The Great Depression Part II Options

[fameONE]

Is another Great Depression right around the corner for the American economy? Considering two investment bank powerhouses (Morgan Stanley and Goldman Sachs)have become bank holding companies in order for a financial backing from the Federal Reserve (this is a really big deal), should we be concerned? Also, take into consideration Bush's bailouts and his $700 billion dollar plan to 'save the banks,' do you think we're in deep shit?

Debate.

[mipadi]

I don't know, I'm not an economist. What do you think?

[superstitious]

I think that you're in deep shit if you are lower middle class and below but will more than likely be "ok" if you are upper middle class and above.

Consider the recent gas crisis. This certainly will not be the last time something like this occurs and the possibility of most cars going the hybrid route becomes more plausible as these things occur. The problem is, Joe Consumer can't afford a hybrid but guess who can? Yep, upper middle class and above. So what happens to those who can't afford to get to work? Well, I won't pretend to be a future reader but my guess would be that either employers will opt for telecommuters or people will lose their jobs. Not a good outlook for the community as a whole, in my opinion.

I hate to seem "hopeless", but these problems have been long since coming and as such, a solution cannot happen over night. I don't know if my generation (early 30's bracket) is in "deep shit" but I sincerely fear for my son's generation.

[fameONE]

I don't know, I'm not an economist. What do you think?

I'm not an economist either, but the simple fact that I have stock in JPMorgan-Chase has me worried. This bailout plan could do one of two things:

1. For the greater part of fiscal year 2009, the stock market will be at an all time low in decades. Subsidiary companies and affiliates of major financial institutions will go under, people will get laid off and 401ks will be ripped out of the pockets of hard-working employees. With a proposed budget cut for the war, it will give the government a bit more money to play with. The American consumer will be back-handed with inflation and the entire country will continue to see a progressive rise in taxes (regardless of who the president is). Once the market picks back up and these companies get back to being the money-hungry superpowers they once were, balance will be restored to Wall Street. With this restored balance, our economy could potentially improve as taxes lower. "It will get worse before it gets better."

2. The worst case scenario would be the bailout plan failing immensely. George W. Bush could be, potentially, signing a check that his ass cannot cash, just in time for him to step out of office. Despite all finger pointing, the American economy will suffer. The Asian market is more likely to receive global financial assistance because of the backseat that they've taken (primarily Japan) in the current international affairs. Countries like Sweden, Norway, Denmark, United Kingdom, Australia, Germany, Japan, etc, could view 'helping out the US' as a move that would be detrimental to their own economies, leaving the US to deal with our history of reckless spending and borrowing. The Federal Reserve would be forced to step in, but how much money would 'the royal families of the US' be willing to contribute to the cause? Would they make sure that big business remains big business, while shitting on the little guy, or would the entire economy collapse entirely?

[DoubleJ]

I mean to be honest, I think that the economy has never recovered after 9-11. The recent events with these banks, has just shown us that the big wigs were sweeping shit under the rug the whole time. Working at Goldman for 5 years, I can tell you, that I saw this coming, and it was more evident this week than any. My friend who still works there, told me about how they stopped overtime for contingents, and were giving the whole NY campus pizza among other things.

While some of you may be like wtf pizza, what does that have to do with anything....whenever there is pizza at gs, that usually means something big is about to happen. Brandon is right when he says that other countries will not want to touch us, now that our markets are basically nill. Those optimists on the markets, will continue to try to feed us bullshit, but the truth is, that if you don't educate yourself on what is going on, then you will get caught up in the upcoming storm of this economy.

[Comptine]

I would be horrified but not necessarily surprised if a Depression hit. Economies run in cycles and it seems that it's about time for the market to hit a low. DoubleJ made a point. Our economy never recovered from 9/11. Our countries checkbook was balanced and we had surplus when Clinton left office. Then, 9/11 happened and wiped out a huge financial market not only in the US but in the world. Then, to supplement that, Bush decides he needs to go to war and drives (no, plummets) us into trillion dollar debt. We're borrowing money on top of money. Meanwhile, Bush is neglecting basic domestic issues that drive down the market.

I'm starting to save up and spend less in anticipation that the next few years might not be so cushy. And I'm only in my second year of undergrad. I can't imagine what my parents or other adults are thinking.

[mipadi]

The $700 billion bailout plan is a joke. It's just a way to protect the wealthiest individuals and corporations. To quote Dennis Kucinich:

The same corporate interests that profited from the closing of U.S. factories, the movement of millions of jobs out of America, the off-shoring of profits, the out-sourcing of workers, the crushing of pension funds, the knocking down of wages, the cancellation of health care benefits, the sub-prime lending are now rushing to Washington to get money to protect themselves.

The double standard is stunning: their profits are their profits, but their losses are our losses.

Bernie Sanders has proposed a 5-year, 10% surtax on couples earning over $1 million a year, or individuals earning over $500,000. His logic is that, under Bush, the wealthy have benefited greatly, so it's their turn to step up and help us out of the mess they helped to create.

I'm not sure I completely agree, but it doesn't seem like a bad idea, either. I definitely don't agree with the bailout. On the surface, it seems that in the short-term, it's beneficial to everyone to "save" our financial institutions -- if the economy goes south, we all lose. But Ron Paul has pointed out why saving the banks isn't a viable long-term solution:

Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring even greater instability in the financial system in the long term.

The solution to the problem is to end government meddling in the market. Government intervention leads to distortions in the market, and government reacts to each distortion by enacting new laws and regulations, which create their own distortions, and so on ad infinitum.

You should read all the above links. Kucinich, Sanders, and Paul are some of the few politicians who don't have their heads up their asses (or up the asses of corporate America).

[fameONE]

I forgot I began this thread to begin with. My bad.

This morning, I found myself doin more research on the heralded Dr. Ron Paul and found this Q&A. I can't be the only person that notices how much sense this man makes.

[sixfive]

I think that you're in deep shit if you are lower middle class and below but will more than likely be "ok" if you are upper middle class and above.

Consider the recent gas crisis. This certainly will not be the last time something like this occurs and the possibility of most cars going the hybrid route becomes more plausible as these things occur. The problem is, Joe Consumer can't afford a hybrid but guess who can? Yep, upper middle class and above. So what happens to those who can't afford to get to work? Well, I won't pretend to be a future reader but my guess would be that either employers will opt for telecommuters or people will lose their jobs. Not a good outlook for the community as a whole, in my opinion.

I hate to seem "hopeless", but these problems have been long since coming and as such, a solution cannot happen over night. I don't know if my generation (early 30's bracket) is in "deep shit" but I sincerely fear for my son's generation.

Hybrids are not an economic purchase, poor or rich. They're a feel-good purchase. Too bad they're not only less economic than say, a Honda Civic (normal, not hybrid), they're more environmentally detrimental. Check the Hybrid Car thread I made a while back. Basically: They don't last as long, battery is stupidly expensive to replace, battery creates lots of acid rain in canada, destroying forests where and near by it is mined, too much shipping/processing, and the extra mileage it gives you doesn't make up for all the extra costs.

I'm not an economist either, but the simple fact that I have stock in JPMorgan-Chase has me worried. This bailout plan could do one of two things:

1. For the greater part of fiscal year 2009, the stock market will be at an all time low in decades. Subsidiary companies and affiliates of major financial institutions will go under, people will get laid off and 401ks will be ripped out of the pockets of hard-working employees. With a proposed budget cut for the war, it will give the government a bit more money to play with. The American consumer will be back-handed with inflation and the entire country will continue to see a progressive rise in taxes (regardless of who the president is). Once the market picks back up and these companies get back to being the money-hungry superpowers they once were, balance will be restored to Wall Street. With this restored balance, our economy could potentially improve as taxes lower. "It will get worse before it gets better."

2. The worst case scenario would be the bailout plan failing immensely. George W. Bush could be, potentially, signing a check that his ass cannot cash, just in time for him to step out of office. Despite all finger pointing, the American economy will suffer. The Asian market is more likely to receive global financial assistance because of the backseat that they've taken (primarily Japan) in the current international affairs. Countries like Sweden, Norway, Denmark, United Kingdom, Australia, Germany, Japan, etc, could view 'helping out the US' as a move that would be detrimental to their own economies, leaving the US to deal with our history of reckless spending and borrowing. The Federal Reserve would be forced to step in, but how much money would 'the royal families of the US' be willing to contribute to the cause? Would they make sure that big business remains big business, while shitting on the little guy, or would the entire economy collapse entirely?

I don't necessarily think a bail-out is a bad idea. The way they're trying to do it is f**king retarded though. Not only are they allocating it to poorly, the people who get the money don't use it the way it should be used. For instance, there was an 80 billion dollar bail out of AIG insurance, and when they got that money the executives spent something like 450,000 dollars in one night partying. What the f**k? Promotion of large corporations isn't a bad thing like it's commonly been labeled as. When they're doing well, they're providing more jobs. When the private sector does well, things get better. The government gets more money from taxes, letting them do whatever their dumbasses like to do.

Also, I don't think things will be like the Great Depression, at least not nearly as suddenly or severely. We can attribute this to globalization. So soso many countries have investments/interests in America. I know a lot of people are trying to pull out, but you can't just pull out of that kind of thing.

I forgot I began this thread to begin with. My bad.

This morning, I found myself doin more research on the heralded Dr. Ron Paul and found this Q&A. I can't be the only person that notices how much sense this man makes.

Ron Paul is quite popular, especially in this area. Our district neighbors his. When I make deliveries to Galveston, I pass by his office.