Edited August 17, 2010 by Mr. Big Dog

[JohnSmith2007 353]

I live on planet earth. Question is where do you reside? I see new faces in the building. Why? Well, because we're hiring. Doors were all but closed for two fcuking years and now we're open again. We're re-starting major development projects that have been on ice for the past two years. Things are moving where I work. And things are moving all the same at our competitors.

You can repeat that bullshite of the stimulus having done nothing to help the economy all you want but it's still bullshite. Look at corporate profits in 2009 and 2010. You'll see a trend that should surprise you. Are businesses hiring as rapidly as one would wish? No, they aren't. But that's not for a lack of money.

You quote Reich? Good Lord. You can keep your head in the sand all you want, you can quote liberal hacks like Reich all you want. The facts are still the same. We have 10% unemployment, soaring deficits and hyper inflation is coming soon. The economy is about to crash and you can sit there and tell me all is well. Sorry, that isn't flying. Open your eyes. Next year when the Bush tax cuts expire watch for another crash in the market followed by a huge rise in unemployment. This time we will not be able to borrow trillions from the Chinese to fund another worthless stimulus and the Fed will have to monotize our debt. That will cause hyper inflation and sink the shadow recovery you think we are having. Read your own history. Look at what happened in Germany in the 30's. We are heading down that same road.

[Mr. Big Dog 10,747]

You quote Reich?

Well, I felt the Christian Science Monitor as a source would please you.

[Mr. Big Dog 10,747]

We have 10% unemployment, soaring deficits and hyper inflation is coming soon.

Hyper inflation? Inflation is virtually non-existent at this point. We were debating the prospect of deflation and what harmful effect that would have not too long ago.

Look at what happened in Germany in the 30's. We are heading down that same road.

Who's gonna play Hitler? You?

Edited August 17, 2010 by Mr. Big Dog

[JohnSmith2007 353]

Well, I felt the Christian Science Monitor as a source would please you.

Why would I care if you quote the CSM? It is Reich that I am laughing at.

Who's gonna play Hitler? You?

It seems you are playing the gullible fool like your countrymen did back then.

[Mr. Big Dog 10,747]

Why would I care if you quote the CSM? It is Reich that I am laughing at.

Yes, because you're a much more competent economist.

[Mr. Big Dog 10,747]

It seems you are playing the gullible fool like your countrymen did back then.

Getting angry, bro? I do admit that the RWN are doing all they can to create an environment as hostile to Muslims as the Nazis did back then to Jews. But aside from that, I see no 1930's Germany rising around here. Maybe I lack your exceptional visoniary capacity.