patrick.net

Actual title: Obama says administration prevented another Great Depression

And of course this is ridiculous because we are in a depression and have been for six years. Just because we aren't walking jaggedly in a sepia background wearing 1930s clothing doesn't mean we aren't in a depression. Did you really expect the world to go monochrome during a depression? Just because all the footage from the First Great Depression was in black-and-white doesn't mean people didn't actually see in true color back in the 1930s.

Of course this depression isn't going to feel like the last one. We're not all going to huddle around giant radios running on vacuum tubes. Food stamps have replaced soup kitchens and technology has advanced so much that this depression is less painful than the last, but economically speaking, this depression is as bad as the last one. Unemployment is as bad. Wages have fallen in real terms since 2000. Just because we have iPads and Smart Phones doesn't mean we aren't in a depression.

Furthermore, the depression will last at least another three years, possibly eight more.

This depression could have been avoided if the too-big-to-fail banks were allowed to fail and the housing prices were allowed to quickly collapsed. Doing so would have gotten all the bad debt out of the system and punished only those who gambled on housing. Instead, the government under both Bush and Obama decided to let the speculators avoid loses by spreading out that pain across the general population and across many years, prolonging and deepening the economic consequences.

The depression was created by bailing out speculators at the cost of you and me. It was a wound inflicted on the common man by high ranking politicians who are bought out by banks and other financial firms. And this depression could have been avoided in many ways even up to the year 2006.

It's true because we believe it!

We are not in a depression. We are not even in a recession anymore.
http://www.tradingeconomics.com/united-states/gdp-growth

When Obama became President we were heading straight towards a depression. He gets credit for preventing one, and that is his greatest achievement for the economy.

Lets give the man credit where credit is due.

Raw says

We are not even in a recession anymore.

Really? I can't tell. Neither can the massive throngs of the unemployed/underemployed.

freak80 says

Raw says

We are not even in a recession anymore.

Really? I can't tell. Neither can the massive throngs of the unemployed/underemployed.

The definition of recession is - 2 consecutive quarters of negative growth.
As we don't have that, we cannot be in a recession.

I'm not trying to blame Obama or anything. But we need much faster growth to get back to where we were before the crash.

freak80 says

I'm not trying to blame Obama or anything. But we need much faster growth to get back to where we were before the crash.

I agree.
Faster growth will come, but for now we just have to be happy we did not end up in a depression.

I respect Obama.

However I think we didn't prevent the GD 2.0, we just softened the initial blow of it by extending it for many decades. The structural problems that created a distorted bubble economy, are still in full force, in some ways they are worse. Big stupid banks were encouraged to get even bigger.

Obama said he prevented a depression and Clinton said "I never had sex with that women". Hahahahahahahahahah. LMAO.

The insanity that is Globalization must stop. Nations are pretty much powerless to reign in the power of a global plutocracy.

TARP (now rechristened QE, QE2, and QE3) prevented a depression among Wall Street bankers, who are doing better than ever thanks to their puppets in both major parties. For the rest of the world, i.e. the 99.9% who don't profit directly from TARP&QE, the Depression is at best postponed. Living on credit isn't sustainable, and at this point the FIRE sector of the economy is consuming everything else. Cannibal anarchy will not benefit anyone except maybe Levi and his daughter Breeze Beretta, and I can only hope they prefer the taste of banker.

http://www.mcclatchydc.com/2012/09/12/168266/incomes-drop-in-2011-rich-and.html

Incomes are even lower then when the crisis began.

But no worries the income gap between average citizens and the handlers of both Demublicans & Republicrats continues to widen.

So everything is going well, mission accomplished! Oh something for you apple face:

"While the unemployment rate dipped from 9.6 percent to 8.9 percent from 2010 to 2011, the decline was ALMOST ENTIRELY DUE TO PEOPLE DROPPING OUT OF THE LABOR MARKET,"

Raw says

We are not in a depression. We are not even in a recession anymore.

http://www.tradingeconomics.com/united-states/gdp-growth

When Obama became President we were heading straight towards a depression. He gets credit for preventing one, and that is his greatest achievement for the economy.

Not even close.

First, the word recession was created by economists to prevent the public from using the word depression and making economists and politicians sound bad, like they weren't doing their jobs.

As you stated, a recession is two consecutive quarters of declining GDP. But why would anyone give a rat's ass if for two quarters the GDP declined? It says nothing about the strength of the economy.

For example, consider an economy with a GDP of $100 billion/year. Scenario 1, in quarter 1 the GDP increases 50% and then declines 5% for the next two quarters. Scenario 2, the GDP increases at 5% for the next three quarters. Scenario 1 is a recession, but the people and the economy is way better off than in scenario 2 where everything is honky donkey according to the definition of recessions. The word recession serves no purpose but to keep people from talking about depressions, which are important.

Even in depressions, it is rare to have many consequential quarters of decline. In fact, you could have a 100 year depression without having a single recession. Image an economy's GDP declining by 90% in one quarter than than increasing 1% a year for the next century. Would you really consider that century to be an economic boom period?

Now, as for our economic situation, let's look at the real unemployment and underemployment situation.

[I]f the labor force participation rate was the same today as it was back when Barack Obama first took office, the unemployment rate in the United States would be a whopping 11.2 percent. But every month the Obama administration has been able to show "progress" because of the fiction that hundreds of thousands of Americans are "disappearing" from the labor force each month. Frankly, the way that they come up with these numbers is an insult to our intelligence.

http://www.presstv.com/usdetail/261418.html

http://www.shadowstats.com/alternate_data/unemployment-charts

Even counting just the fully unemployed by conservative metrics, the real unemployment rate is about 15%. More realistic estimates are about 23%.

The government's most widely publicized unemployment rate measures only those who are out of a job and currently looking for work. It does not count discouraged potential employees who have quit looking, nor those who are underemployed — wanting to work full-time but forced to work part-time.

For that count, the government releases a separate number called the "U-6," which provides a more complete tally of how many people really are out of work.

The numbers in some cases are startling.

http://www.cnbc.com/id/48468748/Real_Unemployment_Rate_Shows_Far_More_Jobless

And by startling, CNBC means in the twenties.

Real Unemployment Rate Is 23%, Not 8.1%

And if you actually counted the underemployed, i.e., all those who are working crap jobs part-time because they can't get jobs they are qualified for and full-time employment, it's a lot higher than 23%.

Now let's compare that to the First Great Depression.

Unemployment During the Great Depression

Average rate of unemployment
in 1929: 3.2%
in 1930: 8.9%
in 1931: 16.3%
in 1932: 24.1%
in 1933: 24.9%
in 1934: 21.7%
in 1935: 20.1%
in 1936: 16.9%
in 1937: 14.3%
in 1938: 19.0%
in 1939: 17.2%

http://www.shmoop.com/great-depression/statistics.html

And you're telling me we aren't even in a minor depression? I call this the Second Great Depression because the facts are every bit as bad as the First Great Depression from 1929-1939.

If our current economic situation doesn't constitute a depression, then WTF will it take for you to call this a depression? Do lolcats have to start appearing in sepia?

Raw says

Lets give the man credit where credit is due.

Oh, I get it now. It's all about politics. So, to answer my question, "WTF will it take for you to call this a depression?", the answer is a republican in the White House.

How about instead of giving credit or blame, we just acknowledge reality for what it is and figure out what needs to be done to make it better. Pretend we're not in an election year, and talking about how bad the economy is and how to fix it isn't an election issue.

Because if you argue that today's economy is the new norm, it will be. The first step to solving any problem is acknowledging it's existence.

Dan8267 says

Lets give the man credit where credit is due.

Oh, I get it now. It's all about politics. So, to answer my question, "WTF will it take for you to call this a depression?", the answer is a republican in the White House.

How about instead of giving credit or blame, we just acknowledge reality for what it is and figure out what needs to be done to make it better. Pretend we're not in an election year, and talking about how bad the economy is and how to fix it isn't an election issue.

Because if you argue that today's economy is the new norm, it will be. The first step to solving any problem is acknowledging it's existence.

Stop tossing the cats, they are not gonna bounce.
Dan, this is not about politics but reality. I am a liberal leaning independent. The first thing I do every morning is turn on CNBC like a good capitalist. I voted McCain.
I'll tell you exactly what I would call a depression. Unemployment rate twice as much as today based on the same formula, and a GDP rate at a negative 10% or more.
We don't have that. I will concede we have low growth, but not even a recession.

Going by the metrics used in the 1930s, we clearly have as much unemployment today as during the peak of the First Great Depression. And that's not high enough? Perhaps then we shouldn't call the period from 1929 to 1939 a depression then.

Just because our government has convinced the media to accept its bold-face lying statistics, doesn't make this economic downturn any less severe than the one in the 1930s. Either they are both depressions, or neither is. And if neither is, then there has never been a depression in American history.

Oh, and there is absolutely no way that had Obama's policies been different, unemployment would be twice of what it is now. That's really stretching it. Especially since Obama's economic polices aren't materially different from what Bush was doing at the end of his term: bailing out banks, issuing stimulus spending, and keeping interest rates low.

Dan8267 says

Going by the metrics used in the 1930s, we clearly have as much unemployment today as during the peak of the First Great Depression. And that's not high enough? Perhaps then we shouldn't call the period from 1929 to 1939 a depression then.

Just because our government has convinced the media to accept its bold-face lying statistics, doesn't make this economic downturn any less severe than the one in the 1930s. Either they are both depressions, or neither is. And if neither is, then there has never been a depression in American history.

Oh, and there is absolutely no way that had Obama's policies been different, unemployment would be twice of what it is now. That's really stretching it. Especially since Obama's economic polices aren't materially different from what Bush was doing at the end of his term: bailing out banks, issuing stimulus spending, and keeping interest rates low.

All industrialized countries, including us, use a similar formula for unemployment. It has nothing to do with deceiving the media. I believe in the 1930's they would have used the same formula too. So no, we had a depression in the 1930's, and we don't have one today.
Spain has a 25% unemployment today. I would understand if you were to call that a depression.
I would agree if Republicans were in charge, the economy would not be much different. No President has a magic wand to make thing work. Nevertheless, Obama gets the credit for staving off a depression.

no way to tell for sure if OB's actions helped or hurt.
find another wedge issue to hang your ass on....

Let’s Be Honest: We’re in a Depression, Not a Recession, And There’s No End In Sight

We Are in Age of ‘Late Great Depression' - Robert Shiller"

The US Labor Market Is In A Full-Blown Depression

In his new book, End This Depression Now! Paul Krugman states that the U.S. is in the throes of a depression — not merely an economic crisis.

America is in a Depression, not a Recession

We Are In a Modern-Day Depression

With the US trapped in depression, this really is starting to feel like 1932

America’s Second Great Depression
- Even uses my own term: Second Great Depression

NPR: Why the U.S. Is in an Invisible Depression - excellent video!

Video: We Are Living in a ‘Modern-Day Depression’: David Rosenberg

http://www.youtube.com/embed/5q_jkNE7VH0

http://www.youtube.com/embed/rt6OnX2efU0
- He even uses my term: The Second Great Depression

http://www.youtube.com/embed/N_6EDX8G9ZQ

Video: America is clearly in a depression

Vicente says

However I think we didn't prevent the GD 2.0, we just softened the initial blow of it by extending it for many decades. The structural problems that created a distorted bubble economy, are still in full force, in some ways they are worse. Big stupid banks were encouraged to get even bigger.

I agree. We're not out of the woods and one day this may be considered a long depression, as the great depression was.

Dan8267 says

Of course this depression isn't going to feel like the last one. We're not all going to huddle around giant radios running on vacuum tube

Funny you mention cacuum tubes because they were trying to have old ones come out but frankly the quality just isn't there
http://www.6moons.com/audioreviews/tubetuner/r601p.html

I think it would be hard to say that Obama put us into this but also doubtful that he prevented a depression. That's like trying to say that the space program prevented an alien invasion.

mdovell says

I think it would be hard to say that Obama put us into this but also doubtful that he prevented a depression.

Of course Obama didn't cause the depression. It started in 2006 and was caused by the Housing Bubble. I'd argue that Obama didn't help any and that all depressions eventually work themselves out and you can't keep losing jobs at a high rate because eventually there are too few employees to run businesses.

But who's to blame is not important. What's really important is that people acknowledge that this is indeed a depression right now. Pretending isn't going to make the problem go away. It's only going to make solutions go away.

Raw says

All industrialized countries, including us, use a similar formula for unemployment. It has nothing to do with deceiving the media.

The BLS's unemployment metrics are just as nonsensical as what the Boskin Commission did under Clinton's watch, which was to re-jig how CPI was measured in order to suppress Social Security COLAs.

There are a lot more outlets for readily distracting ourselves today. I'm not suggesting it's part of a big conspiracy, but the sedative effects of gadgets and cheap calories defintely buffer the blows of the depression. I would point my finger right back at myself, but I can't because 1.) I am typing and need that finger and 2.) I am not hurting $$$ wise because I am a VRM, and therefore, require less opium than the next bum.

Actually, the more I think about it, the more I'd have to agree with Raw Apple in that this is not a depression. In fact, I think to call it such borders on being a cop out. What I would call this is the new normal, the initial contractions of which are painful

Raw says

The definition of recession is - 2 consecutive quarters of negative growth.
As we don't have that, we cannot be in a recession.

Do you actually think we had negative growth all through the 16 years of the great depression? If we did, don't you think the GDP would have become negative by the end of the depression? But, actually, the GDP grew 150% during the great depression.

We are neither in a recession nor depression. But rather several regressions in succession before an election in a direction that will most likely cause an erection deemed a transgression of natural selection .
Or we could be entering a boom cycle.

SoftShell says

We are neither in a recession nor depression. But rather several regressions in succession before an election in a direction that will most likely cause an erection deemed a transgression of natural selection .
Or we could be entering a boom cycle.

Poetry Slam on Patrick.net!

Where is the depression? It's always sunny in sunny OC.

http://www.ocregister.com/articles/home-371359-price-market.html

Raw says

Where is the depression? It's always sunny in sunny OC.

You're thinking of Philadelphia.

I wouldn't call this a depression, I'd call it a lengthy recession with bouts of stagflation.

And, in the next 4 month after that, the 1-year went to 1100 basis points. So, that's almost a 30x increase in just 8 months.

Oh noes, another Duck Duck Goose fight!

There's the hyperinflationist camp. I tend to think it won't happen: the aristocracy/plutocracy doesn't benefit if those whole system crashes. Nobody does.

There's the deflationist camp. I tend to think it won't happen: the FED won't allow deflation since it's believed to be bad (everyone just hoards cash). If the FED has to print money to avoid deflation, it will do it, and that's a good thing.

Then there's the "simultaneous hyperinflation AND destructive deflation" camp. Which is crazy. How can you have both inflation and deflation at the same time? Sure, any given asset can go up/down relative to the average, but inflation/deflation is talking about *overall* prices.

Was 1965 - 1982 hyperinflation ?

According to http://www.dollartimes.com/calculators/inflation.htm,

one dollar in 1965 had the buying power of $3 in 1982.

This was not your ordinary 17 year period.

I believe that the powers that be would like to inflate again - but that it will be tricky because of downward pressure on wages from other countries. WE're in a very tough situation, given the fact that our economic growth (domestically), when it occurs, is based largely on consumption.

marcus says

WE're in a very tough situation, given the fact that our economic growth (domestically), when it occurs, is based largely on consumption.

Agree. That's why "Reaganomics" won't get us out of this mess.

freak80 says

If the FED has to print money to avoid deflation, it will do it, and that's a good thing.

The FED has to print money to avoid deflation, no if here. It has to print a LOT of money just to avoid deflation. It just added a new $40B/month money printing program because it could not avoid deflation w/o it. In fact for the last 4 years the FED prints much more money than is destroyed by loan repayments/failures.

The problem is that neither the FED nor the US GOV-T can effectively direct printed money. All this printed money supports misallocations of real resourses, thus destroying real economy. As it is today the Keynesian multiplier of recent stimuli and QEs is not only close to 0 (ZERO). It is in fact negative, because buying MBS actually drags resourses from other fields where they are much more productive.

At certain point we will be unable to increase our borrowing that prints all these money. At that point we'll either fail to print all those tens of trillions of $USD in physical notes, which will cause a huge deflation that will destroy most of our perceeved wealth; or we'll succeed in printing them, which will again destroy all our perceeved wealth thru hyperinflation.

Kinda reminds me of what I read about the German hyperinflation, people would rather steal the wheelborrow and leave the piles of worthless money behind.

"Paper money ALWAYS returns to its intrinsic value" Voltaire
[emphasis added]

All is well. Upwards of a quadrillion in derivatives risk. No problem. Faith in fiat never faileth. No danger in hyper-extending leverage on food stuff commodities, because too many people will never be hungry at the same time.

dunnross says

housing is not 100% deflated from the last bubble.

It is about 90% deflated, though. At least nationally:

http://www.multpl.com/case-shiller-home-price-index-inflation-adjusted/

dunnross says

Hardly need to look hard. Take the entire peninsula from San Francisco, all the way down to San Jose.

That area is expensive because of the high-paying tech jobs. Locally, anything can happen to RE.

A few years ago western North Dakota was nothing but ghost towns. Now, RE is booming thanks to the Bakken oil play.

RE goes up when there's a flood of money coming in.

That doesn't mean anyone should buy if they can rent something similar for less.