

8 in 10 Americans Say Economy Is Bad - chailatte
http://www.cbsnews.com/stories/2010/08/26/eveningnews/main6808993.shtml

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jswinghammer
Because it is bad. There is another major correction coming and when the
second wave of foreclosures hits things are going to get much, much worse for
the whole world. People know what's going on even though the powers that be
are very optimistic. Every major economist has been wrong about industrial
output, home sales, and GDP growth projections so far. They've been wildly off
too. I don't think their employers are going to call them on it because they
were all wrong. The clustering of predictions keeps people who are massively
incompetent employed.

Right now the world's economy is being propped up by debt and phony stimulus
money. When that party stops the reality of our situation will be exposed for
what it really is: ugly.

~~~
sprout
The powers that be have to be optimistic. That is a prerequisite for growth.
In fact, the real powers (CEO's and boards of the big corporations) are
pessimistic, and therefore the economy is in danger of dying.

The whole thing is largely psychological. It's not like we actually have
crumbling infrastructure that would be difficult to repair; it's just that the
social structures (money, corporations, banks, government) we have in place
are not properly arranged to spur allocation of wealth to new projects.

So I find all this naysaying essentially to be a self-fulfilling prophecy.
It's entirely in our collective minds that we can't build enough for everyone
to be prosperous. Naturally, it's a real problem, but when people say that
specifically the stimulus money is "phony" it seems very myopic. It's all
phony. The question is, how do we convince ourselves it's real, and how can we
harness that?

~~~
dantheman
It's not all psychological, the problem is that massive amounts of capital
have allocated to the wrong uses - building 100 homes, when only 50 were
needed or building a factory that produces 10,000 items when only 5,000 are
needed. Unfortunately do to all the interference in the market no one is sure
what the correct prices are and hence what the actual demand is and what is
and isn't profitable. Adding to this all the messiness of new insurance laws,
etc it becomes very hard to predict what the next correct move will be so
instead people save their cash until they know what to do.

The way we find out what is real is by seeing what people will buy at what
price and letting everyone go bankrupt who can't pay their bills. This will
depress the costs of goods until demand picks up. For instance, everyone
thinks their house is worth probably 30 - 40% than it is. So they refuse to
sell at lower prices, keeping inventory off the market. Thus no one is buying
houses since the asking price is too high. Housing is tough one because it
takes forever for the prices to adjust back to normal, but everywhere this
type of effect can be seen.

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ryanricard
Headline should read "2 in 10 Americans say reducing incredibly complex
systems to binary questions is silly"

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rumpelstiltskin
What else would you expect when 4 out of 5 media outlets say the economy is
bad?

~~~
joshfinnie
I have to agree with you whole-heartedly. I cannot believe that the
sensationalist media and its continuing push to make this economy really in a
recession. Yes, joblessness is up. Yes, credit is getting harder to come by.

I don't think you can honestly find 8 out of 10 people that have been affected
enough by this past year or two to honestly say their spending habits is one
of someone in a recession. Restaurants are still full on the weekends;
amusement parks are still busy with tourists. I just don't get it.

Though this is coming from someone who still has a steady job and is not in
financial problems due to the current state of the economy.

edit: finishing thought.

~~~
hga
How many people do you know are un- or underemployed? (The latter are those
not making what they were making despite trying, most especially those not in
a full time permanent job but instead working part time, contracting, etc.)

For the next step of the discussion, see this remark of mine:
<http://news.ycombinator.com/item?id=1639188>

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ronnier
But is it bad for those 8 people? Or do they just perceive it being bad for
everyone else?

~~~
hga
"It's a recession when someone you know loses their job. It's a depression
when you lose your job."

True, U-6 and beyond unemployment, underemployment and just plain given up
searching is so high (22% according to
[http://www.shadowstats.com/alternate_data/unemployment-
chart...](http://www.shadowstats.com/alternate_data/unemployment-charts)) that
we're seeing something akin to Great Depression levels. It's just that we're
wealthier, have much greater safety nets (as I recall 40 million are on Food
Stamps), we're more flexible, etc.

For that matter, our government is a lot better than in the Great Depression
(Hoover/FDR), e.g. we aren't doing stark raving mad things like driving up
food prices by destroying food and preventing planting when 1/4 of the nation
is malnourished....

~~~
mkr-hn
Mobility and information are big factors too.

In the Great Depression, a poor person or a farmer out in the middle of
nowhere couldn't just hop on the web and make themselves more employable (or
market themselves), or drive 50+ miles on well-maintained highways and
interstates to other opportunities.

~~~
hga
Exactly, that's an important subset of what I labeled "flexibility".

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tocomment
What gets me is shopping centers. Every one I see if 25% to 50% empty. If I
recall, a few years ago you'd once in a while see an empty unit in a shopping
center, and usually there was a sign that something was coming soon. (Am I
remembering incorrectly?)

It kind of feels like a post apocalypse situation going into some shopping
centers?

~~~
tocomment
BTW my wife rents retail space at a shopping center and even though they have
20% of their units empty, they refuse to lower the price she negotiated five
years ago (her lease is up for renewal). She called a few other places and
they're also still charging the same prices and don't seem willing to
negotiate.

What's the deal with that? Shouldn't prices be going way down since there's so
much empty space everywhere?

~~~
angstrom
I think they're hoping inflation will eventually compensate...

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tocomment
Another anecdotal indicator, for the past few months when I go out to
restaurants they've been half full. These are places that less than a year ago
had 30 minute waits most nights.

I wonder if it takes this long after the crash for people's spending behavior
to adjust, or are we really hitting a second dip now?

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d2viant
Contrarian indicator.

There are some excellent investments out there right now that in twenty years
will cause people to look back and wish they had made a move when everyone
else was paralyzed with fear.

"Be fearful when others are greedy and be greedy when others are fearful."
-Buffett

~~~
hga
Well, of course ... but first you have to have the money to invest. That's not
true for most Americans, especially since most who do have investments have
them in their primary residence and retirement plans, the vast majority of
which have taken a significant hit.

Then you have to call the bottom, where the adage "Don't try to catch a
falling knife" comes into play. A lot of people who bought into the stock
market in, say, 1931 lost their shirts.

That said, I'm sure there are good and fairly safe asset classes (perhaps the
one this forum is dedicated to? :-) to be invested in right now, but it's
certainly riskier than "normal".

Also, when citing that "in twenty years" hindsight concept don't forget
survivorship bias....

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mkr-hn
The economy's great or bad depending on what you look at.

Large businesses are doing fine--they get a lot of money from investing in
diverse markets that are less affected by a single country's political and
social situation.

Small businesses and most people in the US are still in a rough spot though.

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postfuturist
I know it's "just one data point," but I live in Portland, OR and everyone is
hiring. No, seriously, every software shop I know about is looking to hire.
Not just boring-as-hell C# and Java cubicle farms, but startups and small
companies writing interesting software with Python and Ruby.

~~~
maxawaytoolong
Ruby programmers might be doing ok, but:

the general problem with Portland is that nobody else is hiring... ever

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bld
I'm wondering why the roads are still so full of cars, even late into the
night.

~~~
mkr-hn
People with second and third jobs, people taking night shifts to stay
employed, people working late to stay employed.

That and stuff like it, mostly.

~~~
stcredzero
[Citation Needed]

~~~
mkr-hn
All I've been able to find is a PDF showing a lot of people with second and
third jobs on the BLS website from 1997, so nothing recent.

It's something that seems reasonable, but I don't have anything to back it up.
The BLS is probably who would have it though if you wanted to look in to it.

