In a recession GDP goes down and then recovers to roughly the level it was at before the recession started. This is because of strong economic growth as confidence in the economy is converted into production by the nations private sector. This has not happened in the Obama recovery. The stimulus did not work even though it was equal to ~ 6% of GDP and equal to the difference between the GDP before the recession and the lowest point after the recession ended. Where is this $2 Trillion gap which you claim. Progressive policies rarelty fail ?? What are some examples which have succeeded ?? How would progressive policies prevented this "bubble economics" that you claim. The Obama economy has never recovered to the growth curve present before the 2008 recession and is in fact growing at a slower rate that typical. In all other recessions the economy has fully recovered without massive stimulus spending and then continued to grow at typical rates. http://www.multpl.com/us-gdp-inflation-adjusted/
Again not true. The prepoderance of empirical data confirms that increasing the minimum wage results in job loss. The studies you cite are flawed as Neumark and Wascher show. Price fixing benefits some and harms others but is always detrimental to economic growth.
Here is some recent empirical data which shows that raising the minimum wage does indeed result in job loss for those who need the jobs the most. This is anecdotal and a very small number of workers were affected but the non profit business started by a pastor to both serve the low income public and those with compromised skills, experience, disabilities, and criminal backgrounds was forced to shut its doors. This is "empirical" data from the real world. http://www.wsj.com/articles/michael...420412563?tesla=y&mod=djemITP_h&mg=reno64-wsj
L You just said its anecdotal.... And, if the job market expands past one small business/nonprofit, particularly as demand is raised from the minimum wage, as consumers see more dollars in their household budgets, that your anecdote is easily seen to be wrong. One business being talked about by a "news outlet" with an agenda to argue against the minimum wage, evidence be damned, is not statistically significant enough to be evidence on its own. Especially if it's going against a trend. At worst, the most recent and reliable evidence shows that, at worst, the minimum wage has negligible effects on job creation/job loss. When Wascher and Neumark's own studies were shown to be based in (insufficient) information supplied by a business coalition looking to keep the minimum wage lower (administrative payroll data from fast food restaurants) and attempted to say that Card and Krueger was disproved by it, when card and Krueger used more comprehensive data based on tax collections across a wider, statewide sample, that has been supported more and more with new empirical work, I'm inclined to think that Wascher and Neumark are attempting to get to a conclusion by using data that will fit the conclusion. At the end of the day, what drove the U.S., and the world, out of the Great Depression, was deficit spending by governments that put people to work, especially the poor and middle class, to create a consumer base for a consumption based economy. And, as the economy soared and raised revenues, and debt became a smaller issue as it became a smaller percentage of GDP, and inflation reduced the real costs of debt (even if nominal numbers rose). You can't have a consumption based economy without consumers. Our economy is 70% consumption.
You showed the output gap in your own chart, and didn't even know it. [/quote] See where the GOP housing bubble not only stops growth, but reduces it? It means the trend has ended, and the trend is beginning from a lower starting point. And the economy is attempting to play catch-up, as opportunities for growth have been lost because the GOP blocked job and economic growth, while Democrats were afraid of the price tag to address the problem with a large enough stimulus to get growth high enough to end the recession years before, and thereby reduce long term deficits and debt more quickly. For one, stronger banking/finance and stock market regulation, with more stringent oversight from regulators. The right's push for deregulation, and leaving finance to create new ways to make taxpayers their suckers didn't work, as 2008 showed. The New Deal policies, being wildly successful and creating an environment of growth that lasted for more than 40 years (generally) was able to keep large scale banking failures from happening, until the legislation was repealed. The worst part of it, is that Reagan's S&L collapse was a learning moment for government and bankers. Minimum wage, occupational safety and health regs, freedom for workers to form unions, regulation stock markets and banks, aid for dependent families, the elderly and infirm, and investment in infrastructure are all things that promoted large scale growth in the US after WWII. I'm willing to bet that conservatives are unable to make any factual or honest claims of progressive policy failing. I guess conservative policies like deregulating finance and stock markets (which includes blocking funding to regulators) hurts, and rolls back growth, while blocking policies to promote job growth (which translates into economic growth as demand is raised) will hold an economy down. And conservatives are still wanting to do the same things, expecting different results... the growth rate is fairly close to the rate before the GOP housing bust. But it took a nearly $2 trillion hit, and has not caught up yet. Had the Democrats opted for a larger stimulus, and Republicans supported it in the name of economic reality, instead of blocking it for ideological insanity, we might have recovered to a higher growth rate.
A practical minimum wage is one that also functions as a Standard for social safety net purposes; there is no need to burden the private sector with minimum wage requirements when a minimum wage should be, compensation for simply being unemployed, since public policy is public use.
And the anecdote is from the real world. And again a few new studies which basically attempt to claim that the "entropy of the universe" is decreasing do not change the reality that there is a negative elasticity of jobs with minimum wage - increase the minimum wage and employment decreases. This is always the case when prices are increased artifically.
Why not lower our tax burden by socializing the minimum wage instead of burdening Commerce with it. A simple minimum wage on an at-will basis to use for public purposes our laws regarding employment at will, could solve simple poverty and increase the circulation of money in our Institution of money based markets, and improve the efficiency of our market for labor and cure Capitalism's, natural rate of unemployment through that form of eminent domain.
See where the GOP housing bubble not only stops growth, but reduces it? It means the trend has ended, and the trend is beginning from a lower starting point. And the economy is attempting to play catch-up, as opportunities for growth have been lost because the GOP blocked job and economic growth, while Democrats were afraid of the price tag to address the problem with a large enough stimulus to get growth high enough to end the recession years before, and thereby reduce long term deficits and debt more quickly. For one, stronger banking/finance and stock market regulation, with more stringent oversight from regulators. The right's push for deregulation, and leaving finance to create new ways to make taxpayers their suckers didn't work, as 2008 showed. The New Deal policies, being wildly successful and creating an environment of growth that lasted for more than 40 years (generally) was able to keep large scale banking failures from happening, until the legislation was repealed. The worst part of it, is that Reagan's S&L collapse was a learning moment for government and bankers. Minimum wage, occupational safety and health regs, freedom for workers to form unions, regulation stock markets and banks, aid for dependent families, the elderly and infirm, and investment in infrastructure are all things that promoted large scale growth in the US after WWII. I'm willing to bet that conservatives are unable to make any factual or honest claims of progressive policy failing. I guess conservative policies like deregulating finance and stock markets (which includes blocking funding to regulators) hurts, and rolls back growth, while blocking policies to promote job growth (which translates into economic growth as demand is raised) will hold an economy down. And conservatives are still wanting to do the same things, expecting different results... the growth rate is fairly close to the rate before the GOP housing bust. But it took a nearly $2 trillion hit, and has not caught up yet. Had the Democrats opted for a larger stimulus, and Republicans supported it in the name of economic reality, instead of blocking it for ideological insanity, we might have recovered to a higher growth rate.[/QUOTE] GDP always "takes a hit" during a recession. And in normal recoveries the GDP growth rate increases to make up the "hit" until GDP regains the pre recession magnitude and slope. The Obama recovery has not done that primarily by causing increases in the costs of production and uncertainty in the magnitude and timing of those increases. The stimulus did not work and a larger stimulus would not have worked any better. Where did you get that chart that shows the Obama recovery operating at a 4% growth rate ?? It's been half of that at ~ 2%. The New Deal policies did nothing to get us out of the Great Depression. Employment never got below 14% and in fact a recession was experienced in the middle of the Great Depression. What New Deal policies do you claim were wildly successful ?? The S & L crisis was again a product of gov regulation just as the housing bubble and financial crisis was. Deregulation had nothing to do with the 2008 financial crisis.
Why is it soo difficult to muster good Capitalists to our federal Congress to make more money to better ensure the general prosperity and the general welfare, with an official Mint at their disposal.
The banking and stock market regulations had the unintended consequence of causing the finincial crisis. What legislation was repealed ?? If you are thinking of Gramm-Leach-Bliley Act of 1999 that had absolutely nothing to do with the financial crisis. The New Deal policies had nothing to do with the prosperity of the US - the prosperity of the US funded those programs which were so badly conceived that they now are major contributors to the national debt.
Of course it's still regulated, somewhat. But some legislation, like taking down the firewalls between commercial and investment banking, lower regulated mortgage lenders, and derivatives that avoid regulation to keep them from being a burden on the economy and taxpayers, can't be realistically denied.
Right. It wasn't deregulated. Therefore, the financial crisis could not possibly have been caused by deregulation, because deregulation never occurred.
if this is the ridiculous assertion that GSE's were to blame, or that the CRA, which did not regulate subprime lending, was to blame, then you're not even in the realm of earthly reality. http://economistsview.typepad.com/economistsview/2010/06/it-wasnt-fannie-freddie-or-the-cra.html http://www.federalreserve.gov/newsevents/speech/20081203_analysis.pdf The firewalls between commercial and investment banking was taken down. http://economistsview.typepad.com/e...-or-regulatory-failures-cause-the-bubble.html The national debt is largely the fault of conservatives, between their tax cuts, and lowering the economic growth of the U.S., by relying on bubbles, with short term gains at long term costs. The New Deal, coupled with the growth it helped to foster, allowed for the US to be prosperous and to pay down the debt, or keep it low, throughout the post-WWII era, until the Reagan/Bush era. - - - Updated - - - Some deregulation happened, including the repeal of Glass-Steagall. So, your conclusion is Incorrect.
No. Deregulation didn't happen. Regulations were changed. The industry was still regulated. It was not deregulated.
see, it shouldn't be that difficult for good Capitalists to have enough Faith in Capitalism, with an official Mint at their disposal.
The housing bubble which resulted from progressive housing policies and flawed monetary policy is separate from the financial crisis. The collapse of the housing bubble initiated the financial crisis but the financial crisis was the result of gov regulations which acted together with tragically unintended consequences. What caused the financial crisis. The short answer to understand how these regulations in concert led to the financial crisis is to read the book by Friedman and Kraus Engineering the Financial Crisis 2011. As can be seen these rules were issued over the years with no analysis on how they might conspire together to set up a catastrophic house of cards situation due to the homogenization of asset mix held by many of these investment houses. Collapse of the housing bubble which affected these assets including MBSs (whose contained loans were still paying at ~ 80%) then lost value due to the market price dropping way below value triggering large paper losses due to mark to market accounting rules. This reduced the capital and lending capacity of the banks due to Basel I and the Recourse Rule (an adoption in the U.S. of part of what later became Basel II), which specify those capital requirements. The conflation of all of this resulted in the financial (really the banking) crisis. Here are the set of regulations: 1. SEC Regulations from 1936 requiring mandated minimum ratings for a growing number of institutional investements. 2. SEC decision in 1975 to confer NRSRO on the big three ratings agencies. 3. Basel 1 from 1978 which established favorable risk weighting for mortgages and GSE issued MBSs. 4. Mark to market accounting established by FAS 115 in 1993 and refined by FAS 157 in 2006. 5. HUD targets for mortgages to low-income families in the late 1990s resulting in reduction of down payment requirements for the GSEs. 6. Recourse Rule issued by the FED, FDIC, and Office of the Comptroller of the Currency, and the Office of Thrift Supervision. Repeal of Glass Steagal had nothing to do with this ^. Here are some excerpts from an editorial from the WSJ: http://online.wsj.com/article/SB10001424052970204468004577166723093578272.html Google The Meltdown Remains a Whodunit Bubbles result from bad gov policy and regulations by not allowing the market to work properly. This was never more obvious than the housing bubble created by HUD policy and FED monetary policy. And the current stock market bubble created again by FED monetary policy.
If there was any deregulation (which, there was, without a doubt) then the industry experienced deregulation. http://www.cepr.net/documents/publications/dereg-timeline-2009-07.pdf
And the best way to promote the general welfare (increase the standard of living) is to grow the economy. The Obama recovery has resulted in economic growth of ~ 2% despite the growth of the last 2 quarters following the negative growth of Q1. Read more: http://www.washingtontimes.com/news...ic-recovery-grows-from-private/#ixzz3NywW9FGz Follow us: @washtimes on Twitter The argument that the Obama stimulus should have been larger is absurd. The stimulus as configured failed due to non compliance with Larry Summer's 3 T's - timely, targeted, temporary. A great deal of the stimulus spending was merely used to pay the bills of state governments who received allocations and the infrastructure projects were certainly not short term. A better strategy would have been to do a temporary tax cut (which is a Keynesian policy BTW) which would have allowed taxpayers to keep more of what they had earned for a short period of time - timely, targeted, and temporary. As with any temporary policy much of those monies would not have been spent because the recipients have brains and would have paid down debt or saved based on negative expectations. Here are conclusions from John Taylor and John Cogan from the book "Government Policies and the Delayed Economic Recovery" - 2012. The complete book is available free in the link below. http://media.hoover.org/sites/default/files/documents/Hoover_Ohanian_GovtPolicies-final.pdf
