The Government Is Doing Everything Wrong to End the Recession

Last week, the National Bureau of Economic Research announced that the recession that began in December 2007 ended as of June 2009 and we have been in an expansion since.

The vast majority of the American public who are struggling to pay their monthly bills would no doubt disagree with them. Millions of unemployed workers are still unable to find work. Companies are simply not hiring like they should after a recession has ended. What kind or a recovery is this?

The answer is that the recession has never really ended because it was not allowed to do its work. It must correct the misallocations from the previous boom. Standing in its way are fiscal policy, monetary policy, and onerous regulatory burdens.

All today’s big government apologists look at when discussing the economy is whether GDP is positive or negative. There is no distinction made between public and private sector growth. It is not understood that growth from the private sector is self perpetuating, whereas growth from government is not only temporary but is a perpetual drag on future growth because the money borrowed to finance it must be paid back, with interest.

The difference seems so elementary that it would hardly be worth mentioning if it weren’t for the fact that the policy makers in Washington actually believe this Keynesian nonsense. They believe spending is spending and it matters not where it comes from. Spending and business activity based on more and more debt is hardly reason to celebrate. We need to step back and realize that it is the private sector that finances government and not the other way around. Government is the parasite, only able to live on the production of the host, which is us. Growing the parasite does not bring prosperity.

Continued Here: http://freemarketeconomicsinastory.blogspot.com/

 

It's just a beginning.

 

Exactly, they didn't let the free markets take care of it, they intervened with programs, stimulus, tarp, 0% interest rates and trillions of dollars to help stave off any long term recession. The problem is they never let the pieces of the puzzle fall as they were supposed to. Anytime there is a bit of a slowdown in this economy it is looked down upon as something terrible, that no matter what GDP needs to grow at 3-4% a year. Too much intervention as we have now is going to be more problematic moving forward for our economy as a whole. The reason for the credit crisis were in now was because of the step taken by greenspan in 2000-2002, to reduce interest rates and flood the markets with easy cheap credit, that was the answer to the last recession. Fast forward to 2010 and bubble ben bernanke is doing the same exact damn thing. He is pushing trillions in spending to create an economy thats not ready for another bubble. The only way this economy has grown over the last 2 decades is through bubbles and expansion of credit. No one is taking into consideration that this is not to grow an economy.

They can say all they want about the recession being over but its clearly not over, forcing trillions in stimulus and propping up the GDP is not considered growth, too many fucking fools out there consider the last 18 months of gdp growth to be real, its not real, it was propped up through the stimulus programs. Find me something real, something that is going to bring true organic growth to this economy. All they are doing is printing money to create what they think is a real economy, its not and wont be for many decades to come.

 

O's QUIETEST JOBS-KILLING MACHINE

By JAMES INHOFE

Last Updated: 12:23 AM, October 5, 2010

Posted: 10:03 PM, October 4, 2010

One insidious force keeping unemployment high is regulatory uncertainty: Companies that could hire (or re-hire), don't -- because they're worried about what new restrictions will be coming down from Washington.

Congress bears much of the blame -- especially for the new "financial reform" law, which leaves so many details to be filled in later. But a major contributor to businesses' worries is the Obama Environmental Protection Agency, which is issuing a daily barrage of rules and regulations threatening jobs in American industry.

So concludes "EPA's Anti-Industrial Policy: Threatening Jobs and America's Manufacturing Base" -- a new report from the minority staff of the Senate Committee on Environment and Public Works (on which I serve as ranking member).

The report focuses on four of the EPA's most egregiously anti-business proposals and explains how they threaten American jobs and global competitiveness.

One example: the EPA's proposed rules for industrial boilers -- which the consulting firm IHS-Global Insight found could cost 800,000 jobs.

The United Steel Workers union says the proposal "will be sufficient to imperil the operating status of many industrial plants . . . Tens of thousands of these jobs will be imperiled . . . many more tens of thousands of jobs in the supply chains and in the communities where these plants are located also will be at risk."

Communities should also be bracing for new regulatory burdens from EPA's pending ozone decision. The Obama EPA is now expected to demand, in some areas, ozone levels lower than what occur naturally in the ambient air.

The economic impacts are sure to be disastrous. Nearly 600 counties across the nation could be in "non-attainment," which entails, among other things, draconian new regulations to lower emissions; loss of industry and economic development, including plant closures, and increased fuel and energy costs.

Several New York counties -- Monroe, Seneca, Fulton and Essex, among others -- are at risk of "non-attainment" status, meaning more job losses.

Unions for Jobs and the Environment, an organization of 12 national and international labor unions (including the United Mine Workers, the Teamsters and the Sheet Metal Workers) warns that the ozone rules "would lead to significant job losses across the country during a period of high unemployment."

The Obama administration clearly knows these numbers won't sell with the American public -- it has delayed announcement of the ozone rules from August to the end of this month, too late (it hopes) to register before Election Day.

The EPA adds insult to injury with its endangerment finding for greenhouse gases under the Clean Air Act. This finding (issued after the Senate refused to pass a cap-and-trade bill for the fourth time in seven years) will lead to onerous new regulations potentially covering over 6 million sources in the economy.

According to the US Chamber of Commerce, the finding may "force" the EPA to regulate 260,000 office buildings, 150,000 warehouses, 92,000 health-care facilities, 71,000 hotels and motels, 51,000 food-service facilities, 37,000 churches and other places of worship and 17,000 farms. The regulations will pinch a vast range of industries -- including aluminum production, ammonia production, cement, iron, steel, lime, petrochemical, phosphoric acid production and pulp and paper manufacturing.

Yet, by EPA estimates, the net effect of these regulations would be to cut global mean temperature by about one-hun dredth of a degree by 2100.

Of course, reducing global warming is not the point. As the report shows, the EPA's proposals have negligible environmental benefits. Instead, they are the vanguard of President Obama's anti-industrial policy agenda -- pushing America's manufacturing base overseas.

As Americans continue to feel the economic pain of the recession and fear for their jobs, it's time for Congress to do its job: This agenda must be stopped.

James Inhofe represents Oklahoma in the US Senate.

 

And your point is?

There is a dynamic shift in Economics, nothing one can do about it unless the politcal body in DC starts to see how important Manufacturing and Skilled labor are.

I doubt the Reps or Dems going forward will tackle this new Shift. They will be like most in the US, crying about the change, doing more damage, playing the blame game and endless promises to change it back to the old days.

Sorry folks. Just as the markets are fluid, economics change but the foundation does not. Credit, Wallstreet, Public Traded Companies were not part of the original Capitalist Plan. Basic ideas such as Land, Labor, Product, and "Ideas" were the driving force.

When a nations GDP is 70% consumer spending, Capitalism dies and "Socialism and Hedonism" take over.

With a Central bank having more power over the Economy (As warned by Milton Freidmen Himself", Fiat currency becomes worthless.

Either change with the economy, tap into the Global Economy or end up on the Goverments Pay roll. Our generation has abused the system.
Buying homes they can't afford, taking second mortgages to buy toys they can't truly afford, working in over-saturated markets like Banking and paper pushing industries as well as working for the FED gov.

Game over....time to wake up.

 

You must have put countless hours of research into that.

Brilliant

 

George Soros disagrees with you: http://www.bloomberg.com/news/2010-...hreaten-europe-with-deflationary-spiral-.html

"Soros said more government spending is needed in the U.S., in lieu of monetary stimulus, to sustain the country’s budding recovery and avoid chocking off growth. "

I agree with you that monetary policy and regulations are part of the problem, but just google 'lessons from the Great Depression' and consider whether stimulus spending was the right decision.

 

stimulus spending is not the essence, right question is who gets the free money as a result of the printing, not to mention didn't work for it, just as the argument to save the banks to not bring down the financial system is really so the bankers and stockholders don't have to absorb those losses by transferring this losses to everyone

 

From what I understand, Maestro is a profitable trader. Maybe he will walk you through his analysis on the chart he posted.

 

To sustain the country's budding recovery and avoid chocking off growth, what the fuck, I think its time this economy cools off on its own, this economy is running on huge deficits and printed money, how can you spend money to create what everyone believes to be a turn around when all it is is a prop job.