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http://en.wikipedia.org/wiki/John_Kenneth_Galbraith
http://www.blupete.com/Literature/Biographies/Philosophy/Galbraith.htm
http://www.quotationspage.com/quotes/John_Kenneth_Galbraith/

Of course I have never heard him say that accounting/personal finance should be mandatory in our schools. But then, I have never heard any economist say that accounting/personal finance should be mandatory in our schools.

I guess they are all a bunch of commies. lol

umbra
http://www.epi.org/content.cfm/pm110

quote:
What's wrong with the economy?

by EPI President Lawrence Mishel and Policy Director Ross Eisenbrey

1. Profits are up, but the wages and the incomes of average Americans are down.

Inflation-adjusted hourly and weekly wages are still below where they were at the start of the recovery in November 2001. Yet, productivity"”the growth of the economic pie"”is up by 13.5%.


Wage growth has been shortchanged because 35% of the growth of total income in the corporate sector has been distributed as corporate profits, far more than the 22% in previous periods.


Consequently, median household income (inflation-adjusted) has fallen five years in a row and was 4% lower in 2004 than in 1999, falling from $46,129 to $44,389.
2. More and more people are deeper and deeper in debt.

The indebtedness of U.S. households, after adjusting for inflation, has risen 35.7% over the last four years.


The level of debt as a percent of after-tax income is the highest ever measured in our history. Mortgage and consumer debt is now 115% of after-tax income, twice the level of 30 years ago.


The debt-service ratio (the percent of after-tax income that goes to pay off debts) is at an all-time high of 13.6%.


The personal savings rate is negative for the first time since WWII.
3. Job creation has not kept up with population growth, and the employment rate has fallen sharply.

The United States has only 1.3% more jobs today (excluding the effects of Hurricane Katrina) than in March 2001 (the start of the recession). Private sector jobs are up only 0.8%. At this stage of previous business cycles, jobs had grown by an average of 8.8% and never less than 6.0%.


The unemployment rate is relatively low at 5%, but still higher than the 4% in 2000. Plus, the percent of the population that has a job has never recovered since the recession and is still 1.3% lower than in March 2001. If the employment rate had returned to pre-recession levels, 3 million more people would be employed.


More than 3 million manufacturing jobs have been lost since January 2000.
4. Poverty is on the rise.

The poverty rate rose from 11.3% in 2000 to 12.7% in 2004.


The number of people living in poverty has increased by 5.4 million since 2000.


More children are living in poverty: the child poverty rate increased from 16.2% in 2000 to 17.8% in 2004.
5. Rising health care costs are eroding families' already declining income.

Households are spending more on health care. Family health costs rose 43-45% for married couples with children, single mothers, and young singles from 2000 to 2003.


Employers are cutting back on health insurance. Last year, the percent of people with employer-provided health insurance fell for the fourth year in a row. Nearly 3.7 million fewer people had employer-provided insurance in 2004 than in 2000. Taking population growth into account, 11 million more people would have had employer-provided health insurance in 2004 if the coverage rate had remained at the 2000 level.
quote:
Originally posted by Vox:
Does anybody know the name of any prominent left-leaning economists? I mean left-leaning or liberal in terms of their economic philosophies.


Why is this important to you?

In my view the real question is "Can you identify any LEFT-LEANING economic policies in place within the Black community that guides the interactions BETWEEN BLACK FOLKS as we perform commerce between each other that has resulted in ECONOMIC DEVELOPMENT of a Black community?"

(Please don't say that shopping in your own stores is in and of itself 'leftist'. The Asian community is far from being liberal or socialist.

You forgot Dr. Julianne Malveaux. She can read the very same economic data as the next economist and find victimization of Black people contained within.

It's intesting that of all of the posts I was the only one to promote a BLACK ECONOMIST. Are you sure you all are not "bookers" for the ABC News show "This Week With George S....."? He is a liberal and he too seems to have difficulty bring Black subject matter experts onto his show unless he is talking SPECIFICALLY about a "Black subject". appl
quote:
Originally posted by Kevin41:
well this is all a crock...because dubya said this country is doing great...........


And this is the problem with YOUR brainwashed azz.

Just because PEOPLE WHO THINK LIKE YOU and thus have their actions follow along the lines of what you would have them to might be just barely making it...THIS DOES NOT MEAN THAT EVERYONE IS SUFFERING.

The day that Kevin learns to stop using the terms "Rich and Poor" and instead begin to look at it as "THOSE WHO ARE WITHIN A SYSTEM THAT CREATES WEALTH AND THOSE WHO ARE OUTSIDE OF THAT SYSTEM OR WHO ARE POSITIONED IN THE SYSTEM WHERE THEY DON'T RECEIVE THIS WEALTH THAT IS GENERATED" he will NEVER, NEVER, NEVER come up with an effective solution to address the needs of the people he CLAIMS to care about.

One thing is for sure though. Kevin ain't gonna move too far from the very system that he condemns. He receives too much benefit from it to do so.
quote:
Originally posted by Constructive Feedback:
Please don't say that shopping in your own stores is in and of itself 'leftist'. The Asian community is far from being liberal or socialist.


Now how do you figure that? How the fuck do you know?

BTW, which Asian-American Community are you talking about? Asian-Americans of East Asian descent, or Asian-Americans of South East Asian descent?

Alot of South East Asians are working-class and live in the ghetto, or poor parts of Asian neighborhoods. And some of them tend to be more conservative than East Asians.
quote:

The day that Kevin learns to stop using the terms "Rich and Poor" and instead begin to look at it as "THOSE WHO ARE WITHIN A SYSTEM THAT CREATES WEALTH AND THOSE WHO ARE OUTSIDE OF THAT SYSTEM OR WHO ARE POSITIONED IN THE SYSTEM WHERE THEY DON'T RECEIVE THIS WEALTH THAT IS GENERATED" he will NEVER, NEVER, NEVER come up with an effective solution to address the needs of the people he CLAIMS to care about.


What you don't seem to comprehend is that the present "wealth producing system" requires that there be people outside of the system in order for it to produce wealth to begin with.

So trying to figure out how to position everyone inside of that system is a bit like trying to make sure that our educational system produces only "above-average" students.
quote:
Originally posted by Empty Purnata:
BTW, which Asian-American Community are you talking about? Asian-Americans of East Asian descent, or Asian-Americans of South East Asian descent?

Alot of South East Asians are working-class and live in the ghetto, or poor parts of Asian neighborhoods. And some of them tend to be more conservative than East Asians.


Not sure where you live dude. (I know it's not Cuba)
I suggest you get into your petroleum powered car and drive down to the nearest "China Town" and observe.

I IN NO WAY SAID THAT "ALL ASIANS" are prospering. I AM SAYING that there appears to be an economic engine that they have established in most major cities in which they have:

1) A high rate of business ownership PARTICULARLY in their own community and certainly in other communities as well (go to the local 'urban mall' to bear this out)

2) The have a high rate of SELF-FINANCING of their business ventures. This means that a higher portion of community oriented banking establshments are present. (This does NOT MEAN that the mega-banks are absent from the scene).
quote:
Originally posted by HonestBrother:
quote:

The day that Kevin learns to stop using the terms "Rich and Poor" and instead begin to look at it as "THOSE WHO ARE WITHIN A SYSTEM THAT CREATES WEALTH AND THOSE WHO ARE OUTSIDE OF THAT SYSTEM OR WHO ARE POSITIONED IN THE SYSTEM WHERE THEY DON'T RECEIVE THIS WEALTH THAT IS GENERATED" he will NEVER, NEVER, NEVER come up with an effective solution to address the needs of the people he CLAIMS to care about.


What you don't seem to comprehend is that the present "wealth producing system" requires that there be people outside of the system in order for it to produce wealth to begin with.

So trying to figure out how to position everyone inside of that system is a bit like trying to make sure that our educational system produces only "above-average" students.


Maybe an economics course (after the tax course) will help him understand a little better. He worships the ideas of Milton Friedman (even without knowing whose ideas they are or how they are strangling everyone in the middleclass).
quote:
Originally posted by Constructive Feedback:
Not sure where you live dude. (I know it's not Cuba)
I suggest you get into your petroleum powered car and drive down to the nearest "China Town" and observe.


I've been to China Town several times. It's mostly slums, row houses and ghettos like any Black neighborhood.


quote:
I IN NO WAY SAID THAT "ALL ASIANS" are prospering. I AM SAYING that there appears to be an economic engine that they have established in most major cities in which they have:

1) A high rate of business ownership PARTICULARLY in their own community and certainly in other communities as well (go to the local 'urban mall' to bear this out)


Where did you get this information? Please post your sources, otherwise this is just conjecture.

Being the manager of your own business is not the same as "owning" it. Most Chinese-owned businesses are Ma and Pa places, not huge, multi-million dollar franchises.

You can find the same in many Black neighborhoods.

There are Black-owned and Asian-owned big businesses, but they are the minority (in more ways than one, lol).

quote:
2) The have a high rate of SELF-FINANCING of their business ventures. This means that a higher portion of community oriented banking establshments are present. (This does NOT MEAN that the mega-banks are absent from the scene).


Sources?

Newsflash: Many inner-city Black businesses do the same.
quote:
Why is this important to you?

In my view the real question is "Can you identify any LEFT-LEANING economic policies in place within the Black community that guides the interactions BETWEEN BLACK FOLKS as we perform commerce between each other that has resulted in ECONOMIC DEVELOPMENT of a Black community?" ... The day that Kevin learns to stop using the terms "Rich and Poor" and instead begin to look at it as "THOSE WHO ARE WITHIN A SYSTEM THAT CREATES WEALTH AND THOSE WHO ARE OUTSIDE OF THAT SYSTEM OR WHO ARE POSITIONED IN THE SYSTEM WHERE THEY DON'T RECEIVE THIS WEALTH THAT IS GENERATED" he will NEVER, NEVER, NEVER come up with an effective solution to address the needs of the people he CLAIMS to care about ... Not sure where you live dude. (I know it's not Cuba)
I suggest you get into your petroleum powered car and drive down to the nearest "China Town" and observe.
by CF

Ah Huh ... That's nice. Really?!? Please pass the greens.
quote:
quote:
I IN NO WAY SAID THAT "ALL ASIANS" are prospering. I AM SAYING that there appears to be an economic engine that they have established in most major cities in which they have:

1) A high rate of business ownership PARTICULARLY in their own community and certainly in other communities as well (go to the local 'urban mall' to bear this out)


Where did you get this information? Please post your sources, otherwise this is just conjecture.


I thought we dealt with this topic here: Confused

http://africanamerica.org/eve/forums/a/tpc/f/791602...291063643#1291063643
quote:
The day that Kevin learns to stop using the terms "Rich and Poor" and instead begin to look at it as "THOSE WHO ARE WITHIN A SYSTEM THAT CREATES WEALTH AND THOSE WHO ARE OUTSIDE OF THAT SYSTEM OR WHO ARE POSITIONED IN THE SYSTEM WHERE THEY DON'T RECEIVE THIS WEALTH THAT IS GENERATED" he will NEVER, NEVER, NEVER come up with an effective solution to address the needs of the people he CLAIMS to care about ... Not sure where you live dude. (I know it's not Cuba)
I suggest you get into your petroleum powered car and drive down to the nearest "China Town" and observe.



* I guess the term "poverty level" is a nebulous term that I made up. I guess the term "wealthy" is one I coined. I live on the very nice side of town CF...but that has nothing to do with the fact that i fried burgers as a teenager then went to college 12 years huh (4+3+5)...I swear it was liberal policies that allowed me to make such an ascension, hence why I will be wealthy and a liberal.....and when I go buy a burger at Whataburger in Texas and me and the youngsters talk....I first show them how WE(me and my homies) made the burgers and then I tell them why we are not doing so now and what enabled us to empower ourselves....is something wrong with that? Hell..it beats telling them to slang drugs or kissing a white man's azz to get where I am...don'tcha think?


CF...you're not smart enough to be my spokesperson....when are you going to quit making a damn fool of yourself by speaking on my behalf without using my words?
I hear ya Isome...I eat beef for protein and fish and chicken...the only pork I really eat is like bacon on a cobb salad or cheeseburger..and not that often....i'll take it you still eat fish and chicken.....because for straight vegetarians, I read that it takes a hella combination of grains and cereals to replace the protein found in meat................
quote:
Originally posted by Kevin41:
I hear ya Isome...I eat beef for protein and fish and chicken...the only pork I really eat is like bacon on a cobb salad or cheeseburger..and not that often....i'll take it you still eat fish and chicken.....because for straight vegetarians, I read that it takes a hella combination of grains and cereals to replace the protein found in meat................


Chicken, some seafood and... pepperoni on my pizza. Dammit, I cannot give up that particular version of pork! I've tried (not really). *lol*
quote:
Maybe an economics course (after the tax course) will help him understand a little better. He worships the ideas of Milton Friedman (even without knowing whose ideas they are or how they are strangling everyone in the middleclass).


I took economics as a minor in college.

I aced by "Money and Banking" course.

I would love to see YOU get through an ECONOMETRICS course.

I even recall taking a "Logic" course. This is what YOU need to pursue. I am sure there is a local school that offers adult education.
quote:
Originally posted by Constructive Feedback:
I took economics as a minor in college.

I aced by "Money and Banking" course.

I would love to see YOU get through an ECONOMETRICS course.

I even recall taking a "Logic" course. This is what YOU need to pursue. I am sure there is a local school that offers adult education.


Big deal. I'm in college now and I'm planning a double-Major of International Politics (or International Development) and International Economics.

You aren't the only Black man who has ever gotten an education.
And, obviously... CON-Feed flunked the "Logic" course. That or he thinks people are ignorant of the gross negligence and gross violations of logic that permeate his posts.

Now, all-of-a-sudden, HIS college education amounts to something. When Kevin talked about his academic accomplishments I recall CON-Feed trying his best to shit on it (anti-intellectualism, obviously) because C-Feed couldn't fathom claiming intellectual superiority.

Like a grade school kid on the first day of school after Christmas Break, C-Feed acts like his Minor in Economics is reason for juvenile celebration:

"I Got Somethin' You Don't Got!"
"I Got Somethin' You Don't Got!"


I don't know if he is a formally trained economist....but writes many papers on economics.

Robert B. Reich
Robert B. Reich is Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written ten books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet, and his most recent book, Reason. His articles have appeared in the New Yorker, Atlantic Monthly, New York Times, Washington Post, and Wall Street Journal. Mr. Reich is co-founding editor of The American Prospect magazine. His weekly commentaries on public radio's "Marketplace" are heard by nearly five million people.
VIDEO: How Unequal Can America Get Before We Snap?
Download MP3 (1 hour, 39 min; 21 MB)

VIDEO: Appearance on The Daily Show with Jon Stewart View (7 min)

Popular articles:
Sam's Wake-Up Call -- And Mine
The Day I Became a Feminist
Being a Dad
Locked in the Cabinet


In 2003, Reich was awarded the prestigious Vaclev Havel Foundation Prize, by the former Czech president, for his pioneering work in economic and social thought. In 2005, his play, Public Exposure, broke box office records at its world premiere on Cape Cod.

As the nation's 22nd Secretary of Labor, Reich implemented the Family and Medical Leave Act, led a national fight against sweatshops in the U.S. and illegal child labor around the world, headed the administration's successful effort to raise the minimum wage, secured worker's pensions, and launched job-training programs, one-stop career centers, and school-to-work initiatives. Under his leadership, the Department of Labor won more than 30 awards for innovation. A 1996 poll of cabinet experts conducted by the Hearst newspapers rated him the most effective cabinet secretary during the Clinton administration.

Reich has been a member of the faculties of Harvard's John F. Kennedy School of Government and of Brandeis University. He received his B.A. from Dartmouth College, his M.A. from Oxford University, where he was a Rhodes Scholar, and his J.D. from Yale Law School.
quote:
Reich has been a member of the faculties of Harvard's John F. Kennedy School of Government and of Brandeis University. He received his B.A. from Dartmouth College, his M.A. from Oxford University, where he was a Rhodes Scholar, and his J.D. from Yale Law School.


I'd say he is far better qualified to speak on economic issues, than Sowell or Williams is to speak on race issues.
quote:
I took economics as a minor in college.

I aced by "Money and Banking" course.


lol

Transcript please. Remember this thread?

http://africanamerica.org/eve/forums/a/tpc/f/791602...921024943#1921024943

I said: If you understood economics, you would[n't] have said this:

quote:
As a whole though investors are putting their money into gold rather than the currency markets because 1) the recent instability in France and general terrorism concerns and 2) the growth in China and India's economic fortunes is also increasing the demand for gold in these countries as these people with increased wealth look to purchase jewelry and other items made with precious metals.


I said:
quote:
Suffice it to say, investors are far more concerned with the world and financial instability being caused by this US administration's actions (e.g., its making the world a far more dangerous place by fighting a war in Iraq, threatening Iran, Syria, Korea, etc., its exploding the deficit by granting tax cuts while spending billions on war, its unwillingness to engage and/or cooperate with the world community), than the civil unrest in France or the general as hell "terrorism concerns."

and, that bit about new Asian wealth running up the price of gold because they are seeking bling?!? Please. You must have got that one from one of those unsolicited "Get Rich By Investing In Gold" mailers sent out by an "Industry Insider Investment Expert" that I throw away unopened.


You said:
quote:
ek

[/QUOTE]
quote:
I'd say he is far better qualified to speak on economic issues, than Sowell or Williams is to speak on race issues.
Julianne Malveuax{sic} was mentioned earlier. Whatever you think of her, she does speak about economics and the imact policies, etc. have on Black people economically. But, Sowell has written books about culture, etc. and, to my knowledge, has little to say about economics per se and he's clearly not cited by White CONservatives (or Black ones) for his knowledge, theory and views about Economics, even Black Economics.

So, does anyone know if either Sowell or Williams have ever published anything noteworthy as Economists?
quote:
Originally posted by Nmaginate:
KWELI?

Are you saying you can lead a horse to water but you can make him drink? Even if a professor pours him a tall glass? bump


No, I'm saying that the web is the wonderfulest place in world. Where else can someone become right because "I say I am"; or Smart because "I say I am"; or even Black because "I say I am?"
quote:
Originally posted by Constructive Feedback:

And a STFU to you to. Learn what you are talking about:

Some NON-CULTURAL topics from Sowell:
http://www.amazon.com/gp/product/0465081436/qid=1137091...846&s=books&v=glance
You need to learn to respond in and to ENGLISH!!!

AND I QUOTE:
He's clearly not cited by White CONservatives (or Black ones) for his knowledge, theory and views about Economics, even Black Economics.

Dude, the fact the Sowell has books out does not make those books NOTEWORTHY. Now, can you comment on or rather can you contradict my statement above?

OBVIOUSLY NOT!!

Noteworthy = something other people note, cite and refer to (often). List threads, posts, articles, etc. where YOU and your WHITE BUDDIES have cited either one of Sowell's ideas from either one of those books. And, while you're at it, give me a ratio of the number of times Sowell is cited for speaking about RACE & Culture vs. times he's referenced about a theory, etc. posed in either one of those ECONOMIC books.

I'll be waiting for you to actually deal with what I'm talking about. Thank you.
The economy that Alan Greenspan is about to hand over is in a much less healthy state than is popularly assumed

DESPITE his rather appealing personal humility, the tributes lavished upon Alan Greenspan, the chairman of the Federal Reserve, become more exuberant by the day. Ahead of his retirement on January 31st, he has been widely and extravagantly acclaimed by economic commentators, politicians and investors. After all, during much of his 18½ years in office America enjoyed rapid growth with low inflation, and he successfully steered the economy around a series of financial hazards. In his final days of glory, it may therefore seem churlish to question his record. However, Mr Greenspan's departure could well mark a high point for America's economy, with a period of sluggish growth ahead. This is not so much because he is leaving, but because of what he is leaving behind: the biggest economic imbalances in American history.

One should not exaggerate Mr Greenspan's influence"”both good and bad"”over the economy. Like all central bankers he is constrained by huge uncertainties about how the economy works, and by the limits of what monetary policy can do (it can affect inflation, but it cannot increase the long-term rate of growth). He controls only short-term interest rates, not bond yields, taxes or regulation. Yet for all these constraints, Mr Greenspan has long been the world's most important economic policy maker"”and during an exceptional period when globalisation and information technology have been transforming the world economy. His reign has coincided with the opening up to trade and global capital flows of China, India, the former Soviet Union and many other previously closed economies. And Mr Greenspan's policies have helped to support globalisation: the robust American demand and huge appetite for imports that he facilitated made it easier for these economies to emerge and embrace open markets. The benefits to poorer nations have been huge.

So far as the American economy is concerned, however, the Fed's policies of the past decade look like having painful long-term costs. It is true that the economy has shown amazing resilience in the face of the bursting in 2000-01 of the biggest stockmarket bubble in history, of terrorist attacks and of a tripling of oil prices. Mr Greenspan's admirers attribute this to the Fed's enhanced credibility under his charge. Others point to flexible wages and prices, rapid immigration, a sounder banking system and globalisation as factors that have made the economy more resilient to shocks.

The economy's greater flexibility may indeed provide a shock-absorber. A spurt in productivity has also boosted growth. But the main reason why America's growth has remained strong in recent years has been a massive monetary stimulus. The Fed held real interest rates negative for several years, and even today real rates remain low. Thanks to globalisation, new technology and that vaunted flexibility, which have all helped to reduce the prices of many goods, cheap money has not spilled into traditional inflation, but into rising asset prices instead"”first equities and now housing. The Economist has long criticised Mr Greenspan for not trying to restrain the stockmarket bubble in the late 1990s, and then, after it burst, for inflating a housing bubble by holding interest rates low for so long (see article). The problem is not the rising asset prices themselves but rather their effect on the economy. By borrowing against capital gains on their homes, households have been able to consume more than they earn. Robust consumer spending has boosted GDP growth, but at the cost of a negative personal saving rate, a growing burden of household debt and a huge current-account deficit.

Burning the furniture
Ben Bernanke, Mr Greenspan's successor, likes to explain America's current-account deficit as the inevitable consequence of a saving glut in the rest of the world. Yet a large part of the blame lies with the Fed's own policies, which have allowed growth in domestic demand to outstrip supply for no less than ten years on the trot. Part of America's current prosperity is based not on genuine gains in income, nor on high productivity growth, but on borrowing from the future. The words of Ludwig von Mises, an Austrian economist of the early 20th century, nicely sum up the illusion: "It may sometimes be expedient for a man to heat the stove with his furniture. But he should not delude himself by believing that he has discovered a wonderful new method of heating his premises."

As a result of weaker job creation than usual and sluggish real wage growth, American incomes have increased much more slowly than in previous recoveries. According to Morgan Stanley, over the past four years total private-sector labour compensation has risen by only 12% in real terms, compared with an average gain of 20% over the comparable period of the previous five expansions. Without strong gains in incomes, the growth in consumer spending has to a large extent been based on increases in house prices and credit. In recent months Mr Greenspan himself has given warnings that house prices may fall, and that this in turn could cause consumer spending to slow. In addition, he suggests that foreigners will eventually become less eager to finance the current-account deficit. Central banks in Asia and oil-producing countries have so far been happy to buy dollar assets in order to hold down their own currencies. However, there is a limit to their willingness to keep accumulating dollar reserves. Chinese officials last week offered hints that they are looking eventually to diversify China's foreign-exchange reserves. Over the next couple of years the dollar is likely to fall and bond yields rise as investors demand higher compensation for risk.

When house-price rises flatten off, and therefore the room for further equity withdrawal dries up, consumer spending will stumble. Given that consumer spending and residential construction have accounted for 90% of GDP growth in recent years, it is hard to see how this can occur without a sharp slowdown in the economy.

Handovers to a new Fed chairman are always tricky moments. They have often been followed by some sort of financial turmoil, such as the 1987 stockmarket crash, only two months after Mr Greenspan took over. This handover takes place with the economy in an unusually vulnerable state, thanks to its imbalances. The interest rates that Mr Bernanke will inherit will be close to neutral, neither restraining nor stimulating the economy. But America's domestic demand needs to grow more slowly in order to bring the saving rate and the current-account deficit back to sustainable levels. If demand fails to slow, he will need to push rates higher. This will be risky, given households' heavy debts. After 13 increases in interest rates, the tide of easy money is now flowing out, and many American households are going to be shockingly exposed. In the words of Warren Buffett, "It's only when the tide goes out that you can see who's swimming naked."

How should Mr Bernanke respond to falling house prices and a sharp economic slowdown when they come? While he is even more opposed than Mr Greenspan to the idea of restraining asset-price bubbles, he seems just as keen to slash interest rates when bubbles burst to prevent a downturn. He is likely to continue the current asymmetric policy of never raising interest rates to curb rising asset prices, but always cutting rates after prices fall. This is dangerous as it encourages excessive risk taking and allows the imbalances to grow ever larger, making the eventual correction even worse. If the imbalances are to unwind, America needs to accept a period in which domestic demand grows more slowly than output.

The big question is whether the rest of the world will slow too. The good news is that growth is becoming more broadly based, as demand in the euro area and Japan has been picking up, and fears about an imminent hard landing in China have faded. America kept the world going during troubled times. But now it is time for others to take the lead.


http://www.economist.com/opinion/displaystory.cfm?story_id=5385434
WARNINGS that the United States may be heading for the economic rocks are starting to come through fast and furious. The latest person to join the gloom camp is Raghuram Rajan, the top economist at the International Monetary Fund.

In remarks posted on the IMF's website, Rajan notes that America is running a current account deficit of 6.25% of national wealth, or 1.5% of the total output of the world.

To finance this huge shortfall it is pulling in 70% of the world's savings, much of it from Asia. So we have the curious position of the world's poor financing the over-consumption of the earth's richest nation.

Rajan notes that the response to an investment slowdown in the Anglo-Saxon countries has been to expand budgets and lower interest rates. In the United States and Britain easy credit has fuelled housing booms.

The IMF man believes that two changes are needed. Consumption has to give way to investment, and, to reduce current account imbalances, demand has to shift from deficit nations like our own - Britain had a record trade deficit of £6bn in November - to nations running surpluses like China.

The risk is that the adjustment will be 'abrupt', taking away a major support of world growth. In plain language, the housing market in the US will crash and the shockwaves, in the shape of recession, will be felt around the world.

John Snow, the American Treasury Secretary, is doing his best to allay such fears, promising to shrink the US budget deficit by containing spending.

Quite difficult when a new study by Nobel prize winner Joseph Stiglitz places the cost of the Iraq war at $1.184bn. And that is a moderate scenario! Moreover, Snow brushes to one side fears that China may be preparing to shift some of its reserves out of US dollars. 'I'm confident the US will continue to attract the capital it needs,' he suggests, noting the solid returns on US assets.

It is Snow's job to allay suspicions that America's credit and debt mountains pose a threat to global stability. Indeed, as Rajan notes, China can play a great role in helping to smooth change by allowing the renminbi to climb against the dollar.

But the overriding worry is that the Bush government is failing to impose enough discipline on its financial affairs and it will all end in tears.

http://www.thisismoney.co.uk/news/article.html?in_article_id=406208& in_page_id=19&in_author_id=1
quote:
Originally posted by Constructive Feedback:
I took economics as a minor in college.

I aced by "Money and Banking" course.

I would love to see YOU get through an ECONOMETRICS course.

I even recall taking a "Logic" course. This is what YOU need to pursue. I am sure there is a local school that offers adult education.


nono You know better than to go down this road, The examples of your circular logic and vast knowledge deficit are many... you admit to one notorious example in your own rambling signature line. Don't try this; it won't work for you.
quote:
Originally posted by Noah The African:

...Yet a large part of the blame lies with the Fed's own policies, .... Part of America's current prosperity is based not on genuine gains in income, nor on high productivity growth, but on borrowing from the future. The words of Ludwig von Mises, an Austrian economist of the early 20th century, nicely sum up the illusion: "It may sometimes be expedient for a man to heat the stove with his furniture. But he should not delude himself by believing that he has discovered a wonderful new method of heating his premises."

As a result of weaker job creation than usual and sluggish real wage growth, American incomes have increased much more slowly than in previous recoveries. According to Morgan Stanley, over the past four years total private-sector labour compensation has risen by only 12% in real terms, compared with an average gain of 20% over the comparable period of the previous five expansions. Without strong gains in incomes, the growth in consumer spending has to a large extent been based on increases in house prices and credit. ...Central banks in Asia and oil-producing countries have so far been happy to buy dollar assets in order to hold down their own currencies. ...Over the next couple of years the dollar is likely to fall and bond yields rise as investors demand higher compensation for risk.

When house-price rises flatten off, and therefore the room for further equity withdrawal dries up, consumer spending will stumble.

...After 13 increases in interest rates, the tide of easy money is now flowing out, and many American households are going to be shockingly exposed. In the words of Warren Buffett, "It's only when the tide goes out that you can see who's swimming naked."


That just needed to be repeated for those who are so blind that they cannot see.

There is also this article that predates the current alerts about our financial condition as a nation by about four years:
    The US economy is limping ahead following last year's downturn, but faces a number of risks that could push the world's largest economy back into trouble, the IMF said Wednesday.

    In its twice-yearly World Economic Outlook, the International Monetary Fund said it sees US economic growth "remaining below potential until well into 2003." ...
quote:
I took economics as a minor in college.

I aced by "Money and Banking" course.

I would love to see YOU get through an ECONOMETRICS course.


The interesting thing about education is the missing information. The banks loan us the money to buy junk designed to become obsolete. Then the economists don't measure the depreciation of the junk in econometrics, but they measured our buying the junk.

How much do American consumers loose on depreciation of automobiles each year? And every year since 1945?

This is the diagram economists use:

They talk about depreciation of capital goods in the Net National or Domestic Products but don't put it in their diagram. This is what it should look like:

But putting in that depreciation introduces an obvious assymetry which should be compensated for like this:

But this brings up the issue of depreciation of durable consumer goods, Dcon, which our economists apparently don't want to talk about. I figure Americans loose at least $300 BILLION on depreciation of cars alone each year. It should amount to $10 TRILLION lost since 1945.

Where did that fit in to your ECONOMETRICS?

I don't hear about this from liberal or conservative economists. How do people with PhDs explain getting grammar school algebra incorrect for 50 years?

umbrarchist

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