US Economy - Greenspan Issues Warnings

[Astronuc]

Greenspan Worries About Economic Health
Friday August 26, 1:03 pm ET
By Jeannine Aversa, AP Economics Writer
Federal Reserve Chairman Greenspan Raises Concerns About Long-Term Health of U.S. Economy

JACKSON, Wyo. (AP) -- Creeping trade protectionism and bloated budget deficits pose a risk to the United States' long-term economic vitality, Federal Reserve Chairman Alan Greenspan warned Friday.

"Developing protectionism regarding trade and our reluctance to place fiscal policy on a more sustainable path are threatening what may well be our most valued policy asset: the increased flexibility of our economy, which has fostered our extraordinary resilience to shocks," the Fed chief said in a speech to an economic conference here, sponsored by the Federal Reserve Bank of Kansas City.

http://biz.yahoo.com/ap/050826/greenspan.html?.v=9

Don't know how long that link will be valid.

 

[Skyhunter]

Nothing there that is really new. Most of it he has said before, although this is the first time I have heard him tie it altogether.

So many people are getting interest only loans on the expectations that their property values will increase enough to warrant such speculation. There are so many economic factors that could cause an economic downturn that I am perhaps more alarmed than Greenspan. Bush's posture toward the world has caused such animosity toward the US that the only thing keeping the rest of the world from causing an economic collapse of the US is the strong effect it will have on their own economies. If our economy does tank, their only motivation to help us will be self interest. Let us hope that that will be enough to keep them from trading oil in euros, calling in debt, etc.

 

[Pengwuino]

If our economy does tank, their only motivation to help us will be self interest. Let us hope that that will be enough to keep them from trading oil in euros, calling in debt, etc.

... that's been very true for decades now and for almost every 1st world nation, how is it any different now? (besides the oil trading thing).

The budget deficit thing is a point that does not need to be mentioned since it was far worse a couple years ago. The housing thing htough, wooooo. Theres no "if" on that one. Theres no way this mass hallucination of a quarter million dollar shack out in the mojave desert is going to continue for much longer. I bet bill gates' house is worth half of Europe with this stupid market. Its rediculous, its going to bust, and its already showing signs of happening in a few markets (San Diego to name a familiar one).

I know there's a few <1 acre lots around my city that are going for a quarter of a million... just the lot. I mean what is going on here, am I buying a guaranteed place in Heaven too?

 

[BobG]

The budget has been pretty disappointing for a government with both a Republican president and Congress. It tends to to suggest the problem is Congress itself, not which party is in control. Maybe that's why the thirty year average for Congressional approval rating is only 41% - and only 33% currently (http://www.pollingreport.com/job.htm .

Of course, people generally find their own Congressman to be the exception to the rule (62% thirty year average approval rating). There might be even greater insight in that statistic.

The key to getting re-elected is making sure your own folks get a slice of the pork - not in cutting pork from the budget entirely.

 

[Pengwuino]

The budget has been pretty disappointing for a government with both a Republican president and Congress. It tends to to suggest the problem is Congress itself, not which party is in control. Maybe that's why the thirty year average for Congressional approval rating is only 41% - and only 33% currently (http://www.pollingreport.com/job.htm .

Of course, people generally find their own Congressman to be the exception to the rule (62% thirty year average approval rating). There might be even greater insight in that statistic.

haha yah, textbook politics. Its always Congress's fault and never your own representative.

The key to getting re-elected is making sure your own folks get a slice of the pork - not in cutting pork from the budget entirely.

Its a self-perpetuating system. Congressmen say they will give the people more more more and the only people who get to stay in Congress are the people who are successful at getting more more more from the budget. Thus, the budget has to expand which allows more money grabbing and longer terms in Congress and another budget expansion. This continues until the government receives your check from work and runs your life. Oddly enough though, Congressmen could never get elected again because there's no "more" left :P

 

[SOS2008]

...A boom in corporate profits has not yet created a job market that makes workers feel secure, economists say. Hiring hasn't skyrocketed. Worse, wages are stagnant. This paycheck squeeze may prove more worrisome than soaring oil prices and concerns over a housing bubble. Some experts worry that wage stagnation may prove more permanent this time, because of an increasingly global market for labor.

...Normally, as employees are able to produce more in each hour of work, the result is greater cash flow that can be divvied up between workers and owners or investors. In the long run, rising productivity means rising wages and living standards.

But in the short run, "most of the gains in the economy have gone into profits rather than wages," says Behravesh.

Growth: Then and now
Annual change in key indicators...1998...2005 (est)

National output (GDP).....4.2%...3.7%
Inflation.........1.5...3.1
Job growth (payrolls)......2.6...1.7
Real disposable income......5.8...2.2

Other benchmarks
Unemployment rate......4.5%...5.1%
Consumer sentiment index...104.6...93.6

Source: Global Insight

http://www.csmonitor.com/2005/0822/p01s03-usec.html?s=hns

Hmm...I wonder who is in favor of big business (outsourcing, illegal labor, questionable trade agreements) over the American worker, giving tax breaks to the wealthy, subsidies to oil companies, etc. I guess it has yet to trickle down, eh?

 

[Pengwuino]

http://www.csmonitor.com/2005/0822/p01s03-usec.html?s=hns

Hmm...I wonder who is in favor of big business (outsourcing, illegal labor, questionable trade agreements) over the American worker, giving tax breaks to the wealthy, subsidies to oil companies, etc. I guess it has yet to trickle down, eh?

Odd... According to the Washington Post and the Bureau of Labor Statistics...

http://www.washingtonpost.com/wp-dyn/content/article/2005/08/02/AR2005080201938.html
http://www.bls.gov/news.release/pdf/empsit.pdf

2.4% inflation and 2.7% wage growth

 

[Informal Logic]

Odd... According to the Washington Post and the Bureau of Labor Statistics...

http://www.washingtonpost.com/wp-dyn/content/article/2005/08/02/AR2005080201938.html
http://www.bls.gov/news.release/pdf/empsit.pdf

2.4% inflation and 2.7% wage growth

Such data is easy to manipulate, so who knows what the real statistics are. The CSM article basically says the economy is looking good, but right now it is looking better for corporations than for individual workers. You have expressed concern about the cost of homes, and I believe we are all aware of the rising cost for fuel. When was the last time you had a pay raise?

 

[Pengwuino]

Such data is easy to manipulate, so who knows what the real statistics are. The CSM article basically says the economy is looking good, but right now it is looking better for corporations than for individual workers. You have expressed concern about the cost of homes, and I believe we are all aware of the rising cost for fuel. When was the last time you had a pay raise?

When doesn't it look better for corporations? Has it ever been better for the workers then the companies? The only time I can think of where a company loses out and workers win out monetarily across an entire economy is minimum wage increases.

Not sure why your asking about my pay raise since I am still a student Plus I am sure you wouldn't want to be bringing a subjective sample into scientific analysis would ya?

 

[Informal Logic]

When doesn't it look better for corporations? Has it ever been better for the workers then the companies? The only time I can think of where a company loses out and workers win out monetarily across an entire economy is minimum wage increases.

Not sure why your asking about my pay raise since I am still a student Plus I am sure you wouldn't want to be bringing a subjective sample into scientific analysis would ya?

It appears you did not read the quote "most of the gains in the economy have gone into profits rather than wages," and how this is not the norm. Usually workers benefit more from corporate success--so it has been better for workers in the past.

I was not trying to single you out, but merely to make a point that the cost of living is rising (housing, fuel, etc.) and wages are not.

 

[Pengwuino]

It appears you did not read the quote "most of the gains in the economy have gone into profits rather than wages," and how this is not the norm. Usually workers benefit more from corporate success--so it has been better for workers in the past.

I was not trying to single you out, but merely to make a point that the cost of living is rising (housing, fuel, etc.) and wages are not.

Well we're still looking at teh short term, as the article points out. We'll have to wait and see if this is a permanent situation as the article hints at.

 

[The Smoking Man]

Well we're still looking at teh short term, as the article points out. We'll have to wait and see if this is a permanent situation as the article hints at.

Can you point at some of the long term programs that are currently being put into place to redress the issue and the mechanisms that will make them work? The government can't be leaving this to chance, can they?

 

[Pengwuino]

Can you point at some of the long term programs that are currently being put into place to redress the issue and the mechanisms that will make them work? The government can't be leaving this to chance, can they?

I don't really remember many times where the government started forcing companies to take money out of their profits and give it to its employees.

Other then MW.

Dinner time. I am going to have a big fat cow for dinner and throw some grain in teh trash just for spite :D

 

[The Smoking Man]

I don't really remember many times where the government started forcing companies to take money out of their profits and give it to its employees.

Other then MW.

Dinner time. I am going to have a big fat cow for dinner and throw some grain in teh trash just for spite :D

LOL

Other than Minimum Wage?

Damn, I guess the whole history of the industrial revolution and Unions passed you by. There were a whole mess of provisions lobbied and eventually enforced which went for the benefit of the worker ... So much so, in fact, that it gives the Republicans endless ammunition to talk about 'government waste and socialist programs'.

Do both of us a favour and instead of asking me, ask a US Captain of Industry what he complains about the most. That should keep both you and he amused and prove to be informative for you.

Off to the Hungry Heffer? Don't forget to lop off the horns and hooves, they can be binding. May I recommend the Cheese sauce or a Hollandaise and a side of fries (freedom or otherwise)? And make sure you have a good dessert. Don't worry, collesterol is your friend.

Elastic wastebands are a real hoot on those sweatpants aren't they!?

Nice thing about grain ... Throw it away on a large open field and you can feed hundreds.

Let's hear it for Johnny Appleseed.

 

[Kakarot]

my mom wants to buy an apartment as an investment, is this a bad time? lol

 

[Pengwuino]

LOL

Other than Minimum Wage?

Damn, I guess the whole history of the industrial revolution and Unions passed you by. There were a whole mess of provisions lobbied and eventually enforced which went for the benefit of the worker ... So much so, in fact, that it gives the Republicans endless ammunition to talk about 'government waste and socialist programs'.

Governments did not do the Unions bidding, they simply allowed them to exist. Give me an example where the government took money out of corporate caufers and gave it to the workers.

 

[Pengwuino]

Since I feel your ends should be justified by my means, similar messages will appear from time to time, or well... whenever I damn well feel like posting.

And I'm not sure if I've ever seen a more random post...

 

[Pengwuino]

Off to the Hungry Heffer? Don't forget to lop off the horns and hooves, they can be binding. May I recommend the Cheese sauce or a Hollandaise and a side of fries (freedom or otherwise)? And make sure you have a good dessert. Don't worry, collesterol is your friend.

Ah yes, I downed a 32 oz steak, burnt down a farm, and punched some vegetarian that got all up in my face and punted her cat over a fence. Typical friday night out for idnner.

 

[Townsend]

Ah yes, I downed a 32 oz steak, burnt down a farm, and punched some vegetarian that got all up in my face and punted her cat over a fence. Typical friday night out for idnner.

Hey now...that is not the way to protest against liberals. The best method I have found is work hard, earn money and be happy. The liberals just cannot stand it when people are happy and successful with the way things are.

 

[Pengwuino]

Hey now...that is not the way to protest against liberals. The best method I have found is work hard, earn money and be happy. The liberals just cannot stand it when people are happy and successful with the way things are.

Why must you politicize a lovely evening full of vegetarian decking and cat kicking! This just makes me want to go out and waste some junior high schoolers

 

[The Smoking Man]

Governments did not do the Unions bidding, they simply allowed them to exist. Give me an example where the government took money out of corporate caufers and gave it to the workers.

Welfare, Food Stamps, education .etc.

Taxation is the process of the government removing cash from the corporate coffers and distributing it to the people.

For those who can't afford it, there is also free health care at a basic level.

 

[Pengwuino]

Welfare, Food Stamps, education .etc.

Taxation is the process of the government removing cash from the corporate coffers and distributing it to the people.

For those who can't afford it, there is also free health care at a basic level.

I was only talking about government directly removing money from corporations, not removal through taxation or else the article would have gone in a different direction. I can see how you got confused. I was simply talking about directly pulling from businesses bottom line. But then again taxes does a nice job of that as well. Welfare and food stamps do not fit the topic as they are indirect consequences instead of actual actions.

 

[The Smoking Man]

I was only talking about government directly removing money from corporations, not removal through taxation or else the article would have gone in a different direction. I can see how you got confused. I was simply talking about directly pulling from businesses bottom line. But then again taxes does a nice job of that as well. Welfare and food stamps do not fit the topic as they are indirect consequences instead of actual actions.

I only worked in the states as a contractor but when I was in Canada and the UK, Companies were required to pay parity with contributions demanded of employees.

 

[Pengwuino]

I only worked in the states as a contractor but when I was in Canada and the UK, Companies were required to pay parity with contributions demanded of employees.

Well those are different countries.

A lot of companies do that here too voluntarily because its a nice way to attract good employees just like any good retirement plan does.

this is a boring discussion, i want food.

 

[alexandra]

this is a boring discussion, i want food.

Pengwuino, dear, I do so hope you got more food. Yes, this is the way to go: just indulge yourself. Not long to go now... eat as much steak as you can in the meantime, hear:-)

 

[Skyhunter]

Pengwuino, dear, I do so hope you got more food. Yes, this is the way to go: just indulge yourself. Not long to go now... eat as much steak as you can in the meantime, hear:-)

The problem is while they eat themselves to death they cause so much grief to the rest of the world.

 

[Skyhunter]

When doesn't it look better for corporations? Has it ever been better for the workers then the companies? The only time I can think of where a company loses out and workers win out monetarily across an entire economy is minimum wage increases.

Not sure why your asking about my pay raise since I am still a student Plus I am sure you wouldn't want to be bringing a subjective sample into scientific analysis would ya?

There was a time in American history when corporations were formed for a real and defined purpose, other than lining the pockets of their shareholders. They also paid the majority of the taxes. Today it is just the opposite, yet young people like yourself, not knowing history, believe that this is the way it has always been.

In keeping with the trend:

Syracuse University’s Transactional Records Access Clearinghouse discovered that the audit rate by the Internal Revenue Service (IRS) for businesses of all sizes slid to 2.1 audits for every 1,000 businesses last year, down from 2.2 in 2002. Meanwhile, the IRS audited 14 percent more individual tax returns, amounting to 6.5 audits per 1,000 taxpayers.

The report also indicated that the decline in face-to-face audits for all corporations was even steeper, dropping by 21 percent from 2002. For the largest corporations ($250 million or more in assets), there was a 16 percent drop from the previous year.

Accounting for slightly more than 1 percent of the economy in 2003, corporate income tax receipts have fallen to historically low levels. The General Accounting Office recently reported that 62 percent of US-owned companies and 71 percent of foreign-owned firms contributed no taxes in the US from 1996 to 2000—at the height of the stock market bubble when profits were soaring. Nine out of ten corporations paid less than 5 percent of their total income. Last year, corporate taxes fell to just 7.4 percent of government receipts, versus a high of 40 percent during World War II.

And who is it that hires the Jack Abrahmoffs to lobby men like Tom Delay to get laws written that favor corporations, even individual corporations?

The average middle class American pays 35% of their income yet they don't have the representation of a lobbyist.

Does that remind you of any constitutional laws like...hmm... "taxation without representation"?

But let's just blame the liberals for everything that is wrong, even though they have no power in government and never have.