The Double Dip Has Arrived

[Gaspar]

MSNBC is reporting that the double dip recession has arrived.

http://www.msnbc.msn.com/id/43946055/ns/business-us_business/

We may already be at the nadir of the trend, so it's important that any additional burden put on private industry is avoided to steer us away from disaster. 

We've been steered into uncharted water now.  Typically we could just unharness business and throttle out of it, but we know that's not going to happen.  Hopefully, most private industry is smart enough to conserve and hold on until the storm passes, but that's not going to help most people.

Perhaps we are going to start clawing our way out of this, but we have some looming burdens that impact all businesses in 2014, and the implications of those burdens are not yet measurable by the small business owner.  As for now they are a light in the tunnel.  Could be a train, could be the other side, but either way, it is wise to move slowly.

[Townsend]

Perception is a hell of a drug

[AquaMan]

Or lack of it.

[Teatownclown]

That was a prediction by TTC if more money wasn't printed.

A minor recession has resulted from extortion politics. 

It amazes me how reactionary forum posters are when the light hits the dark.

[nathanm]

Business has been unharnessed, G. They've been too busy doing the stock buybacks and paying dividends to hire. (I don't blame them; demand is low because everyone who isn't pumping up their stock price is paying off debt)

[carltonplace]

This would be a good time to lay off more government workers, teachers etcetera and stop paying any unemployment claims. We wouldn't want people to be consumers or pay their mortgages right now.

[guido911]

This would be a good time to lay off more government workers, teachers etcetera and stop paying any unemployment claims. 

Now your talking...

[carltonplace]

Now your talking...

Now you're talking!!!

Thanks for making me chuckle gweed.

[guido911]

Now you're talking!!!

Thanks for making me chuckle gweed.

And thanks for getting the joke.

[YoungTulsan]

These [smiley faced friends] have been trying to act like the recession ever ended....   My [buttocks]

[we vs us]

I've been wondering what the next thing will be, since we're now officially done with the debt ceiling (at least for 6 more months or so when the SuperCommittee starts cutting revenue again)  Everyone seems to agree in public statements that the jobs crisis should be at the top of the agenda, though it remains to be seen whether that will actually get addressed or if we'll move on to another ideological battleground. 

My guess is that the budget is the next place to fight the war.  The Ryan budget will be the GOP template and will be marketed as a job creator in the Gaspar vein -- unharnessing the rich and business interests by unharnessing them from tax obligations and regulation.  It'll be a retread, but the Ryan budget at this point is too rich and too untapped a vein to be taken off the table entirely. 

The result of the debt ceiling battle means we're now definitively in an austerity spiral (in some ways like Greece but probably more like Britain) and so our options are now limited to more austerity and/or more dereg and/or more tax cuts.  The government will not now be investing any more money in the economy and is now boxed in entirely by the GOP view of things.  If we actually double dip, the chances of us learning a lesson and realizing that stimulus is a useful tool is greatly diminished. It's much more likely that we double down with our double dip, and cut more away.

What's sad is that the austerity period is going to continue unabated through the 2012 election cycle.  Obama's cast his lot with the rightie economic frame, so no matter who wins that election (I still can't see anyone in the GOP actually winning at this point), the result will look the same at least through 2016:  more austerity.     

[Gaspar]

I've been wondering what the next thing will be, since we're now officially done with the debt ceiling (at least for 6 more months or so when the SuperCommittee starts cutting revenue again)  Everyone seems to agree in public statements that the jobs crisis should be at the top of the agenda, though it remains to be seen whether that will actually get addressed or if we'll move on to another ideological battleground. 

My guess is that the budget is the next place to fight the war.  The Ryan budget will be the GOP template and will be marketed as a job creator in the Gaspar vein -- unharnessing the rich and business interests by unharnessing them from tax obligations and regulation.  It'll be a retread, but the Ryan budget at this point is too rich and too untapped a vein to be taken off the table entirely. 

The result of the debt ceiling battle means we're now definitively in an austerity spiral (in some ways like Greece but probably more like Britain) and so our options are now limited to more austerity and/or more dereg and/or more tax cuts.  The government will not now be investing any more money in the economy and is now boxed in entirely by the GOP view of things.  If we actually double dip, the chances of us learning a lesson and realizing that stimulus is a useful tool is greatly diminished. It's much more likely that we double down with our double dip, and cut more away.

What's sad is that the austerity period is going to continue unabated through the 2012 election cycle.  Obama's cast his lot with the rightie economic frame, so no matter who wins that election (I still can't see anyone in the GOP actually winning at this point), the result will look the same at least through 2016:  more austerity.     

There is still a great deal of reserve capital in the private sector.  It's like a loaded cannon.  If we can bring up confidence through the passage of a Ryanesque budget then I think we can fire the cannon.

There still is the question of Obamacare looming over the private sector.  I still have yet to meet anyone in business (and I deal with CFOs all day, every day) who has an understanding of what it will mean to their company.  A significant amount of corporate reserve capital is either being held or invested in technologies to mitigate future hiring as a result.

I don't know what the solution to that is going to be.   It may be necessary for congress to take a different approach and target the mechanisms responsible for medical insurance increases, in the hopes that that will deflate the Obamacare monster, and make healthcare affordable without making it a mandate.

[Conan71]

I still have yet to meet anyone in business (and I deal with CFOs all day, every day) who has an understanding of what it will mean to their company.  A significant amount of corporate reserve capital is either being held or invested in technologies to mitigate future hiring as a result.

I don't know what the solution to that is going to be.   It may be necessary for congress to take a different approach and target the mechanisms responsible for medical insurance increases, in the hopes that that will deflate the Obamacare monster, and make healthcare affordable without making it a mandate.

Whew, so it's not just the company I work for and the myriad of companies I do business with every day who still don't know all the ramifications.  This hoarding of capital has been crassly mischaracterized by the left as greed when they have zero understanding what kind of doubt Obamacare has created.  Am I wrong in stating that much of that capital (and more is getting hoarded as profits continue to increase) may not return to the playing field until after 2014, if even then?

I honestly don't think people who have never owned a business or created a job have any sort of understanding of how much uncertainty and doubt plays in an economy.  It's not a simple matter of pouring a dumpster load of money out and things will get better (stimulus).  When the government is not working in concert with business to improve the overall jobs and business picture, all they are doing is pouring money into the street and watching it go down the storm sewer.  It provides temporary relief for some sectors but zero incentive to re-invest in more jobs, new plants and other capital expenditures once it's all gone if at the other end of that largesse, companies see the big boot of government prepared to stand firmly on their head.

And Wevus, you make it sound like government spending will dry up.  It won't.  There will be enough accounting gimmicks to ensure that no one has to go home to their district without fresh slabs of bacon.  I hope I'm wrong about that though and the government can figure out how to turn some of their entitlements into an exchange for productivity, like extended unemployment benefits.  Instead of paying someone to make three or five (or whatever the requirement is) job inquiries per week, put a shovel in their hand or a laptop in their lap and at least get a needed service in return.  I hardly find that heartless and cruel.  It's a proven fact that someone who has a job has a better sense of self worth and accomplishment.  It's good for them mentally and could give them new job skills even.  That's a social program I could believe in.

Social programs and government spending doesn't become a problem until they are used to pay people to NOT be productive.  That's one of the major problems facing countries like Greece: too many people on the dole, too many people on the government payroll who get 6 weeks of vacation a year, great benefits, and they retire when they are 58.  It's not terribly unlike one of the main issues which bankrupted GM.  Too many retirees in their 50's and 60's on the payroll with too many benefits.

[Gaspar]

Social programs and government spending doesn't become a problem until they are used to pay people to NOT be productive.  

I really like that Conan.  That sums it up in a logical and irrefutable manner.

[AquaMan]

I really like that Conan.  That sums it up in a logical and irrefutable manner.

So when the government pays agri-business to not produce in order to manage the industry's natural greed, greed that would produce binge/purge economic failures, then that is a problem? Lots of other examples in energy, conservation, manufacturing.

All generalities are false, including this one.

You guys make way too much of "ObamaCare". Really? Business is so scared of health care costs that they retract from their mission of serving the public at a profit for their stockholders...who are the public? Weird business. Short sighted business. Maybe things have changed that much. I doubt it. Businesses simply don't hoard their capital from fear of rising costs. At least not for long. They may pass them on, they may adjust their structures, but well run businesses don't sit on their capital.

Two things you can always depend on in politics and business. Recurring cycles and the effort to capitalize on them.

I think the problem arrives when government spending on social programs is co-opted by the interests of political power and business. Those are practically one and the same now. But they didn't used to be. You couldn't find a conservative in the 1930's/40's's/50's/60's who could get props for what you guys routinely consider irrefutable logic now. Those conservative folks were voices in the wilderness because, wrong or right, they were out of synch with the population. Goldwater had some well reasoned arguments but a party that was driven by leftover Hooverites was totally out of synch with a young, dynamic population.

That is what is happening now. Decades of largesse and new generations who never experienced the failure of economies driven by and for industry have combined to make mortal enemies out of those in synch with a dumbed down population (I don't mean you guys, we know our population is generally sheep) vs those out of synch. Doesn't mean liberals are wrong, they are merely the voices in the wilderness now. They lack the power that a determined, mindless "winning!" mentality commands. In this last struggle over a debt ceiling, Obama had to recognize, that politically, his country has a short historical memory and a Dali-esque view of the world. The only thing that will save him, and our country's economic viability is another young, dynamic, well educated generation. I do believe it is their time of flowering.