Gramm delivers really straight talk
posted at 11:30 am on July 10, 2008 by Ed Morrissey
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Phil Gramm vented a little frustration about the doom-and-gloom talk surrounding the economy in an interview with the Washington Times, and Democrats have jumped all over it. Gramm, speaking as a surrogate for the John McCain, decried the rush to pessimism, noting that we have not yet experienced a single quarter of contraction, let alone a recession. His description of a “mental recession” has McCain’s opponents gleefully portraying Gramm as out of touch:
In an interview with the Washington Times, Phil Gramm, a former Texas senator who is now vice chairman of UBS, the giant Swiss bank, said he expects Mr. McCain to inherit a sluggish economy if he wins the presidency, weighed down above all by the conviction of many Americans that economic conditions are the worst in two or three decades and that America is in decline.
“You’ve heard of mental depression; this is a mental recession,” he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. “We may have a recession; we haven’t had one yet.”
“We have sort of become a nation of whiners,” he said. “You just hear this constant whining, complaining about a loss of competitiveness, America in decline” despite a major export boom that is the primary reason that growth continues in the economy, he said.
“We’ve never been more dominant; we’ve never had more natural advantages than we have today,” he said. “We have benefited greatly” from the globalization of the economy in the last 30 years.
Gramm has at least the non-recession correct. In fact, growth ticked slightly upwards in the last quarter from 2007Q4, going from 0.6% to 1.0%. Since recession is defined as two successive quarters of negative GDP growth, Gramm rightly states that we haven’t yet had a recession. The export boom shows that America can compete on a globalized stage, despite the shrieks of economic collapse that accompany trade talks.
Democrats call Gramm out of touch for calling the US a “nation of whiners”. It may be politically inapt in an election year, but the description isn’t far wrong. We hear comparisons made to the Great Depression and a “Herbert Hoover economy”, but that only proves how incoherent and economically illiterate critics can be. Growth remains positive and unemployment remains in the range of historical average of 5.5%. Contrast that to the economy of Jimmy Carter, when unemployment, inflation, and interest rates all went out of control — and even that was nothing next to the Depression. Whiners? You bet.
And the most ironic part of this criticism is that most of the people launching it want to do exactly what Hoover did — revert to economic protectionism. They want a Smoot-Hawley approach to foreign trade that would make whatever economic troubles we do have grow exponentially.
Gramm made a mistake, though, in assigning whiner status to the entire country, and the Democrats are poised to pounce on it:
“How dare john McCain and his advisers so callously dismiss the challenges the American people face? No wonder voters feel john McCain is out of touch. He and his campaign don’t even understand the everyday issues Americans are dealing with.”
The problem with today’s economy comes from two sources: the credit collapse from the burst of the housing bubble, and the rapidly-increasing price of fuel. Both parties can take the blame for the former if any blame at all is to be assigned, but the latter belongs squarely in the lap of Democrats. Republicans have tried for years to increase both domestic production and refining of oil, as John Boehner reminds everyone today in the New York Post, but the Democrats have obstructed all efforts. Had we brought the OCS and interior sources on line during the 1990s, we would have no supply crisis today. Had we done so after 9/11, when the strategic issues regarding oil production became blindingly obvious to all but the most obtuse, we would be seeing the maturation of those supply sources right now.
Instead, what did we get? Thirteen years of whining that it would take seven years to bring new sources of oil to the market. I’d say that Gramm diagnoses the problem with accuracy, and that the Democrats should own up to their affliction.
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And your right, Ed, we have not even experienced a recession as the definition entails.
carbon_footprint on July 10, 2008 at 1:01 PM
Let’s get some perspective here. Let’s consider how human life has been lived on this planet for the last 20,000 years. Life used to be short. When it was dark, it was dark unless you had torches which smelled bad and left soot everywhere. When it was cold, it was cold. The levels of violence and cruelty were similar to what we in the contemporary muslim world. People sometimes starved to death if the harvest was bad and the harvest was often bad.
Now, a persons who can’t afford a $600,000 goes ahead and buys one. The house is foreclosed and this is suffering? People have to pay more for gas and this is suffering? A high cheerleader breaks her fingernail. More suffering, I suppose.
Can’t we at least agree not to use the word “suffering” in terms of the economy until there is at least a recession?
thuja on July 10, 2008 at 1:03 PM
reaganaut on July 10, 2008 at 12:50 PM
It is those useless crap that power this economy. Cut out that $5.00 cup of java from starbucks and you get 600 stores closing and 12,000 people out of work. cut out those cable channels and comcast, directtv etc will layoff workers etc. In an economy powered by 70% consumer spending if you cut out the useless spending you send the economy quite literally into a massive recession which will feed on itself.
unseen on July 10, 2008 at 1:03 PM
I think I recently read that China recently raised the price of oil (gasoline??) by 17%. It is still subsidized, but the subsidy has been reduced, and the price of energy there to the end-user is going up as well.
Will try to find link.
JiangxiDad on July 10, 2008 at 1:03 PM
Get real. The day after President Obama is inaugurated, the economy will stop being discussed at all in the media for weeks. When they start reporting on it again, it will be all good news about the “Obama recovery.” The point is that the economy is not in a recession now, so it will be easy to stop calling it a recession once Obama is inaugurated.
The housing and financial services sector is in a depression, without a doubt. That won’t pick up until well into 2009. But the agricultural and export sectors are booming. The energy sector is booming. The entertainment sector is doing fine. Even the automotive sector that is producing smaller, fuel-efficient cars is doing fine. Lower cost retailers like Walmart are doing fine. To call this a recession is a joke.
This “recession” has been a total media production. And it will all stop when the media’s favored candidate becomes President.
rockmom on July 10, 2008 at 1:05 PM
That day was coming sooner or later.
Imagine taking a large part of your population who formerly would have worked in some form of manufacturing and put them in front of a cash register or cappucino machine.
It was always a recipe for disaster.
Thrift was once a virtue. Now we are supposed to spend the economic stimulus check at Starbucks.
JiangxiDad on July 10, 2008 at 1:06 PM
Leave it to Democrats to whine about someone telling the truth.
.
GT on July 10, 2008 at 1:07 PM
The baby boomers have always driven the economy. We are now retiring, at an incredible rate.
That alone means in the next 10-20 years a huge shift in the economy. There has to be a change, it will be fluctuating, and trying to balance, while the driving force of the economy for the past 60 years is moving out of the work force.
Place into that the government obsessive compulsion to punish manufactures, and you have a turbulent economy for a couple of decades.
May come back stronger, maybe weaker (in 15 years, who is going to occupy the homes we now have, immigrants?), who will but the cars, the motor homes, the resorts, golf courses.
70% of the nations economy and assets are owned by people over 55 (and only 20% of the workforce). 70%, think about that figure, and what it means for that to disappear or shift in the next 20 years, year by year.
The economy is shifting quickly, and the Republicans cannot sit back and call people whiners, they need to present solutions.
right2bright on July 10, 2008 at 1:09 PM
Better make that the AM/PM, Starbucks closing 600 stores.
right2bright on July 10, 2008 at 1:11 PM
Ed, HOOVERIAN indeed! LOL & good post.
As a critic said that Gramm, now VP UBC, got what he deserved, in more ways than one, yes. He certainly is better off now than when he was a public servant.
He makes his point; and it is the point that matters on this thread more so than Gramm’s delivery style. Hell, if its strictly on the basis of delivery, criticism would slant towards bobama’s teleprompt silver (plated) tongue.
As per the economy and society ills, people have a love/hate relationship with news. The public wants to hear the news, but hates the news and kills the messenger.
***
I don’t see a thread on McCain (not surrogate) yet.
But there’s a point worth noting about candidate McCain, the obvious beyond the obvious warts. I was reflecting about McCain’s bipartisan “evil” perception by die-hard opponents.
McCain has proven the length of the “middle ground” extent that ANYONE can reach from the present Congress in legislation. In so doing, McCain has exposed the extent of his foes as well as his friends, showing exactly where they will meet any “bipartisan” (aka RINO/DINO) agreement. Whatever his frustrations at not being appreciated for all of that truly diplomatic work that it took to accomplish all of those McCain/Democrat bills (their intrinsic value per content aside), McCain not only proved that he can work with democrats to get things accomplished (recall that McCain began from the “middle” in all of the negotiations that ultimately were compromised as is the nature of Congressional legislation) but also that McCain has done EVERYTHING POSSIBLE to get Congress functioning! McCain has given this Democrat Congress EVERY OPPORTUNITY to prove their worth to America–and the DEMOCRATS FAILED AMERICANS and continue to fail on their path to CHANGE FOR MARX!
Whether he will or not (pray for epiphany and conservative renaissance), once elected, McCain can extend the olive branch to the Democrats not from the “middle” but from right of center, aka GOP Oval Office. The Left had its chance to make good for America, and they failed.
If elected, McCain has his chance (from RIGHT OF CENTER as per his constituent votes and as per logic dictates) to appoint Cabinet Members like Forbes, Romney, Thompson who can manage affairs they know best and he knows least, allowing McCain to defend America against terrorists with all of his attention. McCain’s military training and familial military experience prepared him to become Commander in Chief. He would be the first to explain that one man can not alone win any war. Nor can one man alone win an election.
That Phil Gramm was willing to face the public on McCain’s behalf is appreciated as a show of support from Gramm’s perspective and those who voted for Gramm are listening. If every person in America who supports McCain steps up to the podium to say so, for their own reasons, those who agree are influenced positively. Those who disagree already disagreed anyway. You can lead a horse to water, but can’t make it drink. Offer enough watering holes, and the horses will come given their own time.
Meanwhile, Fred Thompson built the GOP Constitutional founding principle platform up to 21st Century specifications and requirements. “Build it, and they will come” made a popular hit.
Meanwhile, from the Oval Office, he can call on all those democrat big whigs whom he personally vouched for with his former legislative efforts (successfully achieved/ chagrine aside) and ask them to support his work. If they turn him down, it only makes them look WORSE than they do at single digits today.
maverick muse on July 10, 2008 at 11:44 AM
maverick muse on July 10, 2008 at 1:11 PM
Fannie Mae and Freddie Mac are total creatures of Democratic policies and they are far more responsible for what has happened in the housing market than the repeal of Glass-Steagall. I’m hoping they are insolvent, because it’s the only way the truth will ever be told, and Democrats are going to take it in the shorts when it is.
And guess who was trying to rein in Fannie and Freddie when he was Chairman of the Banking Committee, and who got scolded every time he did? Phil Gramm.
rockmom on July 10, 2008 at 1:11 PM
Big Orange on July 10, 2008 at 12:55 PM
that kind of thinking will lose 99% of elections.
unseen on July 10, 2008 at 1:12 PM
THAT is the problem….the idea that the peeps are out there overextending themselves. Sure some are, but large chunk aren’t.
Our delivery driver takes home $320 a week. His car now takes $50 bucks to fill up. That’s almost 16% of his cash. This kid is a stone cold conservative but I gotta tell ya, he is going to sink. He simply doesn’t have what it takes to do much else then what he is doing. He earns what the marketrate is for his position in our area. Now take his delivery van (company supplied)…our gasolineinsurance/maintenance cost have DOUBLED in 8 months.
If it is hurting the hell out of me then it damn sure is hurting the hell out of him. How long before this kid gets his head turned by free-this and free-that? It isn’t about giving this kid bootstraps, it is about giving his situation as much attention as the Rooney’s capital gains.
Limerick on July 10, 2008 at 1:14 PM
It is not governments responsibility to pacify your wants, that would be your job. Again, conservatism 101, government is not the answer, it is the problem.
How about this: Cut my damn taxes!
Here’s my solution. If you are not able to buy what you want and need, earn more money or spend less. Hell, it’s not rocket science.
Big Orange on July 10, 2008 at 1:16 PM
Excuse me? McCain is now running an ad here in Ohio claiming the economy is “in shambles”. Which I think is way over the top. So which is it? An exaggeration or not? I suspect McCain is going to run a campaign like Bush ‘92 or Dole ‘96. That is, with a lack of focus or consistent message. In that case, meet President Obama.
Paul-Cincy on July 10, 2008 at 1:16 PM
For those of you out there who are not economists, a bit of clarification may be in order: a recession is two successive quarters of negative real GDP growth, which is the nominal (i.e. dollar value) growth rate minus the rate of inflation.
For reasons too complicated to explain here, the government underestimates inflation on the order of 3-4%. So when the government says that real GDP growth was 1%, what they are saying is that the nominal growth rate was ~4% and that the consumer price index went up by ~3%. In reality, though, inflation now is closer to 7%, so real GDP is actually shrinking by about 3% per year—clearly recession territory.
This may not resonate well with the “Blame Democrats First” crowd here, but George W. Bush is directly responsible for a large part of our current economic woes. After 9/11, rather than letting the economy fall into a short recession, the president pushed for (and received) a Fed Funds rate of a highly-inflationary and highly-destructive 1%. This cheap money fueled the housing bubble that led to the current recession. In effect, what happened was that the president, by denying Al Quaeda the propaganda victory of sending the US economy into a small recession, created a much larger recession further down the road.
For those among you interested in understanding the science behind this process, cf Human Action chapter XX section 6.
hicsuget on July 10, 2008 at 1:17 PM
JiangxiDad on July 10, 2008 at 1:06 PM
yes. It was bad economic long term policies. But it is the fact that if we save we destroy our economy at least in the short run.
unseen on July 10, 2008 at 1:17 PM
Tell it to Reagan.
Big Orange on July 10, 2008 at 1:18 PM
Apparently all this pain is a mere figment of your imagination according to rockmom and others.
Grow Fins on July 10, 2008 at 1:18 PM
As they should. What kind of a serious person, or a serious people, or a serious nation doesn’t know that making a cup of coffee at home saves money, that buying a cup at McDonald’s or 7-11 saves money, that wasting hard-earned money on luxury products when you’re not a rich person is a recipe for disaster?
When I see a Whole Foods, or a Starbucks, or other over-priced “cool” store designed to rob Yuppies and their kids, I buy the stock, not the product. Sold them both way before they both tanked. Wasn’t hard to see coming.
You know what’s cool to buy? A savings account.
JiangxiDad on July 10, 2008 at 1:19 PM
We’ve been in a recession for nearly all of the past 8 years.
dave742 on July 10, 2008 at 1:21 PM
Graham is a fool.
McCain, if he is not a bigger fool, should distance himself from these remarks. Fast
Graham is using the semantics of a disconnected idiot to confuse business growth, and export growth, with the ‘recession’ the public recognizes, that is a terrible job market with declining wages that the public recognizes comes from the exporting of their jobs overseas. Businesses may retain profit from job export, but the working public sees recession, as in the tide going out on their futures.
The 20 percent of jobs that went overseas because they were exportable manufacturing jobs have not been replaced with equivalent opportunity, unless telemarketing, retail, fast food, and home health care worker are good jobs. A huge percent of non-exportable jobs like construction, food processing, hotel and restaurant service, skilled trades have been taken off the market by importing illegals and the public sees this everywhere.
They see the replacement workers.
They see the pathetic opportunities in the want-ads
They are getting screwed flat by gas prices, rising food and utility bills.
They all know someone getting foreclosed, or are the millions who are being killed by balloon mortgages but cant sell to move to a new job.
If you want to lose the American voter, tell him now he is a whiner. Tell him he was greedy and should pay the price.
While you are at it, tell him he is too lazy to pick lettuce for $50 an hour. Again.
There isn’t a recession on paper while businesses continue the garage sale. Yet banks are sinking, Fannie Mae and Freddie Mac are out of money, and lending is drying up.
When Bush Sr cooked his goose by insisting the economy wasn’t bad, the economy was raging compared to the precipice of depression we are approaching.
McCain better put on his running shoes, or at least beat up Graham with a rubber hose
entagor on July 10, 2008 at 1:22 PM
I understand that statement, as counter-intuitive as it sounds. But, I can’t go along. It’s time to hunker down. Save your money, have a part in gold.
JiangxiDad on July 10, 2008 at 1:22 PM
Thanks. That’s informative. I’ve heard some banks guiding their customers away from TIPS (the treasury inflation protected securities), since the view on the Wall Street is that the government “bakes” the inflation figures, in part to help reduce entitlement payouts.
dedalus on July 10, 2008 at 1:22 PM
I don’t buy that. Some real assets are inflating now (or at least were until a few days ago), specifically commodities such as oil, metals and food. Some real assets are deflating now (the biggest being real estate). The term structure of interest rates in the treasury bond markets indicates that inflation, as in a general increase in the price level, isn’t currently a problem and isn’t antcipated to become a huge problem. Certainly we should do what we can absent monetary tightening to bolster the dollar and hopefully drive down the price of oil, but becoming too hawkish in the inflation front would at this point would destroy housing and ensure a recession.
phronesis on July 10, 2008 at 1:25 PM
Don’t worry. Anyone who articulates conservative principles he usually runs from.
Big Orange on July 10, 2008 at 1:27 PM
And then what?
I mean, maybe it’s just me, but I think it’s been fairly well reported that gas prices are high.
It’s up to those who believe it’s so to make the case to this kid that if he wants to pay less for gas, the answer is to get out of the way and let the people who find the crude oil to make it and then who refine it to find and make some more, and that to suggest otherwise is an insult to his intelligence.
If this kid wants to buy that a benevolent government is somehow or another magically going lower the price he pays for gas because it’s all the fault of Big Oil, well, eventually he’ll learn better.
We’ll just have to hope eventually doesn’t turn out to be too late.
Typhoon on July 10, 2008 at 1:28 PM
So now wanting lower taxes, investment relief for R&D, an energy plan that lowers our fuel costs, closing the borders are all to “pacify my wants”. What “want” was I wanting from the Government beside less restrictions.
Look at your post, you are arguing with yourself, maybe people can’t buy what they want because of government restrictions and high taxes? It’s not rocket science…
right2bright on July 10, 2008 at 1:28 PM
Tell it to Reagan.
Big Orange on July 10, 2008 at 1:18 PM
“All great change in America begins at the dinner table.” RR
unseen on July 10, 2008 at 1:28 PM
I agree on this point. Greenspan did create this housing bubble by being too easy for too long.
phronesis on July 10, 2008 at 1:29 PM
rockmom said: “Get real”
Here’s real:
Automobile sector: - GM has to raise money fast. It’s already put Hummer on the market - no buyers. Buick and Saturn may be up for sale soon. Its finance piece, GMAC, is a net drain on capital owing to bad loans. Chrysler has bupkis. Ford at least has a better cash position and a piece of Mazda. The winners - Honda and Toyota. Bankruptcies - Chrysler first, GM maybe, Ford may survive.
Housing: builders going under right and left - and HUNDREDS of regional banks are overexposed in residential and commercial real estate. The FDIC is bringing folks back out of retirement because a lot of those banks are going down too.
And the banking sector’s failure triggered the Great Depression. All these economists, all those MSM that everyone says is making up this recession thing, are still cheerleading the economy. They said “subprime is contained” - BS. The Fed saved Bear Stearns by forcing a shotgun marriage buyout, but they can’t keep it up - some of those that are vulnerable are big enough that there aren’t any prospective buyers who could take them.
Retail sector - crashing harder than Gary Busey after an all night drinking binge - strip mall vacancies are up huge, Starbuck’s is closing 600 stores, Sharper Image is going under, I lost track of how many Gaps are closing.
The media was asleep at the wheel and late to the game - and if you watch financial coverage, it’s almost universally saying buy now, buy anything, buy something. Kinda like realtors - now is always the time to buy. Here’s why - if it’s time to stay out of the market the MSM advertisers - like say, brokers, don’t make any money and don’t advertise.
And all this is trickling into gov’t revenues - California is laying off teachers and prison guards, and Cincinnati is telling cops to park their cars for 30 minutes every hour to save gas.
Is that real enough for ya?
As for Fannie and Freddie vis a vis Glass Steagall - Fannie and Freddie are symptoms. You notice how SecTreas Paulson is now asking for more authority to regulate banks? He must have noticed that the horses walked out the barn door. And I’m not blaming just Republicans, Clinton is just to blame for a bunch of the BS he allowed/enabled.
But it’s all falling apart now, with Bush and Bernanke at the helm. It’s McCain’s bad luck to be the designated loser of the 2008 election.
olddeadmeat on July 10, 2008 at 1:29 PM
This is doubly false, and in total contradition of Say’s Law. When demand for useless goods drops, the capital and labor employed in the production of useless goods are freed up to be re-employed in the production of useful goods. In fact, economic growth is nothing other than the transfer of capital and labor (which, in the short run, exist in fixed supply) from less-productive uses to more-productive ones.
It is better to have an economy driven by the production of useful non-crap than of useless crap, but the only way to get there is through the failure of those enterprises devoted to the production of said useless crap.
hicsuget on July 10, 2008 at 1:31 PM
Certain states are clearly in a recession. This is very true. California and Flordia are in a recession as their housing market has collasped in a very severe fashion.
phronesis on July 10, 2008 at 1:32 PM
JiangxiDad on July 10, 2008 at 1:03 PM
China did increase it. But India has not. Countries like Malaysia have tried, but it started riots.
China has cut some of its subsidies, but they don’t want to stop their economic growth. Until they end ALL subidies - not just China - demand will continue to rise.
We just need to make more electric vehicles and other vehicles that don’t run on oil at all. If we can do that and sell them to the indians and chinese before they buy and produce gas guzzlers, demand will fall.
ThackerAgency on July 10, 2008 at 1:32 PM
JiangxiDad on July 10, 2008 at 1:22 PM
While i agree it is time to “hunker down” People have to understand what that is going to do to our economy. You can not conserve your way out of recession. You can conserve yourself to weather the crisis but to get out of a recession you must grow and therefore you must spend.
unseen on July 10, 2008 at 1:32 PM
I agree with you. He would agree with you. My point is that statements like Graham’s is going to smack this kid in the face. He isn’t whining to me when he complains about gas prices, he is worried. Telling him he is being a crybaby isn’t going to go far before he gives someone the finger.
Limerick on July 10, 2008 at 1:35 PM
hicsuget on July 10, 2008 at 1:31 PM
You would be right if the USA economy was a closed system. it no longer is. The useful crap is no longer made here. so when you free up the capital/labor it no longer as a place to go. and the labor that was been used for the useless crap now just does nothing.
unseen on July 10, 2008 at 1:35 PM
Not to worry.
Obama will tax US into prosperity!
old trooper on July 10, 2008 at 1:40 PM
A little background on Phil Gramm -
A noted anti-immigration group has criticized an effort led by Sen. Phil Gramm, R-Texas, to implement an immigrant “guest worker” program that would, in effect, grant amnesty for nearly 7 million immigrants from Mexico currently in the U.S. illegally.
According to Voice Of Citizens Together, a Sherman Oaks, Calif.-based group opposed to what it views as liberal U.S. immigration laws, the initiative undertaken by Gramm and four others — Sens. Zell Miller, D-Ga.; Pete Domenici, R-N.M.; Jim Bunning, R-Ky.; and Mike Crapo, R-Idaho — will do little except increase sympathies in the U.S. for policies favorable to Mexico.
Also, Glen Spencer — head of Voices Of Citizens Together — said the initiative supported by the “Gramnesty Five” was tantamount to “treason.”
“The legalization of Mexicans would ultimately create more than 10 million new voters — voters whose allegiance would be to Mexico, not the United States of America,” he said in a statement released Jan. 11. “If we fail to deport illegal Mexicans and instead grant them permanent residency, Mexico City will have more power over parts of our country than Washington, D.C., and we will lose our sovereignty.”
Gramm and his Senate colleagues met Jan. 10 in Mexico City with President Vincente Fox to discuss the proposed worker amnesty program. According to the Associated Press, the “program for Mexicans … would have the effect of granting amnesty to those currently working illegally in the country — up to 7 million people — while allowing others to apply for work from Mexico in the future.”
But Spencer indicated that the proposal undermines current U.S. policy of attempting to thwart illegal immigration. And he pointed out that Gramm specifically addressed curbing illegal immigration as a benefit of the 1993 passage of the North American Free Trade Act.
“Gramm’s NAFTA succeeded in bringing millions of Mexicans to the U.S. border, creating an environmental, social and national security nightmare,” Spencer said. “Gramm was wrong about NAFTA, and he is wrong about legalization. He is compounding his 1993 NAFTA error with total capitulation in 2001.”
- WorldNetDaily
Another anti-American plantation owner shill who can go fork himself.
MB4 on July 10, 2008 at 1:40 PM
Great as a stat, and as a formula accurate. However, tell that to the furniture manufactures in America. How many of them were hired to work in the high-tech jobs that replaced them? You had ten of thousands laid off, as the useless goods were being manufactured in China. Where China does not have to meet the restrictions we placed on our plants.
Always a little more complex then the formulas. The “re-employed” was to minimum wage jobs, or early retirement to keep them off the unemployed lists.
right2bright on July 10, 2008 at 1:41 PM
Now there is a shocker…MB4 against another conservative, against another McCain supporter…like the sun rising in the morning.
right2bright on July 10, 2008 at 1:42 PM
No, it hasn’t and no it won’t. People will continue to get hosed at the grocery store and gas pump. Wait till electrical rates start to really go up. No matter what the media says, citizens can balance a checkbook, and Obama can’t make the cost of living pain go away. It won’t matter how they try to sugar coat it.
a capella on July 10, 2008 at 1:43 PM
unseen:
The silver lining - as transportation costs rise, manufacturing reverts to closer sources - we might see some rebound.
Anecdotally, I know steel is on the rebound, but how much of that is due to transportation costs, I couldn’t say.
Regardless, the economy is about to undergo a profound transformation. Time fasten your seat belt, we are about to encounter some turbulence.
olddeadmeat on July 10, 2008 at 1:44 PM
They just can’t help themselves. It’s in their nature.
MB4 on July 10, 2008 at 1:44 PM
Says is not a law, its a theory, and you got it wrong anyway.
Says states that you won’t have a demand without supply… but not say that it will either artificialy create a demand, or if the demand ceases to exist, that supply can, or should, continue.
As to your assertion that resources will move into real products… patently false. It takes TIME, Capital, and skilled labor to make real good… coffee takes very little of any of them.
Add in skyrocketing transportation costs, which WILL affect the cost of our exports, and we have problems.
Key to the whole Export driving the economy theory is cheep transportation… when that goes away, importing and exporting becomes LESS attractive.
Romeo13 on July 10, 2008 at 1:46 PM
Time for you to wake up.
Anti-American plantation owner shills are not conservatives.
MB4 on July 10, 2008 at 1:46 PM
Wow, imagine that. A former Senator from Texas favoring immigration reform. Who’da thunk it???
rockmom on July 10, 2008 at 1:48 PM
MM has rightly called McCain and Obama the LaRaza twins. Do you think that Obama is a conservative?
You need to get a clue.
MB4 on July 10, 2008 at 1:49 PM
He does know what he talks about.
Remember the early 80’s?
Prime was 14% to 17%
GM offered an amazingly low apr of 9.9% to sell cars.
Gold was $800.00
the Dow was 800
The left is holding the US down with its doom and gloom election year rhetoric. We’re not that bad right now.
.
I’m buying as much stock as possible right now, might even sell some property to buy more.
Look at some of the blue chips at insanely low numbers.
.
The problem? Obama ( and the left and the Dems) won’t let you pass this on to your kids without giving up more than half of the profits.
shooter on July 10, 2008 at 1:49 PM
Dude, you won’t get anywhere here saying Phil Gramm isn’t a conservative. Most of us would have voted for him in a heartbeat if he had run for President this year.
rockmom on July 10, 2008 at 1:49 PM
Your right about ridding us of government restrictions and other things you said but when Graham basically says quit whining and do something about it (such as voting out the big government bums) many attack him and call him a fool because it “doesn’t sound good”. It’s not republicans fault or dems fault, it’s our own for retuning the idiots to office year in and year out. It’s our lack of knowledge in economic matters that gave us the two candidates we have now.
Big Orange on July 10, 2008 at 1:50 PM
MB4 on July 10, 2008 at 1:51 PM
Dudette, if someone is a shill for anti-American plantation owners and for shamnesty they are not a conservative no matter what other $$$ economics they preach.
MB4 on July 10, 2008 at 1:54 PM
Thanks for the psychological evaluation Dr. Phil.
*sigh* Nobody, with a brain, has ever denied the importance of LEGAL immigration to this country’s founding - einstein - it’s the ILLEGAL immigration that’s the problem sir.
labrat on July 10, 2008 at 1:55 PM
olddeadmeat on July 10, 2008 at 1:44 PM
Yes it is a silver lining. same for the dollar.
I read that a cargo ship is costing 400,000 per day to ship the stuff from china to the USA. That is quite an input cost. As fuel goes up it becomes cheaper to build it here IF tax rates and regulations do not change that. which with a BHO it will.
As far as steel. US steel stock (X) is on a tear. But higher coal costs and other input costs are pushing the prices of steel way up.
unseen on July 10, 2008 at 1:56 PM
QFT
labrat on July 10, 2008 at 1:56 PM
MB4, please spare us the lectures on the definition of a conservative. You are like a whore trying to lecture a nun on religion.
rockmom on July 10, 2008 at 1:57 PM
shooter:
Are you kidding me?
UBS, yeah, a great bank that recently took $33 billion in losses to its books, and looks like they still have more to come. Some blue chips have “insanely low numbers” because they are amazingly FUBAR.
Think twice before you buy, the market has a small bounce coming, maybe, then another big drop. Might even fall to 4 figures before the end of the year.
olddeadmeat on July 10, 2008 at 1:59 PM
I long ago got wise to chuck-and-jive shamnesty politicians like Juan McBernie, Swimmer Kennedy, Prissy Lissy and Phil Basset Hound. The reason that Republican supporters of “Comprehensive Immigration Reform” want it is so that they and/or their campaign contributors can have serf labor. They would probably prefer actual out-and-out slaves but that is illegal.
The reason that shamnesty Democrats want this is so that those who are now illegal can become legal and vote for them. Many of them probably also want to do this for the same reason that shamnesty Republicans do too.
Does anyone think that many of these shamnesty politicians really care one wit otherwise for the illegals.
Does anyone think that any of the shamnesty politicians are going to invite these Mexican Indios and Mezclados to join their elite/exclusive golf clubs?
Come to live in their gated communities, other than as servants?
Invite them to their yachts, other than as low paid deck hands and/or servants?
Invite them to their cocktail parties?
Introduce them to their daughters?
The big majority of the Mexicans who have come here/will come here are Indios and Mezclados, not the Spanish descendant light-skinned ruling class of Mexico. This is a form of ethnic cleansing by Mexico’s ruling class.
So the shamnesty politicians like John McCain are aiding and abetting and facilitating ethnic cleansing.
If the U.N. were not such a joke, they would all be standing trial for trying to reintroduce a form of latter-day-slavery in the United States and for the mass ethnic cleansing of Mexico.
MB4 on July 10, 2008 at 2:00 PM
Sorry rockmom, I misrepresented your comment, I apologize. Sure, he is more to the right of McCain, but not conservative.
labrat on July 10, 2008 at 2:02 PM
You can’t handle the truth or counter it so you call me a whore and yourself a nun.
Very weak and oh so grade school.
MB4 on July 10, 2008 at 2:05 PM
Sen. Phil Gramm
ACU lifetime rating: 95%
rockmom on July 10, 2008 at 2:06 PM
yeah I think deep down they crave to own a plantation, and be called ‘bwana’
thats exactly what illegal immigration is. and you don’t have to bother to provide them food or shelter, just pay them slave wages, and send them back to the barrio at sunset…
right4life on July 10, 2008 at 2:08 PM
Reporter: Senator McCain, is it true that if you become President you will put a real fence along the border with Mexico rather than just some phony so called “virtual fence”? And a follow up question sir, if so what will the physical fence look like?
John McCain: That is a very good question and yes when I become el Presidente with close advisors like Phil Gramm and Teddy Kennedy I will put up a physical fence. What will it look like? Well it will run the full length of the border and have special security gates every 100 feet.
All the security gates will have on them:
1) Press one for Spanish (with a response of “Welcome Amigo, my country is your country and please take a free map to the wonderful plantation owner employer of your choice. Also please feel free to enroll you children in our schools and demand that they be taught in Spanish and please also feel free to avail yourself of all the free medical care that you want. If there are any Gringos in line in front of you, just go to the head of the line. If you want to fly any Mexican flags plese feel free to just take down an American one and use it’s flag pole”).
2) Press two for English (with a response of “#uck you! I know more than any of you damned bigoted nativist lazy madre fornicario gringos who do not want what is right for America del Norte!!!”).
MB4 on July 10, 2008 at 2:08 PM
MB4 on July 10, 2008 at 2:00 PM
I couldn’t agree more. In fact the reason I am so against illegal immigration is a view it as a step above slavery. Illegal immigatants are treated like second class citizens they are under the radar in the form of rules and regulation. It also makes the wage of american citizens lower in the long term. Making them citixens or giving them amensity would be the humane thing to do IF it would not just promote more illegal immigration. And continue the form of slavery. If I was born poor in Mexico I would be in this country. so it is not them that is the problem it is the system that allows it to happen. add in the non assimilation efforts by the “multiculturlists” and you have massive riots waiting to happen like in the 1950’s and 1960’s as the black underclass finally said enough. So too will the illegal population sooner than later.
McCain and other believe that the problem can be fixed with a wave of the pen and make them citizens. It can not. Amensty would be like freeing all the blacks that were slaves but continuing the process of slavery.
You must end the slavery before you free the slaves. Lincoln got that part right.
unseen on July 10, 2008 at 2:11 PM
One of the nice things about being an economist is that, when I talk about economics, I’m right. This isn’t an opinion vs opinion debate; this is science vs opinion. Say’s Law is as immutable as any other law of nature, and it applies regardless of whether one is examining a closed economy or a subset of a larger economy.
There is plenty of useful stuff made in America, and that it is made with far less unskilled labor than it used to be is a sign of progress. That the unskilled laborers who formerly held highly-paid factory jobs are now making less than they used to is not an indictment of the system; it is merely proof that their wages (probably owing to the monopolist practices of their unions) were far higher than their skills justified.
Your claim that the labor “does nothing,” in addition to being made in ignorance of theory, has also been made in ignorance of fact. If you will note the text of the article that precipitated this thread, Ed states (correctly) that the unemployment remains near the historical minimum—clearly these people had somewhere to go.
You might want to check out a primer like Sowell’s Citizen’s Guide to the Economy or Hazlitt’s Economics in One Lesson before you embroil yourself in future debates concerning economics.
hicsuget on July 10, 2008 at 2:12 PM
What generates the electricity for the cars?
Here in the US, we have the at least the option for gas fired power plants, and “clean” coal maybe, and nuclear. (If things get bad enough, they’ll burn dirty coal–so will I)
We also have an opportunity to compress natural gas to make a liquid that can power cars. At least we have these energy sources domestically.
I don’t know about China and India, but I think nuclear and oil is their only options. I don’t think they can generate more electricity for electric cars without importing more oil. Not sure that gets them anything.
What I do know for sure is that my NE home is heated with oil and I’m concerned about fuel bills now like never before.
JiangxiDad on July 10, 2008 at 2:14 PM
William Tecumseh Sherman’s work is not complete. He needs to come back and do some more burning to the ground.
MB4 on July 10, 2008 at 2:15 PM
lol.
If all economists were laid end to end, they would not reach a conclusion.
- George Bernard Shaw
If all the nation’s economists were laid end to end, they would still point in all directions.
- Arthur H. Motley
Economists are quite unique in their failure to solve a single one of the problems of their profession.
- John Papworth
Economists are people who work with numbers but don’t have the personality to be accountants.
- Anon
MB4 on July 10, 2008 at 2:22 PM
My 2:12 response to unseen addresses most of this; however, one point remains to be touched on.
You say that employees of US furniture manufacturers were laid off because of “useless goods” that were manufactured in China. I think what you meant by that is that employees of US furniture manufacturers were laid off because of “furniture” that was manufactured in China at a lower cost.
Ultimately, the reason for the closure of the US furniture plants was that, when given the choice between expensive, high-quality hardwood handcrafted US furniture, and inexpensive, low-quality pine machine-made Chinese furniture PLUS additional spending money for other goods, American consumers opted to save money by buying the cheap furniture.
Outcomes like this are an inevitable outcome of market forces regardless of which politicians or parties are running the show, and only three alternatives exist: mercantilism, fascism, and communism. Which of these, right2bright, would you prefer?
hicsuget on July 10, 2008 at 2:25 PM
And oldie but goodie. 3 people stuck on a deserted island with a can of tuna. How to open the can? First two suggest rocks, sticks, etc. The third, an Economist says “lets assume we have a can-opener.” (Sure you’ve heard some version of it, but couldn’t resist.)
All true. But we will have a S. American type of society ruled by wealthy oligarchs if your (correct) interpretation of the laws of economics are allowed to play out to their conclusion. i.e. we can’t and shouldn’t be indifferent to someone who used to build cars but now works at Target.
Once again, lower standard of living for many to support über standard of living for few. That leads to social unrest.
JiangxiDad on July 10, 2008 at 2:26 PM
How quickly do they occur? What help is given the displaced? How many industries affected at once? What states suffer the most? How are they compensated? What training/education exists?
There are ways to manage an economy without being knocked from wall to wall.
JiangxiDad on July 10, 2008 at 2:29 PM
The gov’t/fed has monetary and fiscal methods to do this. But they’re stuck between a rock and a hard place because of the dollar’s value and the price of oil and other commodities. Their next step is probably to raise interest rates. That’s not following your prescription.
And so you ask the consumer who should be saving like mad now to afford energy this winter to go out and spend? Good luck with that. This is a mess.
JiangxiDad on July 10, 2008 at 2:36 PM
Gramm has a point, not only about the economic statistics but about the attitudinal perspective of most Americans.
My parents were blessed during the great depression. My father had a very secure job and made a salary that by today’s terms is probably somewhere around $150k.
It’s an understatement to say that others were not so fortunate. They could remember seeing people, formerly middle class working folks, rooting through my parents’ garbage cans looking for something to eat.
Most Americans have no real conception of what hard times really means. Today, “hardship” for most Americans is not having two cars, or only one TV, or other relatively trivial material “wants”.
Nobody’s starving-go sign up for foodstamps; nobody lacks at least basic healthcare-go sign up for Medicaid; homeless-shelters for the homeless or rent subsidies to help seniors and others on very limited fixed incomes; Social Security and SSI for Seniors. We have a social safety net in this country that pretty much (not perfectly but pretty much) eliminates real hardship such as what millions of Americans endured during real hard times, the Great Depression.
So, yes, there is some whining.
DavePa on July 10, 2008 at 2:37 PM
but given the chinese use state subsidies to support their industry, at the cost of our jobs, and use that money to arm themselves against us, where do you draw the line about the ‘free market’. since there obviously isn’t one.
this is just economic warfare, and we just surrender, in order to get cheaper goods.
you act like this is just manufacturers in one country competing against each other, and its far more than that.
right4life on July 10, 2008 at 2:38 PM
Kids that have heard that said repeatedly to them from an effort to get them past sophomoric attitudes mimic their own criticism at others. Self justification of sorts. Another of their gimmicks is to regurgitate ad nauseum the same line containing a newly minted $.50 word.
Speaking of trolls, did y’all catch The Simpson’s episode where Bart was the Dark Knight in the computer internet game casting his town characters? Poor Ol’ Moe, “I am not a troll! Why does everyone call me a troll?” as he runs under a bridge to crouch.
maverick muse on July 10, 2008 at 2:45 PM
One thing I’ve always loved about the Hotair comments section is how people whose knowledge is inadequate to permit the correct spelling of words like “cheap” argue self-righteously against the few scientists who happen to drop by occasionally with a few pearls of wisdom. (Say’s Law is “just a theory”? Are you a YECer?)
As I recommended to unseen, you might find it useful to check out a primer on economics, or, time and intelligence permitting, a more complete work on the subject.
hicsuget on July 10, 2008 at 2:47 PM
hicsuget on July 10, 2008 at 2:12 PM
You are about as right as the other 99 economists that forcasted good times in 2008.
unseen on July 10, 2008 at 2:52 PM
oh yes a ’scientist’ like those global warming goof-balls? or the mad-dog darwiniacs like dawkins (aliens are OK, but not God)?
and you think we should bow down because someone labels themselves a ’scientist’…especially of the dismal ’science’??
nice.
right4life on July 10, 2008 at 2:52 PM
MB4:
Plantation what? That is sooo crazy. It really is.
I can go back to the 20’s and find people like you arguing against letting the Italians and Poles in. In the 30’s they argued against letting the Jews in. They all said the same thing: the foreigners will ruin the country.
And it is as wrong now as it was then. Not everything everywhere all the time is about illegal immigration. Not every problem can be solved by rounding up Mexicans.
You are sounding more and more like Pat Buchanan. What is next? Holocaust denial?
Terrye on July 10, 2008 at 2:54 PM
Your first paragraph sounds like something that would be written by a person who has bought into the Marxist dogma that, under capitalism, the rich get richer while the poor get poorer—odd sentiment to find on a conservative blog. (The laws of economics, incidentally, refute this conclusion.)
Your second paragraph sounds more like a thinly veiled threat of populist revolution. So much for principle over pragmatism, and for the inalienable natural rights of man.
I’m sure in real life you’re a Republican, but you don’t sound like one here.
hicsuget on July 10, 2008 at 2:55 PM
Actually, I forecasted this recession back in 2001 when I heard the news that the Fed Funds rate had been lowered to 1%.
hicsuget on July 10, 2008 at 2:56 PM
Like it or not there is truth in what Gramm says. I was talking to an old lady in her 90s about the Great Depression. She told me that people today could not deal with that kind of poverty.
Think about the influenza epidemic in 1918 that killed more Americans than WW1. Imagine the reaction. Think about the Dust Bowl and the hundreds of thousands of displaced people.
No, today people expect a lot more than they used to.
Terrye on July 10, 2008 at 2:57 PM
BTW, Mb4, I know an old guy who just sold his truck farm this year because he can’t find anyone who will work the place for him and there are not as many migrants as there used to be. Why don’t you go out and get one of those jobs picking melons?
Terrye on July 10, 2008 at 3:00 PM
I’m working on that. Believe me, I KNOW we won’t ever be completely oil free, I just don’t want to be oil dependent any longer. I would love to have lower gas and oil so that I could drive my Hummer H2 to the mailbox and back. I love my Hummer and will keep it until I die. . . I might even get buried in it even if gas prices go to 20 dollars a gallon.
But GM is producing a car called the VOLT. It use a battery that is charged normally, but it is RECHARGED with a GASOLINE GENERATOR. The key is how do you re-charge the batteries. The Volt will use gasoline to recharge the batteries, not coal, or nuclear, or solar, or wind, or any other type of conventional electricity.
So the problem is how to recharge the battery using the propulsion of the vehicle to generate the energy. As I said, I’m working on it. But my Hummer will NEVER be an electric car. . . and you will never be able to make electric powered aircraft either. . . automobiles might have a solution due to friction with the ground.
I’m working with a race car drivin kin in Lexington, NC (my uncle is the mayor). I guess it’s the Lexington project for a reason. I don’t want a prize though, just fix it right and I’ll be satisfied.
ThackerAgency on July 10, 2008 at 3:00 PM
DavePa on July 10, 2008 at 2:37 PM
Those of us whose parents grew up during the Great Depression and went on to fight WWII agree that your point is valid.
Hard times are when you are literally starving to death and have no roof over your head. Kids should read the Grapes of Wrath to remember how it was from Steinbeck’s perspective, how Americans treated Americans, how easy it always is to presume, “They just don’t know any better” so long as it isn’t THEIR job, home and life that are lost. Those were tragic days.
Times are tough for many Americans right now. But today the government does have programs in place that did not exist in Hoover’s day. During the Great Depression, charities were unable to meet the crisis in America.
maverick muse on July 10, 2008 at 3:01 PM
hicsuget on July 10, 2008 at 2:47 PM
What I have found in comments is when those that are reduced to attacking the spelling and/or grammer of the poster, they have lost the agruement.
You have so many assumptions in your posts that it would take a week to go thru them all.
unseen on July 10, 2008 at 3:02 PM
Wow… economic laws are the same as physical laws?
Then why is our economy so messed up?
Could it be because of flawed input numbers?
Lets see… 303 million people in the US.
24.6% of whom are under 18.
12.4% of whom are over 65.
So, 37% of the population is too young or too old to work.
or 190 Million folks in the correct age to work…
Yet, B of Labor Stats says the workforce is ony 154,294 million. Thats total workforce working, and unworking, and whether they want a job or not. Seems that there are about 36 million folks unaccounted for.
Add in that if you are unemployed for more than 5 weeks, they don’t count you in the unemployment numbers… and if you, like myself, are a self employed contractor they COUNT you as employed whether you are on contract or not?
Unemployment is a LOT higher than the government wants to admit…
So, based on that flaw, explain to me how you can have immutable laws of economics, and base them on flawed statistics?
Romeo13 on July 10, 2008 at 3:04 PM
hicsuget on July 10, 2008 at 2:56 PM
LOL. So you were wrong for 7 years before you were right. Got to love that. Only in economics, government, and weather forcasting can someone be wrong for 7 years and still keep their jobs.
unseen on July 10, 2008 at 3:05 PM
Didn’t say the poor get poorer. But the differences in wealth can widen.
I’ve wondered what the new fashion of gated communities in America is all about. Gated against what? Always reminds me of Mexico.
What the point of a progressive income tax if not for income re-distribution? What kind of upper class or political class is not concerned with the welfare of the worker?
JiangxiDad on July 10, 2008 at 3:05 PM
maybe he should try raising his wages…but oh no, they don’t want to do that…they like that ‘way down south in the land of dixie’ plantation owner thing…
right4life on July 10, 2008 at 3:09 PM
maverick muse on July 10, 2008 at 3:01 PM
Yeah i can see the campaign ads now. you aren’t straving so what are you complaining about? Yeah we will win so many elections like that.
Why don’t we just shorten it to “Let them eat cake” that worked out so well for the French ruling class.
unseen on July 10, 2008 at 3:10 PM
And one thing I love about Hot Air is how some folks worry about spelling, instead of bothering to read what was said…
I might add, I had that exact same discussion with my Economics Prof in College a few years back…
Its amazing to me that we have a THEORY of Gravity in the sciences… yet economists are so sure they have LAWS… sounds more like a religous belief (which is often equated with LAW) to me….
Romeo13 on July 10, 2008 at 3:12 PM
The “assumptions” in my posts are the entire corpus of economic knowledge, and it would take the most intelligent among us far longer than a week to fully understand them all. My goal here is merely to relay the conclusions of economic science, not to prove its validity—Ricardo, Mill, Mises, et al. already took care of the proofs.
hicsuget on July 10, 2008 at 3:16 PM
He’s right, we are a nation of whiners. The average American crisis remains having to wait in line at Starbucks.
Grafted on July 10, 2008 at 3:16 PM
I don’t watch cartoons very much but I’m glad that you enjoy them. You might not want to take them so seriously though.
Like me? No you can’t so stop hallucinating and making vile slurs.
One on my grandfathers was probably half Jewish you twit.
Who said anything about rounding anyone up? You are getting more and more delusional.
No, Holocaust denial is not next. You are just throwing out slurs as you don’t have anything else. What should be next for you is to get a brain and a clue and you should also probably take a nap.
MB4 on July 10, 2008 at 3:17 PM
right4life:
Maybe people should stop bitching about food prices too. Maybe you think that paying $10 or $11 a hour to do field work is too low, but there comes a point where the product is not worth the price of production.
And you know something? Americans have never wanted to do that kind of work. Back in the 30’s my mother’s people lost a farm in that Dust Bowl everyone has forgotten about. The government rounded up the Mexicans {well half of them were actually Americans but the spoke Spanish so it was all the same} and people like my family moved into those camps and picked fruit. Maybe you have heard of them, they called them Okies. After a few years they left and the migrants came back..that was more than 70 years ago.
The idea that all people have to do is come up with a dental plan and a couple of dollars more an hour and people will work in the fields and orchards is ridiculous. It won’t happen. More and more places are selling out and going to row cropping because they can use machinery rather than the labor intensive work of field work.
Terrye on July 10, 2008 at 3:17 PM
lol.
MB4 on July 10, 2008 at 3:19 PM
And what did those economists say about competing against state-subsidized entities? which is what we face with china?
right4life on July 10, 2008 at 3:20 PM
MB4:
I was not throwing out slurs. I am just saying you remind me a lot of Pat Buchanan. And you do.
Terrye on July 10, 2008 at 3:20 PM
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