Unemployment lowest since 2008 (1 Viewer)

[roadkill1292]

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

Could you expand on this comment and question so a dummy like me can understand it?

This comment draws on a post I read on economics blog a few months back showing the value of housing as an asset and as equity on an inflation-adjusted per person basis thoughout time. You can see that the collapse in housing prices has led the value of equity to fall to its lowest levels in over 3 decades. Since Bueno is advocating that prices fall much futher to hit its hypothetical "bottom", I think it is fair to ask how many more decades back in equity he wants to go. Hope that makes sense.

Thanks. That's sorta what I thought you meant but I wanted to be sure.My concern about housing is how real those equity levels are if the demand isn't there to support it. So I guess I'm asking, even though housing has been a great part of middle-class wealth, does it make sense to prop it up artificially? Or will we be doing ourselves a bigger favor in the long run by letting them bottom out? It could be that the latter option, though excruciatingly painful, may be healthier for us in the long run. Disclaimer -- I don't have much in the way of mortgage debt.

 

[Rich Conway]

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

Could you expand on this comment and question so a dummy like me can understand it?

This comment draws on a post I read on economics blog a few months back showing the value of housing as an asset and as equity on an inflation-adjusted per person basis thoughout time. You can see that the collapse in housing prices has led the value of equity to fall to its lowest levels in over 3 decades. Since Bueno is advocating that prices fall much futher to hit its hypothetical "bottom", I think it is fair to ask how many more decades back in equity he wants to go. Hope that makes sense.

Your comment appears to beg the question of whether high levels of per capita housing equity is necessarily a desirable thing. Is it? I'm not so sure.

 

[Slapdash]

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

Could you expand on this comment and question so a dummy like me can understand it?

This comment draws on a post I read on economics blog a few months back showing the value of housing as an asset and as equity on an inflation-adjusted per person basis thoughout time. You can see that the collapse in housing prices has led the value of equity to fall to its lowest levels in over 3 decades. Since Bueno is advocating that prices fall much futher to hit its hypothetical "bottom", I think it is fair to ask how many more decades back in equity he wants to go. Hope that makes sense.

Thanks. That's sorta what I thought you meant but I wanted to be sure.My concern about housing is how real those equity levels are if the demand isn't there to support it. So I guess I'm asking, even though housing has been a great part of middle-class wealth, does it make sense to prop it up artificially? Or will we be doing ourselves a bigger favor in the long run by letting them bottom out? It could be that the latter option, though excruciatingly painful, may be healthier for us in the long run. Disclaimer -- I don't have much in the way of mortgage debt.

Of course the value is determined by the level of demand, but I don't think that makes it any more or less real. If demand were higher, wealth would be higher. Prices and demand are falling as incomes are stagnant and people that would be forming households are staying put. Perhaps if it were clear we had more supply than the population warrants I would be more likely to buy into your notion, but I do not think that is the case. I do not agree that an adequate money supply or stimulating incomes by building physical infrastructure or investing in education is artificial in any way.

Multiple equilibriums are possible in this market, supply and demand are not static and there is not a true or real equilibrium that the market will tend to in the long run that is not determined by the path those variables. I do not think it is wise to enact polices that serve to weaken demand, depress prices, and destroy wealth based on those notions. When this avocation comes from those who have a vested interest in benefiting from the short term pain in favor of their hypothetical long run situation (which seems to very often be the case) I am even more skeptical.

 

[Slapdash]

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

Could you expand on this comment and question so a dummy like me can understand it?

This comment draws on a post I read on economics blog a few months back showing the value of housing as an asset and as equity on an inflation-adjusted per person basis thoughout time. You can see that the collapse in housing prices has led the value of equity to fall to its lowest levels in over 3 decades. Since Bueno is advocating that prices fall much futher to hit its hypothetical "bottom", I think it is fair to ask how many more decades back in equity he wants to go. Hope that makes sense.

Your comment appears to beg the question of whether high levels of per capita housing equity is necessarily a desirable thing. Is it? I'm not so sure.

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Probably more open to your point on an abstract level, but I'm curious what you think would replace that equity? If it is higher debt for the households being provided by wealth funneled through the financial system, I don't think that is a good idea. If it is lower levels of household ownership with a higher percentage of renters, that is reasonable to me. However, I would stress that what we are seeing now is less households actually forming irrespective of whether they are renting or buying.

 

[MasterofOrion]

Seven steps to help improve our economy.



1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done.

2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses.

3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work.

4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability.

5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside.

6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes?

7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Do you own a business? I know I am not at the top and a few of these would help me and my small companies.

I have owned several business. The last 30 years or so , I created 2 start up businesses that are catalyst related, from scratch, made them profitable and sold them. I am working on a new start up business that creates LNG at the wellhead and at the pipe line for use in fleets (trucking/cars). We want to create a small natural gas filling station at the users site. Clean Fuels, makes LNG, has several large refineries and ships the fuel one way and dead loads the truck back to the refinery. Our model eliminates the trucks costs. The idea is to go into a fleet, say Highway Patrol or UPS, where they have a large enough demand that they could justify a fueling station.

We created and demonstrated a pilot plant some time ago and sold several units. PGE then refused to sell us NG and we took them and several others to court ( Boone Pickens, So Gas ...) In that time PGE tried to make their own small refinery. The case lasted many years and we lost- kind of, it is complicated. When PGE couldn't make a competitive machine they agreed to sell us gas. Before the suit we had the resources needed, but the law suit was expensive. We are now looking for funding. Starting up a new business is harder than having a great idea and bringing it market. The crap you have to go through now days is ridiculous.

 

[MasterofOrion]

Seven steps to help improve our economy.



1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done.

2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses.

3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work.

4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability.

5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside.

6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes?

7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

I am a product of what I read. None of the ideas are mine.

Question- have you ever worked for a poor man?

 

[Fensalk]

How about the government gets out of the way and we let the market hit bottom?

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

The economic cycle is not an opinion that we may choose to advocate or not. It is a fact. If you wish to interrupt that cycle today, it will just come around again but even worse next time. Actually, we've been interrupt all the little busts for a couple decades. That's why we are having a huge bust now.

 

[Slapdash]

How about the government gets out of the way and we let the market hit bottom?

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

The economic cycle is not an opinion that we may choose to advocate or not. It is a fact. If you wish to interrupt that cycle today, it will just come around again but even worse next time. Actually, we've been interrupt all the little busts for a couple decades. That's why we are having a huge bust now.

I don't agree with your opinion at all.

 

[Abashail]

Seven steps to help improve our economy.



1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done.

2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses.

3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work.

4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability.

5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside.

6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes?

7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Do you own a business? I know I am not at the top and a few of these would help me and my small companies.

I have owned several business. The last 30 years or so , I created 2 start up businesses that are catalyst related, from scratch, made them profitable and sold them. I am working on a new start up business that creates LNG at the wellhead and at the pipe line for use in fleets (trucking/cars). We want to create a small natural gas filling station at the users site. Clean Fuels, makes LNG, has several large refineries and ships the fuel one way and dead loads the truck back to the refinery. Our model eliminates the trucks costs. The idea is to go into a fleet, say Highway Patrol or UPS, where they have a large enough demand that they could justify a fueling station.

We created and demonstrated a pilot plant some time ago and sold several units. PGE then refused to sell us NG and we took them and several others to court ( Boone Pickens, So Gas ...) In that time PGE tried to make their own small refinery. The case lasted many years and we lost- kind of, it is complicated. When PGE couldn't make a competitive machine they agreed to sell us gas. Before the suit we had the resources needed, but the law suit was expensive. We are now looking for funding. Starting up a new business is harder than having a great idea and bringing it market. The crap you have to go through now days is ridiculous.

And forcing you to pay PGEs legal costs for the suit you lost would have made things better?

 

[Fensalk]

How about the government gets out of the way and we let the market hit bottom?

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

The economic cycle is not an opinion that we may choose to advocate or not. It is a fact. If you wish to interrupt that cycle today, it will just come around again but even worse next time. Actually, we've been interrupt all the little busts for a couple decades. That's why we are having a huge bust now.

I don't agree with your opinion at all.

Wat?

 

[Gr00vus]

Could this be finally true? Not in the US, but globally?

Neither is it true any longer that the more each individual works, the better off everyone will be. The present crisis has stimulated technological change of an unprecedented scale and speed: 'the micro-chip revolution'. The object and indeed the effect of this revolution has been to make rapidly increasing savings in labour, in the industrial, administrative and service sectors. Increasing production is secured in these sectors by decreasing amounts of labour. As a result, the social process of production no longer needs everyone to work in it on a full-time basis. The work ethic ceases to be viable in such a situation and work-based society is thrown into crisis...

--André Gorz, Critique of economic Reason, Gallile, 1989

What if it is? How would we adapt? Could we adapt?(Even if you don't think it is ever possible to be true, can you imagine the ramifications?)

There are always technological advances that reduce the need for labor. That just leaves more labor to do something else. That's why having a system that allows for the creation and expansion of new businesses is so important.

Problem today though is the rate at which technology is advancing. It's something that typically happened more incrementally over generations. It makes it more difficult to expand new business at the rate that is needed and requires more agility from the work force. Maybe the way we look at education is a bit outdated. In technical circles, you have a lot of certification programs that can serve to demonstrate knowledge in areas, are entirely relevant to a given field rather than having a lot of fluff that you would never use again, and can be quickly obtained. They also expire, so you are required to keep your skills current to maintain them. Maybe this is a model that would serve our country better rather than "so, you graduated from Rutgers in 1972"...

Cert programs are swindles. If you have a solid background in the fundamentals of comp sci, any given specific computer system will not be difficult to learn/master.In regard to Bottomfeeder's post, the situation described is real, and the pace of obsolescence is going to increase. The thing they don't discuss, which is just as important, is the effect digitalization of media has on distribution of media products for profit. Eventually we will get to a point where there is no money to be made selling/distributing copies of digital goods. That too will cause a pretty significant upheaval in the labor market. If we are able to realize something like replicator technology (and people should get familiar with current advances in 3d printing to get a taste of what may actually be coming sooner than we thought), even production of physical goods could experience a huge change that will greatly affect labor markets.

I'm not a believer in the singularity, but I do know that the pace of technological advances will continue to accelerate for some time to come and this will have disruptive affects not only on economies and labor forces, but also on our outlook on humanity.

 

[roadkill1292]

Could this be finally true? Not in the US, but globally?

Neither is it true any longer that the more each individual works, the better off everyone will be. The present crisis has stimulated technological change of an unprecedented scale and speed: 'the micro-chip revolution'. The object and indeed the effect of this revolution has been to make rapidly increasing savings in labour, in the industrial, administrative and service sectors. Increasing production is secured in these sectors by decreasing amounts of labour. As a result, the social process of production no longer needs everyone to work in it on a full-time basis. The work ethic ceases to be viable in such a situation and work-based society is thrown into crisis...

--André Gorz, Critique of economic Reason, Gallile, 1989

What if it is? How would we adapt? Could we adapt?(Even if you don't think it is ever possible to be true, can you imagine the ramifications?)

There are always technological advances that reduce the need for labor. That just leaves more labor to do something else. That's why having a system that allows for the creation and expansion of new businesses is so important.

Problem today though is the rate at which technology is advancing. It's something that typically happened more incrementally over generations. It makes it more difficult to expand new business at the rate that is needed and requires more agility from the work force. Maybe the way we look at education is a bit outdated. In technical circles, you have a lot of certification programs that can serve to demonstrate knowledge in areas, are entirely relevant to a given field rather than having a lot of fluff that you would never use again, and can be quickly obtained. They also expire, so you are required to keep your skills current to maintain them. Maybe this is a model that would serve our country better rather than "so, you graduated from Rutgers in 1972"...

Cert programs are swindles. If you have a solid background in the fundamentals of comp sci, any given specific computer system will not be difficult to learn/master.In regard to Bottomfeeder's post, the situation described is real, and the pace of obsolescence is going to increase. The thing they don't discuss, which is just as important, is the effect digitalization of media has on distribution of media products for profit. Eventually we will get to a point where there is no money to be made selling/distributing copies of digital goods. That too will cause a pretty significant upheaval in the labor market. If we are able to realize something like replicator technology (and people should get familiar with current advances in 3d printing to get a taste of what may actually be coming sooner than we thought), even production of physical goods could experience a huge change that will greatly affect labor markets.

I'm not a believer in the singularity, but I do know that the pace of technological advances will continue to accelerate for some time to come and this will have disruptive affects not only on economies and labor forces, but also on our outlook on humanity.

We need to fire up the "Coming Technology and How it Will Change Your Life" thread. It will indeed be disruptive but it's pretty interesting to talk about.

 

[Rich Conway]

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

Could you expand on this comment and question so a dummy like me can understand it?

This comment draws on a post I read on economics blog a few months back showing the value of housing as an asset and as equity on an inflation-adjusted per person basis thoughout time. You can see that the collapse in housing prices has led the value of equity to fall to its lowest levels in over 3 decades. Since Bueno is advocating that prices fall much futher to hit its hypothetical "bottom", I think it is fair to ask how many more decades back in equity he wants to go. Hope that makes sense.

Your comment appears to beg the question of whether high levels of per capita housing equity is necessarily a desirable thing. Is it? I'm not so sure.

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.Probably more open to your point on an abstract level, but I'm curious what you think would replace that equity? If it is higher debt for the households being provided by wealth funneled through the financial system, I don't think that is a good idea. If it is lower levels of household ownership with a higher percentage of renters, that is reasonable to me. However, I would stress that what we are seeing now is less households actually forming irrespective of whether they are renting or buying.

I think it could be replaced by more renters who have their wealth in other things besides real estate, or people who choose to live more modestly rather than in McMansions, or some of each, or lots of similar things. Basically, I'm challenging the notion that high levels of equity per capita is necessarily desirable for society at large. Maybe as a society we just decide that land and property aren't as valuable relative to other things (e.g. gold, stock ownership, free time, proximity to transportation, etc.).

 

[kupcho1]

One place to start is by dealing with trade issues. Time to crack down on things like currency manipulation. We are getting screwed by trade. Other countries can sell stuff here, but not the other way around? #### that noise.

Aren't we (the US) keeping the dollar weak to spur exports? Are we not guilty of exactly what you're talking about wrt currency manipulation?

:crickets:Guess it's only manipulation when the other guy's doing it. Otherwise it's fiscal policy.

 

[humpback]

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Having the housing market fall a great deal further would obviously have a negative impact on the economy, but what is the alternative? The real estate boom had a huge positive impact on the economy, but it was a bubble, and it still hasn't completely popped.

 

[Bottomfeeder Sports]

Could this be finally true? Not in the US, but globally?

Neither is it true any longer that the more each individual works, the better off everyone will be. The present crisis has stimulated technological change of an unprecedented scale and speed: 'the micro-chip revolution'. The object and indeed the effect of this revolution has been to make rapidly increasing savings in labour, in the industrial, administrative and service sectors. Increasing production is secured in these sectors by decreasing amounts of labour. As a result, the social process of production no longer needs everyone to work in it on a full-time basis. The work ethic ceases to be viable in such a situation and work-based society is thrown into crisis...

--André Gorz, Critique of economic Reason, Gallile, 1989

What if it is? How would we adapt? Could we adapt?(Even if you don't think it is ever possible to be true, can you imagine the ramifications?)

There are always technological advances that reduce the need for labor. That just leaves more labor to do something else. That's why having a system that allows for the creation and expansion of new businesses is so important.

First some housekeeping:I guess I should add this piece from the same quote

...The connection between more and better has been broken; our needs for many products and services are already more than adequately met, and many of our as-yet-unsatisfied needs will be met not by producing more, but by producing differently, producing other things, or even producing less. This is especially true as regards our needs for air, water, space, silence, beauty, time and human contact...

The new businesses need to be producing something "more" though. I'm not so sure I agree with this part at all which is why I didn't cut this out yesterday, but it seems to be important with your reply.To your point:

Is there really a shortage of new businesses being created? Without going into all of theories (taxation, regulation, etc) that are typically argued to thwart the next big thing from getting started, are their statistics that new businesses are not being created? If that is true we need to do what is on the wiki page where I found the quotes a few years ago.

 

[Bottomfeeder Sports]

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Having the housing market fall a great deal further would obviously have a negative impact on the economy, but what is the alternative? The real estate boom had a huge positive impact on the economy, but it was a bubble, and it still hasn't completely popped.

Slapdash's point is that the bubble burst and wiped out the gains from the bubble and then it wiped out a few more decades that had nothing to do with the bubble.

 

[rascal]

One place to start is by dealing with trade issues. Time to crack down on things like currency manipulation. We are getting screwed by trade. Other countries can sell stuff here, but not the other way around? #### that noise.

Aren't we (the US) keeping the dollar weak to spur exports? Are we not guilty of exactly what you're talking about wrt currency manipulation?

:crickets:Guess it's only manipulation when the other guy's doing it. Otherwise it's fiscal policy.

It's helping us sell cars in Asia. But if Europe goes under I'm not sure that any of this is going to matter.

 

[humpback]

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Having the housing market fall a great deal further would obviously have a negative impact on the economy, but what is the alternative? The real estate boom had a huge positive impact on the economy, but it was a bubble, and it still hasn't completely popped.

Slapdash's point is that the bubble burst and wiped out the gains from the bubble and then it wiped out a few more decades that had nothing to do with the bubble.

 

[Bottomfeeder Sports]

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Having the housing market fall a great deal further would obviously have a negative impact on the economy, but what is the alternative? The real estate boom had a huge positive impact on the economy, but it was a bubble, and it still hasn't completely popped.

Slapdash's point is that the bubble burst and wiped out the gains from the bubble and then it wiped out a few more decades that had nothing to do with the bubble.

It is right in his post.

 

[humpback]

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Having the housing market fall a great deal further would obviously have a negative impact on the economy, but what is the alternative? The real estate boom had a huge positive impact on the economy, but it was a bubble, and it still hasn't completely popped.

Slapdash's point is that the bubble burst and wiped out the gains from the bubble and then it wiped out a few more decades that had nothing to do with the bubble.

It is right in his post.

The housing market doesn't care how much equity you have. We haven't wiped out decades of gains in price, and unfortunatley we aren't done with the declines. Housing is still overvalued in many areas.

 

[Rich Conway]

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Having the housing market fall a great deal further would obviously have a negative impact on the economy, but what is the alternative? The real estate boom had a huge positive impact on the economy, but it was a bubble, and it still hasn't completely popped.

Slapdash's point is that the bubble burst and wiped out the gains from the bubble and then it wiped out a few more decades that had nothing to do with the bubble.

I think this has more to do with people financing a higher percentage of their purchases than the prices falling. Housing prices in most areas are still above where they were a decade ago. The low equity percentage is because buyers no longer put 20% down, but actually often put a negative percentage down (i.e. borrow more than the cost of the house).

 

[bueno]

This country needs to start making things again. Without that, I don't see how this situation improves.

What would be the best way to get this country to start making things again?

That's a good question. One place to start is by dealing with trade issues. Time to crack down on things like currency manipulation. We are getting screwed by trade. Other countries can sell stuff here, but not the other way around? #### that noise. There needs to be some way to make it feasible for companies to keep jobs here. It should not be profitable for companies to send jobs overseas. It should be profitable to keep jobs here.

There is, but it would look like corporate welfare to you.

If you are talking about more tax cuts for corporations that are already sitting on trillions of dollars in cash, then you would be correct. I'm not interested in tax cuts to line their pockets even more.

Actually I wasn't but interesting to see where your mind went.

 

[bueno]

Seven steps to help improve our economy.



1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done.

2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses.

3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work.

4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability.

5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside.

6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes?

7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

I rest my case.

 

[bueno]

What could get this economy going however is the banks bulldozing the foreclosed homes. The ones no one wants. They are doing it some but they need to go all out. Even if it is 'stimulus' like money to get it done. Jobs created cleaning it up, inventory drops and the housing market is revived.

Seems an awful lot like the broken window fallacy. I don't see how spending taxpayer money to destroy things of value will improve the economy.

No one is going to buy them. There are just way too many of them. As they sit empty they deteriorate.

Even so, paying people to destroy them is kind of like paying people to dig holes and then fill them in. It doesn't improve the economy.

Not in the short term but it will get things moving faster in the long run. Otherwise, we are looking at a long time before the inventory is absorbed. A very long time.

How about the government gets out of the way and we let the market hit bottom?

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

As many as it takes to stabilize the market.

 

[bueno]

Seven steps to help improve our economy.1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done. 2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses. 3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work. 4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability. 5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside. 6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes? 7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Actually, I really like #3 and #7. I'm not a fan of forced "unionism", although I also wouldn't be a fan of the feds telling the states they have to do this. I would like it if each state did it on their own. #7 is a really interesting idea, in that it would force Congress to start from scratch on the tax code, something I think everyone knows should be done but doesn't know how to get there from here.The others are full of pros and cons, and I think the cons outweigh the pros for such blanket statements. For example, "eliminate most licensing requirements" is a bit too broad for my liking, even though I'm certain that some of those requirements aren't necessary.

I have a degree and 35 years of practice. Why should I need a license?

 

[humpback]

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Having the housing market fall a great deal further would obviously have a negative impact on the economy, but what is the alternative? The real estate boom had a huge positive impact on the economy, but it was a bubble, and it still hasn't completely popped.

Slapdash's point is that the bubble burst and wiped out the gains from the bubble and then it wiped out a few more decades that had nothing to do with the bubble.

I think this has more to do with people financing a higher percentage of their purchases than the prices falling. Housing prices in most areas are still above where they were a decade ago. The low equity percentage is because buyers no longer put 20% down, but actually often put a negative percentage down (i.e. borrow more than the cost of the house).

This, and people taking cash-out refinancing when values were high. It had a major stimulative effect on the economy (they pulled their equity out and bought stuff with it), but now we're seeing the downside of that when values decline.

 

[Bottomfeeder Sports]

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Having the housing market fall a great deal further would obviously have a negative impact on the economy, but what is the alternative? The real estate boom had a huge positive impact on the economy, but it was a bubble, and it still hasn't completely popped.

Slapdash's point is that the bubble burst and wiped out the gains from the bubble and then it wiped out a few more decades that had nothing to do with the bubble.

I think this has more to do with people financing a higher percentage of their purchases than the prices falling. Housing prices in most areas are still above where they were a decade ago. The low equity percentage is because buyers no longer put 20% down, but actually often put a negative percentage down (i.e. borrow more than the cost of the house).

I agree, the equity is because just five years ago guys like me were called idiots for not using the house as an ATM at 100% or more of its value. Then that value nose dived (that blog post has a graph for that also). So yes, housing is worth more than 1978 (at least as far as we can tell) so that value hasn't been wiped out. However, all of the middle class wealth that comes from home ownership is more or less non existent. That being said 1978 was a pretty good year for me so that would be a good year to return to. Especially if I get to keep some of my current knowledge.

 

[Slapdash]

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

Could you expand on this comment and question so a dummy like me can understand it?

This comment draws on a post I read on economics blog a few months back showing the value of housing as an asset and as equity on an inflation-adjusted per person basis thoughout time. You can see that the collapse in housing prices has led the value of equity to fall to its lowest levels in over 3 decades. Since Bueno is advocating that prices fall much futher to hit its hypothetical "bottom", I think it is fair to ask how many more decades back in equity he wants to go. Hope that makes sense.

Your comment appears to beg the question of whether high levels of per capita housing equity is necessarily a desirable thing. Is it? I'm not so sure.

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.Probably more open to your point on an abstract level, but I'm curious what you think would replace that equity? If it is higher debt for the households being provided by wealth funneled through the financial system, I don't think that is a good idea. If it is lower levels of household ownership with a higher percentage of renters, that is reasonable to me. However, I would stress that what we are seeing now is less households actually forming irrespective of whether they are renting or buying.

I think it could be replaced by more renters who have their wealth in other things besides real estate, or people who choose to live more modestly rather than in McMansions, or some of each, or lots of similar things. Basically, I'm challenging the notion that high levels of equity per capita is necessarily desirable for society at large. Maybe as a society we just decide that land and property aren't as valuable relative to other things (e.g. gold, stock ownership, free time, proximity to transportation, etc.).

That is fair. It doesn't seem to me like that transition is happening right now though. The people that have had the equity wiped out aren't replacing it with wealth elsewhere. You can see a big chunk of net worth is just gone. I don't think driving prices down harder is going to accomplish that rebalancing either, not with demand so depressed. That is not to say that I don't favor reversing many government policies that subsidize homeowners.

 

[Slapdash]

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Having the housing market fall a great deal further would obviously have a negative impact on the economy, but what is the alternative? The real estate boom had a huge positive impact on the economy, but it was a bubble, and it still hasn't completely popped.

The alternative is to stimulate incomes using monetary policy and fiscal policy until the new household formation absorbs the excess housing supply. We could also drastically increase our issuance of high skilled immigrant visas to that end.

Housing prices fell because of the bubble popping but they fell further because of the stunning collapse in output in 08. Until we return to the output trend there will be tremendous downward pressure on all domestic prices. Everything will seem overvalued because they are relative to the collapse in incomes. IMO, the answer is not to drive the prices down to the depressed income level, but increase the income level and therefore spending. Deflation is a vicious self-reinforcing cycle that is difficult to escape.

 

[Rich Conway]

Seven steps to help improve our economy.1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done. 2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses. 3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work. 4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability. 5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside. 6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes? 7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Actually, I really like #3 and #7. I'm not a fan of forced "unionism", although I also wouldn't be a fan of the feds telling the states they have to do this. I would like it if each state did it on their own. #7 is a really interesting idea, in that it would force Congress to start from scratch on the tax code, something I think everyone knows should be done but doesn't know how to get there from here.The others are full of pros and cons, and I think the cons outweigh the pros for such blanket statements. For example, "eliminate most licensing requirements" is a bit too broad for my liking, even though I'm certain that some of those requirements aren't necessary.

I have a degree and 35 years of practice. Why should I need a license?

I don't know what you do, so I have no idea whether you "should" need a license or not. I could argue, however, that depending on the activity, N years of practice shouldn't automatically preclude the need for licensing. For example, I think driver's licenses should need to be renewed every so often, including retaking both the written and driving portions of the test. The fact that one has been driving for 70 years doesn't mean that one is still be a capable driver.

 

[humpback]

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Having the housing market fall a great deal further would obviously have a negative impact on the economy, but what is the alternative? The real estate boom had a huge positive impact on the economy, but it was a bubble, and it still hasn't completely popped.

The alternative is to stimulate incomes using monetary policy and fiscal policy until the new household formation absorbs the excess housing supply. We could also drastically increase our issuance of high skilled immigrant visas to that end.

Housing prices fell because of the bubble popping but they fell further because of the stunning collapse in output in 08. Until we return to the output trend there will be tremendous downward pressure on all domestic prices. Everything will seem overvalued because they are relative to the collapse in incomes. IMO, the answer is not to drive the prices down to the depressed income level, but increase the income level and therefore spending. Deflation is a vicious self-reinforcing cycle that is difficult to escape.

How can we use montetary and fiscal policy to stimulate incomes at this point? It seems we've tried a bunch of things which haven't worked. I'm all for increasing high skilled immigrant visas, but I wouldn't expect that to have a huge impact. It's worth doing though.I think you're underestimating the excess housing supply. The number of bad loans still waiting to be realized are scary, and the number of homes waiting for a "bounce" to be put on the market is huge as well. Combine that with interest rates that have to rise at some point, and the housing market is facing major headwinds- this isn't something that's going to snap back quickly, even if/when our economy gets back on track.

I agree that deflation would be very bad, but unfortunately I think it's likely barring another internet-type boom. Our economy got way too levered up at the wrong time, we still have a lot of deleveraging to do to get back to sustainable levels. I'm not saying the answer is to drive prices lower (although I believe they would be much lower if we weren't propping them up). At some point, you have to ask whether trying to fix things is doing more harm than good.

I agree with you that it all comes down to employment- our economy is so dependent on consumer spending that it leads to these large peaks and valleys.

 

[MasterofOrion]

Seven steps to help improve our economy.1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done. 2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses. 3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work. 4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability. 5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside. 6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes? 7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Actually, I really like #3 and #7. I'm not a fan of forced "unionism", although I also wouldn't be a fan of the feds telling the states they have to do this. I would like it if each state did it on their own. #7 is a really interesting idea, in that it would force Congress to start from scratch on the tax code, something I think everyone knows should be done but doesn't know how to get there from here.The others are full of pros and cons, and I think the cons outweigh the pros for such blanket statements. For example, "eliminate most licensing requirements" is a bit too broad for my liking, even though I'm certain that some of those requirements aren't necessary.

A lady was interviewed on TV who braiding hair in a black community. She was forced from doing business because she didn't have a licence. The licensing for cutting hair didn't take into account that black women where she lived wanted their hair taken care differently than what was allowed by licensing. The point is, that licencing is government control over how you should run your business. The beauty of free enterprise is that you try different things and if there is a demand for the new product or service you can succeed. Government does not have to control how we do everything, that is a loss of freedom and restricts what Americans do best- we invent.Sure there is a place for licensing in moderation. But the idea that some is good than more is better is wrong. We need to eat to live for example. But eating too much isn't healthy.

 

[Ministry of Pain]

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

Could you expand on this comment and question so a dummy like me can understand it?

This comment draws on a post I read on economics blog a few months back showing the value of housing as an asset and as equity on an inflation-adjusted per person basis thoughout time. You can see that the collapse in housing prices has led the value of equity to fall to its lowest levels in over 3 decades. Since Bueno is advocating that prices fall much futher to hit its hypothetical "bottom", I think it is fair to ask how many more decades back in equity he wants to go. Hope that makes sense.

Hey Slap,I agree with your question and what it entails. My wife and I are starting to think its time to jump in even if homes do not go up in value at all the next 5 years, maybe even trickling down further. It is about the same to rent as it is to buy, sometimes even less so from that classic theory, it seems like it would be time to buy. It's interesting how folks suddenly throw out all financial theory and rules we have come to learn over a long period of time whenever things get really rough like they are now.

The forecast on housing over the next 24 months is anything but sparkling though.

 

[MasterofOrion]

Seven steps to help improve our economy.



1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done.

2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses.

3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work.

4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability.

5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside.

6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes?

7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Do you own a business? I know I am not at the top and a few of these would help me and my small companies.

I have owned several business. The last 30 years or so , I created 2 start up businesses that are catalyst related, from scratch, made them profitable and sold them. I am working on a new start up business that creates LNG at the wellhead and at the pipe line for use in fleets (trucking/cars). We want to create a small natural gas filling station at the users site. Clean Fuels, makes LNG, has several large refineries and ships the fuel one way and dead loads the truck back to the refinery. Our model eliminates the trucks costs. The idea is to go into a fleet, say Highway Patrol or UPS, where they have a large enough demand that they could justify a fueling station.

We created and demonstrated a pilot plant some time ago and sold several units. PGE then refused to sell us NG and we took them and several others to court ( Boone Pickens, So Gas ...) In that time PGE tried to make their own small refinery. The case lasted many years and we lost- kind of, it is complicated. When PGE couldn't make a competitive machine they agreed to sell us gas. Before the suit we had the resources needed, but the law suit was expensive. We are now looking for funding. Starting up a new business is harder than having a great idea and bringing it market. The crap you have to go through now days is ridiculous.

And forcing you to pay PGEs legal costs for the suit you lost would have made things better?

No it wouldn't have. That is off point, we have to look at the big picture rather than what is important for one specific individual. Business are peppered with frivolous law suits. Lawyers throw #### against the wall and sees what sticks. In is called frivolous law suits and it costs our business a bundle and does very little to improve the general welfare of society. Basically we have a legal system that is good for lawyers and nobody else. The lawyers have very little to lose in this system and much to gain. Changing the equation where lawyers have to pay for loses would radically reduce these frivolous lawsuits. IMO business could grow, generate more wealth, help the economy and create more jobs rather than throwing money away on a rigged system that only helps lawyers with nothing better to do.

 

[humpback]

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

Could you expand on this comment and question so a dummy like me can understand it?

This comment draws on a post I read on economics blog a few months back showing the value of housing as an asset and as equity on an inflation-adjusted per person basis thoughout time. You can see that the collapse in housing prices has led the value of equity to fall to its lowest levels in over 3 decades. Since Bueno is advocating that prices fall much futher to hit its hypothetical "bottom", I think it is fair to ask how many more decades back in equity he wants to go. Hope that makes sense.

Hey Slap,I agree with your question and what it entails. My wife and I are starting to think its time to jump in even if homes do not go up in value at all the next 5 years, maybe even trickling down further. It is about the same to rent as it is to buy, sometimes even less so from that classic theory, it seems like it would be time to buy. It's interesting how folks suddenly throw out all financial theory and rules we have come to learn over a long period of time whenever things get really rough like they are now.

The forecast on housing over the next 24 months is anything but sparkling though.

Just keep in mind that he's talking about home equity there, not home prices.

 

[MasterofOrion]

Per capita housing equity has already declined to 1978 levels. How many more decades of wealth do you advocate destroying?

Could you expand on this comment and question so a dummy like me can understand it?

This comment draws on a post I read on economics blog a few months back showing the value of housing as an asset and as equity on an inflation-adjusted per person basis thoughout time. You can see that the collapse in housing prices has led the value of equity to fall to its lowest levels in over 3 decades. Since Bueno is advocating that prices fall much futher to hit its hypothetical "bottom", I think it is fair to ask how many more decades back in equity he wants to go. Hope that makes sense.

Hey Slap,I agree with your question and what it entails. My wife and I are starting to think its time to jump in even if homes do not go up in value at all the next 5 years, maybe even trickling down further. It is about the same to rent as it is to buy, sometimes even less so from that classic theory, it seems like it would be time to buy. It's interesting how folks suddenly throw out all financial theory and rules we have come to learn over a long period of time whenever things get really rough like they are now.

The forecast on housing over the next 24 months is anything but sparkling though.

Now is great time to buy a house for the very reason you stated. It is cheaper to buy than to rent. But people buy high and sell low for a reason. When the market is going up, they think it will go up forever. Conversely, when the market is going down they think the market will go down forever. With the price of homes and interest rates low it a great time to buy.

To Slaps point. Economics state that their is an equilibrium where supply and demand meet. Government can artificially skew the S&D curve and defy the laws of economics for a time. But eventually, all it does it create a bubble that bursts and the market has work its way back to equilibrium. When that happens, like now, it is great time to react to the market. As M of P stated buying a home is cheep now and he is right. Eventually both the price of homes and interest rates will go up.

 

[MasterofOrion]

Two other ideas that will but us back to work.

We need a real energy policy. Yes, cheep oil helps our economy and we need to drill baby drill. China is drilling off the coast of Cuba and drinking our mike shake. We should drill off the coast of Florida, we can do it responsibly and far enough off the coast that it will not be an eye soar. We can drill in ANWAR. Seriously we need oil, and if you don't like it, sell your vehicle. Do without energy for a while.

China. We need to take China on.

1) they do not believe in intellectual property and are working very hard at stealing what we develop. We need to put more teeth into international protection laws and enforcement;

2) their currency has been purposely driven down to make their products cheep.

3) they are allowed to operate their business by lax (environmental) standards. If we put high environmental standards on our industry and not China's, for example, they end up with a competitive advantage. Maybe should only allow products to be imported that meet our environmental standards. This is brainstorming and it has to be thought through further.

 

[Anthony Borbely]

Two other ideas that will but us back to work.We need a real energy policy. Yes, cheep oil helps our economy and we need to drill baby drill. China is drilling off the coast of Cuba and drinking our mike shake. We should drill off the coast of Florida, we can do it responsibly and far enough off the coast that it will not be an eye soar. We can drill in ANWAR. Seriously we need oil, and if you don't like it, sell your vehicle. Do without energy for a while.China. We need to take China on. 1) they do not believe in intellectual property and are working very hard at stealing what we develop. We need to put more teeth into international protection laws and enforcement; 2) their currency has been purposely driven down to make their products cheep.3) they are allowed to operate their business by lax (environmental) standards. If we put high environmental standards on our industry and not China's, for example, they end up with a competitive advantage. Maybe should only allow products to be imported that meet our environmental standards. This is brainstorming and it has to be thought through further.

This might be a first: I agree with you.

 

[Abashail]

Seven steps to help improve our economy.



1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done.

2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses.

3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work.

4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability.

5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside.

6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes?

7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Do you own a business? I know I am not at the top and a few of these would help me and my small companies.

I have owned several business. The last 30 years or so , I created 2 start up businesses that are catalyst related, from scratch, made them profitable and sold them. I am working on a new start up business that creates LNG at the wellhead and at the pipe line for use in fleets (trucking/cars). We want to create a small natural gas filling station at the users site. Clean Fuels, makes LNG, has several large refineries and ships the fuel one way and dead loads the truck back to the refinery. Our model eliminates the trucks costs. The idea is to go into a fleet, say Highway Patrol or UPS, where they have a large enough demand that they could justify a fueling station.

We created and demonstrated a pilot plant some time ago and sold several units. PGE then refused to sell us NG and we took them and several others to court ( Boone Pickens, So Gas ...) In that time PGE tried to make their own small refinery. The case lasted many years and we lost- kind of, it is complicated. When PGE couldn't make a competitive machine they agreed to sell us gas. Before the suit we had the resources needed, but the law suit was expensive. We are now looking for funding. Starting up a new business is harder than having a great idea and bringing it market. The crap you have to go through now days is ridiculous.

And forcing you to pay PGEs legal costs for the suit you lost would have made things better?

No it wouldn't have. That is off point, we have to look at the big picture rather than what is important for one specific individual. Business are peppered with frivolous law suits. Lawyers throw #### against the wall and sees what sticks. In is called frivolous law suits and it costs our business a bundle and does very little to improve the general welfare of society. Basically we have a legal system that is good for lawyers and nobody else. The lawyers have very little to lose in this system and much to gain. Changing the equation where lawyers have to pay for loses would radically reduce these frivolous lawsuits. IMO business could grow, generate more wealth, help the economy and create more jobs rather than throwing money away on a rigged system that only helps lawyers with nothing better to do.

But it's not just one isolated case for one specific individual. This happens all the time, little guy goes up against a big guy in court with at least a semblance of a reasonable case and loses. The civil court system is already skewed in favor of the bigger guy who can afford the best representation, forcing the small party to consider that there is a chance they will have to pay both sides legal fees tilts it even further in the wrong direction. If, going in to your suit, you knew there was a chance you would have to pay PGEs legal fees if you lost, you probably wouldn't have gone to court at all. And PGE would know this. Meaning they would adopt even less fair trade practices because they would have no fear of the courts.

 

[tommyGunZ]

Seven steps to help improve our economy.



1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done.

2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses.

3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work.

4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability.

5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside.

6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes?

7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Do you own a business? I know I am not at the top and a few of these would help me and my small companies.

I have owned several business. The last 30 years or so , I created 2 start up businesses that are catalyst related, from scratch, made them profitable and sold them. I am working on a new start up business that creates LNG at the wellhead and at the pipe line for use in fleets (trucking/cars). We want to create a small natural gas filling station at the users site. Clean Fuels, makes LNG, has several large refineries and ships the fuel one way and dead loads the truck back to the refinery. Our model eliminates the trucks costs. The idea is to go into a fleet, say Highway Patrol or UPS, where they have a large enough demand that they could justify a fueling station.

We created and demonstrated a pilot plant some time ago and sold several units. PGE then refused to sell us NG and we took them and several others to court ( Boone Pickens, So Gas ...) In that time PGE tried to make their own small refinery. The case lasted many years and we lost- kind of, it is complicated. When PGE couldn't make a competitive machine they agreed to sell us gas. Before the suit we had the resources needed, but the law suit was expensive. We are now looking for funding. Starting up a new business is harder than having a great idea and bringing it market. The crap you have to go through now days is ridiculous.

And forcing you to pay PGEs legal costs for the suit you lost would have made things better?

No it wouldn't have. That is off point, we have to look at the big picture rather than what is important for one specific individual. Business are peppered with frivolous law suits. Lawyers throw #### against the wall and sees what sticks. In is called frivolous law suits and it costs our business a bundle and does very little to improve the general welfare of society. Basically we have a legal system that is good for lawyers and nobody else. The lawyers have very little to lose in this system and much to gain. Changing the equation where lawyers have to pay for loses would radically reduce these frivolous lawsuits. IMO business could grow, generate more wealth, help the economy and create more jobs rather than throwing money away on a rigged system that only helps lawyers with nothing better to do.

But it's not just one isolated case for one specific individual. This happens all the time, little guy goes up against a big guy in court with at least a semblance of a reasonable case and loses. The civil court system is already skewed in favor of the bigger guy who can afford the best representation, forcing the small party to consider that there is a chance they will have to pay both sides legal fees tilts it even further in the wrong direction. If, going in to your suit, you knew there was a chance you would have to pay PGEs legal fees if you lost, you probably wouldn't have gone to court at all. And PGE would know this. Meaning they would adopt even less fair trade practices because they would have no fear of the courts.

Exactly. Too many people screaming for tort reform fail to consider the overall repercussions.

 

[MasterofOrion]

Seven steps to help improve our economy.



1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done.

2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses.

3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work.

4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability.

5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside.

6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes?

7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Do you own a business? I know I am not at the top and a few of these would help me and my small companies.

I have owned several business. The last 30 years or so , I created 2 start up businesses that are catalyst related, from scratch, made them profitable and sold them. I am working on a new start up business that creates LNG at the wellhead and at the pipe line for use in fleets (trucking/cars). We want to create a small natural gas filling station at the users site. Clean Fuels, makes LNG, has several large refineries and ships the fuel one way and dead loads the truck back to the refinery. Our model eliminates the trucks costs. The idea is to go into a fleet, say Highway Patrol or UPS, where they have a large enough demand that they could justify a fueling station.

We created and demonstrated a pilot plant some time ago and sold several units. PGE then refused to sell us NG and we took them and several others to court ( Boone Pickens, So Gas ...) In that time PGE tried to make their own small refinery. The case lasted many years and we lost- kind of, it is complicated. When PGE couldn't make a competitive machine they agreed to sell us gas. Before the suit we had the resources needed, but the law suit was expensive. We are now looking for funding. Starting up a new business is harder than having a great idea and bringing it market. The crap you have to go through now days is ridiculous.

And forcing you to pay PGEs legal costs for the suit you lost would have made things better?

No it wouldn't have. That is off point, we have to look at the big picture rather than what is important for one specific individual. Business are peppered with frivolous law suits. Lawyers throw #### against the wall and sees what sticks. In is called frivolous law suits and it costs our business a bundle and does very little to improve the general welfare of society. Basically we have a legal system that is good for lawyers and nobody else. The lawyers have very little to lose in this system and much to gain. Changing the equation where lawyers have to pay for loses would radically reduce these frivolous lawsuits. IMO business could grow, generate more wealth, help the economy and create more jobs rather than throwing money away on a rigged system that only helps lawyers with nothing better to do.

But it's not just one isolated case for one specific individual. This happens all the time, little guy goes up against a big guy in court with at least a semblance of a reasonable case and loses. The civil court system is already skewed in favor of the bigger guy who can afford the best representation, forcing the small party to consider that there is a chance they will have to pay both sides legal fees tilts it even further in the wrong direction. If, going in to your suit, you knew there was a chance you would have to pay PGEs legal fees if you lost, you probably wouldn't have gone to court at all. And PGE would know this. Meaning they would adopt even less fair trade practices because they would have no fear of the courts.

Good point. You know what the judge stated when we lost: "You didn't get your gas because you didn't ask". Seriously. He was telling us that he was bought and paid for. The remark was blatantly false and he isn't stupid. There is no justice in our legal system. We took it to the 9th circuit and they just stated that they upheld the decision of the lower court. We had 6 law firms, big names, who wanted to take it to the supreme court. If the 9th circuit had put any justification of why they upheld the lower court at all, the case may have gotten to the Supreme court. As a conservative I was/am amazed how corrupt and how much influence big corporations have. I believe in free markets and justice. Big corporations that have monopolies or who rig the justice system are harmful to free enterprise IMHO.

 

[MasterofOrion]

Seven steps to help improve our economy.



1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done.

2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses.

3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work.

4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability.

5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside.

6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes?

7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Do you own a business? I know I am not at the top and a few of these would help me and my small companies.

I have owned several business. The last 30 years or so , I created 2 start up businesses that are catalyst related, from scratch, made them profitable and sold them. I am working on a new start up business that creates LNG at the wellhead and at the pipe line for use in fleets (trucking/cars). We want to create a small natural gas filling station at the users site. Clean Fuels, makes LNG, has several large refineries and ships the fuel one way and dead loads the truck back to the refinery. Our model eliminates the trucks costs. The idea is to go into a fleet, say Highway Patrol or UPS, where they have a large enough demand that they could justify a fueling station.

We created and demonstrated a pilot plant some time ago and sold several units. PGE then refused to sell us NG and we took them and several others to court ( Boone Pickens, So Gas ...) In that time PGE tried to make their own small refinery. The case lasted many years and we lost- kind of, it is complicated. When PGE couldn't make a competitive machine they agreed to sell us gas. Before the suit we had the resources needed, but the law suit was expensive. We are now looking for funding. Starting up a new business is harder than having a great idea and bringing it market. The crap you have to go through now days is ridiculous.

And forcing you to pay PGEs legal costs for the suit you lost would have made things better?

No it wouldn't have. That is off point, we have to look at the big picture rather than what is important for one specific individual. Business are peppered with frivolous law suits. Lawyers throw #### against the wall and sees what sticks. In is called frivolous law suits and it costs our business a bundle and does very little to improve the general welfare of society. Basically we have a legal system that is good for lawyers and nobody else. The lawyers have very little to lose in this system and much to gain. Changing the equation where lawyers have to pay for loses would radically reduce these frivolous lawsuits. IMO business could grow, generate more wealth, help the economy and create more jobs rather than throwing money away on a rigged system that only helps lawyers with nothing better to do.

But it's not just one isolated case for one specific individual. This happens all the time, little guy goes up against a big guy in court with at least a semblance of a reasonable case and loses. The civil court system is already skewed in favor of the bigger guy who can afford the best representation, forcing the small party to consider that there is a chance they will have to pay both sides legal fees tilts it even further in the wrong direction. If, going in to your suit, you knew there was a chance you would have to pay PGEs legal fees if you lost, you probably wouldn't have gone to court at all. And PGE would know this. Meaning they would adopt even less fair trade practices because they would have no fear of the courts.

Exactly. Too many people screaming for tort reform fail to consider the overall repercussions.

I think the problem is the justice system is being abused. We need to stop frivolous lawsuits and we need to keep the justice system fair for all, not just the fat cat. Yes, the tort system needs to be reformed.

 

[IGKYA!!!]

Two other ideas that will but us back to work.We need a real energy policy. Yes, cheep oil helps our economy and we need to drill baby drill. China is drilling off the coast of Cuba and drinking our mike shake. We should drill off the coast of Florida, we can do it responsibly and far enough off the coast that it will not be an eye soar. We can drill in ANWAR. Seriously we need oil, and if you don't like it, sell your vehicle. Do without energy for a while.China. We need to take China on. 1) they do not believe in intellectual property and are working very hard at stealing what we develop. We need to put more teeth into international protection laws and enforcement; 2) their currency has been purposely driven down to make their products cheep.3) they are allowed to operate their business by lax (environmental) standards. If we put high environmental standards on our industry and not China's, for example, they end up with a competitive advantage. Maybe should only allow products to be imported that meet our environmental standards. This is brainstorming and it has to be thought through further.

 

[Slapdash]

I think it is fair to state that I am assuming that the destruction of 33 years of housing wealth and the resulting unemployment and low growth aren't desirable. I am also assuming that further deterioration would just entrench this under-employment equilibrium rather than returning to the previous state.

Having the housing market fall a great deal further would obviously have a negative impact on the economy, but what is the alternative? The real estate boom had a huge positive impact on the economy, but it was a bubble, and it still hasn't completely popped.

The alternative is to stimulate incomes using monetary policy and fiscal policy until the new household formation absorbs the excess housing supply. We could also drastically increase our issuance of high skilled immigrant visas to that end.

Housing prices fell because of the bubble popping but they fell further because of the stunning collapse in output in 08. Until we return to the output trend there will be tremendous downward pressure on all domestic prices. Everything will seem overvalued because they are relative to the collapse in incomes. IMO, the answer is not to drive the prices down to the depressed income level, but increase the income level and therefore spending. Deflation is a vicious self-reinforcing cycle that is difficult to escape.

How can we use montetary and fiscal policy to stimulate incomes at this point? It seems we've tried a bunch of things which haven't worked. I'm all for increasing high skilled immigrant visas, but I wouldn't expect that to have a huge impact. It's worth doing though.I think you're underestimating the excess housing supply. The number of bad loans still waiting to be realized are scary, and the number of homes waiting for a "bounce" to be put on the market is huge as well. Combine that with interest rates that have to rise at some point, and the housing market is facing major headwinds- this isn't something that's going to snap back quickly, even if/when our economy gets back on track.

I agree that deflation would be very bad, but unfortunately I think it's likely barring another internet-type boom. Our economy got way too levered up at the wrong time, we still have a lot of deleveraging to do to get back to sustainable levels. I'm not saying the answer is to drive prices lower (although I believe they would be much lower if we weren't propping them up). At some point, you have to ask whether trying to fix things is doing more harm than good.

I agree with you that it all comes down to employment- our economy is so dependent on consumer spending that it leads to these large peaks and valleys.

We have tried a lot of policy and it has been enough to prevent the crash from bringing about a depression thus far. Still, I think there is a lot more that can be done, particularly by the Fed. The first and most important thing that could be done by the Fed is to explicitly commit to a level of nominal spending growth and do whatever is necessary to hit that target. They could do it for wages or inflation levels instead, as many conservative economists like Greg Mankiw suggest. This would shape expectations for businesses and households and greatly reduce uncertainty around demand. They could also lower the interest rate on excess reserves, even to negative territory like Sweden. These are not really radical ideas; they are based on Milton Friedman’s and Bernanke’s analysis of the Great Depression and Japanese lost decade. Here is the money quote as it related you what you said:

During the 1970s, you had the bubble period. Monetary growth was very high. There was a so-called speculative bubble in the stock market. In 1989, the Bank of Japan stepped on the brakes very hard and brought money supply down to negative rates for a while. The stock market broke. The economy went into a recession, and it’s been in a state of quasi recession ever since. Monetary growth has been too low. Now, the Bank of Japan’s argument is, “Oh well, we’ve got the interest rate down to zero; what more can we do?”

It’s very simple. They can buy long-term government securities, and they can keep buying them and providing high-powered money until the high powered money starts getting the economy in an expansion. What Japan needs is a more expansive domestic monetary policy.

The Japanese bank has supposedly had, until very recently, a zero interest rate policy. Yet that zero interest rate policy was evidence of an extremely tight monetary policy. Essentially, you had deflation. The real interest rate was positive; it was not negative. What you needed in Japan was more liquidity.

Though monetary is our best bet, on the fiscal side I would support massive investments in infrastructure and education. There are a lot of other ways that tax policy, welfare structure, and the regulatory environment could be improved to stimulate the economy but they are not very realistic in a paralyzed government completely captured by special interests. I’d focus on the first two and think they would help to support more sustainable growth. I have no qualms with higher debt levels given the apparent high market demand for more debt. Perhaps I am underestimating the housing issues. My position is that a stronger demand and spending level would support higher prices; structural issues may exist but would be much less severe if those underlying problems were solved.

On the deleveraging issue I think that higher inflation (which has been at post-WW2 lows for the past 3 years) and a weaker exchange rate would do a lot to soften the price/wage adjustments needed. Yet another way a more aggressive Fed would help.

 

[humpback]

SD, those articles basically just say that the Fed has already done what Japan should have. I agree that it helped slow the fall, but it certainly hasn't put us back on track. We're already doing huge amounts of QE, and it's not having the demand effect they talk about. IIRC, most economists agree that QE gets less effective each time you have to use it.

The part I disagree with is "do whatever is necessary to hit that target". There are negative impacts of many of these policy decisions as well- we can't totally ignore those.

I agree there are many fiscal things we can do, but I have very little faith that we will do them. We blew it with the stimulus, so I don't blame people for being against another one, even though it seems necessary.

 

[bueno]

Seven steps to help improve our economy.1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done. 2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses. 3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work. 4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability. 5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside. 6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes? 7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Actually, I really like #3 and #7. I'm not a fan of forced "unionism", although I also wouldn't be a fan of the feds telling the states they have to do this. I would like it if each state did it on their own. #7 is a really interesting idea, in that it would force Congress to start from scratch on the tax code, something I think everyone knows should be done but doesn't know how to get there from here.The others are full of pros and cons, and I think the cons outweigh the pros for such blanket statements. For example, "eliminate most licensing requirements" is a bit too broad for my liking, even though I'm certain that some of those requirements aren't necessary.

I have a degree and 35 years of practice. Why should I need a license?

I don't know what you do, so I have no idea whether you "should" need a license or not. I could argue, however, that depending on the activity, N years of practice shouldn't automatically preclude the need for licensing. For example, I think driver's licenses should need to be renewed every so often, including retaking both the written and driving portions of the test. The fact that one has been driving for 70 years doesn't mean that one is still be a capable driver.

We're not talking about driver's licenses here. Most professional licenses are renewed without having to take a test. In fact several professional licenses do not require a test, only pay a fee.

 

[Rich Conway]

Seven steps to help improve our economy.1. Immediately halt all regulatory rule-making processes at the federal level. We have enough regulations now to get the job done. 2. Eliminate capital gains taxes. Eliminating these taxes would allow a free flow of investment capital that would enable countless new businesses. 3. Make every state a right-to-work state. Completely outlaw compulsory unionism. Nobody should ever have to join a union in order to work. 4. Repeal Sarbanes-Oxley. It's another jobs killer and inhibits corporate growth and profitability. 5. Institute loser pays at the federal level and urge states to do the same. This means that if you file a lawsuit against someone and you win, good for you. If you lose, you pay the other side's legal fees. Too many lawyers look at lawsuits like a lottery ticket, potential for windfall profits without much downside. 6. Eliminate most business and professional licensing requirements. Why should you need the state's permission to braid hair or to match pillows with drapes? 7. Revamp the tax code- set a date certain for the expiration of our current tax code. That will force congress to come up with a better plan.

I don't know where you cut and pasted this from since you never provide links (which you should do), but this would not do anything to help anyone except those at the top.

Actually, I really like #3 and #7. I'm not a fan of forced "unionism", although I also wouldn't be a fan of the feds telling the states they have to do this. I would like it if each state did it on their own. #7 is a really interesting idea, in that it would force Congress to start from scratch on the tax code, something I think everyone knows should be done but doesn't know how to get there from here.The others are full of pros and cons, and I think the cons outweigh the pros for such blanket statements. For example, "eliminate most licensing requirements" is a bit too broad for my liking, even though I'm certain that some of those requirements aren't necessary.

I have a degree and 35 years of practice. Why should I need a license?

I don't know what you do, so I have no idea whether you "should" need a license or not. I could argue, however, that depending on the activity, N years of practice shouldn't automatically preclude the need for licensing. For example, I think driver's licenses should need to be renewed every so often, including retaking both the written and driving portions of the test. The fact that one has been driving for 70 years doesn't mean that one is still be a capable driver.

We're not talking about driver's licenses here. Most professional licenses are renewed without having to take a test. In fact several professional licenses do not require a test, only pay a fee.

No doubt. Like I said above, I'm certain that some existing licensing requirements aren't necessary, but "eliminate most licensing requirements" is a bit too broad for me. I can think of a number of professions where licensing requirements are sound policy (doctor and lawyer to name a couple). As far as your particular license, I can't make my own judgment call on whether you "should" need one because I don't know what you and do and what your license covers.

 

[Slapdash]

SD, those articles basically just say that the Fed has already done what Japan should have. I agree that it helped slow the fall, but it certainly hasn't put us back on track. We're already doing huge amounts of QE, and it's not having the demand effect they talk about. IIRC, most economists agree that QE gets less effective each time you have to use it.The part I disagree with is "do whatever is necessary to hit that target". There are negative impacts of many of these policy decisions as well- we can't totally ignore those.I agree there are many fiscal things we can do, but I have very little faith that we will do them. We blew it with the stimulus, so I don't blame people for being against another one, even though it seems necessary.

I think the key difference between QE and their recommendations is the open-ended nature of the commitments they advocate. Having a limited value on these purchases makes it much harder to shape expectations and does not insure the proper liquidity is provided if it beyond the number. Additionally, it still keeps the too low implicit core inflation rate ceiling of 2% the Fed has which will stall the economy every time it starts to get moving.QE‘s intent has been to prevent outright deflation and on that measure it has been a success. They have not been trying to return nominal spending to trend so I don’t think that is the metric to judge the program on. Frankly, they make it quite clear that they will not accept the inflation needed to do that. That strikes me as exactly the same mistake that happened in those two prior situations. I do agree that each time it will be less effective mainly because the political pressure will force it to come later and in smaller amounts than it is needed. Of course there are downside risks to doing whatever it takes to hit the goal. Over aggressive policy could cause a price-wage spiral that is difficult to contain. However, I think it is very wrong to be concerned about then when inflation is currently so low and has been so low signifying that money is now too tight. I am not a fan of making the problems we have worse while worrying about problems that there is no evidence are close to occurring. Wages are stagnant and market inflation expectations are as low as they have ever been. The Fed has a ton of credibility with the market as an inflation fighter and I am confident that they would rein inflation in before it got out of control. Hell, they are so concerned about inflation that they are constantly sabotaging any effort to escape the largest deflationary bust this country has seen in 80 years. That some credibility!

 

[Fensalk]

Of course there are downside risks to doing whatever it takes to hit the goal. Over aggressive policy could cause a price-wage spiral that is difficult to contain. However, I think it is very wrong to be concerned about then when inflation is currently so low and has been so low signifying that money is now too tight. I am not a fan of making the problems we have worse while worrying about problems that there is no evidence are close to occurring. Wages are stagnant and market inflation expectations are as low as they have ever been. The Fed has a ton of credibility with the market as an inflation fighter and I am confident that they would rein inflation in before it got out of control. Hell, they are so concerned about inflation that they are constantly sabotaging any effort to escape the largest deflationary bust this country has seen in 80 years. That some credibility!

The bolded is very misguided. Inflation is not something that builds up gradually over the course of several years. History clearly shows that inflation is a spiky phenomenon. By the time you start to see inflation building up, its too late. There are valid cases to be made for not worrying about inflation right now, but to say we should not be concerned about inflation because there are no current signs of it at the moment is very wrong.