GREENSPAN ON TRUTH SERUM?

[unlawflcombatnt]

Greenspan on Truth Serum?

Greenspan must have been very confused today. He mistakenly leaked out some truth about the economy (Did someone slip drugs into his coffee?)

Of course, he started out by interjecting his right-wing mythology into the discussion, by mentioning the alleged threat of "protectionism." (Heaven forbid we should impede Corporate America from shopping globally for the cheapest labor.)


However, in a surprising turn today, he almost admitted there were some weaknesses. Of course, he referred to them as "imbalances." Maybe he was referring to the imbalance between consumer spending and consumer income. Or the imbalance between productivity and hourly wages. Or the imbalance between goods supply and wage-supported consumer demand.

On second thought, it couldn't have been any of those imbalances, could it?. Because everyone knows that insufficient consumer demand is impossible, don't they? Regardless of income, consumers can always buy more production, can't they?

What was really surprising were his statements about the "paper wealth" created by housing appreciation. He actually warned people that they shouldn't count on that paper wealth, which could evaporate if economic conditions deteriorate rapidly. I don't have his exact statement, but for Greenspan to acknowledge that some of our recent wealth creation is "paper wealth" is truly noteworthy.

Today Greenspan strengthened his warnings about the housing market. He stopped short of calling it a "bubble," but he clearly warned of the dangers of declining home prices, as well as the effect it would have on our economy. He did admit that in some local housing markets homeowners and lenders could get clobbered. In previous speeches Greenspan has warned of "froth" and "speculative fervor."

Here's the link to the AP article:
http://news.yahoo.com/s/ap/20050826/ap_on_bi_ge/greenspan;_ylt=Ai6pY.EFL5MIZ5.er9YM2gSs0NUE;_ylu=X3oDMTA3b2NibDltBHNlYwM3MTY-

unlawflcombatnt

[rfranklin]

1. We must be on the brink of the Second Great Depression...

if this fat old fuck is starting to mention that there may be an "imbalance!"

[unlawflcombatnt]

2. Absolutely

For Greenspan ever to say things aren't going well implies our economy is doing very badly.

unlawlfcombatnt

[wli]

6. especially during a Republican administration n/t

[political_invader]

16. Greenspan:

For Greenspan to say anything worth hearing he must have been hit in the head with a very large apple, because he has been asleep for 40years.

[madmom]

3. one thing I wonder about is why.....

did the powers that be say that the only reason the economy was any where near good for Clinton was the dotcom bubble, but when it comes to bush and the housing bubble the economy is great and getting better?

[unlawflcombatnt]

10. Clinton vs. Bush

Republicans make such claims to justify tax cuts, and the rest of their supply-side economic mythology.

Our economy, and the necessary consumer spending to keep it going, has been propped up by consumer deficit spending. This is in stark contrast to the wage-financed consumer spending of the Clinton years. The deficit reduction under Clinton allowed Bush a lot of slack to spend more than we took in. Had we not reduced our debt as much as we did under Clinton, our economy would have completely collapsed long ago. It's taken a lot more economic stupidity on the part of Bush wreck our economy, than it would have taken otherwise.

unlawflcombatnt

[madmom]

12. in total agreement...

my hubby said he heard one source state, massive tax cut for multi-national corps. are part of economic spike because of the tax cut for repatriated dollars. Tax was 85% Bush changed it to 5% until Sept.1 resulting in $800 billion temporary fix. Any info on this aspect?

[unlawflcombatnt]

13. Greenspan Still on Truth Serum

I haven't actually heard about that. It sounds interesting though. If you could give me some more details, maybe I could look it up.

Bush and his henchman are taking so many different corporatocratic actions that it's hard to keep track of them all.

Greenspan made another speech on Saturday, where he issued an even stronger warning about an imminent deflation of the Housing Bubble.

Here is a quote from Greenspan from a Yahoo News story
titled "Housing Market Will Cool Off":
"The housing boom will inevitably simmer down," Greenspan said in prepared remarks on Saturday. "As part of that process, house turnover will decline from currently historic levels, while home price increases will slow and prices could even decrease," he said.

Here's a link to the article:
http://news.yahoo.com/news?tmpl=story&cid=509&ncid=509&e=1&u=/ap/20050827/ap_on_bi_ge/greenspan_16

[Turbineguy]

4. It seems that it's time

to start the Greenspan Character Assasination well in time for Bush's appointee to take over. That way if the economy collapses, we should all be saying "yeah, but just think how bad it would have been had Greenspan still been in charge!"

[ChiciB1]

5. It Is Now Time To Sell My Five Acres Of Land

here in Florida. Going on the market next week! Don't want to sit on it til the bubble pops!

[OneTwentyoNine]

7. Housing "appreciation" for the most part is BS...

Sure,your house goes up in value--thankfully because unless you buy Ferrari's everything else you buy goes down. But BFD,unless your selling out and then living in a cardboard box you'll pay that "appreciation" on the next house you buy which has ALSO appreciated over the years. Or if its a new house you'll pay because prices have been jacked up year after year because of low interest rates.

Unless your selling and moving in with the kids its pretty hard to take the profit and run with it.

[spooky3]

8. Agreed. Housing "wealth" is misleading even if you don't move.

If you make $10000 in interest and dividends and cash it out, that is wealth you can spend.

But if your house appreciates by $10000, your cost of living has just gone up too. If you borrow against that $10000, for example, you still have to pay it back. And, the cost of your house is now $10000 more, whether you stay there, or sell it and buy another place in the area. The only way it is "real" money is if you plan to move to a part of the country with much lower housing costs.

[ChiciB1]

9. Oh, It's Just Prime Vacant Florida LAND!

Bought it back in 1989 at a steal! I've been hounded about selling it for almost a year now. We were going to retire there, but this old house I live in now is almost paid for so WHY NOT???

Actually my husband really wanted to move there, I never did! I want to travel, so I'll take the money and RUN!! First chance I get it's off to Oregon in a Winnebago!!

But I'm NOT sure if I want to put my money where I have it now. Guess CD's are my best bet! I must sound so terribly stuffy and smug!! Really it was a crap shoot when we bought the land, but now North Port. FL is the fastest growing town in Florida! It had flooded several times but we had heard they were going to fix that, but everyone told us not to buy. We did and WHOOPEEE!!

And this is really going to kill you. We paid $28,500.00 for it and I won't tell you how much it's worth now. Best crap shoot I ever made. Actually never made one before!

[unlawflcombatnt]

11. Absolutely Right

Housing appreciation is nonsense. It is simpy artificial wealth. It represents nothing but current overvaluation, which is not supported by any housing market fundamentals.

[mikelewis]

14. You're not factoring in the investment market and the "rehab"...

trend that has swept the nation. Say a person buys a house for $20k, invests another $20k in the home and then turns around and resells that property for $80,000, not only has he doubled his money which is good, he's raise the value of the properties around him. These are all good things. However, once the $20k homes are all gobbled up and the prices for all homes have doubled, who can actually afford to buy these homes especially when the prevailing wage has stagnated or in many areas even went down. When the price of the houses exceeds the populations ability to buy them, the bubble bursts and the property will begin to decline in value rather rapidly. Now the person who bought the $80K home has a $80k mortgage on a $60k house. It's not the developers who get screwed in the bubble, it's the homeowner whose stuck in a mortgage that far exceeds the value of the house. This is no fallacy, it's a reality that is going to affect lots of people.

[unlawflcombatnt]

17. Housing Appreciation Exceeds Wage Appreciation

Housing price increases have greatly exceeded wage increases. Under normal conditions, home prices parallel employment and wages. This has not been the case since 2001. Loosening of loan requirements and low interest rates is what has really fueled home price appreciation.

There has actually been a decrease in real wages since November 2001. "In July 2005 dollars, the wage was $16.15 in November 2001 but only $16.13 last month," according to the Economic Policy Institute.

In contrast, worker productivity has increased 12% since that time. The benefits of increased productivity are not being shared with workers. Consumer spending has been maintained largely by increased borrowing, not by increased wages. The biggest source of this borrowed money is home equity loans. This information can be found at:
http://www.epi.org/content.cfm/webfeatures_snapshots_20050817


Below is a graph of real wages since 2003.

[Jamison]

15. The truth is just getting harder & harder to hide.

The people are seeing that the economy is not so "robust" as Bushco wants us to believe. People see energy prices going up, food prices going up, housing prices going up, while wages stay stagnant or even decline. Only the most hard core Kool-Aid drinkers and the rich still believe the economy is booming.

[unlawflcombatnt]

19. Our "robust" Economy

Those drinking the Kool-Aid certainly do make a lot of noise. But all that noise is starting to get drowned out by the real truth about the economy.

[OneTwentyoNine]

18. Huh Alan??? Those BIG tax cuts you pimped for aren't doing the job?

My my...of course we told you so about THREE years ago when you started passing out those idiot rebate checks. Those checks did NOTHING except blow all the Clinton surplus and start the deficit spiraling skyward.

Your pathetic Greenspan.....