Economy-is it really bad, or is it just excessive whining?

Technocrat

Economy-is it really bad, or is it just excessive whining?

zogger

Mon Jul 28 17:54:00 -0700 2008

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Is the economy really that bad, or are people just so used to fast and increasing prosperity that we have lost sight of past reality and are just whining about it more? By age and study, baby boomers think it is really bad, younger folks and the already retired think it is OK-normal and getting better.

The malaise stems in considerable part from a feeling that individuals have become more vulnerable to forces beyond their control. The American can-do spirit is not dead, of course. Laid-off workers are finding new jobs, motorists are driving less and cooks are trawling the internet for recipes to jazz up the leftovers in the fridge. ed.z.: I'll do my own analysis of the generational differences. This is very general and YMMV. Older than the boomers went though ww2, which sort of sucked thinking you might not make it and so on, and many remember the great depression, even if they were just kids. they've seen and lived through pretty tough times. Plus, they have their homes long ago paid off and etc. and really were the first generation on the planet earth to have superb pensions and so on in vast numbers.

Younger folks are full of youthful enthusiasm and haven't come to grips with aging yet and failing health and decades of never ending bills and raising kids and so forth, right now it is still lotsa drinking and concerts and so on, party down dude. Ya, they work, but really..it is still party time and you'll live forever time.

Boomers got all the responsibility, doing all the heavy work, they are really looking hard at the economy and watching jobs evaporate, savings evaporate, 401ks that might be fancy edged toilet paper sometime, never ending medium sized wars and wondering when the political dingbats will try to restart the draft, making their kids eligible, bills, bills, more bills, and so on. I mean, this ain't rocket surgery.

For the record, I don't "feel" like it is gloomy, I double dang darn know it is gloomy because I can run simple sums and any way you slice it, none of our fearless leaders numbers add up to anything but gloom. I run on that principle, that it has already half collapsed and if it gets even marginally better that is welcome news, but I am not planning on it at all. All those fast growing foreign nations that have been swapping real stuff to the US by the container ship load or tanker ship load for pictures of old fearless leaders on pieces of paper that are being created by the truckload daily with nothing backing them but more pictures of old fearless leaders on pieces of paper are going to sometime just decide that is quite looney tunes insane and just stop doing that. They'll just cut their losses and walk away from it, and the planet earth got a lot more billions of people for a market for them, people who have real stuff to swap for real stuff. I mean, they sometimes just come out and blatantly say that, remember last spring some big chinese economy guy said china "had enough dollars now"? How blatant does it have to get this is tightrope walking time? As of the latest two banks to be seized/bailed out whatever you want to call it this week, FDIC deposit account insurance is "backed" by .35% assets. Deposits that are insured/cash for payouts. That's a point in there ahead of those numerals. And that's it. Feelin' lucky?

Economy-is it really bad, or is it just excessive whining?

asdfg

Mon Jul 28 18:58:16 -0700 2008
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I've posted before with thoughts similar to this title (although I wouldn't call it whining, more along the lines of media hype). That doesn't mean I think the economy is great, or that it won't get worse, but at this instant it's just sort of schlepping along.

For some perspective, I believe 5 banks have failed so far. Here's what wiki says about the S&L crisis of the 80s/90s:

"The U.S. government agency Federal Savings and Loan Insurance Corporation (FSLIC), which at the time insured S&L accounts in the same way the Federal Deposit Insurance Corporation insures commercial bank accounts, then had to repay all the depositors whose money was lost. From 1986 to 1989, FSLIC closed or otherwise resolved 296 institutions with total assets of $125 billion. An even more traumatic period followed, with the creation of the Resolution Trust Corporation in 1989 and that agency’s resolution by mid-1995 of an additional 747 thrifts. ^[8]

There also were state-chartered S&Ls that failed. Some state insurance funds failed, requiring state taxpayer bailouts."

(John "Keating Five" McCain, come on down!)

The unemployment rate in the US in 1982 & 1983 was almost 10%! We've got 5%. I wonder how people will react if we even get close to 10.

Again, things could get worse before they get better, and they probably will given the size of the budget deficit & the fact economies always slow down after a war ends. I do not envy the next president of the US, whomever wins. They may be the Hoover to Bush's Coolidge.

I think the baby boomers are gloomy because:

1) they're spoiled (how's that for a sweeping generalization :)

2) they don't have the life long job security of many of their parents generation

3) growing old sucks! I mean this in all seriousness.

setting heat shields on.

Economy-is it really bad, or is it just excessive whining?

President4242

Mon Jul 28 19:27:00 -0700 2008
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I'm gloomy because the numbers don't match reality. While the government claims 4% or less inflation, and 5% unemployment, I'm seeing nearly 14% stagflation- some 9% of the unemployed have been reclassified as "disabled" to hide them from the statistics, and the price of fuel and food is through the roof but isn't included in the official CPI.

I'm glad you feel secure- because I just had a desparate poor person rob some pizza at gunpoint less than 10 blocks from my home and then barricade himself in a house for 7 hours in a standoff with the police.

And that is no longer unusual in this fire everybody at a whim economy.

Economy-is it really bad, or is it just excessive whining?

mrjk

Mon Jul 28 19:29:41 -0700 2008
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In the upper midwest the booming Reagan 80's were definitely worse than the times now. That is when the big time industrial jobs were lost and with the military build up of Reagan, the states around the Great Lakes all had negative tax burdens around $750 a head. i.e. more fed taxes taken than spent in the state. That money was funding booms on the coasts. It is still true but somewhat less today.

Now for all of the hand wringing, I see good high prices for ag commodities, new markets popping up with ethanol and biodiesel, wind projects going up all over the place. Things are kind of jumping. We are all waiting for the feds to screw it up, and it seems like there already is some kind of concerted effort to badmouth ethanol and biodiesel - since it can't replace all gas and since some bad ways to get it aren't too good - lets throw it out with the bathwater.

Anywhere there were tax cutting governments put in the cities and counties, I am seeing big problems now because these guys usually gutted all the contingency funds, so I think we could see some government bankruptcies by cities or county governments. It is funny that the places screaming most around here all elected people saying government can't do anything right, cut taxes a lot and budgets a little. The places that kept the "high" taxes are just rolling along now.

Economy-is it really bad, or is it just excessive whining?

Charles E Hill

Mon Jul 28 21:30:00 -0700 2008
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Those 5 that have failed had more assets than the 296 back in the late-80s. We're currently at $400 billion and climbing.

We don't have 5% unemployment if you use the same method of calculating they did back in 1982 & 1983. It is closer to 12%, though that is arguable. What is unarguable is that the method of calculating that number changed under Clinton's watch.

The government bailouts are so big, it is unreal. Any by "government" that means taxpayers.

And, of course, that is only the beginning.

What is going to happen? Who knows. All I can say is, listen to the Boy Scouts and Be Prepared.

This is an interesting take.

Economy-is it really bad, or is it just excessive whining?

zuzulo

Mon Jul 28 19:25:27 -0700 2008
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One of my 'friends' clients fought in WW2 and went through the depression. Old school. Turns out that he had several accounts at Indymac over the $100k limit, and took a hit after Indymac went belly up recently. Fortunately not a large part of his portfolio, however, as he learned to distribute his assets based on the painful lessons he learned the first time around.

He was joking about this with my friend and said "Third times the charm, i guess."

The upshot is that the US banking system is in serious trouble, mostly because they *knew* the US would have to bail them out for taking excessive risks if they got large enough fast enough. Add to that the way Bush and Co have singlehandedly destroyed 50 years of fiscal responsibility from the federal reserve and the gained respect of the international banking community by basically gutting the dollar, and you have a recession. Maybe even a depression.

But i think it is a little different creature this time around. Part of it is that the traditional service/commodity industry is changing, as is the realistic implications of intellectual property, and part of it is that the creation of value is heading back towards a distributed system again instead of the centralized systems that have held sway over the past 60 years. Interesting times ahead, folks.

Economy-is it really bad, or is it just excessive whining?

disco

Mon Jul 28 19:35:08 -0700 2008
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We're currently in a slow-down and may or may not be at bottom, but 1-2 years from now everybody will forget it ever happened. Does anybody even care about the recession of 2001? A flea on the elbow.

The oil supply/demand ratio is only going to keep going down and is the big shorter-term issue, plus there's that whole climate change nuisance. Those, plus health care and social security are the bigger long term challenges.

I agree that there is a lot of whining going on, and for the older generation it's a lot to do with resistance to change. "When I was your age ... blah blah blah ... and that's why the world is currently crap".

We're in a temporary rut. We have have some big challenges ahead, but on the whole the world's population has never had it so good.

Economy-is it really bad, or is it just excessive whining?

Nathan Smith

Tue Jul 29 08:23:24 -0700 2008
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I think Phil Graham (ironically) called the election for Obama when he said the US is a nation of whiners in a mental recession. In other words, "it's the economy, stupid!"

I have to say that I am quite disconcerted by the new budget deficit numbers. Half a trillion in the red after you count the wars? The Democrats are often maligned as "tax and spend Democrats," but in this environment that seems a far sight better than the "borrow and spend Republicans" who are running the show.

Economy-is it really bad, or is it just excessive whining?

Bhima

Tue Jul 29 11:28:58 -0700 2008
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I was listening to a Marketplace podcast this morning... they were saying that half a trillion number leaves out a substantial portion of the costs of the various occupations.

Economy-is it really bad, or is it just excessive whining?

asdfg

Tue Jul 29 11:44:45 -0700 2008
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yes. $80 bil for Iraq alone. Isn't that ridiculous!?!? If the US doesn't spend another penny there, it won't help reduce the "official" deficit at all...

Economy-is it really bad, or is it just excessive whining?

duhavid

Thu Jul 31 12:18:14 -0700 2008
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I remember the Carter vs Reagan election.

"Are you better off than you were 4 years ago"?

Except that it is the Democrats who could be using this catchy little phrase now.

As far as sweeping generalizations go...

colin g.

Tue Jul 29 09:07:04 -0700 2008
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I was with you until you characterized the post Baby-boomers by adding

"and decades of never ending bills and raising kids and so forth, right now it is still lotsa drinking and concerts and so on, party down dude. Ya, they work, but really..it is still party time and you'll live forever time"

Gen Xers are in their middle thirties with kids and mortgages and just as many responsibilites as most Baby-boomers. Sure Gen Xers still have fun, but claiming they spend most of their time partying is disingenuous and shows your discriminatory attitude. Even Gen Y is coming out of the "partying" period of their life.

Sure younger people have more youthful enthusiasm and flexible mental outlook. But they are also the ones at risk of a draft reinstatement as you mentioned (whereas baby boomers are not). Baby-boomer's only real unique drama is many of them don't have pensions, are getting closer to retirement, invested 401ks not terribly wisely, and have less time to make up their errors.

As I see it, the real problem is Baby-boomers are the only remaining generation that experienced no significant hardships in their young adult period, and now that things aren't going so well, they can't see light at the end of the tunnel.

As far as sweeping generalizations go...

mrjk

Tue Jul 29 14:10:11 -0700 2008
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"As I see it, the real problem is Baby-boomers are the only remaining generation that experienced no significant hardships in their young adult period"

Huh? Vietnam killed 10 times as many Americans than any war since and that was the formative event in the young adult lives of Baby Boomers. Not to mention Race riots in most North American cities.

The baby boom generation is in fact the LAST generation that faced real life and death in terms of the draft and 50,000 young men and women killed.

I still remember the National Guard in the streets of my home and the curfews and hate (and courageous people) of the race riots also.

Then it doesn't make sense...

colin g.

Tue Jul 29 14:33:42 -0700 2008
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I did forget about Vietnam. As you can probably assume I am a Gen Xer, so to me it was just a tragic ideological and military error from history class. And we seem destined to repeat it. But from speaking with my parents who were middle class young adult Texas residents at the time, they don't seem that affected by the race riots. I'm sure it depends on where you grew up.

Yet with all you point out, why on Earth would Baby-boomers feel like times are bad now, when they have seen so much worse, while post Baby-boomers are more optimistic and this is their first taste of discordant times. Saying they are still carefree and drinking and partying is a bull crap non-reasoned response.