Obama's here!!

[gooman]

Keep the goverment out of my life and my wallet,theres a new tele I want to buy,a USA 1 taboot

[redb]

Keep the goverment out of my life and my wallet,theres a new tele I want to buy,a USA 1 taboot

Just as a joke:

if the keynsians had been running things (their primary concern is stability of price levels, while growing income of both the economy as a whole as well as individuals) your american telecaster would cost about the same as it did in the 50s (300 dollars) because the gains in production technology and effeciency would offset inflation.

should have voted for the guy who said monetarism was the new duran duran. (I dont think that guy existed =/)

[Gris]

One thing I learned on the way to my degrees in economics and finance was that all the economic theory in the world (gold standard, price controls, PE ratios, etc.) really means nothing in the US. Our entire economy has been based upon subjective human expectations, as opposed to asset based valuation and other real world measures, ever since Wall Street became the engine. Suffice it to say my professors avoided me and others in the know after we figured that out because it meant that they really had no answers, just events, labels, meaningless formulas and buzz words for us to memorize...

[redb]

well I think the idea is to create an environment where people can operate, not try to drive the market yourself.

you can however control how much money you print D:

[Gris]

Yes, but ... investment is the cornerstone of any economy. And how can anyone, or any entity, decide how to invest if the return is not based upon any rational, logical data and/or events but rather depends only subjective human 'feelings' of security or insecurity? Of course, the banking system has always relied, to a degree by necessity, upon investor confidence, but when the stock market drives the economy and those stocks do not reflect real value but only people's feelings about what the future holds, well ... time to start burying cash in the backyard.

[cwilliamrose]

........ when the stock market drives the economy and those stocks do not reflect real value but only people's feelings about what the future holds, well ... time to start burying cash in the backyard.

+1

[Cygnus X1]

I disagree.
The dollar can tank anytime.

Buy more gear!

[redb]

Yes, but ... investment is the cornerstone of any economy. And how can anyone, or any entity, decide how to invest if the return is not based upon any rational, logical data and/or events but rather depends only subjective human 'feelings' of security or insecurity? Of course, the banking system has always relied, to a degree by necessity, upon investor confidence, but when the stock market drives the economy and those stocks do not reflect real value but only people's feelings about what the future holds, well ... time to start burying cash in the backyard.

A physicist, chemist and economist are stranded on an island and have a large supply of canned foods that was on their boat. They are hungry and need to figure out how to open the cans and an argument ensues.

The physicist says "let's calculate where to hit it with a rock to cause the can to give."

The chemist says "let's react the metal away."

The economist says "let's assume we have a can opener."


the point of this is that we assume, in all probability incorrectly, that people are rational.

[Gris]

The problem is not that people are inherently irrational, it is that they are lemmings... :-(

[Blue Light]

The problem is not that people are inherently irrational, it is that they are lemmings... :-(

You're talking about the people who gamed the financial system and stripped away regulations and reshaped the tax code?

[cdw2000]

Region A consistently outperforms Region B because of the poor choices B makes with its tax revenue. People then move to Region A in droves. Region B now becomes undesirable with shrinking revenues. Political Party A is 'adopted' by the voters of Region A since their policies most closely align with the views of the voters in that Region. Region B then aligns itself with Political Party B and consistently votes for Party B since Party B sees a political opportunity to 'represent' the disenfranchised voters of that region. Eventually, Party B gains control of the Federal Gov't. Now, Party B is obliged to assist Region B which it then does....

I somewhat agree hudpucker, but let me give you a real-world example of what is happening now with New Hampshire and Massachusetts. New Hampshire (NH) is Region A and Massachusetts (MA) is Region B in your example. NH has no income tax and no sales tax, and a relatively small state government, which also means that the state provides fewer services and there is less of a safety net for individuals. Massachusetts has high taxes and big state government, but has more services and many more safety nets.

Over the last 15 years, people from Massachusetts have been moving over the border to New Hampshire in droves to get lower cost housing and lower taxes.

So here's where your example falls apart. These same folks who have moved here, now expect NH's state government to provide many of the services, laws and regulations that Massachusetts has. They have now voted like-minded people into the majority of the NH legislature and consequently the NH state budget increased a whopping 18% last year. A large portion of this revenue collected through property taxes which are levied on the old and young alike regardless of income.

So what really happens (and is happening right now in NH) is that the people from Region B (that voted for the people that made all those bad decisions) move to Region A. But they don't change their voting habits and eventually vote in politicians that now make bad decisions, making the once prosperous and better performing Region A more and more like Region B every day.

[Gris]

You're talking about the people who gamed the financial system and stripped away regulations and reshaped the tax code?

No, that's a whole seperate issue. I'm talking about the people who buy and sell stocks in response to real-time changes in the market - as opposed to what is actually going on within the real world of the co. they bought stock in. It's the same principle that causes runs on banks, a sort of mass hysteria. It exists independent of market regulation. I believe any attempt to regulate that kind of behavior (restrictions on buying and selling) would be unacceptable to the American people.

[Blue Light]

Well, Gris, it/s become a VERY curious thing, this stock market we have on our hands now. I barely know how to react to it anymore.
Naturally I'd like to see it stabilize. But watching it go up and down (I don't actually own any stocks) I now think of it as some kind of alien life form, completely disassociated from reality.

[cooltone]

Curious indeed. It's scary how much the world economy reacts to pure speculation.

[muddy]

One thing nobody seems to address or mention anymore is the 2008 fuel prices. I firmly believe this was the straw that broke the camels back.

Petro affects the price of everything and gobbled up a lot of $$$ that otherwise would have went to fuel the economy.

I do give President Obama kudos for addressing this issue and hopefully we will be able to get off the Middle-East Oil train one day?
Imo, we can create jobs developing and implimenting alternative power sources?

Fuel prices and out of control health care costs eat up astronomical amounts of folk's income. It's no wonder we are where we are?!

[hudpucker]

I somewhat agree hudpucker, but let me give you a real-world example of what is happening now with New Hampshire and Massachusetts. New Hampshire (NH) is Region A and Massachusetts (MA) is Region B in your example. NH has no income tax and no sales tax, and a relatively small state government, which also means that the state provides fewer services and there is less of a safety net for individuals. Massachusetts has high taxes and big state government, but has more services and many more safety nets.

Over the last 15 years, people from Massachusetts have been moving over the border to New Hampshire in droves to get lower cost housing and lower taxes.

So here's where your example falls apart. These same folks who have moved here, now expect NH's state government to provide many of the services, laws and regulations that Massachusetts has. They have now voted like-minded people into the majority of the NH legislature and consequently the NH state budget increased a whopping 18% last year. A large portion of this revenue collected through property taxes which are levied on the old and young alike regardless of income.

So what really happens (and is happening right now in NH) is that the people from Region B (that voted for the people that made all those bad decisions) move to Region A. But they don't change their voting habits and eventually vote in politicians that now make bad decisions, making the once prosperous and better performing Region A more and more like Region B every day.

I think both our examples are relevant. Not everyone who voted for the 'bad politicians' is going to move. My example was clearly over-simplified...as is yours.

[flintpunk]

Our governor just invited Hollywood to our beautiful "Region A"! It was already just starting to suck here! There goes the neighborhood!