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A Question For Conservatives


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2012 Aug 31, 6:07am   7,134 views  22 comments

by rooemoore   ➕follow (0)   💰tip   ignore  

If McCain/Palin had won in 2008 would the unemployment number be lower than it is now? If so, what specific policies different than Obama's would McCain have implemented to do this?

#politics

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1   Tenpoundbass   2012 Aug 31, 6:31am  

If they kept the Fed functioning as status quo then nothing, but if they either replaced Ben Bernanke with someone not creating a pimply faced kid's dream, final exam economic experiment out of the world and our economy, with the ego maniacal notion that he could have single handedly staved off the Great Depression, by following Japan's economic path. Then all bets are off.

less than .0?% interest rates for savings and federal loans, MM, CD's ect.
Is and has been the single driver of this Great Great Great depression we've been in since 2007-08.

2   rooemoore   2012 Aug 31, 6:54am  

The fed and who runs it are the clearest signal we have of who really runs the govt.

3   mell   2012 Aug 31, 7:17am  

Yes, and that's why mentioning Japan as a failed nation of savers to justify spending does not hold up at all. Japan embarked on the same cheap money path and the savers got screwed over the lost decade. With interest rates like these traditional safe savings unfortunately don't have that much effect. Better go and buy some real estate, prices can only go up! ;)

4   rooemoore   2012 Aug 31, 7:26am  

Bernanke was/is a big critic of Japan's economic policy in the 90s. Perhaps he's delusional?

http://seekingalpha.com/article/289839-bernanke-vs-bernanke

5   Raw   2012 Aug 31, 8:05am  

The unemployment rate would have been the same.
I am an Independent that voted for McCain, because I think he is awesome and Obama would have destroyed the economy.
That did not happen, and Obama prevented a depression. I am so impressed with Obama that this time I will vote for him.
I would also like to apologize to Obama for having doubted him 4 years ago. Sorry dude.

6   mell   2012 Aug 31, 8:14am  

robertoaribas says

CaptainShuddup says

less than .0?% interest rates for savings and federal loans, MM, CD's ect.

Is and has been the single driver of this Great Great Great depression we've been in since 2007-08.

lowest rates causing a depression... yeah... I'm really not sure how to reply to something this stupid...

Better read up on Japan then.

7   Jeremy   2012 Aug 31, 8:27am  

Meh. Why a question for conservatives? Most Right Wingers are delusional enough to believe that the country would be 10 times better off under McCain. Most of them are the same ones that will vote for Romney for the same reason. Although there are ideological differences between the two parties, there are miniscule policy differences, since the entire Government is owned and operated by the worlds Central Banks, Large financial institutions, Big Pharma and Major Corporations. More War, more debt, more bailouts, more handouts, more taxes, more nanny state, less freedom. Same under Bush, Same under Obama, would have been the same under McCain, will be the same under Romney (who will lose in an Electoral College landslide anyway), and so things will continue. More victims in the lower class, a far poorer middle and upper middle class, and a much richer elite class.

8   Jeremy   2012 Aug 31, 8:53am  

Ruki says

Do you have proof of that or did you just pull that out of your ass as it sounds?

We wouldn't have been 10x better off under McCain.

3/4 of my family and friends are avid right wingers. This is the general consensus I've gotten from all of them. I kinda pulled it out of my ass, yes. But it's a basic summary of their beliefs.

9   Jeremy   2012 Aug 31, 8:54am  

Ruki says

No, most are voting for him because they possess the very real knowledge that they are worse off under Obama than they were under Bush.

Very real knowledge??? Talk about pulling something out of your ass!!!!!

10   rooemoore   2012 Aug 31, 8:56am  

mell says

Better read up on Japan then.

There is a lot of debate on that topic, and it is more complicated that you are making it sound. I could point you to several articles by respected economists that would disagree with the simplistic comparison.

11   dublin hillz   2012 Aug 31, 9:52am  

Ruki says

No, most are voting for him because they possess the very real knowledge that they are worse off under Obama than they were under Bush.

They were better off when the DOW was in the 6K range?

12   CL   2012 Aug 31, 9:58am  

Good luck with that. Hard to nail down jello.

Let me try though, "Obama's thug politics and stimulus crowded out private capital and the miracle of the free-market would have solved it all for us a long time ago and he made it worster because on accounta he scared businesses by making sure he had some controls on health insurance that is deficit neutral but it's really not"

McCain is alright, because he has an (R) by his name. Romney has one IN his name!

13   marcus   2012 Aug 31, 10:15am  

CaptainShuddup says

less than .0?% interest rates for savings and federal loans, MM, CD's ect.
Is and has been the single driver of this Great Great Great depression we've been in since 2007-08.

It's more an effect of the depression than a cause. Interest are rates determined in money markets, that both the treasury and the fed are very much involved in.

Readers digest version: The fed has always been able to set short term rates. Longer term rates have traditionally been set by buyers and sellers of long term debt (not the fed) although short term rates affect these markets (occasionally inversely if short term rate drops are seen as inflationary). Now, long term rates are also much more dependent on the government because of purchases of bonds and mortgage debt by the fed in efforts to to keep mortgage rates low to prevent a "worse" (or better?)RE situation.

Bottom line (although an oversimplification):

Since 2008, the fed has been in a relative panic mode, pushing both short and long term rates to be lower than they would be to stave off deflationary forces and to stimulate us out of this extremely stagnant situation.

With rates close to zero, they are somewhat "out of ammunition" relative to these manipulation games by which they attempt to "fine tune" the economy.

This is totally unprecedented in modern times (although Japan was similar after their Real Estate crash - and it still seems like they are recovering from 1991/1992 - and their rates are still low)

(Note: 10 years ago people were always talking about the so called "carry trade." That was where money was borrowed for super low rates in Japan and then invested/traded for returns higher than the rate it was borrowed for in global markets. There was a risk though in terms currency risk, i.e, the value of the yen that were borrowed going against the traders. These days, the "carry trade" can be done within our own banks (which conveniently are also investment banks) which have access to cheap dollars, right here at home. Isn't that convenient?)

14   Tenpoundbass   2012 Aug 31, 10:34am  

rooemoore says

I could point you to several articles by respected economists that would disagree with the simplistic comparison.

Because it's been so effective so far right? And don't forget I said the lunatic is effecting the Global economy. Spain just reported 25% unemployment.

Money makes money that is the way it has always worked. If your money is just changing hands for practically free, then there is no money being made. Interest rates is how people have always successfully retired with out the younger generation calling them leaches and being made to feel that are supporting them.

Interest is what builds the city sky line, and don't you kid your self otherwise.

15   marcus   2012 Aug 31, 10:34am  

Does it sort of remind you of how business was booming in New York during the civil war ?

Is it possible that recession/depression is actually good for many large financial market participants ?

Who are they backing the most in this election ?

16   rooemoore   2012 Aug 31, 10:46am  

CaptainShuddup says

Money makes money that is the way it has always worked. If your money is just changing hands for practically free, then there is no money being made. Interest rates is how people have always successfully retired with out the younger generation calling them leaches and being made to feel that are supporting them.

Interest is what builds the city sky line, and don't you kid your self otherwise.

I invested 500k in my business 3 years ago and have seen phenomenal returns.

Your nuanced interpretation of how economies work and how - if it was up to you - our present global malaise could easily be solved, reminds me of a Tebow fan.

17   Tenpoundbass   2012 Aug 31, 10:58am  

You know who else had phenomenal returns?

The 2000-2005 Re investor.

You know who else had phenomenal returns?

Savers circa 1945-1999.
I'd rather put my money with the guys that had a 50 year good run, than those 5 quickes, that need a bail out and wetnurse after decision they make.

18   rooemoore   2012 Aug 31, 11:02am  

CaptainShuddup says

You know who else had phenomenal returns?

The 2000-2005 Re investor.

You know who else had phenomenal returns?

Savers circa 1945-1999.

I'd rather put my money with the guys that had a 50 year good run, than those 5 quickes, that need a bail out and wetnurse after decision they make.

I agree, it would be nice to go back to stabler economic times, but raising interest rates would not be the answer.

Sometimes you make sense though, and it scares me...

19   Ceffer   2012 Aug 31, 12:17pm  

Low interest rates are designed to punish passive savers and force them to invest in active businesses, real estate, stocks etc.

Surfing the institutional usuries rather than putting capital to work are luxuries of inflationary times and high interest rates. In the early 80's, CD's could be purchased at 15 percent per annum and some even higher returns. Savers and retirees were delighted, no need to take any chances with passive returns that high.

Low interest rates force investors with resources back into a riskier gambling/investment strategies which tend to be production oriented.

It's OK for Wall Street to be a rent taker on a huge scale, but not for the little guy who wants a conservative return on his investments with ordinary interest bearing vehicles.

It seems that inflation is coming soon, though, so interest rates will have to go up, come hell or high water.

21   marcus   2012 Sep 1, 2:55am  

Ceffer says

Low interest rates are designed to punish passive savers and force them to invest in active businesses, real estate, stocks etc.

This makes some sense if you remove "are designed to" out.

Low interest rates are good for other markets for a number of reasons, especially because money can be borrowed for cheap and invested in these other markets. But also for the reason you suggest, although it's usually framed this way: People pay higher prices for stocks and accept lower yields for stocks when higher yields are not available in money markets.

But the idea that for example equity markets spur productivity more than debt markets? I don't think so.

Debt markets are strongly affected by the deleveraging that's going on. Debt and cheap money (cheap interest rates) can be great for businesses, and individuals, when they don't already have to much debt. Or too much surplus capital seeking a decent return.

I do think there may also be an effect that low rates adversely affect small business borrowers, because the lenders aren't making enough with the low rates to compnsate for the risk of borrowers defaulting. So the low rates are mostly available only to huge companies and those who don't really need to borrow, or to those who will borrow with moral hazard.

22   Ceffer   2012 Sep 1, 3:48am  

Well, to answer the OP, it might be likely that the Republican candidates would have endorsed tighter money policies, which would have increased unemployment, at least at first. Using unemployment as a sole metric of economic success is more of "kicking the ball down the road" and short term expediency driving political decisions.

European economies such as Germany are pathologically fearful of inflation because they have been wrecked by it in the past. Their monetary policy is more geared towards stability and predictability of inflation to preserve currency integrity, and they will pay the price of higher unemployment to get it. However, they also have social engines in place to ease the burdens of unemployment on the unemployed, more so than the USA.

They would consider the low interest, print money until the economy recovers strategies to be enormously risky and reckless. The economy does not do anybody any good if you have a period of higher employment, followed by an out of control period where everybody has to use wheel barrows to carry cash to buy ordinary commodities. Then the policy becomes the staggering drunk reactionary policy of more draconian interest rates and burning brakes to control the inflation, with the currency itself becoming vitiated.

Of course, inflation serves the interests of the debt drunk as well by allowing present day debts to be paid back with future increasingly worthless dollars.

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