Why Isn't the Economy Worse?

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How are you doing Muirgeo. Its been a long time.

"And how would it have been if there was no bail out of Bear-Stearns or of Fredie Mack and Fannie Mae."

Short-term it would have sucked. Long-term, the Authorities just poured fuled on the next fire.

The Dirty Mac of NJ @ Jul 21, 2008 23:14:34 PM

"No this is an economy built on debt, the bills have come do and this ain't over yet."

Keep working on the self-fulfilling prophecy - Maybe this time it will take. For 7 years we have been hearing about how bad the economy is. Even when they acknowledged improvement, it was a jobless economy. Then when the jobs improved, they were not the good kind of jobs, they were only in the service areas or at Wall-Mart. Now we hear the "economy built on debt" mantra. I guess I'm optimistic. I'm just sorry so many people believe all that bull@#&%. I am concerned about the falling dollar. I think it may be time to raise interest rates, which should put the brakes on that.

Jay of MN @ Jul 21, 2008 22:49:48 PM

..and Wall Street permabears—that like, you know, the economy is sorta-kinda OK."

And how would it have been if there was no bail out of Bear-Stearns or of Fredie Mack and Fannie Mae. This economyy did NOT survive on it's own. It was bailed out by American taxpayers and infusions of cash from overseas.

"Have American living standards, as Democrats often suggest, really been stagnant since the 1970s? I doubt it."

Yeah just a bunch of whiners. And because they are doing sooo good as you say they are all obviously about to blow it by not voting for more of the same.

No this is an economy built on debt, the bills have come do and this ain't over yet.

muirgeo of CA @ Jul 21, 2008 20:52:03 PM

I can offer another theory. Globalization has allowed us to import the effects of inflation throughout the globe. This has the effect of allowing us to spread inflation over a larger number of people, thereby dampening inflation's overall effect on prices (if this were not the case, prices would be far higher than normal). Also, during the Great Depression, nations were doing whatever was in their power to prevent trade and restricting investment, which in turn brought about deflation and lowered job growth. This time around, we may have severe troubles, but so far Congress has not really raised barriers to trade and investment (although they tried with the Dubai Ports mess and the Chinese government buying a local oil company). This goes in line with James' thesis that we have become richer over time.

Chris of AZ @ Jul 21, 2008 17:58:19 PM

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Capital Commerce

U.S. News business reporter Matthew Bandyk examines the issues, people, and debates that shape the nexus of political and economic life in the nation's capital.

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