Structural vs Stimulus | 82 comments (82 topical, 0 hidden)
Words are versatile (none / 0)

I think investment in infrastructure is both, short-term stimulus AND long-term investment. If economists say those two are mutually exclusive, that's fine, but not that relevant for anybody outside of their profession. I agree that any "stimulus" (notice the quotation marks) should always be as much of a long-term investment as possible. That makes infrastructure and education spending the preferred means that the government can implement. Tax cuts, on the other hand, are useless in the long run, and, as you pointed out, in some cases counter-productive. I think Cenk is very much aware of this, and he has come out against tax cuts numerous times.

As for the value of pure stimulus spending, i.e. just getting the economy out of its current ditch, that's currently a double-edged sword. On the one hand, the world economy is growing again, and America would fall behind if the current slow growth were to be continued for, say, another decade. Reduced economic activity in and of itself leads to less employment, fewer tax revenues, worse education, higher crime rates and a lot of other bad developments that have a long-term impact. A stimulus may be essential to stop that downward cascade. On the other hand, the financial market is heading towards another cliff, and that problem isn't going to be solved, so the next collapse will come either way.

Because of this inevitability of the next collapse, you're right on the substance, which is that any spending must have long-term goals in mind in this particular situation, or it would be completely useless. For most people, however, the word "stimulus" doesn't exclude this, and words tend to follow the majority rather than vice versa.

by OldGerman on 09/04/2010 01:18:59 PM EST

A doctors visit (none / 0)
The problem with "stimulus" and the overall ARRA was that it was in fact geared toward a short term stop gap and not the long term growth we needed. It was the wrong diagnosis, therefore the wrong prescription.

Unless we restore a manufacturing base and make major advances in our energy production and consumption we will never get out of this.

While I agree that Cenk gets most of it, his framing and regurgitation of blanket CBO numbers lays support for Obama continuing to drive the car down the ditch. Let's not forget it was not Bush who drove the car into the ditch, it was Larry, Ben, Greenspan, G eithner and Paulson.

Obama may have switched some seats around but the same drunks are driving the bus.


by sisco66 on 09/04/2010 08:47:48 PM EST

[ Parent ]
"the world economy is growing again" (none / 0)
But for how long, and where can it continue longest? What is the "growth" trend in the US? Do you think any kind of investment will rectify that?

I'm not being argumentative. Do you think there are real solutions?

by Landbeyond on 09/05/2010 03:41:12 AM EST

[ Parent ]
It can grow as long as there's demand for goods (none / 0)

For well-developed countries like the US, the future is IMO the production goods of very high quality, which justify higher costs and prices than the ones manufactured by cheap labor in less developed countries. Production of fewer but more efficient and long-lasting goods should theoretically lead to less consumption of natural ressources and energy as well.

The investments needed for this are in education and infrastructure; that's pretty much it. A highly educated workforce is most important. This is a pretty commonplace answer, but I think it's true.

Other systemic troubles such as the financial system and the imbalanced (mainly in the sense of false priorities) budget need to be fixed, or the economy will always be in some trouble regardless of anything else. I also think that unemployment will rise simply because fewer and fewer people can produce more and more goods, thanks to technical progress. In the long run, I think developed societes will have to find a way to accept and manage a lack of demand for human labor, e.g. by having people work fewer hours, and still ensure that they make enough money to be a happy consumer.

by OldGerman on 09/05/2010 05:05:13 AM EST

[ Parent ]
This is where the rubber meets the road... (none / 1)

our infrastructure is old and failing.  The cost of upgrading exceeds the cost of building it.  On education, it appears to be a nightmare.  As a teacher I have to stay on top of trends and they don't look good.

Schools are spending too much time on developing the whole child and making up for the lack of parental involvement instead of just educating.  Test scores are falling rapidly and most teachers are beginning to question what the point is.  Without a concerted effort to return to the basics, students will not be up to the task of supporting advanced manufacturing.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/05/2010 05:56:35 AM EST

[ Parent ]
Consider the goal (none / 1)
Test scores are falling rapidly and most teachers are beginning to question what the point is

They should. And while they're at it, they should take a cautionary lesson from Japan. Here, teaching knowledge instead of skill is the tradition -- not to mention the cause of widespread inability, barring attendance of "cram schools," which may as well replace traditional Japanese schools altogether.

(All Japanese study English for at least five years in school, yet less than 10% of those whose English studies are limited to those five years can hold their own in a casual conversation, or even introduce themselves without sounding like C3PO. This is because of the infuriating tendency of Japanese schools to teach material so that students pass the test...and then promptly forget everything. If a student's ultimate goal is passing a test, that's all he'll ever achieve.)

by OneHitKill on 09/05/2010 07:52:25 AM EST

[ Parent ]
I won't argue the point, it's the same... (none / 0)

in Hanoi where I am.  Parents want their kids to go to university and nobody wants to give them the bad news that their child isn't going to make it.  However,  their math skills blow away most American students simply because they spend so much time practicing.

I was the best student at French in my school and I could barely hold a conversation before I went to live in a French speaking country.  If the students don't have a way to practice English daily then, yes it is just studying for the test.  Here there is a 98% literacy rate on 1/50th of the US budget.

Go figure.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/05/2010 09:25:14 AM EST

[ Parent ]
I don't think it's that easy (none / 0)
    "education and infrastructure; that's pretty much it"

But improving education and infrastructure requires even more energy than the stagnant/falling level at present available, while the current infrastructure is already quietly crumbling for lack of maintenance.

Such production as still takes place in the US tends already to be relatively energy-efficient. That's just as well, as some production is likely to return, requiring yet more energy, as international shipping becomes more expensive.

Less waste and reduced obsolescence are good, especially as production is almost totally dependent on oil.

Maybe you saw this report on a German military study, discussed here. Have you seen it covered in the US MSM?

Add to that your "other systemic troubles" and maybe you can see there are difficult times ahead.

by Landbeyond on 09/05/2010 10:44:59 AM EST

[ Parent ]
no need to panic (none / 0)

I don't think the study contains a lot of new revelations. Of course, oil reserves will at some point be depleted. But it will be a slow decline in oil supply and accordingly rising oil prices. This gives governments and industries some time to prepare and develope other sources of energy. Sure, there will be some, probably significant economic and geo-political impact, but I don't expect it to be entirely negative, as the study seems to suggest.

However, investing in other energy sources now would certainly be a good choice, as you'd rather produce the technology than buy it from elsewhere. Education is the basis of that as well, of course, as ignorant people are less likely to make the right choices, and even less likely to succeed.

by OldGerman on 09/05/2010 03:54:25 PM EST

[ Parent ]
Slow decline is a big problem (none / 0)
Well, okay. If you think warnings of:

    'shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the "total collapse of the markets" and of serious political and economic crises'

and similar conclusions from now numerous other studies, including industry, the Pentagon and the Department of Energy, can be downplayed as "some, probably significant economic and geo-political impact", then you can continue believing that economic recovery is only a matter of time, as the MSM and the politicians and economists will keep reassuring you.

When you look at this DoE graph:

From a DoE presentation

and when you bear in mind that the dwindling number of oil-producing countries (especially in the Middle East) are using increasing percentages of their output for their own development, I'm not sure how you can maintain such equanimity.

    "investing in other energy sources now would certainly be a good choice"

Maybe a better choice would have been to invest in them when the enormous quantities of fossil fuels needed to transition to other energy sources was still available and when the economy wasn’t entering permanent depression.

    "ignorant people are less likely to make the right choices"

The last few decades have provided ample proof of that.

    “I'd put my money on solar energy… I hope we don't have to wait til oil and coal run out before we tackle that.” — Thomas Edison, in conversation with Henry Ford and Harvey Firestone, March 1931

by Landbeyond on 09/06/2010 05:46:40 AM EST

[ Parent ]
Okay, then... (none / 1)
...panic! We're all going to die!

by OldGerman on 09/06/2010 08:05:40 AM EST

[ Parent ]
That's a tad childish (none / 0)
But a common reaction on this issue when people run out of arguments.

A little surprised to see you resorting to it though.

You've probably seen that Germany looks set to extend the life of its nuclear power plants. Maybe someone has been doing their sums regarding renewables and fossil fuel availability a few years down the road. 

by Landbeyond on 09/06/2010 12:02:12 PM EST

[ Parent ]
Hey! (none / 0)
You're still alive?

by OldGerman on 09/06/2010 12:16:02 PM EST

[ Parent ]
Reduced to four words? (none / 0)
Perhaps I should apologize for inferring from your earlier comments that you were interested in the issue; that perhaps there were younger people in your family or of your acquaintance for whose future welfare you might have some concern, and that you might therefore wish to see TPTB and the public in general trying to make the best of a bad situation.

If you respond with a grunt I'll take it as confirmation that I was incorrect and that we were wasting each other's time. Or you may have retreated into emotional denial :o< -- again, not uncommon, and it's a phase that usually passes.

On the other hand, perhaps others are now a little better informed.

    "Have the courage to use your own understanding!" – Immanuel Kant

by Landbeyond on 09/06/2010 02:01:02 PM EST

[ Parent ]
Let me help interpreting my words (none / 0)
Thanks for your psychoanalysis, but as Opposition said, you didn't make any new points but just said "Study XYZ says that it will be terrible." So yes, discussing this any further would be pointless and a waste of time. You just seem to throw the words "Peak Oil!" around and expect everybody to be outraged. But no, it's obvious that oil will run out, it's not news. We'll have to wait and see how the world deals with it, and do whatever most of us do anyway by casting our votes on election day. It's not like nobody knows or cares about it, okay? You don't have to do any missionary work. Now if you don't mind, stop attacking me and go about your life. I hate it when people think "the end is neigh" and that nobody else knew about it, and I hate it even more when they throw out ad hominem attacks because reactions they recieve aren't excited enough. 

by OldGerman on 09/06/2010 02:39:32 PM EST

[ Parent ]
Much clearer - but puzzling (none / 0)
It appeared to me that it was me who was being subjected to ad hominem attacks, rather than vice versa. Perhaps if you'd used a few more words?

I don't recognize your characterization of my earlier comments. I had thought we were merely exchanging views.

Peak oil has nothing to do with oil running out.

by Landbeyond on 09/06/2010 06:03:52 PM EST

[ Parent ]
Arguments? (none / 0)
You are always just repeating that the whole world will collapse and there is nothing anybody can do about it.

If we can't do anything, why care about it?

Are you greeting your friends every day with the words:
"You are going to die sooner or later!"?

"The first thing Fascists usually try to do is silencing the opposition."

by opposition on 09/06/2010 12:36:57 PM EST

[ Parent ]
scary (none / 0)

If we don't do anything, yes. we already have the solution for energy, it's only a question of building enough windmills right now and research more advanced energy extraction at the same time. 20 percent of energy in my country is from sustainable green tech. right now. Why not just copy paste. 

sweden has a goal of 49 percent green energy in 2030, this progress could be continued till approximate 100% in less than 60 years, at current rate.

But, accelerate it, raise taxes on companies that sells unnecessary products to pay for it the investment. 

by Valhalla on 09/06/2010 08:52:48 AM EST

[ Parent ]
At least Sweden is trying (none / 0)
Unfortunately it finds itself in a world where most "leaders" can't or won't see and articulate what should be obvious.
 
We are currently seeing the first, mild effects of the situation we have created. There is no sign of a general end to high-level denial, which means no serious large-scale efforts at mitigation of whatever difficulties we may be facing before too long.

    “He that will not apply new remedies must expect new evils, for time is the greatest innovator.” — Francis Bacon, Essays

by Landbeyond on 09/06/2010 01:18:23 PM EST

[ Parent ]
So is China (none / 0)
and Germany.

"The first thing Fascists usually try to do is silencing the opposition."

by opposition on 09/06/2010 04:52:52 PM EST

[ Parent ]
Yes (none / 0)
Correct.

by Landbeyond on 09/06/2010 06:06:07 PM EST

[ Parent ]
yep (none / 0)
and we have barely scratched the surface

by sisco66 on 09/07/2010 10:12:03 PM EST

[ Parent ]

Structural vs Stimulus | 82 comments (82 topical, 0 hidden)