U.S. Economic Recovery: Real, Exaggerated...or Bogus?

[OldSchoolGamer]

I figured with the stock market rise and the talk of recovery around the corner, I'd post this poll.

[Vekseid]

The stock market has little to do with it. Actual earnings (both hours worked and wages paid) were up in July. Savings increased by 30%, which may necessitate another stimulus package, but it would be on much healthier terms.

Still, that means the economy grew in July. If U6 goes down again in August, September would have to be quite bad for growth not to occur.

[OldSchoolGamer]

The stock market has little to do with it. Actual earnings (both hours worked and wages paid) were up in July. Savings increased by 30%, which may necessitate another stimulus package, but it would be on much healthier terms.

Still, that means the economy grew in July. If U6 goes down again in August, September would have to be quite bad for growth not to occur.

Oh, I don't doubt we'll see paper growth this year.

But the more important question is, are we going to see real, sustainable growth? "Growing" an economy by use of the printing-press and credit is easy.  Anyone can simulate prosperity with a fat open line of credit...

[Mathim]

Anything positive will be purely temporary if some severe changes aren't made. That's all I'm going to say.

[Oniya]

According to the Bureau of Labor Statistics, unemployment is starting to turn around.  Once people start working, then they will be able to put money back into the economy.  That said, it's still going to take a while for people to rebound from the starvation mentality that they've been in for so long.

[Mathim]

Without population control and mismanagement of resources for people growing up damaged and/or in severe poverty, the tide is still going to be crashing into the shores of recovery. There's not enough money for people to go to school with budgets continually getting slashed like this despite this so-called turnaround.

[ZK]

Population control and mismanagement? What send soldiers to do proxy wars again? x.x That is a bit of a dark sense of direction, but at any rate, it will pick up, but only if the job ratio picks up first. As Oniya said, it'll take a while.

[Revolverman]

I doubt it. None of the issues that caused the depression have been fixed. (Over extending credit, too much Fiat Money Etc. Etc.)

[ZK]

Recession, not Depression. It although was near depression... which was scary.

[TheVillain]

I doubt it. None of the issues that caused the depression have been fixed. (Over extending credit, too much Fiat Money Etc. Etc.)

I respectfully disagree, one of the issues that caused the recession has been changed. Namely, the fact that the executive branch of our government doesn't give metaphorical oral sex to large companies with rampant deregulation and corrupt deals quite so hard.

Not as hard anyway.

[Serephino]

I think the numbers are a good sign, but this is far from over.  It does seem like we learned at least a little about what went wrong and people are trying to fix it. 

[kylie]

     My understanding is the July statistics did not include contract positions. 

     It's easy for me to harp on this, because one disappeared for me...  I'm not sure how many stable contracts are being dropped versus how many short-term contracts are being gained.  I fear the trend is in that order, though.  Don't have time to research and confirm it at the moment.  Just thought I'd bring it up.

     I wasn't sure how to answer the poll.  Wavering between "kinda improved" in the middle and just plain, still in recession.  I'm also worried that the financial markets are little reformed.

[The Overlord]

Anything positive will be purely temporary if some severe changes aren't made. That's all I'm going to say.

On that note I believe more and more that we’ve hit the wall of sustainability regarding the general American lifestyle. Where TyTheDnDGuy has some merits is his prior claims that we are due to return to a normalized and realistic economy. In the new world order, not the one hawked by George Bush Sr., most of us don’t get a massive SUV to pick up the kids from soccer and baseball, and the smart ones among us will not desire one.

[OldSchoolGamer]

What you've got with these economic numbers is flat-out denial of reality.

The economy is recovering on paper...but the only reason is the massive infusion of fiat money that's been going on for the past year.  Housing bottoming out?  Green shoots?  All because of the printing-press, and federal money going to prop up banks.

To get an idea of just how farcical the paper economy is, consider the derivatives market, which recently passed one quadrillion dollars.  That's $1,000,000,000,000,000.00, or the U.S. GDP for a century.  It's fantasy.  It's like kids with a Monopoly game, paper and scissors making themselves a gazillion-dollar bill to buy Boardwalk and Park Place.

I would strongly advise against taking this "recovery" seriously.  All we're in right now is a Wile E. Coyote moment: we've run over the edge of the cliff, but just haven't looked down yet.  The looking-down will come when the fiat money runs out, and the incipient oil shortage begins to bite.

And for those who believe I'm selling America short, underestimating human ingenuity, and so forth, understand that I'm not positing that American can't solve these problems.  I'm saying we're choosing not to, and instead obsessing over the same basic lib-versus-con industrial policy conflict and other partisan bullshit raging since World War II.  Take a survey of what the talking heads and whatnot are fixated on, and ask yourself how much significance any of it will have when the basic energy resources that undergird industrial civilization deplete over the next decade. 

Nevertheless, I suspect the talking heads will be arguing over the circumstances of Obama's birth even after the rolling blackouts kick in...if anyone out there will care to listen.

[Oniya]

The sample size is still statistically insignificant (<30), but you've got a classic bell going.  Very few people are excessively optimistic or pessimistic

[Vekseid]

To get an idea of just how farcical the paper economy is, consider the derivatives market, which recently passed one quadrillion dollars.  That's $1,000,000,000,000,000.00, or the U.S. GDP for a century.  It's fantasy.  It's like kids with a Monopoly game, paper and scissors making themselves a gazillion-dollar bill to buy Boardwalk and Park Place.

Err, it passed a quadrillion dollars last year.

I could write a program to trade a single dollar between three members here until my hard drives are full, creating a trillion dollars in debt from a single dollar.

That doesn't mean any of us have a trillion dollars or even a million. Bear Stearns did not collect 13 trillion, etc. etc.

[Revolverman]

Err, it passed a quadrillion dollars last year.

I could write a program to trade a single dollar between three members here until my hard drives are full, creating a trillion dollars in debt from a single dollar.

That doesn't mean any of us have a trillion dollars or even a million. Bear Stearns did not collect 13 trillion, etc. etc.

Isn't that proof our economy is total bullshit? When most money is just an "Idea" on paper, or a hard-drive?

[Oniya]

You do realize that the 'gold standard' of the US dollar has been essentially abandoned for as long as I've been alive?  It isn't just 'our' economy that is based on the theoretical value of little bits of paper or data - any economy that's moved beyond barter is based on paper and data as well.

[Revolverman]

You do realize that the 'gold standard' of the US dollar has been essentially abandoned for as long as I've been alive?  It isn't just 'our' economy that is based on the theoretical value of little bits of paper or data - any economy that's moved beyond barter is based on paper and data as well.

I have known that, and that might be any economy today, but that isn't the case throughout history.

[Trieste]

Yes, but you also didn't have people swapping around each others' hearts in history, either.

Is there a reason that economics has to remain the same while there are tech-driven advances in every other field?

[Vekseid]

Isn't that proof our economy is total bullshit? When most money is just an "Idea" on paper, or a hard-drive?

It's proof that derivatives are bullshit, at least. Above and beyond that, that deregulating banks was also bullshit. It would be one thing if banks were at least required to reveal their plans to play these games. That way smart shareholders and depositors could remove their money before the stupid hit them in the wallet >_>.

At the end of the day, oil -> fertilizer & transportation -> food & shelter -> security. What financial 'wizards' do with their precious magic numbers does not really change that setup. If they go too far, the economy does not end, the dollar gets replaced and they are left holding the bag - or their heads, if the antics of the financial elite lead to riots.

[Revolverman]

Yes, but you also didn't have people swapping around each others' hearts in history, either.

Is there a reason that economics has to remain the same while there are tech-driven advances in every other field?

I dont see how technology factors in. Nations have been using funny money for eons, and it tends to land them in bad places.

[OldSchoolGamer]

Well, if our economy depends on ever-increasing oil production (cheap oil), then I'd say, "Houston, we have a problem."

http://www.theoildrum.com/files/ccst20090515.png

[Vekseid]

I have no idea wtf that picture is getting its numbers.

http://www.eia.doe.gov/ipm/supply.html

Not that the oil situation is pretty but it's not collapsing overnight.

[Valerian]

I dont see how technology factors in. Nations have been using funny money for eons, and it tends to land them in bad places.

"Funny money" is usually a term for counterfeit currency, which is beside the point here -- maybe that's not what you meant to say?

Regardless, every monetary system -- even one based on and actually circulating gold and other such metals -- exists only because everyone involved agrees that the medium being used has value.  Even if the medium has evolved to become electronic instead of physical, that fundamental agreement is all that's needed to keep the system going.

Of course, that agreement can waver, currencies can fail, and that's when problems arise, which leads us neatly back to the original topic.  :)  But the problems don't necessarily come from whether or not anyone's actually using/owns gold bars or silver coins.

(I'm just amazed that anything from that one, scary economics class I took in college is still in my head.  Heh.)