Memo to the Super Rich, your high-paid lobbyists and your no-compromise political puppets whose sole mission is destroying the presidency: Yes, you are succeeding. You’re also killing the economy.
For anyone who wants some quick insights into how a mission to destroy a presidency operates, grab a copy of the Wall Street Journal and read the last three pages of the first section. It doesn't matter which day, as it's like this every day, and has been for the last four years. Taking Obama out is job #1 for the WSJ editorial page staff (which generally reflects the interests of the conservative political establishment), and if the health of the economy or the country suffers, so be it.
The latest WSJ op-ed content can also be seen here, although you may be dinged to register or subscribe:
(Note that the Wall Street Journal is otherwise a great paper and has some solid reporting staff and columnists who operate independently of the op-ed section.)
That's just about the dumbest thing I've ever read.
First of all, 2000-2010 was not a lost decade in any meaningful sense of the word. It only looks that way because there was an exuberant growth period at the very beginning and a recession at the very end. Looking at economic growth over the business cycle, and we were pretty much on trend. You can argue that the growth was unsustainable due to a heavy reliance on consumer debt, but that's an entirely different argument.
Second of all, if growth does stagnate for the entire period of 2011-2020, it won't be because of "something something wall street something something main street". It will mean that we ended up on the back end of a consumption cycle, which can take time to slowly correct itself. If you spend too much money for 10 years, you spend a little less money for the next 10 years. There's very little any government can do to accelerate or mitigate that. And Wall Street "greed" has exactly nothing to do with it. You could literally burn all of lower manhattan to the ground and replace it with a massive federal credit union and it wouldn't change the fundamental dynamics of "credit up, credit down".
Finally, if a couple thousand college-aged leftists protesting in a coastal american city actually signified an incipient revolution, we'd have had about 20 revolutions in the past 30 years.
That seems awfully dismissive of the situation and people's frustrations with it. Wall Street greed and political corruption do have a lot to do with it. For example, here's an article from Rolling Stone that's probably partly responsible for unleashing a lot of the frustration towards Wall Street: http://www.rollingstone.com/politics/news/why-isnt-wall-stre...
Whenever the subject of Wall Street's participation in our economic woes comes up, a few people show up and try to attribute it largely to normal growth/recession cycles, but that doesn't explain why so many of the figures that we're seeing now more closely resemble trends from 70 or more years ago.
Lastly: those "couple thousand college-aged leftists" have recently been receiving support from a wide variety of other groups. About the best thing you can do for their cause is to continue underestimating them.
I'm being intentionally dismissive of the notion that America is on the cusp of a popular revolt against "the rich", at least to the extent such a revolt takes the form of the occupy wall street movement. I think various establishment Democrat-affiliated groups have taken an obvious interest, since they're hoping (against hope, I'd say) that this will become a counter-balance to the Tea Party. I will happily continue to underestimate them, despite the risk that it will somehow make them stronger.
Also, I'm not saying that our recession is a normal growth/recession cycle. The 'standard' business cycle is (usually) inventory driven and the economy quickly recovers once inventories drain. This is a "balance-sheet" recession. It's driven by excessive consumer (and public) debt, and only goes away once that debt clears the system. "Wall Street" is to blame for excessive debt in the same way that McDonalds is to blame for obesity. They're one side of a two-sided transaction that was taken to excess, and now we have to patiently wait for the consequences to play out.
Was there an exuberant growth period at 2000? That's about the time the tech bubble burst. I was starting college for CS at the time, and the consensus was that the outlook was pretty grim for tech jobs. Hiring seemed to be slow. Most claimed that we were in a recession.
Amazing to read articles like this given the state of the tech industry. More work is available than I know what to do with. This is structural unemployment. People need to acquire modern skills. I dont think this is a wall st problem, I think wall st just accelerated the inevitable demise of antiquated industries and occupations.
Sure, but which ones? Programming? There are frequent articles on HN related to how to distinguish good programmers from bad programmers in a hiring context, so newcomers need to have enough time to become good at programming, which requires radical changes in the very nature of the way they think.
Then, they have essentially two choices: either a more traditional business environment ("wanted: junior Java programmer with 15 years' experience..."), or a startup ("wanted: rock star Ruby hacker that wants to drink beer with us, you get equity...").
Businesses, including startups and businesses outside of the software-dev industry, are largely reluctant to hire trainees. In the past, it was possible to get hired and then learn how to do the job over a period of a couple of years, or more; prospective employees now are expected to show up with all the required tools and skills, ready to work within an hour of being shown their desk space.
What I've been hearing so far from businesses is that they don't have the time or money to invest in an employee, and they don't view employees as a long-term asset anyway.
"Businesses, including startups and businesses outside of the software-dev industry, are largely reluctant to hire trainees."
I don't know what this is based on. I'm at a fortune 100 company and my last employer was also a fortune 100 company. I hired a lot of people fresh out of college with no experience for both companies.
In fact, I've found that it's much easier to find good people coming straight out of school than it is to attract good people that likely already have good jobs. And, I've hired a number of people that have no college or majored in something like music rather than comp sci.
Bottom line, if you can show that you know how to code, you'll get a job. Something as simple as writing your own blog software which you can then talk about intelligently.
I disagree with localhost3000 too, all people can't be programmers/tech people. That's not a solution.
" all people can't be programmers/tech people. That's not a solution."
totally agree. i was just using my own experience in the tech industry to demonstrate that there are indeed areas of the economy in which demand for labor outstrips supply. it isn't down down down across the board if someone like me is turning away work.
It's meaningless to say it's structural versus cyclical here, unless you're willing to offer proportions.
This is a complicated econometric problem, but one obvious telltale sign that structural employment can't explain everything is that virtually every major sector of the economy has shed jobs. If it were entirely structural, you would expect certain sectors to be rapidly accumulating jobs, which we just don't see.
Note that Groupon clones will never comprise a major sector of the economy. God willing.
Those people want to "train up" to better jobs. They want that desperately. No one wants to be poor and unskilled. The problem is that they have no savings, and there's no social safety net, and our politicians have become actively mean-spirited because the dumbs equate mean-spiritedness with masculinity. So these people fall into the secondary labor market (jobs that were intended for teenagers and retirees, like in retail) on account of desperation and they can't get out.
Skill obsolescence is not the most common cause of this. Unexpected medical problems can do it, too.
It's not the fault of "Wall Street" alone. It's the fault of a corrupt, failing political system owned by corporate interests.
I don't understand what's free market about mortgage-backed securities, bank bailouts and giving the banking elite a monopoly on money through the federal reserve...
> what's free market about mortgage-backed securities
It's an aggregation of assets to reduce variance.
I won't invest in a single mortgage because of the variance. However, I'll consider investing in a small piece of 1000 mortgages.
Of course, I'll want to know what those mortgages look like and what the mortgages in the market look like. (Fannie lied about the makeup of the market, significantly understating the fraction of sub-prime, which threw off everyone's risk calculation.)
> bank bailouts and giving the banking elite a monopoly on money through the federal reserve...
It's a vehicle for funding politicians and buying votes.
"Nice bank there, be a pity if it was burned down by folks who can't afford a mortgage that they can't pay for".
Mortgage backed securities are the epitome of a free-market innovation. The ability to pool mortgages and sell them in chunks essentially allows small investors (say, me, although I did not ever buy a MBS share) to make home loans. That makes home loans easier to come by, which makes homes easier to come by, and it's all delivered by the innovation of the free market.
The bailouts, on the other hand, were quite obviously not a free-market device.
Finally the federal reserve doesn't "give the banking elite a monopoly on money". Although, I honestly don't even know what that means. The federal reserve is supposed to control monetary policy to prevent inflation (good for normal people) and minimize unemployment (good for normal people). They do that by controlling interest rates and "reserve" rules. In other words, they do that by bossing around banks, and manipulating them into making more or fewer loans. That is also not a "free market" system, but there's good reason to suspect it's better than a private money alternative.
Coherent thoughts on what is and is not "free market". I would disagree that the fed is really meant to prevent inflation. Many of their actions are specifically designed to increase inflation. I also disagree that there is any reason to suspect that its better than a private money alternative, or backing to some kind of commodity based standard like gold. I would say most evidence is to the contrary (although this is generally a lengthy discussion).
This article actually reflects the chaos that I see on TV. People protesting anything and everything without clear causal links or evidence. The author blames the "Super Rich" and Wall Street on: the high government debt levels, a stagnant stock market, an ineffective fed, financial regulation, and just general economic malaise. Of course, the author fails to paint any kind of coherent causal relationship or propose any solution. However it seems pretty clear from the author's tone that they would propose some kind of increased government involvement to stop "Wall Street Greed", which is like saying the cure for cancer is to give the patient hepatitis. You can easily make a strong case that government involvement in business and markets is to blame for most of the issues above, so the natural solution would be to reduce government involvement. This is something the author is not likely advocating, and is politically difficult for the current political parties.
I agree that there is an overwhelming sense of lack of direction. Combined with a generally increasing spirit of revolt, it's a very dangerous mix.
It's made even more dangerous by the fact that commentators quite consistently miss the really dangerous problems, which are unemployment and (to a somewhat lesser degree) stagnant real wages, and the huge inequality with which people are affected by them. Those are the real reasons that really drive people into to the streets, because they actually affect their lives.
Even you managed to miss those problems - though I don't blame you. It's easy to become distracted by all the reporting about everything else.
All those other things: stagnant stock market, ineffective fed, high government debt levels? They don't affect people's lives. They're not the reason why people are taking to the streets.
But the fact that there is such a huge disconnect between what the media is talking about and what the people who are protesting ultimately care about, the discussion isn't moving forward. As a result, people are unable to articulate well-focused demands, and that's what really worries me.
Revolts and revolutions are always dangerous, but unfocused revolutions? Those are really scary.
What's astounding is that anyone pays any attention to "Occupy Wall Street". It's a big circle jerk between some hippies in need of a bath and lefty-media types.
For anyone who wants some quick insights into how a mission to destroy a presidency operates, grab a copy of the Wall Street Journal and read the last three pages of the first section. It doesn't matter which day, as it's like this every day, and has been for the last four years. Taking Obama out is job #1 for the WSJ editorial page staff (which generally reflects the interests of the conservative political establishment), and if the health of the economy or the country suffers, so be it.
The latest WSJ op-ed content can also be seen here, although you may be dinged to register or subscribe:
http://online.wsj.com/public/page/news-opinion-commentary.ht...
(Note that the Wall Street Journal is otherwise a great paper and has some solid reporting staff and columnists who operate independently of the op-ed section.)