Friday, March 07, 2008

Today I am in glowing, robust good health!

That may be a slight exaggeration, but compared to a couple of days ago, it's relatively true. I attribute my quick recovery, at least in part, to the well-wishes of my blogging buddies, creepy, distributorcap, fingers, gorilla bananas, and Dr. Zaius. Thank you, one and all!

My euphoria had a bit of a backslide this evening, when I was watching the news on tv. First it was all about "Punch and Judy" on the campaign trail, hitting each other with rhetorical clubs. The most egregious nastiness was spread by a couple of their staffers. I am anxious for the whole primary mess to be over and to see who is the last man/woman standing. Then, I hope the "winner" will give the "loser" a hand up and invite him/her to be his/her running mate. It's hard to imagine "Judy" accepting the number two position, but I think "Punch" might be willing.

We'll see.

Then, of course, it was all about the "looming recession." Okay, it's been almost 30 years since I got my B.A. in Economics, but I'm still going to vent about what I feel is a self-fulfilling prophecy in the works. That is, if people are bombarded every day with "the sky is falling" bad news about the economy, they're going to get nervous, and even if THEY still have a job, they're going to stop buying things and hunker down, their bosses are going to get nervous and change their minds about expanding the shop and buying that new machinery, nervous traders are going to sell stock, and flee to gold, etc. ad nauseum. I believe that the economy's condition could have been more accurately referred to as a "cyclical correction," which would not have been as frightening and less likely to exacerbate the situation.
Also, the whole "housing crisis" business is making me crazy! People! The continuing rise in prices of homes for the past few years was UNSUSTAINABLE! Increased demand pushed prices up so high that most people simply could not afford them, but they still wanted to buy a house, so the mortgage companies "helped" the buyers by finagling various methods (especially the nefarious "adjustable rate" mortgages) to make the initial payments seem manageable. Now, I'm not just blaming the financiers. People should not enter into a financial contract of that magnitude without thoroughly understanding what they are getting into! They should also not buy a house until they can afford it. Sorry, all you newly-weds. Try RENTING for the first few years, like we old farts did, back in the stone age. Okay, I'm getting off-message here. My point is that when prices get so high that almost no one can buy them, the prices will...and did...drop. It's called a "correction," not a depression.
Geez, I've got cramps in my fingers.


fingers said...

Well, technically a recession is said to be occurring when you have 4 successive quarters of negative GDP growth, so it's not an arbitrary call, however I've also wondered why the media spend so much time creating market panic or market greed in certain sectors of the economy.
I assume they're just another bunch of cunts with an agenda to fuck me up...

Distributorcap said...

you are so right Madame Z -- it can be a self fulfilling prophecy -- but we cannot deny there is a severe economic crisis looming and it is the doing of both ourselves and the disasterous economic policies of the the Bush administration and 6 years of Congressional enabling.

meanwhile i am glad you are feeling better

DCup said...

Sadly the people I know tune out when economics are discussed anyway. If the "news" isn't about some idiot celebrity, they don't listen or retain it.

I'm glad you're feeling better, too. That whole everything hurting just sucks!

Dr. Zaius said...

I am glad that you are feeling better! I believe that Fingers is mistaken, a recession is two or more successive quarters.

Gorilla Bananas said...

I'm delighted that you're feeling better, Madam Z! I'm especially pleased to hear that you're glowing!

Lower growth, or even a recession, is a necessary part of the readjustment to lower housing prices. Clearly many people are poorer than they expected to be, which will change their spending patterns.

fingers said...

The Monkey Doctor is correct.
It's two successive quarters of negative real GDP.
I blame these small laptop keyboards and my lazines for not typing the word 'two'.
I'm getting sick and tired of my mistakes...

electro-kevin said...

That's interesting - 'recession' being definable.

But I don't think it's a matter of creating recession. I can't speak about your economies (Fingers, Madam Z) but ours has been based on heavy borrowing for years, both governmental and personal.

This debt (encouraged by low interest rates) should have been corrected years ago but the UK Government have refused to tackle it. I believe that this was on the basis that the 'feel good' factor enabled them to make radical political changes without popular resistance from the public who were largely satisfied with their lot. It's the economy which keeps governments in power.

The debt has grown to unsustainable levels and is likely to result in more than a managed 'correction' - especially since our country has been transformed beyond recognition by rising crime and immigration levels. People qualified to emmigrate are doing so in droves - 'qualified' being the important factor because most of our immigrants are UNqualified (we have no points system)

We are a less able people than we were merely ten years ago - the economy is fucked and I can't see it recovering.