US 'in danger of economic relapse'

[Lars77]

Run time: 02:09 https://www.youtube.com/watch?v=BR0xfBqaQTQ   Posted on YouTube: January 11, 2010 By YouTube Member: Views on YouTube: 0   Posted on DU: January 11, 2010 By DU Member: Lars77 Views on DU: 2610

 
Senior economists in the United States have warned that the country could be in danger of falling into an economic relapse, which could lead to another recession.

The economists say there is a 25 to 40 per cent chance of a 2010 crisis, a phenomena they call a "double dip recession".

The warning comes as recent figures show that 85,000 more Americans were unemployed last month, a figure most economic forecasters did not predict.

Analysts say the figures represent worrying news for the administration of Barack Obama, the US president, who is struggling to halt the increasing number of lost jobs.

Christina Romer, the administration's top economic adviser, has said she still believes jobs will return in a few months, but she says the government is looking at other options to energize the economy.

To help that effort, the US House of Representatives has passed a bill that would commit $155bn for construction projects and extensions of unemployment benefits.

However, much of the money needed for such projects will have to be borrowed and leaders of the country's Republican party say the Obama administration has already spent too much.

Al Jazeera's Patty Culhane reports from Washington, DC.

[Goldstein1984]

1. Good information. Thanks

Consistent with warnings by Paul Krugman and others.

I'm not an economist, but my gut tells me that what's left of the economy is still a house of cards.

I don't believe this is a recession. It's an adjustment. What we see around us is the new norm.

If our "leaders" in Washington don't lay off the trickle down stuff and start some New Deal style work programs, things are going to get worse.

[Craftsman]

2. More like and economic collapse.

We've to stop spending like drunken sailors.

[flyarm]

3. K&R

[dixiegrrrrl]

4. "most economic forecasters did not predict" seems to happenig a lot.

And for a long time.
Maybe we need to find some reality based economists.
And give them reality based figures to work with.

[SemperEadem]

15. the information has been there

But Greenspan, Paulson, Summers, Geithner, Bernanke, Goldman-Sachs, The Fed and the NYFed all made sure their pockets and the pocket of their little friends all got a golden lining at the tax payer's expense while at the same time spitting on the taxpayer.

Congress hasn't helped by not holding all of the above accountable and forcing them to either make their transactions transparent or die like the scourge they are.

And because the vast majority of the American public were sucking on the teats of fear instead of holding their representatives accountable, they are going to suffer for their lack of focus when it mattered.

[Raoul]

5. Don't worry - Obama will take immediate action..

Obama is going to go around the country begging employers to hire more people. He'll even get on his knees to plead. So everything is gonna be just fine....

[Craftsman]

6. The "immediate action" taken to bail out the banks is part of the problem.

[girl gone mad]

7. Hey, neo-libs..

your economic policies are just as successful as the neo-cons' foreign policy has been.

[Vermontgrown]

8. The

feds will just hand wall street more money. That will mean the feds are giving main street the finger. So what are we to do in the private sector? March on DC, shutem down...

[SemperEadem]

16. No. Don't come here and tie up traffic

vote the miserable bastards out who have given the Fed and wall street a pass.

[Vermontgrown]

9. It is quite clear what the ultra

rich in Washington are doing;they are bankrupting main street, and turning this country into a third world nation so fat creepo corporate big wigs don't have to send work overseas. The lowest paid workers in the world will be Americans.

[Aristophrenia]

18. Almost -

what is happening is the removal of nationalistic orientation - in other words - during the past 150 years the west built up a sense of nationalism, which did not previously exist.
Not many people are aware of this, and presume we have always been nationally oriented. Not so. The main reason for it was to create large, volunteer armies. These are no longer needed, hence,
loyal citizens are not either.

In contrast the world has moved to a model where corporations will move production and services to wherever the cheapest labor is, hence the long unabated decline in real wages and living standards in the west. There will be a stronger and stronger move towards global governance, biased towards corporate control with citizens restricted to national borders but limited by global competition.

This will cause a redistribution of wealth from rich to poor citizens while corporations will remain strong.

Further corporate citizens will gain more and stronger rights (freedoms of movement, votes, government influence, taxation, etc) while non corporates will be further deteriorated in power.

This has been happening for a long time and only needs to be seen to be understood, now you understand what it is ALL ABOUT.

[lib2DaBone]

10. Economic relapse.. new recession?

I never knew we were out of the first recession.

Funny how Republicans take no responsibility for getting us into this mess in the first place.

[KansDem]

11. I had to laugh...

Last week with the announcement that Sen. Dodd wasn't going to seek re-election, the media went into their "will the Dems survive 2010" mode, waxing philosophical about whether or not Democrats will retain both Houses of Congress.

I thought, "Yeah, right...like six years of GOP rule resulting in two needless wars and almost 5,000 Americans dead, economic malaise with banking and Wall Street meltdowns, increase in both the jobless by millions and national debt by trillions is something Americans want to return to?"

The media is so full of themselves; they forget we have the internet to give us real informaiton. They still think they control the message...

[Hulk]

12. Tha'ts "really classic" to hear uncle tom complain about NO HCR??

Does anyone care to point out to this ignorant, brain dead and pathetic loser that it was THE REPUBLICAN undoing of the financial industry that brought about this financial catastrophe? How about, it's the REPUBLICAN PARTY OF NO that has been stonewalling at ever step, the HCR that IS going to pass, although much weaker for the American public.

What a pathetic loser!!

[SemperEadem]

13. Bring back Glass-Stegall.

and read "It Takes A Pillage" by Nomi Prinz.

[winyanstaz]

14. Well if these idiots would just listen to the people...we wouldn't be in this mess!

I have been screaming it from the roof tops ..but NOoooo.
Throwing billions to the banks and mortgage companies that made the mess instead of making them PAY for their crimes was the first clue that we were being snowed.
Refusing to even bother to investigate not only who and why of 9-11..but the mess the bankers made...should have been our second and third clue.
These same twits outsourced all our jobs..and then they wave their frickin hands in the air and cry "Oh Noz!"
I am an American home maker and I could balance the budget a hell of a lot better than these jokers.
We have been screwed over here in America for a long time now. Wake up damn it!
We don't even have the togetherness to be able to stop them from poisoning our water supplies with flouride..the only ingredient in today's rat poison for heaven's sake!
Fluoride makes you docile and obese...but hey..it sells a lot of diet fads and keeps the sheeple from rioting as they steal our homes,...our retirements and our children's futures.

[cufford]

17. Insane

Do these people really not understand what's going on, or are they intentionally trying to deceive everyone.

All this talk of recessions and recoveries is utter nonsense.

For about three decades or so, we've been on a path to economic hell that we've only just begun to really see. Only the tip of the iceberg so far. We've not been in a cyclical "recession" but continuing to head into full blown "depression". It's not a cyclical thing at all. It's a fundamental restructuring of our entire economy over the past decades. From good paying jobs for the masses, to minimum wage jobs for the masses. This has killed our economy, and it's a self-perpetuating trend that can not possibly turn around, not for decades at best. And only then if we reversed course on labor prices, which most certainly will not happen.

Without enough good paying, working-class jobs to fuel the economy, there is not enough demand to sustain it. And nobody is talking about good paying jobs, only "jobs", which is meaningless. 100% employment at minimum wage wouldn't do a thing for our country. We'd continue to spiral downward.

Fact is, without good paying jobs (union jobs, factory jobs, etc.) for the masses, things collapse. Because those jobs create the demand for all the other jobs. And they've eliminated a critical mass of those jobs, and they aren't coming back.

Double the minimum wage, better yet triple it, and we'd see the economy take off like a rocket. But that'll never happen. Hell, they're out to even lower the minimum wage. That has now started this past week.

You see, it's all about people, us people, every day people, having money to spend, to consume with. That has been systematically destroyed since the passage of NAFTA and the subsequent mass outsourcing of jobs. The best paying jobs for everyday people, gone.

It's all about cheap labor. That's what corporations want. But that's a double-edged sword because the workers are also the consumers. If they don't make enough, they can't buy your goods and services. U.S. corporations, in their rapacious greed to ever increasing their bottom lines by cutting labor costs, have fired their own best customers. It's taken 30 years of so-called "Free Trade" and union busting policies to do it, but the chickens are simply coming home to roost.

There will be no turn-around, no recovery. It's simply irrational to even think that. There's no basis to support it. That's just happy talk to appease the masses while the powers that be continue to turn the screws even further. We'd need to return to high paying jobs for the masses - what built this great empire in the first place - and that's clearly not going to happen.

The middle class is what created our massive economy. Everyday people making, and more importantly "spending", good money. That drove the entire engine. That's now gone. The middle class has been reduced to an ever increasingly smaller sector of our population, and we're seeing the consequences. There's simply not enough money being spent, and that's because the money has been systematically transferred from the masses to the very few at the top. And it does nothing for our economy for wealthy people to stockpile the money in their investment accounts. Nothing.

That same money in the hands of the masses instead, gets spent, creates demand, jobs, productivity. It is the fuel that feeds the economic engine.

It's really not rocket science, these basics of our economy. Enough people need to earn sufficient income to not just sustain a robust economy, but keep it growing. Cutting wages to the bone not only stops the progress, but ultimately falls far short of even sustaining an even level economy. It becomes self-destructive, and that's where we're at.

Things will continue to spiral downward year after year, decade after decade. America's standard of living will continue to decline steadily for as long as we can imagine. It's a mathematical certainty.

Get used to it.

[Aristophrenia]

19. Not quite right -

Yes on the whole, however what is happening is not only a devaluing of the American middle class, but a raising in standards of the emerging economies - in other words you income is now going to them, we are creating a new global class of workers significantly poorer than 50 - 80's American workers, but significantly wealthier than Chinese and Indian and Africans of the same period.

By the end of this decade Americans will be on par with the average Indian.

On top of this will sit a new global corporate elite - significantly wealthier than anything we have ever seen, governed by teh WTO and IMF.


Corporate elites have no need for national boundaries, they hate them, they also hate American workers, and would prefer global workers as they have less rights, less organised etc.

Slight but very, very important differences.

[cufford]

20. Actually...

What you've expressed is really an extension of my own comments.

As I noted, it's all about "cheap labor", and that is obviously found abroad. That's what outsourcing is all about.

Of course, other business overhead besides labor prices are part of the equation, but it's specifically the fall of "labor prices" in the U.S. that is to blame for our (U.S.) economic decline.

I also mentioned the transfer of wealth to a small upper class.

So essentially, we're both on the same page. Both quite right.

I could have gone to deeper depths about all of this, but my post was long enough already. I chose to focus on the most obvious (well, apparently not to so-called "economists") issue. And that's the decline of labor prices in the U.S. over the past several decades - kicked into high gear with the implementation of so-called "Free Trade" agreements which served no purpose other than to help big corporations fire well paid American workers.

Declining labor prices is the most significant reason for our economic decline. Contrary to the propaganda, those unions workers that were paid very well, are what made out great economy. Those jobs fueled it. The downstream effect of those jobs not only sustained but created more middle and lower class jobs. The domino effect of losing even a thousand such jobs by closing a factory somewhere, is exponentially devastating down through the chain of the economy. That's why we're currently in a self-perpetuating downward spiral that can't possibly turn around in our lifetimes. The more jobs are lost, the more jobs will be lost.

And most importantly, it's not "UNemployment" but rather "UNDERemployment" that is the problem. Even those working full time, at or near minimum wage aren't making it. 100% employment, if at or near minimum wage wouldn't do crap for our economy. Unless that minimum wage was raised significantly, and that ain't going to happen.

The dirty little elephant in the room with talk about our economy in the media and by the high profile economists and politicians is that "Free Trade" and it's effect of driving labor prices way down is the main reason for our economic decline. Not short term Wall Street and Banker shenanigans (that's just a convenient scapegoat), but rather a long, systematic destruction of the middle class through government enabled trade policies. The big lie about "having to compete in a global market" that so many people bought into.

Anyway...as I say, there are many layers and nuances to all of this which can't be addressed in a few paragraphs on a message board. I was just trying to summarize what I see as the most significant area, and in a very generalized form.