MPLS Fed

[mplsjaromir]

Great little article about how a public official took a policy stance, looked at data, and then changed their mind! I was not a fan of Narayana Kocherlakota, now he seems like a totally reasonable dude. Hopefully his pivot from inflation hawk to full employment champion will help the economy recover quickly.

http://articles.chicagotribune.com/2012 ... hmark-rate

[Lancestar2]

but can the economy ever REALLY recover?

With globalization cheaper labor forces over seas will prevent any manufacturing from coming back. Increasing disproportional of wealth as the middle class disappears from increasing costs (healthcare, education, housing, ect) and decreasing wages or wages that don't keep up with the inflation rates. There is zero incentive for citizens to save money as interest rates are to low and as a society people are encouraged to BUY BUY BUY from ads on tv, radio, print and beyond ( I will define beyond if need be)

How can a society (our country) improve it's position in the world from where it has fallen to by playing with economic numbers and thinking that will fix the root problems. Even before the recession there was rising health care costs (because as a society we no longer eat healthy and now were fat and sick) turn on the tv now and you still see ad's for products that add to the problem. Fatty foods that create poor diets, Prescription drugs that don't deal with the root issue but just numbs the side effects, and worthless status products that encourage citizens to BUY BUY BUY.

Of course the claim is that consumers will wake up and start switching by using their buying power. Just the other day I was buying "Whole Wheat crackers" only to find out they only had 5% whole wheat in them but the 95% other wheat was the enriched white wheat crap!! Companies that can buy off politicians with campaign donations and other existing corruption and you think the economy is going to recover?

I think the economy is gonna continue to slowly degrade while retail and other job providers start hiring more "flexible workers" (aka workers who can be scheduled 10 hours one week then 30 or 40 hours the next week) to give the illusion that we are making progress to dig ourselves out of the hole. I just don't see how an actual recover can happen I just think it's mostly changing the meaning of recovery by changing the way they look at facts

[mplsjaromir]

Buy into economic fatalism if you want. Prattling about whole wheat crackers, consumerism and the loss of manufacturing jobs is not convincing. In fact they have nothing to do with the article.

The United States has capital going idle, and demand for it to be put to use. Allowing inflation to rise to 2% (or more) to allow full employment is a good idea. There is no virtue in saving money if there is nowhere to invest. Discouraging corporations to hoard money is good for the economy. They are problems faced by the country, being overly cautious of too much inflation should not be one of them.

[Lancestar2]

sorry I'm just not very good at economic but government capatial sitting idle? 16Trillion debt I don't think technially it's considered capatial lol Secondly do you really think the US economy is healthy when encouragement of huge companies and individual consumers is to spend what little they have? I do recall some car companies running out of reserves funds and some banks that needed to be bailed out because they took way to risky bet's. Sure it may help the economy recover by not letting them "horde" money but is that really gonna get the economy to recover or just push off the major problems off for another day?

[mplsjaromir]

I love these types of responses. "We should allow the recession to continue because if we do something now, there might be a recession in the future." Private industries have equipment going idle, people are sitting at home doing nothing. That is what I meant about capital resources idle, not a government stockpile. It is estimated that U.S. companies have $5 trillion in cash reserves. Link

The fundamentals of the US economy are strong, the worst largest and most diverse economy, dozens of deep-water ports on two oceans, largest contiguous arable land mass, most miles intra-continental waterway in the world, low taxes, laissez faire attitude of governments etc. We may not have the best public policies on everything, but outside of some small Nordic countries and some Sino-city-states the U.S. has the best run economy. The article shows that we are not doomed to be under the yolk of an unyielding bureaucrat.

[Nick]

Without getting too involved with this specifically, I want to float a general idea that I have.

What if, right now, we're on this timeline that starts at the Industrial Revolution and ends in robot butlers? And in the same way that we no longer have nine year olds working twelve hour shifts in coal mines, what if we're far enough along on the timeline that not everyone needs to pretend to work 40 hours a week from age ~23 to age ~65? It's hard to imagine that we're going to have the same work expectations in 2050. We'll have to adjust them eventually.