Streams

Double Dip Looming?

Friday, August 27, 2010

Ross DeVol, executive director of economic research at the Milken Institute, thinks we can be optimistic about the U.S. economy. Then, Heidi Moore, a financial journalist in New York City and former reporter for The Wall Street Journal and Felix Salmon, finance blogger for Reuters, preview Federal Reserve Chairman Bernanke's speech and discuss the latest economic news.

Guests:

Ross DeVol, Heidi Moore and Felix Salmon

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Comments [29]

g.e.Taylor from Bklyn., NY

@Eugenia Renskoff from Brooklyn:

[Please see my posting below]

Here is a description of the cemetery we are entering.

http://gonzalolira.blogspot.com/2010/08/how-hyperinflation-will-happen.html

Your suggested solution (I.e., "GIVE ME THE MONEY") makes you appear more like a "bonus-baby" banker than the deserving low-income person that you pretend to be.

Aug. 27 2010 07:10 PM
Eugenia Renskoff from Brooklyn

Hi, Why don't they just hand out money to people and not from helicopters? I don't see when the jobs will come and what type of jobs these will be. There has to be a way for people, all people, to live with dignity and not have to go to soup kitchens, no matter how great a service these provide. Eugenia Renskoff

Aug. 27 2010 02:09 PM
g.e.Taylor from Bklyn., NY

77,000 jobs. What kind of jobs? Arbitrage trading clerks? Parking violation enforcement officers? Medical personnel? Machinists? Does it matter?
Keep whistling. In fact whistle louder. We're not past the cemetery yet. (In fact we seem to be entering the cemetery in a vehicle that appears to be a hearse.)

Aug. 27 2010 10:41 AM

government spending has saved us in the pass. as pain increases the government will be called on.

Aug. 27 2010 10:38 AM
JJ from JC

This fails to see the macro Keynesian view.

Aug. 27 2010 10:37 AM
Steve from NYC

Rise of Inequality to gilded age and 1920 levels, after more equality from 1940s to 1970s. Not inevitable, but due to policy choice to favor wealthy. And this is linked to recession, according to liberal but far from radical economists such as Rajan in this weeks New Republic, Jacob Hacker, Thomas Szasz and Krugman.; see:

The Inequality Gap Is Ruining the American Economy—and Bernanke Is Just Making it Worse Raghuram G. Rajan

Winner-Take-All Politics: Public Policy, Political Organization, and the Precipitous Rise of Top Incomes in the United States by Jacob Hacker

Aug. 27 2010 10:34 AM
LJ from NJ

Hugh, that's when you analyze CNN.

Aug. 27 2010 10:34 AM
LJ from NJ

lvvyjk it's b/c all their producers are from the UK

Aug. 27 2010 10:33 AM

Hi Moe -- What's a CNN analysis?

Aug. 27 2010 10:32 AM
Ben from Astoria

I have heard no less than 3 tremendously grotesque stories on NPR this morning

Aug. 27 2010 10:31 AM

ROBERT: yes. very much agreed.

Aug. 27 2010 10:30 AM
Brian from Manhattan

The stimulus was too small but did what it was supposed to. Unfortunately it was counteracted by banks that won't lend, businesses cutting to the bone, and state budgets cutting and cutting. Businesses won't hire unless demand increases, demand won;t increase until people have jobs to spend money. Chicken meets egg.

Social security is a red herring. It pays for itself. Don't touch it. Let the tax cuts expire for the rich. But another stimulus won't happen cause of conservative politics. Soooo... its up to busienss to start hiring whether the economy is improving or not. They need to step up. Its the only way to move forward.

BTW, the reason we were strongest under Eisenhower was because the rest of the world's industries were a shambles from WWII. The world bought all their stuff from us (Marshall Plan). Back then we were the world's China.

Aug. 27 2010 10:30 AM
amalgam from Manhattan by day, NJ by night

A big part of the current American economic stagnation almost always goes unmentioned: The United States' place in the global economy.

Since the U.S. is now just one of a few drivers of worldwide economic-consumption (think developing BRIC economies), we can no longer just dictate the terms and manipulate exchanges like the days of the old Bretton Woods.

The U.S. has not been dealing with necessary structural reforms to develop any kind of "industrial"-high tech. policy, 21st century worker and environmental protections, etc., to absorb the shocks that globalization wreaks on economies.

We are overlooking the fact that we are enmeshed in a global economy where the "race to the bottom" has been laid bare after the our own consumer-driven debt crisis. Austerity is not the key, but sensible policy that actually helps create trade and manufacturing, address the development of human capital while protecting workers, all of which allows for the growth of 21st century jobs.

Aug. 27 2010 10:29 AM

Let's also remember something the Wall Street Journal reporter evidently does not: The Fed is legally _charged_ with promoting employment.

The Fed _must_ under law work to reduce unemployment. Something it has pretty much ignored for 30 years.

Aug. 27 2010 10:28 AM
blossom

Why do you persist in speaking as if the NY legal industry is healthy? Thousands have lost jobs. And the way the big firms work, hiring is done by graduating classes, so if you lost a big-firm job after working for 2 years, the firms would prefer to hire new grads rather than associates who lost their jobs. I know this is all a separate issue, but the way you speak about the industry just shows how you are not reporting based on research, you're just relying on anedotal info based on people you know. Irresponsible "journalism".

Aug. 27 2010 10:27 AM
Edward from NJ

Public perception consistently lags behind the economic outlook. In 2007-2008 we were experiencing negative economic growth quarter after quarter, but it wasn't until September 2008 that there was a widespread view that we were really in a recession. The economy is growing now, but not as fast as anyone would like. I wonder if there's some positive economic event that would trigger a broad shift to optimism.

Aug. 27 2010 10:27 AM
Robert from NYC

Your guests are as out of touch with reality as are the politicians! These are folks who are making good salaries and move in different circles than do the majority--THE MAJORITY--of NYers. I mean who are they kidding they certainly don't speak for me or most people I know or see. Where are they getting their statistics? Ask them? Their sources seem to very limited to a certain economic culture that is not the majority--NOT THE MAJORITY-- who have not got salary increases in proportion to cost-of-living--REAL COST-OF-LIVING--in decades--DECADES!!!

Aug. 27 2010 10:27 AM

totally unsophisticated remark here, but..what's the deal with all the "British" experts on the show speaking about American politics and life?

Aug. 27 2010 10:26 AM

Wall Street makes _so_ much money, that it is more than enough to skew the numbers for the rest of the city. The official numbers for the city are very deceptive. Check out what people are reporting from homeless shelters, food pantries, welfare agencies, etc.

It's bad. And trying to hold off the effects of negative expectations by misrepresenting the facts does not help. Indeed, it could now be argued that people are _wise_ to media misrepresentations.

And if we want to totally annihilate the socio-economic structure of the US, then we should do what the idiot Alan Simpson says -- cut social security. It would be a disaster for demand among a huge sector of the economy -- retirees.

One segment of the nation can pay a lot more in taxes -- the super-rich, taxed at far lower rates than in any other industrial democracy (especially once we take into account disparities in treatment of earned income vs. capital gains and also take into account all the loopholes available to the rich).

Aug. 27 2010 10:26 AM
Tim from Bx

NPR thinks bad news sounds better and American criticism too when it has a British accent. Another insult!

Aug. 27 2010 10:26 AM
Phil from nyc

Yes, you can blame the media. Bad news sells. You think the media is above skewing the news for eyes and ears?! BS!

Aug. 27 2010 10:25 AM
Moe from nyc

Hugh, are you sure you're in the right place? Why are you doing a CNN analysis every day?

Aug. 27 2010 10:23 AM
Jim Crutchfield from Long Island City

Mr. Salmon observes that you can't spend money when you're not earning it. I know what he means in the present context, but the fact is that spending money we haven't earned is what Americans have been doing for the past fifty years. After WWII, wages were high. Capital discovered that it could cut wages without cutting consumption by aggressively marketing consumer credit. Servile legislators passed laws to make easy consumer credit available, and we fell for it. Americans borrowed while people in other countries saved. Finally, we couldn't keep all the plates spinning. That's the root of our current fiscal crisis. How do we fix that?

Aug. 27 2010 10:23 AM
Mike

Isn't a big problem that so much of our money supply is in the hands of so few? With all that money out there, don't things cost more?

Isn't there a huge gap in the inflation in prices that manufacturers are paying and the low inflation in prices that consumers are paying? Which is caused by the lack of competition and huge size of megastores?

Aug. 27 2010 10:22 AM

Again, expectations play a role. This is well-established. It's been known since _before_ the Great Depression. Keynes wrote about it, among others.

As Salmon notes, the problem is DEMAND. People are fearful or worse! Journalists, pundits, economists, politicians -- all with JOBS -- just don't get it!

If anything, the media has bent over backwards to create positive expectations. The housing bubble has been consistently ignored -- by The Post, by NPR, by many others.

The sheer depths of the financial crimes have been grossly understated.

And the troubles facing average Americans are are still grossly under-reported.

As for New York City, Greg David just delusional. NYC is doing better than the rest of _some_ of the country. BUT New York results are skewed because of the hundreds of billions funneled into the hands of a few thousand people on Wall Street.

Utter nonsense.

Aug. 27 2010 10:22 AM
Bob from nyc

NPR knows that bad news sells. From 6 a.m. on, with the exception of the BBC "Striking a Chord" segment, I have heard purely bad news. If you log it, you see that it is grotesque, one segment after another. They do this for ratings. Cheese sticks.

Aug. 27 2010 10:18 AM
John from Rainbowland

I appreciate a segment like this because it offers a rational even brighter view of economic news in opposition to segments on the John Batchelor show which relies on screaming doomism along with its attendent horrific nightmarish sounding music bumpers. Good work team. More of this. Less oil spill, less Katrina etc......

Aug. 27 2010 10:13 AM
gary comorau from queens

I constantly hear about business being afraid to hire, but what data is there that they will ever hire. Unless I;m mistaken, private industry hasn't created any new jobs in 10 years. There were none under Bush and we've lost jobs under Obama

Aug. 27 2010 10:11 AM

Despite the dismal numbers, NPR and The New York Times and CNN will _still_ go to the ALWAYS-wrong Mark Zandi. Pretty close to a .000 batting average, yet Zandi is always called upon.

Let's get Dean Baker, Paul Krugman, Nouriel Roubini, etc.

As for Ross DeVol -- give me a break. Sure, expectations affect the economy. But why do conservatives like DeVol suddenly junk classical economics?

The economy is most affected by DEMAND -- and Americans don't have the jobs or the income or the security to sustain demand.

This is a no-brainer that DeVol and his ilk just ignore.

Aug. 27 2010 10:09 AM

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