The Strangest Recession in Economic History

The end of the recession

After following the news on these issues, I am pretty sure that the bad times will end the day after the election. The boom will start right after the inauguartion, right after Barack Obama heals the planet.

Unless McCain wins, in which case the second Great Depression will continue until a Democrat is elected President.

JimBeam of SC @ Sep 10, 2008 16:40:11 PM

Inflation has rendered GDP misleading

Given how the BLS under-reports inflation, it should be no surprise that GDP continues to show positive runs --

Current data contains much more price increases than has been historically reflected in GDP.

Barry Ritholtz of NY @ Jun 11, 2008 17:22:30 PM

Cause of current recession

I blame the home mortgage interest deduction, the FHA, and government programs that subsidize investment in real estate. These programs have created a situation in which when the interest rate is lowered, investment flows into homes that are much larger than we actually need.

Most countries have a population that lives in small apartments, and invest the majority of their capital in the industries where they work. This creates higher wages on the job rather than bigger window panes on a house.

America has done just the opposite. We are the most capital-rich country in the world, and we have chosen to invest in tax-deductible McMansions, subsequently foreclose on them, and offer nothing more than an apology to the investors (many of them foreign) who lent us the capital.

Whether a country's capital should be invested in factories or McMansions should be a no-brainer. It is more important to have high wages at work than to have big window panes on a house. We gave the wrong answer to this question (and still are giving the wrong answer as politicians promise to bail homeowners out.)

And to answer your question, these distortionary policies are THE DEMOCRATS FAULT.

Test Test of CA @ Jun 11, 2008 06:15:06 AM

economic collapse in sept 2008

i tend to worry a little. has anyone heard about the rumor regarding the economic collapse in sept 2008? how did it start, who started it and (gulp) is it going to happen? i keep hoping for the best for this country, but i do worry. thank you.

Robyn of NC @ Jun 10, 2008 01:59:17 AM

Author's viewpoint

I think the viewpoint of the author is accurate. He's wondering how America and investors will react to the likely election of Obama, and he's correctly estimating that for many, the reaction will be negative (hence the profit taking that's occuring now.)

Democrats like to blame republicans for everything--bad traffic, high oil prices, the weather. The self-interest of their arguements is usually thinly disguised or not disguised at all. One of the MANY things republicans are to blame for is that recessions happen about once ever eight years, and so do administration changes. The concept of "lag" is foreign to Democrats (unless it benifits their arguement) and they would try to get you to believe that Bush, not Clinton, caused the stock market crash of 2000 and subsequent recession of 2001. The fact that Clinton was still in office in the year 2000 is pretty irrelevant to most Democrats.

Another thing Democrats never admit is the role of their own self interest. Most are either affirmative action babies or welfare babies. 90% of african americans vote democratic; 80% of hispanics vote democratic. Many WORKING females vote democatic if they rely on affirmative action; most married moms vote in their husbands interests (but not all.)

And yes, white males are usually republican, unless they're gay.

The deviseness of American politics due to Affirmative Action is pretty disgusting. The racial gerrymandering of our politicians has almost created a situation where we don't even need to vote. Just look at the census numbers, and you already know how many votes are going to each party.

It needs to stop. There needs to be more to politics--and to getting elected--than simply figuring out how to rob peter to pay paul.

Test Test of @ Jun 04, 2008 01:37:00 AM

Zimbabwe

Zimbabwe was the single best performing stock market in the world in Zimbabwe dollar percentage increase terms. Evidently the writer believes that if the stock market grows in inflated dollars there's no problem. This is the absence of analytical thought that U.S. News of the 1940's would have never allowed on their pages. Today, it's whatever makes the reader feel optimistic.

I'm not buying this load of horse hockey, and neither should you. This is the very beginning of extremely hard times.

Fazsha of CA @ Jun 03, 2008 21:18:05 PM

Your interest--not the country's

"I am not a tree hugger, but we are undergoing a shift as profound as the agricultural to industrial and those that adapt will succede"

In engish, it's spelled "Succeed."

You are clearly hispanic, and your opinions are those of an affirmative action baby doctor. If you were the white guy who was pushed aside so that someone who scored below you would go, you'd have a different set of opinions.

Universal health care wouldn't be so important to you (ie, forcing others to buy your services.) Equality in college admissions would be VERY important to you.

Why don't you just admit that your opinions are YOUR self interest, not the country's?

Test Test of NY @ Jun 03, 2008 03:34:37 AM

virtual recession

I agree with the people who called the economic situation that we are currently in a 'virtual recession.' It appears that the Democrats are using every possible negative thing they can, to scare and upset the public, and win votes. The Iraq war is being treated the same way. Every bit of bad news they create is to their advantage. So, as with the war, the media seems to only want to report that the U.S. is losing, even when it is winning.

Danny Parks of TX @ Jun 01, 2008 23:56:24 PM