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sg
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 Posted: Sun Aug 28, 2011 8:34 am Post subject: |
 #141 |
Companies are sitting on a lot of cash right now. CEO's dont want to take risks in this kind of environment. They are nervous for numerous reasons, like low demand, credit issues, some of which are outside of this country, like the EU financial situation, a huge trading partner.
They seem to be in wait and see mode, before they will risk capital to start expanding, and thus hiring. So they dont hire.... no new jobs... no new incomes... no new demand. Catch 22.
I think slowly, they will start to stick a pinky toe in the water to see how it feels. And slowwly all the CEO's will follow and start growing their businesses again.
Seems to be mostly psychology at this point. People are not feeling positive about the future, and the lemming effect just magnifies it.
But what can the government do to really help?
Hmmm.... how about we bring the troops home and put them on ROAD CREWS and start fixing our infrastructure 
Instead of blowing all that money for them to be sitting in a desert shooting at s***.... make them build something we NEED for the same price Considering the suicide rates of our soldiers these days, I bet they would be more than happy to finish out their tours as physical laborers AT HOME 
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jjcote
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Joined: 01 Dec 2007
Posts: 3216
Location: Lunenburg, MA, USA
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| Posted: Sun Aug 28, 2011 9:33 am Post subject: |
#142 |
One of the problems with using the military (or people collecting unemployment) to do public works projects (like the WPA/CCC) is that you'll see a lot of resistance from unions, who want their own members doing that work for higher pay.
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Davedebogusone
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Joined: 17 Mar 2008
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Location: Beauklahoma ,peoples republic of Kalifornia
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| Posted: Sun Aug 28, 2011 9:54 am Post subject: |
#143 |
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Davedebogusone
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Joined: 17 Mar 2008
Posts: 1476
Location: Beauklahoma ,peoples republic of Kalifornia
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| Posted: Sun Aug 28, 2011 9:55 am Post subject: |
#144 |
As a counter to the death of the middle class by mickey moore,
I will play the wikipedia search
http://en.wikipedia.org/wiki/Professional_Air_Traffic_Controllers_Organization_(1968)
Then look at the section starting with "August 1981 strike"
Federal empoyees arent allowed to hold the citizens hostage
To bad the states dont have the same laws.
So it was a good thing that the controllers struck and screwed with the entire country?
This just one more reason I vote against progs,
You always play that weak ass card Regan broke the unions wah waaaaaahh
No he broke the federal employees breaking federal LAW and they lost their jobs
Did he break any private unions ? NO
Private sector unions tend to break themselves
In private sector if the unions demand to much the business can close their doors and relocate, State and federal unions are saying same power with no consquences ? So total power and the tax payers just grab their ankles.
My replly on that would be NO
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slimchance
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slimchance
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davisstraub
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Location: Boise, Idaho
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| Posted: Sun Aug 28, 2011 1:08 pm Post subject: |
#147 |
| Quote: |
| Companies are sitting on a lot of cash right now. |
Of course they are. There is no percentage in building their business when their factories aren't running at full capacity. When demand is low there is no reason to make further investments. It's extremely simple.
| Quote: |
| But what can the government do to really help? |
It can increase demand by spending $2 trillion on infrastructure (expenditures that everyone agrees we badly need). Not only will this increase demand just by itself it will increase demand by a multiplier as the workers spend their wages.
Again this assumes that economic growth is in fact possible.
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davisstraub
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Location: Boise, Idaho
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| Posted: Sun Aug 28, 2011 1:13 pm Post subject: |
#148 |
| Quote: |
| pay attention because he makes sense and has a dam good track record |
He makes no sense and has no track record.
Here is a track record:
http://www.hamilton.edu/news/polls/pundit
http://www.poynter.org/latest-news/romenesko/130485/claim-krugman-is-top-prognosticator-cal-thomas-is-the-worst/
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| A Hamilton College class and their public policy professor analyzed the predicts of 26 pundits — including Sunday morning TV talkers — and used a scale of 1 to 5 to rate their accuracy. After Paul Krugman, the most accurate pundits were Maureen Dowd, former Pennsylvania Governor Ed Rendell, U.S. Senator Chuck Schumer (D-NY), and former House Speaker Nancy Pelosi. “The Bad” list includes Thomas Friedman, Clarence Page, and Bob Herbert. |
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sg
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Joined: 17 Jul 2006
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| Posted: Sun Aug 28, 2011 1:16 pm Post subject: |
#149 |
| davisstraub wrote: |
| Quote: |
| Companies are sitting on a lot of cash right now. |
Of course they are. There is no percentage in building their business when their factories aren't running at full capacity. When demand is low there is no reason to make further investments. It's extremely simple. |
You are being way too simplistic.
Havent you forgotten they have a PROFIT motive? They are the same CEO's the media as been labeling greedy win at all cost bastards forever.
CEO's with a lot of cash constantly look for ways to grow and expand their business.
Whether by offering new products, or services, etc. What their OLD idle factories are doing has no bearing on NEW ideas and business.
Sitting capital is wasted capital. Even in this low demand environment, lots of people are still creating brand spanking new businesses. I see it every day. And some of them are successful. Ive seen brand new businesses where I live take off and they are doing very well.
I guess these CEO's getting paid megabucks arent nearly as talented as these small business owners kicking ass locally 
Wait a sec.... its not just the local small guys. Shouldnt Apple freeze development of their iPhone 5????
Proof that even a big company is moving forward and is going to crank and sell product like crazy.
These other guys are just CHICKEN
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Aeros Stealth III 142
| Thomas Jefferson wrote: |
| All tyranny needs to gain a foothold is for people of good conscience to remain silent. |
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davisstraub
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Location: Boise, Idaho
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| Posted: Sun Aug 28, 2011 1:23 pm Post subject: |
#150 |
| Quote: |
| I don't think anyone is saying we don't have an issue with demand...the question is what like in the solution chain does demand play? |
Weird set of words there.
Very simple increased demand leads to increased supply (prices get adjusted).
| Quote: |
| Putting people back to work in any capacity is more an effort in building confidence and kicking off consumer spending. The best employers are non government because they are not using government resources to employ. The quickest way for job creation is to remove risk for businesses to employ. |
It also puts money in workers pockets that then is spent multiplying its value. Both confidence (the willingness to spend) and actual jobs so that money is available to spend are required.
Governments purchase from private businesses and pay private individuals to work. Non government resources are used to supply the government projects and are purchased by government contractors and employees. As far as macro-economics is concerned, it doesn't matter if the demand is created by the government or by individuals, it is the amount of demand that counts.
Our country has a mis balance. It's collective (social) expenditures have been too low and its individual expenditures too high. Instead of 70& of our economy being driven by consumers (which everyone agrees we can't maintain), we are going to have to decrease that to 60% and up the social (government) expenditures to make up the gap.
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| Removing regulations and taxes on small business will stir employment. |
Small business has been doing little to nothing for years now. It is not the engine of our economy. I certainly agree that regulations must be made extremely streamlined. I hate filling out forms as much as the next guy. The best streamlining of forms and regulations - single payer health insurance, helping small business directly - doctor's offices.
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| Doing big expensive government projects like building high speed railroads connecting Quest to Wallaby Ranch is wasteful and inefficient. |
Big projects in a big country are always expensive by definition. I don;t know about high speed rail. I don't know about the future of transportation at all. Maybe that is part of the problem. Fixing what we got should be okay for now until things shake out a bit.
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davisstraub
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| Posted: Sun Aug 28, 2011 1:24 pm Post subject: |
#151 |
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| You are being way too simplistic. |
Since you and I are saying the same thing, then it must be true that I am being way too simplistic.
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sg
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| Posted: Sun Aug 28, 2011 1:28 pm Post subject: |
#152 |
| davisstraub wrote: |
| Quote: |
| You are being way too simplistic. |
Since you and I are saying the same thing, then it must be true that I am being way too simplistic. |
But were not.
Youre saying CEO's are sitting on cash because of low demand. (mostly?)
Im saying CEO's are sitting on cash because of FEAR. (mostly)
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Aeros Stealth III 142
| Thomas Jefferson wrote: |
| All tyranny needs to gain a foothold is for people of good conscience to remain silent. |
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sg
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Joined: 17 Jul 2006
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| Posted: Sun Aug 28, 2011 1:34 pm Post subject: |
#153 |
| davisstraub wrote: |
Our country has a mis balance. It's collective (social) expenditures have been too low and its individual expenditures too high. Instead of 70& of our economy being driven by consumers (which everyone agrees we can't maintain), we are going to have to decrease that to 60% and up the social (government) expenditures to make up the gap. |
The last thing we need is our fat, bloated, corrupt, bureaucratic government eating up even more of our GDP. We need a private sector rebirth, not the opposite.
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Aeros Stealth III 142
| Thomas Jefferson wrote: |
| All tyranny needs to gain a foothold is for people of good conscience to remain silent. |
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davisstraub
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Joined: 13 Dec 2010
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Location: Boise, Idaho
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| Posted: Sun Aug 28, 2011 1:53 pm Post subject: |
#154 |
| Quote: |
| You're saying CEO's are sitting on cash because of low demand. (mostly?) I'm saying CEO's are sitting on cash because of FEAR. (mostly) |
Okay.
I'm saying that the bulk of the $2 trillion sitting on company books is not being invested in growing the businesses (hiring new people, building new plants, etc), because the CEO's see little opportunity for a good return (profit) on that investment (in their business) because they are able to meet the present demand with their existing facilities and personnel. This does not apply to all CEO's and all businesses, just the general case. Some businesses have plenty of demand for new products and are investing in their businesses (corporate jets, perhaps).
Now do CEO's have apprehension about the future? Sure. They fear that demand will not return for a long time.
I'm also saying that banks aren't making loans at the rate that we would like because they aren't seeing business opportunities to make good loans into. Again because the economy is growing too slowly (low demand).
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Last edited by davisstraub on Sun Aug 28, 2011 2:02 pm; edited 1 time in total |
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davisstraub
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| Posted: Sun Aug 28, 2011 1:56 pm Post subject: |
#155 |
| Quote: |
| The last thing we need is our fat, bloated, corrupt, bureaucratic government eating up even more of our GDP. We need a private sector rebirth, not the opposite. |
Perhaps, but we do need government spending through private corporations to rebuild our infrastructure (the government doesn't do the work, it just pays the bills). We certainly need the private sector to be employed, but I feel that we need it to be employed building things that we need collectively not individually (like repairing roads (we use them all together) and not so much building cars (individual purchases)).
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davisstraub
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sg
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| Posted: Sun Aug 28, 2011 2:14 pm Post subject: |
#157 |
Dont have any issues with the above... but does beg the question.... why isnt the government spending money on infrastructure, that we need and would also stimulate the economy at the same time?
Oh yeah... because they are incompetent idiots and the funds are being eaten up by the inefficient bureaucracy, being blown on crap we cant afford right now and being promised to entitlements that far exceed any possible revenue... aaarrrghhhh.
So in the end..... none of it matters. God himself could come down, and tell our politicians exactly the perfect plan, and they would F it up fighting with each other trying to take credit for executing it.
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H4, AT, FL, TFL, AWCL, CL, FSL, RLF, TUR, X-C
Aeros Stealth III 142
| Thomas Jefferson wrote: |
| All tyranny needs to gain a foothold is for people of good conscience to remain silent. |
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davisstraub
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Joined: 13 Dec 2010
Posts: 1713
Location: Boise, Idaho
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| Posted: Sun Aug 28, 2011 2:31 pm Post subject: |
#158 |
| Quote: |
| Don't have any issues with the above... but does beg the question.... why isn't the government spending money on infrastructure, that we need and would also stimulate the economy at the same time? |
Perhaps you didn't notice that the federal government at the legislative level is deeply divided by ideological riffs that prevent any concerted action, even on something as obvious as keeping our house (infrastructure) from falling down.
This is not new. It happened almost exactly like this in 1937. Sending us back into the Great Depression (until FDR spent like a drunken sailor on WWII).
It apparently takes an extreme crisis to get us all lined up in the same direction.
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davisstraub
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| Posted: Sun Aug 28, 2011 2:33 pm Post subject: |
#159 |
BTW we have very efficient bureaucracies. Our overhead cost at Medicare is much lower than private medical care, just as one example.
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davisstraub
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| Posted: Sun Aug 28, 2011 2:34 pm Post subject: |
#160 |
http://krugman.blogs.nytimes.com/2011/07/16/the-political-economy-of-the-lesser-depression/
| Quote: |
So, terrible growth prospects; low inflation; oh, and low interest rates, with no sign of the bond vigilantes. Ordinary macroeconomic analysis tells you very clearly what we should be doing: fiscal expansion and monetary expansion by any means we can manage; in fact, the case for a higher inflation target pops right out of just about any model capable of producing the kind of mess we’re in.
And what are we talking about in policy terms? Spending cuts and an end to monetary expansion.
I know the arguments — fear of invisible bond vigilantes, fear that 70s-style stagflation is just around the corner despite the absence of any evidence to that effect. But why do such arguments have so much traction, while everything economists have spent the last three generations learning is brushed aside?
One answer is that macroeconomics is hard; the idea that if families are tightening their belts, the government should do the same, is as deeply intuitive as it is deeply wrong. |
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