Comments on: Baseline Scenario, April 7, 2009

By: Andrew

Andrew — Wed, 06 May 2009 11:19:15 +0000

Re: The King´s New Clothes

I´d first like to say that both of you, Simon and James, are doing a fine job as concerned and knowledgeable citizens.
However, I ask that you consider the following.
1) You know from your time at the IMF (Simon) that politicians are gamers (many different shades, but gamers just the same).
2) Banking is a commodity business and don´t let anyone tell you differently. The bankers of today (oligarchs) are gamers too.
3) John Q. Public has bought (and or borrowed) into the game.
4) There are two ways of learning: for the love of it or through pain.
5) No one likes pain so it tends to be put it off for as long as possible.
6) The king is naked but no one wants to be the one responsible for the pain, so the gamers play on.
Two possibilities: We can dig up the character that made America great and do what´s right (and needs to be done) or we can continue in denial and allow the gamers to play on until…

Keep up the good work.
Andrew

By: ‘ FIVE QUESTIONS FOR CHRISTY ROMER,’ by Simon Johnson at : baselinescenario. com . The chair of the Pres. Council of Economic Advisers appears before the Joint Economic Comm. tomorrow. « Want Less Blog

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[...] explain precisely how the U.S. will avoid the type of “balance sheet” recession seen in Japan during the 1990s? Building on that, kindly elaborate on why this kind of recession [...]

By: Five Questions for Christy Romer « The Baseline Scenario

Five Questions for Christy Romer « The Baseline Scenario — Wed, 29 Apr 2009 13:14:14 +0000

[...] explain precisely how the U.S. will avoid the type of “balance sheet” recession seen in Japan during the 1990s? Building on that, kindly elaborate on why this kind of recession is [...]

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Business Items :: Back for Business Hours — Wed, 29 Apr 2009 13:12:20 +0000

[...] At the risk of appearing effusive, this month’s edition of the eponymous blog’s baseline scenario included the following synopsis: “the [Obama] administration has made great efforts that [...]

By: nobilityofspirit

nobilityofspirit — Wed, 29 Apr 2009 01:50:45 +0000

I would add this to the conversation: Captains Courageous of Commerce and Industry
Touting the virtues of free enterprise, capitalist economy
They would like us to believe
They are the brightest and they know best
They take the risks to them go the rewards
From their efforts fall great, bountiful benefits to us all
Economically, socially, materially we will be blessed
De-regulate and let the invisible hand work its magic
Look to them for leadership they know the way to prosperity
They are examples to aspire to
Honor, ethics, and morality we ask innocently
Are in the way and in the end do not pay
Charlatans, cowards and corrupt they deceive
These courageous captains of commerce and industry
They are the brightest and they know best
They deserve great rewards for taking the risk
What risk? They risk other people’s money
When comes the call to stand tall in the box of responsibility
Into the shadows invisibly they disappear
They did nothing illegal and owe nothing in return
Honor, morality and ethics just get in the way
After all these courageous captains got their pay
Like the Robber Barons of a Gilded Age
They are protected you see
Uncle Sam will lay the tab on you and me
At the altar of free enterprise and the invisible hand they genuflect
Then feed at the public trough with unrepentant hypocrisy
True leaders with honor, a moral compass and nobility of spirit
These courageous captain choose not to be
This capital is not really important and does not pay materially
They are privileged and protected from free market reality
And the masses upon which they feed and tread
Will pay the price and pick up the tab, naturally
The guardians of the public trust in whom we should trust
To protect us from immoral, unethical, unprincipled avarice
Blind they become to these captains of commerce and industry
Palms greased and pockets filled materially
They dance with these captains on the backs of the masses
A fog of moral malaise and ethical hypocrisy devoid of nobility of spirit
Trickles down onto the masses and, yes, the masses see
Cynically they follow these leaders and further erode society
Surely if it is good enough for the captains and public protectors
It must be good enough for me we say cynically
Honor, trust, integrity, justice and responsibility
Become fading, frayed threads in the fabric of society
Lack of regard, respect, restraint, responsibility and
The ends justify the means becomes the new reality
And, yes, the masses will pay the price and pick up the tab, naturally
Dale O. McCoy (Dec. 08)

By: Glenis Devereux

Glenis Devereux — Sat, 25 Apr 2009 18:57:41 +0000

Point 2 : Crisis ! – What Crisis ? – what have we actually run out of ? I suggest that the problem we have is, at base, caused by us using a financial system that was invented in 15th C – pre-machine age –Venice and only survives on periodic financial asset booms : Tulip bulb booms, housing booms, stock market booms… – quite simply it’s not fit for purpose – what a merry-go-round we have to go through to buy a house built 100 years ago and to eat food that needs only one farmer and a tractor to feed thousands. I suggest that we use a modern financial system based on ideas like NEFS – NET Export Financial Simulation

By: Glenis Devereux

Glenis Devereux — Sat, 25 Apr 2009 18:43:44 +0000

I’ve got 3 points :
Point 1 : Nobody saw this coming :
Well they did –see this Washington Post article by the former Governor of New York http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html – All 50 states saw this coming and tried to stop it. Washington saw it this coming and stopped the states stopping it.

By: Duncan Phelps

Duncan Phelps — Sat, 25 Apr 2009 18:10:09 +0000

Enjoy your hot chocolate ‘GotLife Too’ and do nothing to stop the OneParty Corporate-ocracy in this country and in 2 years most of us will be living like Cubans, and any children will be indebted to a living standard far below Cuba, if they are not swine-flu-ized 1st! I stood out against the War on Iraq and now must pay a 400% tax because not enough others are standing up against these scams, so presently I cannot afford to work to pay my share to the rich politicians and their welfare creations—you are no doubt paying “my share” even now. Hope you are not drinking that hot chocolate out of a paper cup, cause you need to have wiggle-room to down-size. I am down to drinking water!

By: GotLife Too

GotLife Too — Sat, 25 Apr 2009 02:40:56 +0000

Let the Billionaires fail? Give the country back to the people? Look at who is in Congress. The number of mega-millionaires or billionaires or millionaires representing billionaires is staggering. John McCain’s wife was worth a quarter billion. Kerry’s wife was worth over a billion. Anybody heard of Kennedy? Henry Paulson was a Democrat and Chuck Shumer represents New York’s Wall Street which is overwhelmingly Democratic. Bill Gates is a Democrat along with GE’s Jeffrey Immelt who has set up a another company to make billions more off of cap and trade and has a division readying money losing windmills. The one thing every politician is good for is telling the masses what they want to hear to get elected so they can run to the trough with all the other little piggies. But hey, so you are scammed and lied to but would you rather be in a permanently depressed Cuba where the same thing goes on but at a lower economic level? So stop wasting your time here in a pity party. Get some studies on economics, politics and investing. Then, either join the piggy party or enjoy a life of financially disciplined integrity, living a simple life of modest income and service. You don’t need a gold cup to enjoy hot chocolate. You don’t need a BMW to arrive. You don’t need a Harley to enjoy the breeze. And you pay nothing, absolutely nothing for salvation and inner peace. They are free for the taking.

By: GotLife Too

GotLife Too — Sat, 25 Apr 2009 02:34:58 +0000

Let the Billionaires fail? Give the country back to the people? Look at who is in Congress. The number of mega-millionaires or billionaires or millionaires representing billionaires is staggering. John McCain’s wife was worth a quarter billion. Kerry’s wife was worth over a billion. Anybody heard of Kennedy? Henry Paulson was a Democrat and Chuck Shumer represents New York’s Wall Street which is overwhelmingly Democratic and now in control. Summers and Geithner invented most of this mess under Clinton and the Republicans did little to stop it since their hedge funds were generating huge returns. Bill Gates is a Democrat along with GE’s Jeffrey Immelt who has set up a another company to make billions more off of cap and trade and has a division readying money losing windmills. The one thing every politician is good for is telling the masses what they want to hear to get elected so they can run to the trough with all the other little piggies. But hey, so you are scammed and lied to but would you rather be in a permanently depressed Cuba where the same thing goes on but at a lower economic level? So stop wasting your time in a pity party. Get some studies on economics, politics and investing. Then, either join the piggy party or enjoy a life of financially disciplined integrity, living a simple life of modest income and service. You don’t need a gold cup to enjoy hot chocolate. You don’t need a BMW to arrive. You don’t need a Harley to enjoy the breeze. And you pay nothing, absolutely nothing for salvation and inner peace. They are free for the taking.

By: tomaso spingardi

tomaso spingardi — Fri, 24 Apr 2009 21:49:50 +0000

the fact that excessive leverage and abnormally high risk propensity had pushed the world in a very high risk zone was clear to many people for years. let’s not forget that we were coming from LTCM and a quasi lehman collapse in 1998 and a capital crunch in 01-02. surely nobody could predict the exact timing or such magnitude of the crisis. but the lingering suspicion is that the top people were more tha aware of the situation but none of them, subject to competitive pressures, dared to stop first.

By: perfessa

perfessa — Fri, 24 Apr 2009 18:35:52 +0000

great analysis, excellent comments. should be among the best 3 economy blogs I found so far.
what I believe is not discussed enough: the simultaneous impact of a number of significant trends making “recovery” as most understand it unlikely any time soon: energy and other resource scarcity plus the cost caused to states by aging populations. those two alone should force us to lower levels of average wealth in developed economies.

By: Duncan Phelps

Duncan Phelps — Fri, 24 Apr 2009 02:04:35 +0000

This is a plea and statements directed to the fall of 2009, when the last of the hold outs will find that the same experts that contributed to the US financial disaster and who are presently telling the dwindling number of believers who are still listening that the downturn has nearly bottomed—are AGAIN wrong!

This plea is for someone to put together the legal team to charge 98% of politicians and top corporate leaders with conspiracy and embezzlement of US funds. It could start as something seemingly small like CIA sponsored torture charges or Bank of America arm twisting in the take-over of an insolvent firm—anything to lead on up and take-in/include the Big Elite.

Purpose: To declare the usury financial institutions, including the private Federal Reserve, totally BANKRUPT. The bubbles will continue to burst: commercial real estate, credit cards, retirement funds, derivatives, etc.etc. This “too big to fail” BS is only perpetuating the true traitors and swindlers.
We need to let the inevitable occur earlier rather than later. Don’t let the conspirators run the show any longer. Lets get on with raising the Phoenix. Only those who have been standing out in the open trying to expose the corruption for decades should run the show from now on. Put my name on the list to “call the shots” and replace those with no integrity. And I don’t mean that in a violent way. I’ll be one who is willing to be in service to The People for only room and board. Executive payouts are for the twisted where crime pays! Let us call and end to corporate-ocracy. It is bankrupt and has shown no-one is in charge who can give intelligent orders.
A good part of the military is for a banana republic type takeover, but not like the JFK one in 1963! Martial Law is coming—either your way or my way! A declared default will allow The Black world and their projects to come-out of compartmentalized secrecy & the underworld and share new technologies and their money system based on production and mineral/agri wealth and takeover the present bankrupt-slave world currently empowering Elite usury-ists’ families. Cutting-edge production, wealth, and leadership can once more be attainable by the united States.

So, sign me up—class action suit or whatever! I have been working for this day most of my life! I am no terrorist. Those “insiders” of 9-11, the War on Iraq & Afghanistan and pushing for an Iran War are the true terrorists.
Let the New Order of the Universe (NOU) or Universal New Order (UNO) begin! Let the New World Order (NWO) default and be declared bankrupt.
May the Force be with us…

By: Frank Em

Frank Em — Tue, 21 Apr 2009 19:15:39 +0000

What will bring about a recovery? There will be some pent-up demand for things but not enough for a return to the good old days. The demand for goods, houses and services was stimulated by the baby-boomers, who also filled the needed jobs, and bought stocks etc. That stimulus is over and is not coming back anytime soon.

You should really take a look a the demographics of this country. We will very shortly have about the same number of people entering the labor force as leaving it. No baby-boom-like demand. (but also less pressure on unemployment)

Japans lost decade had more to do with a static or declining population that with the health of the banks. Russia is facing the same problem.

Population growth has always been one of the reason for boom times, the other is technology. And what technology is about to save us? Alternative energy? Not if it is more expensive than present conventional sources.

We are doomed to a long slow/no growth period. The only way out is exports, good luck with that!

By: FranklinPierce

FranklinPierce — Mon, 20 Apr 2009 18:21:19 +0000

“this “liquidity crisis” started by a rather noble democratic administration’s attempt to get an over-abundance of Americans into home ownership”

This is only one part of the problem. A much bigger part is gross irresponsibility and fraud in the big banks.

To my mind, it started back in the 1980s with the Savings & Loan scandal. Despite billions in losses, those guilty were let off the hook. Analysts were surprised to discover that 90% of S&Ls actually obeyed the law, even though they could have got away with breaking it. The lesson was clear: obeying the law is for suckers.

Fast forward to today: the numbers are reversed. Rampant fraud is the norm on Wall Street. All these complex “derivatives” are just a smokescreen to confuse the little people. How complicated does a mortgage have to be, after all?

Try this link:
http://www.pbs.org/moyers/journal/04032009/watch.html